Thursday, 27 February 2003

What - No Presence in the Blawgistan Times?

Well, made it in the past. Hopefully, now that my RSS feed seems to be working again, maybe Jottings will show up again. Or maybe not.

Arbitration in 5th Circuit - Signature Not Always Enough

Although not an employment case, the ironic timing of the Fifth Circuit's decision in American Heritage Life Insurance Co. v. Lang [pdf] (5th Cir. 2/26/03) less than two weeks after the New Jersey Supreme Court decision in Leodori v. Cigna, was too good to pass up. In Leodori, the New Jersey Supreme Court refused to enforce an agreement because it lacked a signature by the employee. In Lang, the person seeking to avoid arbitration had signed four separate arbitration agreements. Although different facts, the underlying legal premise was similar - was there an agreement to arbitrate? In Leodori the court required more than just knowledge and continued working by the employee. In Lang, even though he signed the agreements he was illiterate and had asked the American Heritage representative to explain each of the documents he was signing. His affidavit, which was not qualified, said that he had not been told that he was signing an arbitration agreement. The Court found the affidavit by the American Heritage representative equivocal. Under these unique circumstances, the Court held it was for the court to determine the validity of the arbitration agreements.

It appears that we may be entering a new era of arbitration jurisprudence. Even though the concept has been reaffirmed, and is if anything more frequently being used, rather than less litigation about arbitration, we are going to have more. The difference is it will now focus on contract formation, program content, integrity of the process (both actual and perceived) and standards for reviewing decisions. Undoubtedly one of the things lost, or at least diminished, will be the benefits of quicker, cheaper final determinations.

Wednesday, 26 February 2003

Arbitration in New Jersey - Signature Required

Even under the Federal Arbitration Act, there must first be an agreement to arbitrate, and that agreement must conform with state contract law. Now, the New Jersey Supreme Court fills in one more requirement for employers seeking to require its employees to agree to arbitrate disputes as a condition of employment. In Leodori v. Cigna (N.J. 2/13/03) the Supreme Court held:
Although not strictly required, a party's signature to an agreement is the customary and perhaps surest indication of assent. Absent plaintiff's signature here, we cannot enforce the waiver provision unless we find some other unmistakable indication that the employee affirmatively had agreed to arbitrate his claims. Finding no such proof, we must hold for plaintiff.
The mere fact that he was aware that the company's policy was that all disputes should be arbitrated was not sufficient to show his agreement. This differs from the rule in Texas, where the Halliburton decision was just the opposite.

Alabama and the Federal Arbitration Act

Just before Christmas I noted the Alabama Supreme Court's decision in Potts v. Baptist Health System and the high standard for finding the FAA applicable. In that case a hospital did so by showing up to 90% of the materials and equipment that a nurse used in her work traveled in interstate commerce. Just how difficult that task is going to be in many employment cases is shown by last week's decision in Ex Parte David Webb. A divided Supreme Court granted a writ of mandamus, reversing a lower court's order compelling arbitration. The reason for granting the writ was that the FAA was not applicable. The Court summed up its view succinctly:
The parties to the contract containing the arbitration provisions were an Alabama natural person, Webb, and an Alabama domiciliary corporation, Bill Penney Motor Company. The transaction evidenced by the contract was Webb's performing menial chores in a cleanup shop in Alabama. The alleged assault cannot be deemed a transaction evidenced by Webb's employment contract. Bill Penney Motor Company has not submitted any evidence that Webb's employment or chores substantially, or even detectably, affected any of the contracts or transactions between Bill Penney Motor Company and persons or entities outside Alabama.
If this is the standard, it seems likely that many arbitration agreements required as a condition of employment in Alabama may not be enforced. At a minimum, employers' counsel will have to work to make a very focused showing that the FAA is applicable.

EEOC Grounds Aviation Consulting Company

When the EEOC says they take charges of sexual harassment seriously, particularly when it is by high level employees, they can be believed. Or at least the aviation consulting firm Simat, Helliesen & Eichner would no doubt agree as they have just concluded a $2.3 million settlement based on allegations against their former president. Newsday has the story.

Monday, 24 February 2003

New Mexico Near Adoption of Sexual Orientation Protection

The New Mexico House of Representatives has passed House Bill 314 that would outlaw discrimination based upon sexual orientation. According to KOBTV the bill's backers feel confident that they have enough votes in the Senate and Governor Bill Richardson has promised to sign it if it reaches his desk. A similar bill was adopted in New York last fall. Texas legislators are also considering similar legislation this session. See H.B. 574 and H.B. 1136 in the legislative report.

More Million Dollar Verdicts - Discrimination in Wisc - Retaliation in Pa

Failing to ask whether a female manager would want a transfer because the company didn't think she would want to move since she had children, and testimony that she wouldn't have been suited for the job because she would have to deal with 'rude men', was a costly mistake according to a Madison, Wisconsin jury. You can read about Tracy Lust's successful claim here. And how much actual out of pocket loss did it take to get to this award? $1,500 in back pay. The rest was $100,000 in mental anguish and $1,000,000 in punitive damages. The Sealy Corp. won't have to pay this much because of the damage caps under Title VII, even if it decides not to appeal.

And in Philadelphia another federal jury was awarding a 17 year Federal Express manager, Kathleen Talbot-Lima, $2.3 million. Talbot-Lima claimed she was fired in retaliation for helping a female truck driver file a sexual harassment claim. FedEx claiming she was fired for 'failure of leadership' says it will appeal. An earlier trial ended in a hung jury. You can read the AP story here.

Supreme Court Takes ADA Case on Refusing to Rehire Employee Terminated For Failing Drug Test

The Supreme Court today granted certiorari [pdf p.4] in Raytheon v. Hernandez. The decision appealed is Hernandez v. Hughes Missile Systems Company [pdf]decided by the Ninth Circuit in June, 2002. The Court issued a supplemental opinion in August making some changes on the petition for rehearing, and noting with the changes there was no vote for granting the motion to rehear or to hear the case en banc. The case will be heard by the Supreme Court in the fall 2003 term.

In the underlying decision, the 9th Circuit overturned a summary judgment for the employer which had refused to rehire an employee who had previously been allowed to resign in lieu of termination after he tested positive on a drug test. When he reapplied two years later, an employee representative refused to hire him after checking his file and finding that he had been allowed to resign in lieu of termination, applying the company's unwritten policy of not rehiring employees who were allowed to resign in lieu of termination. Hernandez did not claim he was disabled at the time of his re-application, but argued that he was being discriminated against because of his past history of a disability (drug use).

The 9th Circuit found two reasons why Hughes may have violated the ADA. First, he attached a letter from his AA counselor to his application, from which the representative could have concluded he had prior drug use. (The court may also have been influenced by the company's position statement to the EEOC in which it noted Hernandez had been allowed to resign after failing a drug test.) Although one might question that automatic leap, even more amazingly, the court held that even if the representative who made the decision did not know the reason why he had been allowed to resign in lieu of termination, it was the company's policy that kept her in ignorance. From there, the court concluded that having created a policy that kept her from knowing why he resigned, the company could not avail itself of the defense that it was not aware of his past drug use when it made the decision.

The Circuit Court's decision seems to preclude a blanket rule against refusing to rehire employees terminated for improper conduct. Otherwise, the employer, as here, could unknowingly violate the ADA. It would not be surprising if this were another case where the Supreme Court reins in a 9th Circuit employment law decision. If so, at least it is unlikely to be a 9 - 0 decision as Justice Breyer took no part in the decision to grant cert.

Work At Home Unlikely to Be A Reasonable Accommodation

The Seventh Circuit has repeated its view that it would be a most unusual job that would make working at home a reasonable accomodation under the ADA. Rauen v. United States Tobacco Manufacturing (7th Cir. 2/10/03) [pdf]. In this case, the plaintiff was insisting on being allowed to work at home when she decided, even though she was able to do (and actually did) the essential functions of her job without accomodation at the workplace. The Court dodged answering whether an individual who could do the essential functions without accomodation was ever entitled to an accomodation, although it noted at a minimum, it must surely make it a harder burden.

When Direct Deposit Won't Work

The New York Times has a story on how some companies are solving the problem of getting rid of paper payrolls, even when they have a workforce with a large number of employees that do not have a bank account for direct deposit. See To Cash This Paycheck, Find the Nearest A.T.M.

Sunday, 23 February 2003

Where Employment Law Legislation Stands in Texas 78th Legislature

A weekly update on bills that have been introduced:

House of Representatives
H.B. 50 Sylvester Turner (D – Houston) Mandatory leave for employees to attend school conferences, and penalties against retaliation for exercising that right. Referred to Economic Development.
H.B. 105 Norma Chavez (D - El Paso) Provides for unemployment benefits, without charge to an employer's account, if an employee is forced to leave employment because of domestic violence. Referred to Economic Development.
H.B. 126 Lon Burnam (D - Fort Worth) Requires parity for mental illness in disability insurance policies sold in state of Texas. Referred to Insurance.
H.B. 152 Ron Wilson (D – Houston) Limits an employer's ability to obtain so called 'dead peasants insurance,' where an employer obtains a policy on lower paid employees with itself as a beneficiary. Referred to Insurance.
H.J.R. 18 Suzanna Hupp (R – Lampasas) A constitutional amendment to grant a broad right of privacy. In California, a similar constitutional amendment was used as a basis for finding the constitutional right of privacy extended to non-government employers. Referred to State Affairs.
H.B. 181 Jessica Farrar (D – Houston) Allows an individual who receives deferred adjudication to legally deny the arrest and prosecution, except for a subsequent criminal prosecution. This would impact information employers are able to obtain when hiring. The bill passed last legislative session, but was vetoed by Governor Perry. Referred to Criminal Jurisprudence.
H.B. 281 Paul Moreno (D – El Paso) This is not technically an employment bill, but is likely to be one of the most talked about and contested non-financial bills of this session. It would make it a misdemeanor (punishable by a $100 fine) to talk on a mobile phone when driving, unless the car is stopped or the phone is operated without the use of either hand. Referred to State Affairs.
H.B. 328 Warren Chisum (R – Pampa) An attempt to allow employers the opportunity to obtain information from applicants about prior workers compensation claims and injuries. The legislation modifies the Texas Commission on Human Rights Act and the Texas Workers Compensation Act, but unfortunately can not shield employers from the Americans with Disabilities Act which prohibits such inquiries. Referred to Business & Industry.
H.B. 355 and H.B. 356 Harold Dutton (D – Houston) These are two education leave bills, similar to some of the amendments that have been suggested for the federal Family Medical Leave Act. One would require employers to give time off to employees to meet with teachers, counselors or principals; the other to attend certain school activities. The bills also create new causes of actions against employers for refusing to provide the time off. Referred to Economic Development.
H.B. 359 and H.B. 371 Harold Dutton (D – Houston) These two bills attempt to limit the use of mandatory arbitration. The first would prohibit arbitration of Texas Commission on Human Rights Act or Title VII claims, the second would prohibit mandatory arbitration until an employee had worked for an employer for at least 90 days. Even if these bills were to pass, if the agreement were covered by the Federal Arbitration Act, these restrictions would be pre-empted. Most, but not necessarily all, employment relationships will be covered by the FAA. Referred to Economic Development.
H.B. 379 Harold Dutton (D – Houston) Requires employers to allow employees to review their personnel files. Similar legislation has been offered for several sessions. It would make failure to comply by the employer an unfair employment practice, which is treated as a violation of the Texas Commission on Human Rights Act. Referred to State Affairs.
H.B. 570 Fred Brown (R –Bryan) For non-subscribers to workers compensation, the bill would cap liability at $250,000 for work place injuries to employees. In order to qualify for the cap, the employer must have insurance meeting certain limits. Referred to Business & Industry.
H.B. 574 Jessica Farrar (D – Houston) Amends the Texas Commission on Human Rights Act to prohibit discrimination against individuals on the basis of their sexual orientation or gender identity. It would also protect anyone from being treated differently because of the sexual identity of individuals with whom the employee associates. Referred to Business & Industry.
H.B. 624 Jose Menendez (D - San Antonio). Basically a refined version of Representative Moreno's H.B. 281 which prohibits use of mobile phones while driving. This version has more definitions, some exceptions for emergency calls, and a range of fines that increases if the violation occurs in a school zone. Referred to State Affairs.
H.B. 643 Arlene Wohlgemuth (R - Burleson) A technical amendment to the punitive damages cap. Currently, the cap is not applicable where the defendant engages in certain criminal activity. The amendment would require a conviction before the cap would not be applicable. Under the current law, plaintiffs are able to argue that certain conduct should be outside the cap because it meets the literal language of the current statute, even though there has been no criminal prosecution. Referred to Civil Practices.
H.B. 705 Burt Solomons (R - Carrollton) Provides a defense against a claim of negligent hiring for employers whose employees enter another's home for purposes of repairs or delivery of goods. The defense would only be available if the employer obtained a criminal record from the Department of Public Safety. The bill gives the employer the right to have that access. Referred to Civil Practices.
H.B. 772 Dawnna Dukes (D - Austin) Similar to H.B.105, would allow an employee to quit a job if advised to by a law enforcement officer, a licensed medical practitioner or a licensed counselor because of domestic violence or stalking and still receive unemployment benefits. The employer's account would not be charged. Referred to Economic Development.
H.B. 804 Charlie Geren (R - Fort Worth) Amends Texas minimum wage law to pre-empt any city ordinance setting a minimum wage. It does not apply to government contracts or tax-abatement agreements. Referred to Economic Development.
H.R. 810 Eddie Rodriguez (D - Austin) Prohibits discrimination by state agencies on the basis of sexual orientation or gender identity. Referred to State Affairs.
H.B. 812 Roberto Gutierrez (D - McAllen) Provides that 75% of any award of punitive damage award will go to the Permanent University Fund. The plaintiff would receive 15% and plaintiff's attorney 10%, notwithstanding any other contractual agreement. Referred to Civil Practices.
H.B. 826 Yvonne Davis (D -145,408 Dallas) Requires employers to turn over any abandoned wage payments to the State Comptroller. Referred to Economic Development.
H.B. 978 Dawnna Dukes (D - Austin) Restrictions on certain business entities being the designated beneficiary of life insurance policies. Referred to Insurance.
H.B. 995 Ken Mercer (R – San Antonio). Expands the public whistle blower statute to also include protection from retaliation for reporting a waste of funds to an appropriate governmental agency. Referred to Government Reform.
H.B. 1018 Mike Villarreal (D – San Antonio) Would provide a preference by state and local governments for vendors who were certified as family friendly by the Texas Workforce Commission for providing employee dependent care benefits.
H.B. 1045 Joe Deshotel (D – Port Arthur) Creates an alternative base period for computation of unemployment compensation benefits to remove a period of extended medical disability.
H.B. 1136 Mike Villarreal (D – San Antonio) Prohibits discrimination in employment, housing or public accommodations because of sexual orientation.
H.B. 1142 Glenn Lewis (D – Fort Worth) Requires health insurance plans to provide for an annual physical with certain basic lab tests.


S.B. 33 Judy Zaffirini (D – Laredo) Establishes a right to leave to attend certain school functions for employees. Referred to Business & Commerce.
S.B. 61 Judy Zaffirini (D – Laredo) Modifies the existing law on criminal background checks for nursing home employees and applicants. Referred to Health and Human Services.
S.B.137 Rodney Ellis – (D- Houston) Prevents employers from obtaining 'dead peasant's insurance.' Referred to State Affairs.
S.B. 328 Royce West (D - Dallas) Requires an arbitrator and/or arbitration services provider to file a public disclosure within 30 days of the entry of the award by the arbitrator. Failure to do so could result in a fine, and multiple failures could result in the arbitrator being barred from court ordered arbitrations and being listed on a public list maintained by the Office of Court Administration. The disclosure would require the names of the parties, the general nature of the claim and the relief sought, the award by the arbitrator and the costs charged by the arbitrator and the arbitration services provider. It is designed to be a supplement to existing arbitration laws, including the Federal Arbitration Act. Referred to Jurisprudence.
S.B. 374 Tommy Williams (R - Woodlands). Limits liability of employer utilizing a staff leasing company to those items for which it has contracted to pay. Referred to Business & Commerce.
S.B. 390 Rodney Ellis (D - Houston) The first Senate bill to prohibit use of a cell phone while driving. Referred to Criminal Justice.

Friday, 21 February 2003

Fifth Circuit Holds Firm on Retaliation - For Now

By its own words, the Fifth Circuit has a higher standard than others for what constitutes an "adverse employment action", the necessary pre-requisite to a finding of retaliation. In the Fifth Circuit it must be an "ultimate employment decision." Today, a three judge panel consisting of Chief Judge King, Judge Smith and Judge Dennis, stuck with that view in Hernandez v. Crawford Building Material Company, (5th Cir. 2/21/03).

Following his termination Hernandez filed an age and national origin claim. After he filed, Crawford Building counter-claimed against Hernandez for theft of materials. Hernandez amended his pleadings alleging the claim against him was in retaliation for his protected activity of asserting discrimination claims. At trial he lost the claim of age and national origin discrimination, but prevailed on retaliation. In throwing out the jury verdict, the Court held that a counter-claim brought after the employee has been terminated could not be the basis for a retaliation claim as a matter of law.

The "for now" caveat in the title, is based on an unusual concurring opinion by Judge Dennis. While agreeing with the majority opinion that the panel's decision was required by the existing precedent of the Fifth Circuit, he wrote in hopes that a sufficient number of judges would agree to review the prior precedent en banc since he thinks it has been wrongly decided. An unusual call. It will be interesting to see if there are a sufficient number of judges who will heed it.

Wednesday, 19 February 2003

Employment Cases in the NLJ's Top 100 Verdicts in 2002

The National Law Journal has released its annual list of the top 100 verdicts for the past year. Fortunately, no employment law case made the top 50. The employment law cases that did make the list include:
No. 54. Steinberg Moorad & Dunn Inc. v. David L. Dunn, No. SCV-16881 CA 10 (C.D. Calif.) A $40.6 million dollar judgment in favor of super sport agent Leigh Steinberg and his company against former partner David Dunn, who established a competitive company and took a large number of clients. Part of the verdict was due to the recreation of e-mail showing that much of the activity in setting up the competitive business occurred before he left the firm.
No. 59. Gurtin v. The Nurse Connection Inc., No. OCN-L-4017-94 (Ocean Co., N.J., Super. Ct.) $40 million judgment for negligent hiring of a home health care worker who murdered a patient. The employer allegedly didn't find out about his prior burglary conviction and termination from another company.
No. 75 Gober v. Ralphs Grocery Co., No. N72142, (San Diego Co., Calif., Super. Ct.) Proving the second time can be even worse, a retrial on the punitive damage aspect of a sexual harassment case led to a $30 million punitive damage award, approximately ten times the original award.
No. 87 Jelinek v. Abbott Laboratories A $25.7 million verdict in an age discrimination case, where the 59 year old plaintiff argued that he should not have been the only employee forced to move out of his home territory following a reorganization. Instead he took early retirement. The jury did not agree that he had been constructively discharged, but still awarded $25 million in punitive damages.
No. 96 Bogle v. McClure, No. 100-CV-2071 (N.D. Ga.) Seven librarians at the Atlanta-Fulton County Library System won a $23.4 million dollar verdict in their reverse discrimination case. They alleged they had been transferred and in effect demoted because they were white.

The last two cases reflect an aspect of employment law trials that might strike those who do not regularly try employment law cases as odd - that juries can be enraged enough to award large punitive damage awards, even when the employee bringing the suit was not terminated, and sometimes is still employed. It is a reflection of how important the conduct, and often attitude, of the employer is to juries.

Tuesday, 18 February 2003

"Beat the Drug Test"

If you found this by typing that into google, then you had to wade through about 100 offers, at least according to the Washington Post.

Women in the Workplace

U.S. News has an interesting story on how women now make up almost half the workforce, how they got there, and some of the changes it took to get there. A less uplifting story comes from the world of high tech, where according to the Mercury News, notwithstanding efforts at increasing diversity, women have actually lost ground.

Sunday, 16 February 2003

Sarbanes Oxley - Where It Comes Into Play

Recent news points out a couple of different situations where Sarbanes Oxley has or could come into play. A story about ClearOne Communications in Sunday's Salt Lake Tribune is one of those situations that Sarbanes Oxley seems to have intended to cover. The now terminated vice president of product sales for the company has filed charges with the EEOC alleging sexual harassment and religious discrimination, but has also given information to the SEC that has led to charges being filed against the company. The improper practices challenged by the SEC were 'channel stuffing', forcing distributors to take product at the end of a quarter in order to meet projected sales numbers. Although no indication that a charge has been filed under Sarbanes Oxley, it would be surprising if it weren't.

A different story concerns Kirk Gorman, the former CFO of Universal Health Services, who found himself terminated when he requested that the company's auditor's give him some assurances before signing off on the company's financials, a sign off with heightened significance because of the penalties of Sarbanes Oxley. Undoubtedly to his surprise, KPMG apparently refused to give its blessing to the financials as long as he remained as CFO, and the company chose the audited report over him. The New York Times has the story. Some of the correspondence between Gorman and KPMG can be found here. It is not at all clear that this was the result Congress intended.

Last Week In The Texas Legislature

Bills introduced that would impact Texas employers:
H.B. 804 Charlie Geren (R - Fort Worth) Amends Texas minimum wage law to pre-empt any city ordinance setting a minimum wage. It does not apply to government contracts or tax-abatement agreements.
H.R. 810 Eddie Rodriguez(D - Austin) Prohibits discrimination by state agencies on the basis of sexual orientation or gender identity.
H.B. 812 Roberto Gutierrez (D - McAllen) Provides that 75% of any award of punitive damage award will go to the Permanent University Fund. The plaintiff would receive 15% and plaintiff's attorney 10%, notwithstanding any other contractual agreement.
H.B. 826 Yvonne Davis (D - Dallas) Requires employers to turn over any abandoned wage payments to the State Comptroller.
H.B. 978 Dawnna Dukes (D - Austin) Restrictions on certain business entities being the designated beneficiary of life insurance policies.
The following bills have been referred to Committee for further action
H.J.R. 18 Proposing a constitutional amendment relating to a right of privacy, referred to State Affairs.
H.B. 356 Relating to the right of an employee to time off from work to participate in certain school activities of the employee's child; providing a penalty, referred to Economic Development.
H.B. 359 Relating to a restriction on the mandatory arbitration of certain employment disputes, referred to Economic Development
H.B. 371 Relating to certain restrictions on the arbitration of an employment dispute, referred to Economic Development.
H.B. 379 Relating to the right of an employee to inspect the employee's personnel records, referred to Economic Development.
H.B. 570 Relating to limiting the liability of certain employers who do not provide workers' compensation insurance coverage, referred to Business & Industry.
H.B. 574 Relating to the prohibition of employment discrimination on the basis of sexual orientation or gender identity, referred to Business & Industry.
S.B. 374 Relating to the payment of certain wages by staff leasing services companies, referred to Business & Commerce.
S.B. 390 Relating to an offense of using a telephone while operating a motor vehicle, referred to Criminal Justice.

Friday, 14 February 2003

Smackover Man Smacks ConAgra for Million Dollar Verdict

An Arkansas jury has awarded Smackover, Arkansas resident George Williams over $14 million in his racial discrimination suit against ConAgra. According to The Times Record - Fort Smith, Arkansas story, the jury awarded $6.06 million dollars in punitive damages for both racial discrimination and racial harassment.

Defamation Suit Against EEOC Lawyer

The former CEO and CFO of Southern Beverage Co., a division of Pepsi have filed a defamation suit in White Plains against the EEOC lawyer who was litigating a sexual harassment case against the company. Allen Drury of the White Plains News Journal has the story. The EEOC attorney allegeldy told the hometown paper of one of the executives that the CEO and CFO solicited sex from employees. The two executives' suit maintains that claim had never been made by any of the employees involved in the litigation. Pepsi ultimately settled the case for $1.79 million. The EEOC attorney will no doubt urge that the judicial privilege, which extends to statements made in and around litigation, protects his speech. The court's view of how that far the privilege extends outside the actual court room and pleadings, will be a critical question.

Tuesday, 11 February 2003

More on Hoffman-LaRoche v. Zeltwanger

Thanks to How Appealing for spotting the article on last week's Texas Supreme Court argument on how far the tort of intentional infliction of emotional distress should go. For my take on the argument and cites to the Court of Appeals decison check out my earlier comment.

Monday, 10 February 2003

Just In Time For Valentine's Day - Help On Dating, Sex & Romance At Work

Susan Heathfield has coments on the problem, what HR can do about it, and tips for the involved individuals at her regular spot at

War with Iraq - The Loss of White Collar Employees

Employers wondering what the war with Iraq will do to the economy and thus their business, are also facing a new problem. There is an increasing loss of high level executives due to the call up of the reserves. You can read the Business Week story about the problem here. Not only is there an immediate loss to the employer, but because of the right to return when the military service is over, it could cause further problems down the line. Here's Business Week on how the blue chipper, IBM handles the problem.

Last Week At the Texas Legislature

Four new bills were introduced that would impact employment practices generally. In addition, some of the bills previously reported on have been referred to committee. The new bills are:
H.B. 705 Burt Solomons (R - Carrollton) Provides a defense against a claim of negligent hiring for employers whose employees enter another's home for purposes of repairs or delivery of goods. The defense would only be available if the employer obtained a criminal record from the Department of Public Safety. The bill gives the employer the right to have that access.
H.B. 772 Dawnna Dukes (D - Austin) Similar to H.B.105, would allow an employee to quit a job if advised to by a law enforcement officer, a licensed medical practitioner or a licensed counselor because of domestic violence or stalking and still receive unemployment benefits. The employer's account would not be charged.
S.B. 374 Tommy Williams (R - Woodlands). Limits liability of employer utilizing a staff leasing company to those items for which it has contracted to pay.
S.B. 390 Rodney Ellis (D - Houston) The first Senate bill to prohibit use of cell phone while driving.
Other bills previously mentioned have now been referred to committee. Among those are:
H.B. 105 Allows unemployment for domestic violence, referred to Econcomic Development.
H.B. 126 Would require parity for mental health coverage, referred to Insurance.
H.B. 152 Prohibiting peasant's insurance, referred to Insurance.
H.B. 181 Limits required dislcosure of deferred adjudication for purpose of obtaining employment, referred to Criminal Jurisprudence.
H.B. 281 Banning use of cell phones while driving, referred to State Affairs.
H.B. 328 Allows employers to obtain and use past workers compensation history of applicants, referred to Business and Industry.

Saturday, 8 February 2003

Million Dollar Verdicts From the South

Maybe last week was a bad week to go to trial, at least in the South. Two long term employees, each racked up million dollar verdicts, one for discrimination, one for defamation.

Lt. Liz Summers, a 26 year veteran of the Atlanta Fire Department, was passed over for a section chief job, even though she was deemed the best qualified for two open positions. The Atlanta federal jury that found she had been discriminated against in the promotion process, also decided the injury was worth $1,000,000. The AP story quotes the city attorney as saying they were "surprised by the verdict". I would think so. Her attorney expects her to receive a promotion to section chief soon. That these underlying facts, a worker who has not lost a job just a promotion, can still stir a jury to a large award, is a good reminder of what can happen when an employer's decision is turned over to a jury for judging..

Karen Brackin was a 24 year employee of Family Security Credit Union in Morgan County, Alabama, who uncovered a multi-million dollar check-kiting scheme. Rather than singing her praises, she herself was accused of similar behavior and ultimately fired. Although she lost her job, the jury awarded her the same $1,000,000 as Lt. Summers. In an interesting twist, two of those making accusations against Brackin who were called as witnesses at trial, took the 5th Amendment, to avoid incriminating themselves. The Herald Tribune has the story. Having the one who committed the offense be the investigator/accuser sounds bizarre, and it is, but it also is something that I have seen more than once over the years of my practice.

Friday, 7 February 2003

More on Office Romance - Timely Advice for Valentine's Day

Earlier this week my note of the $1.3 million jury award against Bloomingdale, Illinois following a failed romance was mentioned by the splendid site resulting in a large number of visitors. For those interested in the topic, Jeff Scullin of the Lakeland, Florida Ledger has taken the attention given to Chief Circuit Judge Charles Curry's romantic liasion with one of his office staff to point out the dangers.

Expensive Conversation, Hotel Hit for $500,000 For Hidden Microphones

A West Virginia hotel that had hidden microphones as well as video cameras around the hotel obviously offended a jury which awarded $100,000 in actual and $400,000 in punitive damages to a former employee who was 'monitored'. The AP story is running in various papers around the country.

Duffield Back In Play, At Least Temporarily

Back on September 25, I noted the demise of Duffield by a 2-1 decision Duffield is the only circuit decision holding that Title VII claims can not be the subject of mandatory arbitration. Today, the 9th Circuit granted rehearing en banc, which has the effect of at least temporarily making Duffield once again the law of the 9th Circuit. The 9th Circuit is always interesting, although that is not exactly the term my fellow management lawyers who practice there would probably use. For more on the 9th Circuit and on the underlying panel decision check out the story in How Appealing.

The Perils of E-mail, Chapter 500 or so

Even though it is almost 'old news' today, Fortune's Nicolas Varchaver has a good in depth article on the negative side of e-mail, and what companies are and should be doing to make it less dangerous. And just in case you have e-mail down, he points out the problem brought on by the next generation of communicators: instant messaging. Nice to know technology is inventing problems faster than we can solve the old ones!

EEOC Charges Rise in FY 2002

The EEOC provides their summary of charges filed for the government year ending September 30, 2002. The almost 85,000 charges was 4.5% greater than the year before. The biggest percentage rise was in the religious discrimination category, but the largest numerical increase was in age discrimination. See the full story here.

Thursday, 6 February 2003

Poor (maybe to be poorer) Leona: Discrimination Against Gay Employee - Jury's Verdict - $11,000,000

Hard to believe she actually discriminated against one employee by being abusive. Newspaper stories would have you believe she treats everyone that way. Maybe she has just gotten bad press all along. You can read one of the first reports here. The AP has an updated story with more details of the testimony at trial.

No Disability Harassment or Discrimination for Doctor with Hepatitis C

Dr. Gowesky was accidentally infected with hepatitis c while an employee at the hospital. When she sought to return after treatment, she was met with concerns and negative comments, although she was ultimately placed on the schedule. She never actually returned to work, and later sued the hospital claiming both disability harassment and discrimination. Noting that both required a finding that she was 'disabled' under the ADA, the Court refused to make such a finding even under the 'perceived as' prong of the ADA definition. The Court found that she was not disqualified from working as that term is used in the ADA, nor did her employer think so, as evidenced by putting her back on the schedule. Gowesky v. Singing River Hospital System (5th Cir. 2/6/03) [pdf].

Although perhaps of little consolation to Dr. Gowesky, and certainly not her counsel, Judge Edith Jones does note the 'unfairness' suffered by Dr. Gowesky to have contracted the disease under such selfless circumstances, to have suffered through not only chemotherapy but surgery, and then to be met with unwillingness by her supervisors to take advantage of her talents. But as Judge Jones notes,
Gowesky must recognize, nonetheless, that not all suffering — no matter how great, no matter how unmerited — gives rise to a compensable legal action. To obtain the right to present his case to a jury, a plaintiff must, at minimum, adduce evidence upon which a rational jury could, as a matter of law, find in his favor. As much as this court admires Gowesky’s work and pities her suffering, she has, alas, failed to present such evidence.
It is recognition of that hard fact, and acting on it, that is necessary to ensure that the legal system remains a dispenser of justice rather than of sympathy, paid for with others' money.

No Damages for Covenant Not To Compete, No Attorneys' Fees

After being told by the Supreme Court to review whether an employer who prevailed in enforcing a covenant not to compete, but did not recover damages, was entitled to attorneys fees under the Civil Practice and Remedies Code, the San Antonio Court of Appeals, hold no. Perez v. Texas Disposal System, Inc. (Ct. App. - San Antonio, 2/5/03). The Court also reaffirmed its earlier ruling that the employer doesn't recover them under 15.51 of the Texas Business & Commerce Code either.

Arguing Intentional Infliction of Emotional Distress in the Texas Supreme Court

The Texas Supreme Court heard arguments yesterday in Hoffman-LaRoche v. Zeltwanger. The Corpus Christi Court of Appeals decision can be found here.. It involves a matter of no small significance to the defendant employer, since Zeltwanger recovered a judgment in excess of $10,000,000. Zeltwanger sued for both sexual harassment and intentional infliction of emotional distress. The largest part of the award was attributable to the intentional infliction of emotional distress award.

The court's decision could substantially impact the employment law jurisprudence in Texas if it accepts the employer's argument that the tort of intentional infliction of emotional distress is not available where there is another legal remedy (in this case, a TCHRA claim for sexual harassment) for emotional stress damages. I filed an amicus brief on that point on behalf of the Texas Association of Business.
My brief, and the contention of the company, is that intentional infliction of emotional distress is a 'gap-filler' tort, created to provide a remedy only in those cases where there was outrageous conduct and no other remedy.

The Court seemed to understand that the argument being made by the defendant was not pre-emption of intentional infliction of emotional distress by the TCHRA, but rather a defining of the common law claim that only became available in Texas when the Supreme Court adopted it. The Court did seem concerned about how to craft a workable rule if it were to accept the employer's argument. Chief Justice Phillips raised an interesting question about whether the decision might be almost 'theoretical' since even if the employer escaped direct liability, it might be vicariously liable for the act of its supervisor who was also found guilty of intentional infliction of emotional distress.

As with many cases that come before the Court, there are many options available. The case could be a vehicle for a wide ranging decision that could effectively limit the tort of intentional infliction of emotional distress in employment cases, the Court could use it to try to set a more defined standard for what constitutes intentional infliction of emotional distress, or the Court might look for a more narrow path and leave those questions for another day.

Monday, 3 February 2003

Covenants Not To Compete - At the Highest Level

BellSouth took to the offensive to block Vice Chair Gary Forsee's move back to Sprint. See the story here. Although not clear, sounds like an ex parte TRO by a Georgia state court judge. Maybe a little home court advantage? Will be interesting to see how long it sticks, if it does.

Pay Cuts v. Layoffs - What Some Are Doing has the story on what it calls The Kindest Cut of All, although no doubt it still hurts.

Can You Put A Price Tag on Failed Romance? What About $1.3 Million?

At least that is what the Village of Bloomingdale, Illinois has been told. See the report in the Daily Herald: Suburban Chicago's Information Source. A former city secretary who had a romantic relationship with her boss, evidently decided that it ended at a different time than he did. He got a promotion, she got a lawyer. The end result after a 3 day trial, is a jury award of $1.3 million dollars on her sexual harassment claim. Something every manager who thinks he or she can date a subordinate without inviting trouble should think about.

70 to 80% of Jurors Significantly Distrust Big Corporations - Ouch!

Amidst a long article on tobacco litigation in 2002, is tucked this quote:
I think 2002 is the beginning of a pendulum swing back toward jurors favoring plaintiffs in these cases, says Art Patterson, senior vice president at Bowne DecisionQuest, the jury consultants. "There was a period where it was swinging more toward individual responsibility," but Enron and the other corporate scandals have influenced juror attitudes, says Patterson, whose firm consults for tobacco companies. "While in the past a majority of jurors held attitudes of distrust of big corporations," he says, "we are now finding 70 percent and 80 percent of jurors endorsing attitudes of significant distrust."
Employers and their counsel facing a jury panel in the near future, take heed.