Monday, 6 December 2010

Polyglot for Wage and Hour Administrator

Almost two years into his term, President Obama is making a 2nd try at an Administrator for the Wage and Hour division of the Department of Labor, with his nomination of Leon Rodriguez, currently a DOJ lawyer and formerly County Attorney for Montgomery County, Maryland. See, President Obama Announces More Key Administration Posts.

The White House did not use the polyglot label, but when he was announced as County Attorney in April 2007, it was noted he spoke, "English, French, Spanish, Hebrew and Italian".

President Obama's earlier nominee, Lorelei Boylan from New York had asked that her name be withdrawn more than a year ago. See, Wage & Hour: Not Just Collective Actions Anymore.

Monday, 29 November 2010

Disparate Impact Suit - Credit Checks

Three times a year for the last several years I have done a program for the UT School of Law, CLE group called Essential Employment Law. In the morning, I talk about theory and in the afternoon my good friend (and great lawyer) Connie Cornell talks about the practical application.

One of the things I always cover are the three theories of discrimination, including disparate impact. Since disparate impact is not something that always readily comes to mind when you first think about discrimination I always try to mention an example that might cause people to relate to something that they could be doing.

This year, based on the EEOC's recent interest, I talked about credit checks. See, EEOC Public Meeting Explores the Use of Credit Histories as Employee Selection Criteria.

Given that history, it was not rocket science to predict such actions might be coming, but I did find it affirming to see the headline in today's Employment Law 360, School Sued Over Use Of Credit Checks In Hiring ($), challenging the University of Miami's Medical School's hiring practices.

According to the article:
The lead plaintiff in the case is Loudy Appolon, a black woman who lives in Miami. In the summer of 2009, she applied for and was offered a position as a senior medical collector at the university's medical school.

Just before her employment was about to commence — and after she had resigned from her previous position at North Shore Medical Center — the university reneged on its job offer due to her credit history, the complaint alleges.

It says that her credit history showed no pending delinquencies and just a few defaults from prior years that had been remedied to the satisfaction of lenders.
As noted by the term "lead plaintiff", the case was filed as a class action. Unfortunately, almost by definition disparate impact claims lead to class claims.

And if you have not looked in awhile at how savvy plaintiffs' employment lawyers are using the net in these cases, check out the website Credit Discrimination Lawsuit, by one of the plaintiffs' counsel in the suit (Outten & Golden LLP), which include a link to the complaint filed in the S.D. of Florida along with reports and case studies. It also poses the following three questions:
  • Have you been a victim of Credit Discrimination while applying for a job at the University of Miami?
  • Have you been denied a job based on your Credit History?
  • Have you been denied a job based on your Criminal History?

Note that while the first question is limited to the University of Miami, the other two cast a much broader net. If you can answer yes to any of the three, the site kindly notes that "we" would like to talk with you and provides a questionnaire where you can furnish the details.

It may not be a bad time to brush up on disparate impact law.

Friday, 26 November 2010

University of Texas School of Law and Labor Law

When I graduated from UT Law School in 1975, I had taken the only labor law course that was offered (if you didn't count the 2 hour Employee Rights course, which was solely about workers compensation claims). It was a traditional labor law course about the NLRA and was taught by Jerre Williams, who later served on the 5th Circuit. Professor Williams was active as a neutral.

The current labor law expert on the UT Campus is Julius Getman and his latest book, How to Restore the Power to Unions is reviewed at Today's Workplace.

Tuesday, 23 November 2010

In Defense of the EEOC? No, Just a Reminder About Pancakes

Tom Crane, at the San Antonio Employment Law Blog, had a very interesting post last week that complains about an EEOC investigator turning an employee away when it appeared she had a valid complaint, EEOC Would Not See Retaliation If It Was in Front of Its Face.

And I must admit the story is fairly compelling.

After receiving a report of sexual harassment, the investigator asked whether she had told the HR department. After answering no, the employee called HR and made a report from the EEOC office. Then the story continues:
Within ten minutes, the owner calls the employe, still at the investigator's office. She puts him on speaker phone. The owner says, "I understand you complained about me. You don't need to return to the office." The owner fired the employee over the EEOC's own phone within ten minutes of her complaint. The investigator heard it all.

One might think, great, what great evidence! The silly owner called and fired the employee for pursuing her rights with the EEOC - right where the EEOC could observe the whole chain of events.

Wrong. The invstigator still insisted she had no case and refused to allow her to file a claim for discrimination or for retaliation. He tells the employee she should just go collect her last paycheck and move on with her life.
It is certainly not my place to defend the EEOC, they are big enough to do that themselves, nor can I say that I have not heard of events happening at the EEOC that are probably not the best course of action. (But hey, what large organization doesn't have some incidents that don't put them in their best light.)

But I do have to say, when I read the story, a saying by one of my former law partners came to mind:
Every pancake, no matter how thin, has two sides.
My guess is that there is another side to this story.

Monday, 22 November 2010

The Technology Changes -- But the Principles Stay the Same

I have seen several posts about the NLRB issuing a complaint based on an employee's facebook post about their supervisor, that led to additional comments by fellow employees. See Nolo's Employment Law Blog's post as an example, NLRB Sues Employer for Firing Employee Over Facebook Post.

When I talk about social media, I always make the point that although the technology is new, the principles that need to be applied already exist. The law about concerted activity is quite developed; shoot, it was well developed when I had my first 5th Circuit argument back in 1979. There the issue was a comment made at a meeting about an announcement that the employer was going to require everyone to take two weeks off as they moved the printing plant where the employees worked. It's that same body of law that now gets dusted off, because instead of a comment made at a worker's meeting, it is a comment issued through a new mode of communication.

Although it is not to say that there is nothing ever new, it is true that it is probably more rare than we think.

Monday, 8 November 2010

Another Interesting Development from Last Tuesday - $4 MDV for FLSA Retaliation

While most eyes were turned to the election results last Tuesday night, a former Los Angeles policeman was enjoying a $4 million dollar verdict in his favor, after a jury agreed that he had been fired because of his testimony in a federal wage and hour lawsuit brought against the city by another officer.

Richard Romney had testified that he had followed the "unwritten policy" of denying officer's pay for less than a full hour of overtime. After his testimony, an investigation was initiated and he was ultimately discharged for violating the city's written rules on overtime. L.A. County jury awards $4 million to former LAPD officer.

Although all jury verdicts have a long way to go before they become collectable judgments, this one has an additional and somewhat unusual hurdle. It could be severely influenced by the Supreme Court's decision in Kasten v. Saint-Gobain Performance Plastics, which was argued on October 13th. The transcript of the argument is here.[pdf]

Part of the issue is that the FLSA was really the first statute to provide employee rights and a prohibition against retaliation outside the union context, and Congress had not yet had the ability to focus on all the aspects of what protected activity really needed to be covered. Whether the statute is applied as it was written or as Congress would no doubt write it now, may make all the difference.

And in this case, that's a big difference.

Monday, 18 October 2010

Putting Me and Other Employer's Lawyers Out of Work

David Yamada and I have never met but have developed a friendship via the net. Even though we often have different views, usually not on the desired result, but on the ways of getting there, based on our civil conversations in an area where that is not often the case, I think it is fair to say that David would never wish me ill, in a financial sense or otherwise.

However, clearly in his most recent post, What if we applied the Golden Rule at work?, he has intentionally or otherwise stumbled on a concept that if followed would clearly lessen the need for those on both the defense and plaintiff sides of the employment law bar, including yours truly.

Just to emphasize David's post, for all the training I have done about employment law, best hr practices, employment law trials, not making juries mad, positive employee relations, etc. at the end of the day, the Golden Rule is a most apt summary for each of those topics. And actually one which is really hard to improve on.

Unfortunately, I don't think it is likely the need for employment lawyers is going to end any time soon.

But a basic tenet, well known and available to all, that really could lessen the need, is there for all of us to see.

Thursday, 7 October 2010

A SAD Story In So Many Very Different Ways

Commenting on lawsuits based on newspaper stories is risky business. I do it frequently and I probably should remind myself and those who read this blog of the dangers more often. It is not because newspaper reporters are incompetent or that they are not trying to do a good job, it is just that reporting a lawsuit is a very complicated piece of work that requires far more time than is available or really necessary to get some of the high points, which is about the best one can reasonably hope for. So the real question is whether or not the lack of depth which is almost inevitable, prevents even a glimpse of the why something happened, as opposed to just the results.

I say all of this based purely on my own experience. In the relatively few cases I have had which have been the subject of much publicity, I can accurately say that the stories often were less than adequate in portraying reality. The most obvious was a six week trial in a smaller Texas city which at the time had two newspapers. In most common terms, one "was for the plaintiff" and one "was for the defendant." Each day for most of the six weeks and even leading up to it, the story was the front page headline on both papers and was quite detailed, frequently running over to multiple inside pages. A neutral observer might fairly have wondered if they were even reporting on the same case. And although I was certainly not neutral, I did know what was going on and would have to admit that neither was very close to really expressing it.

Which brings me, long way round so to speak, to the report in Eau Claire Leader Telegram of Tuesday's verdict in a Madison, Wisconsin trial of a teacher's disability claim. Former Somerset teacher wins $2 million lawsuit.

If the newspaper report is accurate (see above) then all it would have taken to accommodate Renae Ekstrand's disability, depression caused by Seasonal Affective Disorder, would have been allowing her to switch classrooms to one with a window. An accommodation that another teacher would have been willing to make.

The fact that such a simple thing didn't happen, makes me think there is much more to this story.

In fact, we know there is because this case had an appellate history before going to trial. First, a district court granted summary judgment for the school district. That was partially reversed by the 7th Circuit, which rejected Ekstrand's constructive discharge claim, but sent the failure to accommodate claim back for trial, presciently holding that "we disagree with the district court that no reasonable jury could find in favor of Ekstrand's failure-to-accommodate claim."

But even in sending that claim back to trial, Judge Bauer, who authored the court's opinion offered this:
From the sparse record in this case I assume that the School District of Somerset has high standards.   Its Web site proclaims its motto:  Learning Today to Succeed Tomorrow.   In a district like this, parents quite naturally take an interest in who is teaching their children.   And I can't imagine that many parents would be too pleased to have their first-graders in a classroom taught by a teacher who, to quote the court's opinion, suffered from “fatigue, anxiety, hypervigilance, tearfulness, racing thoughts, and trouble organizing tasks” plus “inability to concentrate ․ retrieve words, make decisions ․ focus on the needs of her students ․ hypersomnia ․ panic attacks, uncontrollable crying, inability to eat, and thoughts of suicide” in the fall of 2005.   While I can imagine that an employer like UPS might be able to accommodate a delivery person with these kind of issues, I have a hard time understanding how a school district could do the same for a first-grade teacher.   This makes me wonder if Ms. Ekstrand, in the context of teaching, could ever establish that she was a “qualified individual with a disability” under the ADA in the fall of 2005 or that an accommodation that would be necessary to ameliorate her condition would be “reasonable.”   This issue deserves, I suggest, a close look on remand.
Ekstrand v. School District of Somerset(7th Cir. 10/6/09).

So it is easy to see why this case went to trial.

Still, the bottom line result is the same. A jury didn't like what the school district did and let it know with its $2 million plus verdict. The reporter did catch, which many don't, the distinction between verdict and ultimate recovery noting that under the ADA it would be greatly reduced by the statutory damage caps.

When I started this post,  I had intended to offer my thoughts on why it is that so many MDV's involve public sector defendants, but having rambled on about the difficulties of newspaper reporting, that subject is best saved for another day.

Unfortunately, I doubt that I shall have to wait long for the opportunity.

Tuesday, 5 October 2010

If You Have a Choice, Would You Bifurcate Punitive Damages?

That was a question I was discussing with a colleague Friday just before we gave a seminar presentation on Things that Employers Do to Make Juries Mad, and Pay for it with Big Verdicts. Fortunately in our case it was purely hypothetical.

But I was reminded of it when I saw today's report of a follow up punitive damage award of $4.8 million, after an earlier award of $3.4 million in compensatory damages. See, Former Rite Aid Employee Wins $4.8 Million Punitive Damages Award.

The award to Maria C. Martinez came in a disability and retaliation case, with the retaliation following her complaint that she had been sexually harassed.

The Beverly Hills Courier story says the defense counsel urged the jury not to award punitive damages, saying they "had already sent the chain store a strong message with the compensatory award." The sad fact is that is pretty much all there is to say.

In Texas state courts, the defendant gets to make the election. Unless there are strong and unique reasons not to, I opt against bifurcation. Basically, I don't want to be in the position of the defense attorney, having to come back after the jury has already hammered you, and your message is "now we get it." A hard sell when you have pushed hard to win on liability.

The clearest benefit is that you get to keep out the net worth of the company in the trial on the merits, but unless it is a stealth company, most jurors know that you are big.

I don't think that small benefit comes close to the cost of losing the opportunity of having it all settled in one bite, where if you have any jurors on your side, they probably have the best opportunity to effect a reasonable compromise.

And another factor I had not really considered is the anger of the jury. Sure, they are angry with you, because they found against you, including the issue, usually some sort of malice, that will justify punitive damages. But it's not that anger I am talking about.

It is the anger that they had to come back and do it again. Since jurors are not told about the possibility of punitive damages (at least in Texas), they are not aware when they answer that magical question a certain way they have just insured another day or two of jury service. Not exactly something that most of them are excited about.

Maybe that's why it only took one-half hour of deliberations to more than double the amount awarded.

Update (5.2.13): I don't follow up on MDV's, although I probably should, because almost always they end up looking much better than they did on the day that the verdict was rendered. Here, thanks to a comment, is the result of this one at the appellate court. Martinez v. Rite Aid (CA Ct. App. 2nd Dist. Div. 7) (4.23.13).

Wednesday, 22 September 2010

McDonnell Douglas Bites the Dust in Tennessee

Yesterday I wrote about Texas' own little corner of the workers' comp world, today it is the Volunteer State's turn to take the spotlight for its unique view of an element of employment law. In Gossett v. Tractor Supply Co. (Tenn. 9/20/10) a sharply divided Supreme Court dumped one of the long time stalwart's of employment discrimination and retaliation, the McDonnell Douglas shifting burden of proof for evaluating a plaintiff's claim.

The Cour rather unceremoniously concluded,
we hold that the McDonnell Douglas framework is inapplicable at the summary judgment stage because it is incompatible with Tennessee summary judgment jurisprudence.
Actually the headline to this post is technically inaccurate, since the Court went on to say
 Furthermore, when applied at the summary judgment stage, the shifting burdens of the McDonnell Douglas framework obfuscate the trial court's summary judgment analysis. The McDonnell Douglas framework "is intended to progressively sharpen the inquiry into the elusive factual question of intentional discrimination" or retaliation. Burdine, 450 U.S. at 254 n.8. Although such inquiry is particularly appropriate at trial, it is ill-suited for the purpose of determining whether "there is no genuine issue as to any material fact."
Most employment law practitioners outside Tennessee state court will be somewhat surprised with that view, since most of the jurisprudence is that once a case actually gets to trial, the McDonnell Douglass framework is particularly inappropriate.

Although it might be found on a closer reading of the opinion, what seems to be missing from the majority's opinion is a basic understanding of what the McDonnell Douglas framework was intended to do. The United States Supreme Court that created it was faced with how does an employee prove intentional discrimination based on a protective category, when it is highly unlikely that employers will admit to such.

One way they concluded was to set up a prima facie case of factors that do not conclusively prove discrimination, but if totally unrebutted, would be sufficient to permit an inference of discrimination to be drawn. They placed the burden of establishing the prima facie case on the plaintiff, allowing them to create an inference of discrimination.  However, when the employer articulates a legitimate business reason that would explain the facts that were used to establish the prima facie case.  When that happens the burden then reverts to plaintiff to show that the real reason for the discrimination was their membership in a protected class.

Now clearly the formulation has gotten a little more complicated and some well known federal judges, most notably Judge Posner of the 7th Circuit, are clearly not fans, but to merely toss it out without even making it clear that they understood how it came to be, seems somewhat odd.

Tuesday, 21 September 2010

Good News for Texas Non-subscribers, Bad News for Excess Carrier

Texas has its own little corner of the workers' compensation world, as I think it is now the only state that permits employers to opt out of the workers compensation system. It does not come without a penalty, because a non-subscriber employer loses the bar against being sued by its employees for negligence, and when it is sued, loses a number of its common law defenses to negligence such as assumption of the risk, contributory negligence etc.

Still, given the costs of workers compensation, particularly before the system underwent some radical changes a decade or more ago, many major employers opted out, and have come up with fairly sophisticated programs that give them more flexibility and that are backed at least in some respect by insurance.

One of those disputes played out in a case that was decided today by the 5th Circuit, which was required to make an "Erie guess" as to what the Texas Supreme Court would do. American International Specialty Lines Ins. Co., v. Rentech Steel LLC et al  (5th Cir. 9/21/10) [pdf].

The question is what would the Texas Supreme Court do  in interpreting an insurance policy  in this situation which excluded coverage:
under any workers’ compensation, disability benefits or unemployment compensation law, or any similar law.
The excess carrier which was looking at a $10,000,000 judgment against for a negligence claim if it was unsuccessful, argued that since the Texas Workers Comp Law penalized the non-subscriber employer and insured by stripping it of some defenses, it should be excluded as being under a "workers' compensation" or at least "any similar law."  

Unfortunately for the insurer, the Court found not only did it believe that the statute does no more than modify the common law claim, and thus as it framed the question, the exclusion was not applicable; more importantly it found that is what the Texas Supreme Court would say as well.
Although the insurance carrier is on the short end of the stick of this opinion (and at $10 million it is a pretty big stick) it is not as if the employer fared all that well. The day before the initial trial was scheduled, the employer/insured tossed it wholly into the insurance company's lap by filing Chapter 7 bankruptcy.

Only in Texas. Literally.

Wednesday, 1 September 2010

Latest DOL Opinion On Donning and Doffing, Not So Fast - 6th Circuit Says

Although it may no longer be true, donning and doffing cases at one time were clearly the big ticket FLSA collective action. And for those still fighting those fights who have been concerned about the thumb that the DOL put on the scale with their June 16 Administrator's Interpretation (No. 2010-2), which reversed course from two earlier opinion letters issued this decade (yes, Obama administration vs. Bush administration), you now have some very favorable authority from yeseterday's decision by the 6th Circuit in Franklin v. Kellogg Co. (6th Cir. 8/31/10) [pdf].

Looking to determine the meaning of the phrase "changing clothes" in § 203(o) of the FLSA, the Court surveyed the DOL's view of that portion of the FLSA and found the following:
  • 1997 Opinion Letter - "clothes" in section 3(o) does not encompass protective equipment and section 3(o) is an exemption to the FLSA that should be read narrowly;
  • 2001 Opinion Letter - reiterated the position taken in the 1997 Letter;
  • 2002 Opinion Letter -  "changing clothes" in section 3(o) refers to the putting on and taking off the protective safety equipment typically worn in the meatpacking industry;
  • 2007 Opinion Letter - reiterated the position of the 2002 Letter;
  • June 16, 2010 Administrator's Opinion - section 3(o) exemption does not extend to protective equipment worn by employees, that is required by law, by the employer, or due to the nature of the job.
Looking at this revolving door of opinions, the Court gave them what seems to me to be the appropriate amount of deference ---none:
First, "an agency interpretation of a relevant provision which conflicts with the agency's earlier interpretation is entitled to considerably less deference than a consistently held agency view. [cite omitted] The DOL's position on this issue has changed repeatedly in the last twelve years, indicating that we should not defer to its interpretation. Additionally, we find its interpretation to be inconsistent with the language of the statute.
For the fans of burden of proof (the most important vestige of employment at will), the Court addressed the question of whether section 3(o) is an exemption to the FLSA where the employer has the burden or a definition, where the employee has the burden. Although it does so, the Court really did not have to look much further than which section of the FLSA section 3(o) appears, is it § 203, Definitions or § 213, Exemptions?

As it appears in §203 not §213 the Court placed the burden on the employee, siding with the 5th and all other circuits which have decided the question, except for the 9th Circuit.

Up to this point the opinion is very employer friendly, but at this point it diverges for some other holdings:
  • in determining whether changing clothes can be a "principal activity" which thus launches the "workday," the Court held that whether or not the time was compensable does not impact the determination;
  • here, changing clothes was a "principal activity".
Although there was a dissent, it did not seem to be over either of these principal issues. Still given the circuit split, it is not inconceivable that it could take the next step up.

If it does, given the somewhat limited nature of section 3(o) which requires a collective bargaining agreement to be applicable, the most important point could well be the deference given to agency interpretations. While it may always have been the case, it is now more clear than ever, particularly in the field of labor and employment law, regulatory agencies are much more bound to an Administration's viewpoint than stare decisis.

My own view is that is not a very good way to run a railroad, but no one has asked my opinion, nor are likely to give it much weight.  It is however a fact of life, and if we are going to deal with it, we might as well know exactly what view the courts are going to give such changing views. My guess hope is that it is the same as the 6th Circuit here.

Wednesday, 11 August 2010

Cautionary Comments as the ADA Nears Adulthood

Turning 21 is a much bigger deal than turning 20 if you are one who is looking forward to consuming adult beverages legally. But if you are a statute, twenty years is a nice point for others to weigh in on your success. 

So in the the last two weeks various pundits have weighed in with their views on the Americans with Disabilities Act. (Although remember in terms of effective date, the ADA has just reached voting age. See, Happy 15th13th Birthday to the ADA).

Someone has no doubt collected a number of the articles about the good things the law has done, but I wanted to point out two cautionary notes because I think they make a serious point. They come from the employer side of the docket and are made by other "employer's lawyers" so you are more than welcome to take them with however big of grain of salt that you wish.

Both Jon Hyman at Ohio Employer's Law Blog and John Phillips at The Word on Employment Law raise a valid concern about the breadth of the ADA and its susceptibility to those who would game the system (my word, not theirs). See, Celebrating the ADA, but bemoaning its breadth and ADA's 20th Anniversary: A Contrary View.

To their contributions, I would add two more points. First, as I have pointed out in the past, there is at least some research that says notwithstanding its good intentions, the ADA may actually have hindered the ability of those that we would all consider disabled, to enter the workforce. See, Hurting by Helping? The Law of Unintended Consequences. 

The other point is really an expansion on Jon and John's thoughts on the breadth the ADA and the problems that are caused by extending coverage to conditions that are at least further from the core of what have traditionally been considered disabilities.

Think about the law works.

The legality of an employer's conduct in almost all circumstances turns on the fundamental question --is the employee who has complained of discrimination under the ADA, disabled? (I know technically -- whether the person is a qualified individual with a disability).  To put it another way, until you know whether someone is disabled, you do not know whether you have to comply with the law or not.

But whether a person is disabled as defined in the original Americans with Disabilities Act was very much a legal question. And not an easy one. Just think of the cases where that was the threshold question and the answer was not available until it went through EEOC, the district court, a court of appeals and in a handful of cases even the supreme court, before that fundamental question was resolved. By then of course many years after the employer had made its own fateful 'guess' as to what the ultimate answer would be.

In other words, in order to comply with the law you have to "know" the answer to what has been the key question over which most ADA lawsuits were fought -- was the person disabled. And in many cases you absolutely could not know for sure, until the lawsuit was decided, which obviously is too late to ensure that you act appropriately

With other types of discrimination it is rare that you have that initial hurdle. You know whether someone is male or female, young or old, black or white, of Hispanic descent etc. In those cases, there is rarely a legal question as to whether the law was applicable.

But are they disabled? As defined under the ADA, not nearly as easy.

And even after all the litigation that occurred after the first 20, oops 18, years, it was not much easier for an employer to make that decision, especially in the middle of the 1,000 other things that were on their plate when they were faced with answering the question.

And even if you had mastered that body of precedent, it has been drastically altered by the recently passed ADAAA, making for more difficulties as we head into the next 20 years.

There is a built in Catch 22 of many ADA cases, particularly those of the type that were mentioned in the two articles --  that in many such cases you don't know whether you have to comply, until you have been tried and found guilty of not complying.

I find it particularly ironic every time I notice a car with a government issued permit pulling into a parking space reserved for those with disabilities.

Thursday, 5 August 2010

Dealing a $2 Million Dollar Verdict in the California Wine Country

Sexual comments and jokes, including a Levitra pen that apparently grows in length, followed by a complaint with no follow up and then a termination were what a Sonoma County jury apparently believed was the hand Shannen De La Cruz , a minimum wage card dealer, had been dealt. $2 million harrassment verdict against Petaluma card room

Although it is easy to imagine how the comments contained in the newspaper story could have been made and taken by everyone as funny, it is equally clear that as it came across in the court room, the jury was offended, not amused.

One factor that certainly did not help the company was the testimony of four other women, including one who had settled her own case. Making that testimony probably even more powerful, she was the human resources chief to whom De La Cruz had reported the harassment. The unresolved issue of how much "me too" evidence should be admitted is an on-going danger of these types of cases.

Although with $5 million year in revenues it's hard to think of the casino on the receiving end of the jury verdict as a really small business, it is certainly no colossus. And what would tend to get almost any small business owner's attention is that the jury verdict amounts to 2/3 of the company's net worth.

Now as I repeatedly mention in reports of MDV's, there is a long way between jury verdict and payment and it is highly likely that any amount ultimately paid, if any, will be considerably less. But that a jury knowing the employee's financial net worth, felt it appropriate to give 2/3 of it to one ex-employee, has to be a sobering thought when contemplating placing one's fate in the hands of a jury.

Wednesday, 4 August 2010

Kudo's For Giving the Bad as Well as the Good

I am not a fan issuing press announcements following a trial victory. To quote an over used Seinfield line, "not that there's any thing wrong with it ..... ", it's just not my cup of tea.

Similarly, I have never mixed (at least that I can remember) my own personal practice results and my blogging, or at least not in any way that they were identifiable.

Others do, although generally they only give the favorable results.

So I was pleasantly surprised to find the following post, Kent County Jury Finds for School District in O’Neill v. Warwick, on the blog of the Employment Law Group. If you check out the story you can see that in this case their client did not prevail before a Rhode Island state court jury.

I admire anyone who actually tries employment law cases to a jury. And if someone is going to announce their wins, I would suggest that they follow the example of the Employment Law Group and shows us all the results, not just the wins.

If you are clicking through to look at their blog, you might look around as it is also an excellent site for developments in the employment law area, particularly in one of the fastest growing parts, whistleblower cases.

Tuesday, 3 August 2010

CBA-FLSA-State Law? Is It Like Rock-Paper-Scissors?

Unfortunately for companies that operate in more than one state or are intently focused on the Fair Labor Standards Act, the answer is no.

Unlike the kid's game,  where the winner is variable, when deciding wage and hour compliance questions, the answer invariably seems to be -- state law tops all.

Judge Easterbrook's short 7 page opinion in Spoerle v. Kraft Foods Global, Inc. (7th Cir. 8/2/10) [pdf] is a good example and (surprisingly) the first appellate decision to address at least one variation of this non-preemption issue. The question was what happens when a CBA which specifically excludes donning and doffing from time worked as permitted under Section 203(o) of the FLSA, runs into a state statute which does not have a similar exclusion? The answer under Section 218(a) according to Judge Easterbrook: state law prevails; employer loses. Here that translates to a $2.2 million dollar judgment on behalf a group of employees against the employer.

This may be the first for this specific issue, but it is not the only time it is a problem. See Union Bargaining Agreements Likely Cannot Waive Overtime Pay Rights, at the Overtime Advisor for a similar issue brewing in Nevada.

If I were rewriting wage and hour law, and I wish someone would ask me to do so, starting with Section 218(a) might not be a bad place to start. Compliance for companies that truly want to comply is hard enough when it is one law, but one law and 50 possible variations is a little too much federalism at times.

If it were truly protecting individuals from abusive treatment that would be one thing. But here, Local 538 of the UFCW, the employees' representative, and the company agreed  that donning and doffing time would not be paid. No doubt elsewhere in the CBA that benefit to the company was offset by a benefit to employees, more than likely higher hourly wage rates.

So who really benefits from this $2.2 million decision?

The workers get all that they bargained for, plus a substantial windfall. Lawyers for the company and the plaintiffs (assuming that the judgment is not reversed by the Supreme Court) will have been well compensated. The Company will be out $2.2 + million dollars, which in classic economic terms likely means consumers will now have to pay more for their products.

I am sorry I must have missed something. Why is any of this a good thing?

Friday, 23 July 2010

The Difference Between Cloth and Leather Gloves? Just Over a Million Dollars

At least that is the thought one might take from a jury verdict at the end of May in Maine state court. As reported by Michael Afthim's counsel, Peter Thompson and Associates in their blog, Maine Employment Lawyer, his complaints about the working conditions of the men he supervised led to his termination and subsequent suit under the Main Whistleblowers' Protection Act.

According to his counsel:
Mr. Afthim became concerned about a number of safety issues in the warehouse that he ran including the lack of ventilation, the company's decision to use cheaper cotton gloves instead of splinter resistant leather gloves, and the insufficient staffing on the second shift. Mr. Afthim noted that the ventilation was so poor in the warehouse that his employees were inhaling significant amounts of dust and dirt. Mr. Afthim made multiple reports and complaints to ALR's management about the ventilation issue but ALR did nothing. Mr. Afthim also noted that the company's switch to cotton gloves from leather gloves was leading to significant splinters for his employees who spent their days constructing and repairing wooden pallets. Mr. Afthim also brought this concern to ALR without an adequate response. Mr. Afthim then noticed that due to understaffing that the workers on the second shift were rushing to keep up with their duties and he became very concerned that this would inevitably lead to a serious injury such as a fall or an accident with the fork lift.

A year earlier, the Maine Human Rights Commission had passed on filing a lawsuit in the case. See Commission Meeting Minutes of June 29, 2009. Although I am not sure of the significance since I don't know about Maine's process, apparently there had been no written objection filed to the investigator's report. Commission Meeting Minutes of April 13, 2009.

With the current popularity of whistleblowing in legislatures including Congress, and quite frequently with juries, this is a story that may frequently be repeated.

Some Facts on Breast Feeding Requirement Under Healthcare Bill

A hat tip to Employment Law 360 for their story, DOL Releases Guidelines On Breaks For Breastfeeding [pdf] ($) and inclusion of Fact Sheet #73 from the Wage and Hour Division, Break Time for Nursing Mothers under the FLSA.

It's the first official word I have seen on a provision contained in the major healthcare reform bill passed earlier this year, that was scant on details.

I am not sure this answers all the questions, but at least it's a start.

Tuesday, 20 July 2010

One Stop Shopping for Whistleblowers

A hat tip to Today's Workplace, the blog of the Outten & Golden firm, for their link to OSHA's new whistleblower website, Office of the Whistleblower Protection Program.

It is worth its weight in gold, if for no other reason than to find a link to all 18 statutes that OSHA currently is responsible for:
Section 11(c) of the Occupational Safety and Health Act, 29 U.S.C. §660

Surface Transportation Assistance Act (STAA), 49 U.S.C. §31105

Asbestos Hazard Emergency Response Act (AHERA), 15 U.S.C. §2651

International Safe Container Act (ISCA), 46 App U.S.C. §1506

Safe Drinking Water Act (SDWA), 42 U.S.C. §300j-9(i)

Federal Water Pollution Control Act (FWPCA), 33 U.S.C. §1367

Toxic Substances Control Act (TSCA), 15 U.S.C. §2622

Solid Waste Disposal Act (SWDA), 42 U.S.C. §6971

Clean Air Act (CAA), 42 U.S.C. §7622

Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. §9610

Energy Reorganization Act (ERA), 42 U.S.C. §5851

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR21), 49 U.S.C. §42121

Corporate and Criminal Fraud Accountability Act, Title VIII of the Sarbanes Oxley Act (SOX), 18 U.S.C. §1514A

Pipeline Safety Improvement Act (PSIA), 49 U.S.C. §60129

Federal Rail Safety Act (FRSA), 49 U.S.C. §20109

National Transit Systems Security Act (NTSSA), 6 U.S.C. §1142

Consumer Product Safety Improvement Act (CPSIA), 15 U.S.C. §2087

Section 1558 of the Affordable Care Act (ACA), P.L. 111-148
The statutes are up to date through the health care bill, but don't yet include those included in the Financial Reform Act which will not be signed into law until tomorrow. For a preview of those, which I am sure will be joining the list soon, see my earlier post, Financial Reform Passes - Major Whistleblowing Changes as Well.

And for two final tidbits, before the next OSHA investigation into a whistleblower complaint, you might want to look over the 190 page Whistleblower Investigations Manual and when you get ready to settle check out OSHA's policy for Approval of Settlements with Future Empoyment Waivers. Spoiler alert, it's on a case by case basis and they look at five factors.

As ENDA Lingers in Congress, a MDV in Maine

Just recently I was having what is a frequent conversation about what I do for a living, basically -- how interesting it is. And how although I am now 35 years into the practice I am still amazed at the new situations and the complexity of issues that I see, or as in this case read about.

And this one really does not even qualify very high on an unusual scale, except that it does reflect how often employers have to battle human nature.

The facts leading up to a $1,047,000 verdict from a Maine jury for Edward Russell are apparently these: Russell had filled in at least four times as General Manager for Express Jet at the Portland airport when the position was vacant. When he applied for the position on a permanent basis and did not get it, he sued arguing it was because he was gay.

So far, straight enough (no pun intended). The complicating factor is that in 2003-04 there had been a complaint from three female employees who had unsuccessfully applied for an open supervisory position. At the time, all of the Express Jet managers at the facility were gay men. The women complained that the gay general manager would only hire other gay men.

The theory of the case for the plaintiff -- the company did not want another gay man in the position. Toss in a few untoward comments and it all ends up to $1 million dollar plus verdict, which as the article notes will be reduced by some amount due to damage caps. See, Man wins gay discrimination suit, from the Portland Press Herald.

Discrimination is of course an individual act, and if his sexual orientation was the reason for his not being promoted, Russell clearly was entitled to recover.

But before one gets all righteous about how the wrong the company was, it is easy to imagine a circumstance, where an employer could, justifiably or not, be saying to themselves -- you're damned if you do, and you're damned if you don't.

I said my job was interesting, I never said it was easy.  Each piece of legislation, valid as it may be, just makes it more so.

Monday, 19 July 2010

When "Sabotgage" Becomes Illegal

I continue to see a number of articles about the need for anti-bullying legislation, much to my dismay. When there is an article about it in the weekly Sunday supplement that's in my local newspaper, you know the movement is gaining traction. See Workplace Bullying: Do We Need a Law?

At least the article had the good sense to include this quote from Victoria Pynchon, who blogs regularly at  Settle It Now Negotiation Blog:
Making a federal or state case over the day-to-day management of any workforce is just plain nuts. At best, it’s a jackhammer solution to an Emily Post problem. At worst, it’s a new scheme for extortion.
What prompted the chain of thought that led to this post was this article from the Official Wire,  California Pizza Kitchen Sued By Former Employee For Harassment And Sabotage Due To Sexual Orientation.

The connection to anti-bullying legislation? Sabotage at work is one of those ills that the statute is designed to protect against. A brochure supporting the Healthy Workplace Bill, includes this definition of bullying:
Verbal abuse, threats, humiliation, intimidation, work interference or sabotage. All of which prevent work from getting done and harm employee health. [emphasis added]
And what kind of allegations might we see in such "sabotage" cases?

Well according to the harassed pizza employee Kenneth Abramowitz it was a homophobic kitchen manager who:
allegedly sabotaged Aramowitz by delaying his food orders, when Abramowitz tried to expedite his customer’s food orders Aguilar would degrade Abramowitz’s homosexuality with verbal and physical slanders.
While I don't want to minimize the problem, and here the verbal abuse might make this a case that would seem actionable, I have griped about slow food service too many times myself to think that it should give rise to a cause of action.

I don't think there is a disagreement that the workplace should be more civil, but adding another layer of legislation is surely not the only way to get there.

He keeps saying and saying and saying .....

Has It Really Been 8 Years?

Since I posted my first jot here? For Lack of a Green Card

Apparently so.

Thanks for all who stop by.

Thursday, 15 July 2010

Financial Reform Passes - Major Whistleblowing Changes as Well

Thanks to Jacob Zuckerman at the Employment Law Group for his on the spot reporting about the new whistleblowing provisions contained in the major financial bill that was passed earlier today. See Dodd-Frank Bill Provides Robust Whistleblower Protection, including a link to a download of all the whistleblower provisions contained in the legislation.

Among the interesting provisions:
  • A reward to whistleblowers who provide information to the SEC which results in monetary sanctions exceeding $1 million.  There are lots of caveats and discretion given to the SEC, but if the award is below 30% of the amount recouped, the individual can file an appeal to a federal court of appeals.
  • There is also protection for retaliation against anyone who provides information in accordance with this incentive program.
  • There is a new Whistleblower statute for Financial Services employees which focuses on conduct related to consumer financial product or services, but has quite a broad scope of coverage.
  • A reward to whistleblowers who provide information to the Commodity Futures Trading Commissions, with similar provisions relating to an appeal if the individual does not like the award they received, although it differs from the similar statute under the SEC in that it does not have a 30% standard that must be met before an appeal is filed.
  • Closes a possible loophole in Sarbanes Oxley coverage by making it clear that subsidiaries of publicly traded companies are included if their results are included in the consolidated financial statements. The statute of limitations doubles to 180 days and precludes SOX claims from being covered by mandatory arbitration agreements.
  • There is also a strengthening of the False Claims Act whistleblowers retaliation provision and sets the statute of limitations at three years.
Given that it takes a number of years for employment law legislation to work its way into the framework of  the law of the workplace, it may be a few years before the impact of today's legislative action is really determined.  And because they are statutory and industry specific, it may even take longer for these particularl statutes.

But it is a pretty impressive body of new law and those in the affected industries would do well to take note.

Tuesday, 29 June 2010

Relational Retaliation: More Than A Mouthful, Another Step Forward?

Jon Hyman at Ohio Employer's Law Blog has been all over the reporting of the 6th Circuit decision of Thompson v. North American Stainless, whose latest iteration at that level was an en banc rejection of a retaliation claim brought by an employee fired three weeks after his fiancee' filed a charge of discrimination against the same company. Since he himself did not engage in any protected activity, the en banc court overturned a panel decision which had held he was within the zone of protection of the anti-retaliation provisions.

Jon is understandably concerned that the Supreme Court granted certiorari yesterday in this case, noting in what if anything is an understatement that "this Court has proven itself favorable to employee rights in retaliation claims." Check out his post. Supreme Court agrees to hear associational association retaliation claim, for links to his past coverage and his promise to follow this one through next term's argument and decision.

However, this is ultimately a question of statutory construction, which calls to mind Jackson v. Birmingham Board of Education, where the dispute was whether Title IX prohibited retaliation, although there was no anti-retaliation provision in the statute itself.  In a 5-4 decision, the court's opinion finding retaliation was prohibited was authored by Justice O'Connor.  Significantly one of the dissenters was Justice Anthony Kennedy. 

Although that was only five years ago, there will be four new justices on the Court that decides North American Stainless, Justices Roberts, Alito, Sotomayor and presumably Kagan. Substitute Sotomayor and Kagan for Souter and Stephens, Roberts for Rehnquist and Alito for O'Connor and if Kennedy's vote had remained the same Jackson would have gone the other way. So maybe North American Stainless will be better for employers than one might think on first blush.

Monday, 21 June 2010

The Potential Impact of Today's Supreme Court's 5-4 Decision on Arbitrability

It is never too much a surprise when the Supreme Court reverses the 9th Circuit, nor in recent years is it a surprise when the Court hands down a decision favoring arbitration of disputes, even in employment law matters. In a narrow sense, that is the substance of  today's 5-4 decision in Rent-A-Center, West, Inc. v. Jackson, (S.Ct. 6/21/10) [pdf].

The dispute was a procedural one, who has the power to determine the initial question of arbitrability in a particular set of circumstances, the court or the arbitrator.  In one sense, all the Supreme Court did was lay down the guideline for how the challenge should be made if the party wishes the Court to be the interpreter.  If that were the only consequence, it would be an important case for practitioners dealing with these issues, but at least the applicable law would be more clear and parties could make their arguments accordingly.

If that is the only result of today's ruling, then at least to me, this will ultimately be a rather inconsequential decision. In the short term, this employer will have won a victory (although not on the merits of the case) and parties will adapt their positions going forward to comply with the holding.

However, rather than being another good day for employers in the Supreme Court, which is much rarer than most believe, it is quite possible that employers may rue the day that Justice Kennedy cast his lot with Justices Scalia (the author of the opinion), Thomas, Roberts and Alito on this case.

I can almost guarantee, in fact it may very well occur before I finish drafting this post, that there will be a hue and outcry by Senator Leahy and others that the Supreme Court has dealt yet another vicious and erroneous blow to employee rights and that the only recourse is swift and sure Congressional action.  (If that occurs, I think most objective commentators will agree that it a tremendous overstatement of what really happened today.)

The problem for employers is that the swift and sure Congressional action if it should come, is unlikely to merely undo Rent-A-Center.  It is much more likely to be the enactment of the Arbitration Fairness Act, which notwithstanding what you may hear, will be the end of arbitration as a means of dispute resolution in the employment setting except for collective bargaining agreements.

I am not sure what term one uses to describe something that is far worse than a mere pyrrhic victory, but if  the result of today's decision is the passage of the Arbitration Fairness Act , then the employer community will certainly need one.

Update: The first linkage (at least that I have seen to the AFA):
Public Citizen's Gupta noted that the House Judiciary Committee on June 23 is scheduled to consider the proposed Arbitration Fairness Act. "The timing is interesting," he said, adding, "The Court and Congress are moving in very different directions. I think this decision will help provoke a legislative response. It really is an attempt by the Court to take away the last safety valve available to consumers and employees."
from a National Law Journal article discussing today's decision.

2nd Update: I am not quite sure when Senator Patrick Leahy's statement on today's case was released, so I can't say how accurate I was on the timing, but I did nail the content pretty well:
Today, five members of the Supreme Court struck a blow to our nation’s civil rights laws and the protections that American workers have long enjoyed under those laws.
And while there is no mention in the press release about the pending Arbitration Fairness Act, it doesn't take much reading between the lines to see where Senator Leahy stands:
There is no rule of law in arbitration. There are no juries or independent judges in the arbitration industry. There is no appellate review. There is no transparency. And as a result of today’s divisive ruling, there will likely be no justice for millions of American workers and their families. The courthouse doors have simply been closed to them. Today’s opinion also gives big business a disincentive to treat their employees fairly and will no doubt lead to virtually all companies requiring their employees to sign one-sided arbitration agreements as a condition of employment.
This is a big issue, although it may not seem so to the general public. Unfortunately, that means it may be easier than some other legislation to slide by under the radar.

If you have an interest in retaining arbitration as part of a dispute resolution program, it is high time to be making sure your senators and representatives are aware of your position.

Tuesday, 15 June 2010

Post-Vacation, On the Road Again, Posting

Back when there were only two or three of us bending your ear on employment and labor law related matters, I felt a weird compunction to announce when I was going to be on an extended trip with no posting. Now that employment law related blogs are both numerous and more importantly of extremely high quality, it seems much less important, and in fact somewhat grandiose. (Not to say that it wasn't before, I just feel differently about it now.)

So, all last week I was enjoying Portland and the Oregon coast and the cool weather. The rain, well not as much, but it was better than the heat in Austin.

Today, I am back on the (business) road again and was curious to see Workplace Diva's post, More Business Travelers Have Roommates.

I am not surprised to find that more companies are asking employees to share given the economic times, I am surprised that an increased group seems more willing to put up with it. I think that probably is more a true measure of how really concerned about their jobs individuals are than as Chris so nicely puts it, looking forward to "making conversation with a co-worker who is trimming his nose hair and wearing Simpsons pajamas."

What it also did was remind me that one of the most clicked through posts of this blog dealt with the same subject more than four years ago, Requiring Rooming on the Road - A Caution From Your Lawyer.  

Since my advice has not changed, maybe it would not be a bad idea for anyone considering it to click through again.

And speaking of traveling, congratulations to Prof Rick Bales, who was kind enough to help me with some information for an upcoming speech while he was getting prepared for work/study, and I hope a little time for pleasure, in Malaysia this summer.  See, Bales Receives Special Fulbright Grant to Study and Teach in Malaysia.

Tuesday, 1 June 2010

When "inside" Witnesses Support the Other Side -- Recipe for an MDV

In a speech I have given about trying employment law suits, one of the first points is that not all lawsuits should be tried. And one of the things that would make me look twice is if there were a key witness, who appeared to have really good inside knowlege, who is not supporting my story.

That seemed to be what happened in the case of an Egyptian born Muslim doctor, who was supported by his immediate supervisor, but claimed discrimination and retaliation from another doctor. See, Medical center ordered to pay Egyptian-born doctor $3.6 million for discrimination. (Actually the headline is ahead of itself as the jury verdict was just returned last Wednesday in federal court in Dallas and the presiding judge has yet to enter a judgment.)

The defendant was the prestigious Texas Southwestern Medical Center. It apparently staffed Parkland's Hospital's AID Clinic, which is where Dr. Naiel Nassar worked. The key witness was his direct supervisor at the AIDS clinic who said that statements made by the head of his Department at Southwestern described a "disconnect between [her] statements and the reality of Dr. Nassar's work." He also at least implied there was a religious bias, since the witness noted the head of the department made it clear that she was Jewish and thought he (the witness) was as well (he was Christian.)

To compound problems, after Dr. Nassar resigned, the same witness said he recommeneded a Pakistani born Muslim to replace Dr. Nassar but the same director "offered the man the job at an unattractively low salary and ultimately hired a less qualified white doctor for more money."

Obviously, that's one side of the story and a bit of the other was the medical school's statement after the verdict that the record introduced at trial showed letters of support and recommendations for Dr. Nassar from the same director of his department being accused of discrimination and retaliation.

Thinking the evidence will support a view that your main was actually a supporter of the Plaintiff, not someone who discriminated against them, could seem fool hardy, but is easier to understand since Dr. Nasser was not fired, but resigned.

Unfotunately, it is hard for both stories to co-exist no matter how they are spun. It might also be one where you would anticipate that an "insider" witness' testimony might carry some additional weight.

If the defendant is the one who has not accurately predicted the view that a jury will take when faced with a binary choice, the result far too often is a large adverse award.

In a case where the positions are diametrically opposed, the jury that rules against your position has found you not only discriminated, but also that you have lied to them about it. An unfortunate double bind, that any employment lawyer practicing on the defense side should know and fear.

Monday, 31 May 2010

Bullying As a Cause of Action - One Large Step Closer

As long time readers may remember, I have for a long time been concerned about a proposed cause of action for bullying. My first post about bullying goes all the way back to January 12, 2003, Newest Workplace Problem? Bullying?

But later that year, my first mention of it as a cause of action was a post about a case decided in England, Can't Wait For "Bullying" Cause of Action to Cross the Atlantic. Four days later though, I had found mention of a proposed statute that would make bullying a cause of action, You Thought I Was Kidding About A Cause of Action For Bullying

So I have been writing about bullying almost as long as I have been blogging. Still, I have been remiss in reporting on a major development.
And the reason is simply that I am stunned and discouraged.
I really thought that it would be sometime before the Healthy Workplace Act, the model bill drafted by Professor David Yamada would advance through even one side of a state legislature. But thanks to the New York State Senate's action on May 12th, that threshold has been crossed. See, Anti-Bullying Legislation Passes NY Senate.

Discussion of that act has gotten some media attention which hopefully is a good thing. Professor Yamada has taken some of it on in a recent post, Why the Healthy Workplace Bill is not a "job killer".

Because David and I have engaged in a back and forth on this topic in our respective blogs, I am taking the liberty of setting forth his arguments in that article in full and giving my view on why I think his arguments miss the key point.

David's has five points in his rebuttal (in fairness to David, he was replying to a specific article and so I don't mean to say that these may be his only five points):
1. High standard for proving a case — The HWB requires an individual to prove that the bullying behavior was malicious and harmful to physical and/or mental health. By legal standards, that’s a high threshold.

2. Damage cap for lesser claims — In cases where the bullying did not include a negative employment decision such as a demotion or termination, emotional distress damages are limited to $25,000 and no punitive damages are allowed. In other words, the HWB blocks runaway jury verdicts for comparatively modest claims.

3. Preserves management prerogatives — The HWB expressly maintains traditional management prerogatives to evaluate employees. It does not do away with the rule of at-will employment.

4. Incentives — The HWB imposes liability on employers, but it provides them with incentives to reduce or avoid liability by taking adequate preventive and responsive measures toward bullying.

5. Notice – The New York version of the HWB requires employees to put employers on notice of bullying behavior as a pre-condition for filing a lawsuit.
Here is the problem. The limitations above are for the most part only defenses against liability or limitations on the ultimate damages that an employer may have to pay to if an employee sues.

What that ignores is the most basic principle of employment law litigation. Once an employer is sued, they have lost.

I can not over emphasize this point. Once an employer has been sued, they have lost.

Lawsuits once filed go away only one of four ways --
  1. voluntary dismissal (unlikely or it would not have been filed in the first place);
  2. by summary judgment (obtainable only after substantial discovery has been involved);
  3. settlement (only by payment of some sum that the plaintiff and his or her counsel will accept and rarely before substantial defense costs have been incurred); and
  4. at the conclusion of a trial and all appellate processes when a final judgment is entered.
As a practical matter, there is no recourse for the employer. While winning by summary judgment or trial is sometimes emotionally satisfying, it never comes close to matching either the hard dollar costs (the biggest component which is likely to be fees to law firms, including mine) or the "hidden" costs of employee time and stress that the human beings defending an employer's decision undergo over the course of litigation, which at a minimum is likely to extend over months, and where it goes all the way through the process, over years.

Here's a graphic way of saying basically the same thing that appeared as part of an April 23, 2007 cover  story in Business Week.

Although legal standards may allow under certain circumstances employers to recover their attorneys' fees, as a practical matter the chance is so slim as to not exist.

Although creating a bullying cause of action would be bad enough, it is made even worse because courts will be hard pressed to grant summary judgment.  Ask any plaintiff's employment lawyer what is their single biggest interim goal in any employment lawsuit, and they will tell you to avoid summary judgment. If they can force a trial on the merits, they know that the settlement value of the cases goes up substantially.

So, when you create yet another cause of action, this time based on conduct that is so subjective, you will have opened the door for almost any employee in any environment to bring a lawsuit, and worse, a law that is written in a manner so that summary judgment is almost impossible, it is in my view both a very dangerous and certainly very costly step.

Arguments can be made that cost is present in any employment law and in any event is justifiable. The first part of that is true.

Some causes of action do justify the costs. Discrimination tied to certain characteristics for example, passes that test. I do not believe bullying or in the words of the Healthy Workplace Bill, protection against an "abusive work environment," does, or even comes close.

Many will say that I am overstating how big a problem permitting employees to file suits based on "bullying behavior" will be. 

Check out the language from S.1823B passed in a 45-16 vote by the New York Senate. You tell me how hard it would be to initiate a lawsuit under this bill or to get past summary judgment.

The way the statute works, it is is illegal for an employer to "subject an employee to an abusive work environment." An abusive work environment is one where"abusive conduct" causes the employee to suffer physical or psychological harm.

Then look at the definition "Abusive conduct" and notice how many "fact questions" exist.  It means:
  • conduct, with malice,
  • taken against an employee by an employer or another employee in the workplace, that a reasonable person would find to be hostile, offensive and unrelated to the employer's legitimate business interests.
  • In considering whether such conduct is occurring, the trier of fact should weigh the severity, nature and frequency of the conduct.
  • Abusive conduct shall include but not be limited to, repeated infliction of verbal abuse, such as the use of derogatory remarks, insults and epithets; verbal or physical conduct that a reasonable person would find threatening, intimidating or humiliating; or the gratuitous sabotage or undermining of an employee's work performance.  A single act shall not constitute abusive conduct unless the trier of fact finds such act to be especially severe or egregious.  
Although it goes without saying that I deplore bullying behavior both as a moral matter, because it is bad business and because it puts employers at risk for numerous other adverse consequences, I remain adamant that it would be a disaster for the legislation to pass, in New York or anywhere else.

My thanks to my friend Jeff Polsky, who had one of the best headlines in reporting on this, The meek shall inherit their own protected category, at California Employment Law where he posts, for prompting me to finally respond.

Update: This is my quickest update ever. Probably before anyone has read it and that's because I had not checked my RSS reader or I could have linked to David Yamada's latest, New York workplace bullying legislation is in the news. In that post, he points out a number of negative comments about the New York bill and notes that many of them focus not on the employees who have been injured, but on litigation costs etc.
But there are times when those costs are so high and the disruption so great, that it can not be discounted so lightly. This is one of those times.

Wednesday, 26 May 2010

ARB Needs Your Help on SOX Coverage of Subsidiaries

Well, that may be a bit of an overstatement, but the Administrative Review Board, which gets the final appellate say at the administrative level of Sarbanes Oxley claims has asked the Assistant Secretary of OSHA and the SEC, and it appears other amici, to submit briefs addressing four specific questions:
  1. Is a subsidiary categorically covered under §806 (e.g., Morefield/Walters)? If so, does the level of ownership of the subsidiary play a factor in that coverage?
  2. Under SOX's whistleblower protection provision, must a nonpublicly held subsidiary respondent be an agent of a publicly held company? What are the factors under a §806 agency test?
  3. Is the integrated enterprise test applieable to §806?  If so, should the Board consider the "centralized control of labor relations" the most appropriate factor?
  4. Is there any other theory under which you contend that subsidiaries would be covered under §806? If so, explain.
The Order Requesting Additional Briefing by the Parties and the Amici Curae all comes in the context of an actual case, Johnson v. Siemens Building Technologies, ARB Case No. 08-32, ALJ Case No. 2005-SOX-015.

This all comes about because of the way Congress drafted the Whistleblower section of SOX, originally §806 and now recodified as 18 U.S.C. §1541A:
Whistleblower Protection for Employees of Publicly Traded Companies.— No company with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l), or that is required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o (d)), or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of any lawful act done by the employee—
When I was drafting the SOX chapter (28) of the Texas Association of Business Texas Employment Law Book, I mentioned that since most publicly held companies were holding companies with few employees, it was possible that arguments would be made that whistleblowers who worked for non-public subsidiaries might not be covered, which would of course have been a major loop hole. And I was at least right that the argument has been made, not terribly successfully I am afraid.

In fact in the last edition, after noting that the entity often registered with the SEC is the holding company, with only a small number of employees, I had to say:
Although some of the initial decisions by the Administrative Law Judges adopted this view, the Administrative Review Board has taken a broader approach, finding such companies liable under an agency theory. The only Circuit Court to address the issue has adopted a similar view.
But from their request for help, what's clear is that the ARB is still puzzled as to what the right rationale for answering the question is.

Not to be a cynic, it's an interesting question, but it's sort of like asking a condemned man if he has a preference for his method of execution. Polite to be sure, but it's highly unlikely to change the ultimate outcome.

Tuesday, 25 May 2010

Opening the Door to Facebook: Severe Emotional Distress May be the Key

A well reasoned opinion by Magistrate Judge Debra McVicker Lynch of the Southern District of Indiana dealing with a request for information from what she dubs Social Networking Sites (SNS) should be a starting point for anyone who is seeking (or opposing) information from an employment law plaintiff's facebook or myspace profile. The 13 page decision in EEOC v. Simply Storage Management that was issued on May 11, 2010 is a textbook example of what a good discovery ruling should be.

Regardless of whether you agree or disagree with how she decided, there is no doubting that the Judge understood the dispute, did not seem irritated by it, balanced the defendant's legitimate need for discovery and plaintiff's right to privacy, within the context of a premise of broad discovery and drew limits. Even better, she noted that the limits themselves might need further interpretation and provided some additional guidance.

Here's how the suit started according to the EEOC press release last October.

The discovery dispute arose when defendants requested Facebook and MySpace profiles, plus related communications and photos and videos, of two individuals on whose behalf the EEOC brought the sexual harassment claim.
The heart of the Court's ruling was as follows:
the court determines that the appropriate scope of relevance is any profiles, postings, or messages (including status updates, wall comments, causes joined, groups joined, activity streams, blog entries) and SNS applications for claimants .... for the period from April 23, 2007, through the present that reveal, refer, or relate to any emotion, feeling, or mental state, as well as communications that reveal, refer, or relate to events that could reasonably be expected to produce a significant emotion, feeling, or mental state.
Additionally the Court held that third party communications to the claimants should be produced if "they place these claimants’ own communications in context."

With respect to videos and photographs, the Court applied the same test but gave more direction:
For example, pictures of the claimant taken during the relevant time period and posted on a claimant’s profile will generally be discoverable because the context of the picture and the claimant’s appearance may reveal the claimant’s emotional or mental status. On the other hand, a picture posted on a third party’s profile in which a claimant is merely “tagged,” is less likely to be relevant. In general, a picture or video depicting someone other than the claimant is unlikely to fall within the definition set out above.
A few other points (but you really should read the whole opinion):
  • Judge Lynch was quick to emphasize the limits of the Order, "This Order is directed toward two claimants who have alleged severe emotional distress, including post-traumatic stress disorder; it does not address the proper scope of discovery for “garden variety emotional distress claims.”
  • Although not explained, in connection with photos and videos the use of the verb "taken" during the applicable time frame stood out, although later the court did refer to "posted" in the context of third party pictures;
  • Although noting that the precision was not as precise as the lawyers might like, the Court also added that the EEOC should err on the side of production.
  • There was no mention of the additional dimension in this case. Because it was brought by the EEOC, it is possible that the claimants whose information is now being discovered might in fact be unwilling to sacrifice their privacy for the right to keep the suit alive. Given how carefully crafted the opinion is, I have no doubts if that were an issue (or at least if the Court were aware that it was an issue) it would have been addressed.
  • It is clear that Judge Lynch is much more comfortable with the internet world than those who currently sit at the top of her chain of command, see Sexting Case Befuddles Supreme Court: 'What's The Difference Between Email And A Pager?' and also
  • Unlike some on the Supreme Court she has no qualms about seeking assistance from jurisdictions out of United States as she discusses two Canadian decisions dealing with the same issue.
The case has already received considerable comment. My hat tip for catching it is Jon Hyman's post at The Ohio Employer's Law Blog, but following his hat tip leads to others, including some by non-lawyer bloggers:

Monday, 24 May 2010

It's Not EFCA, But for Some Cities It Might Be Worse

Because today, Senate Majority Leader offered the Public Safety Employer-Employee Cooperation Act as an amendment to the Supplemental Appropriations Act that is being considered by the Senate. The amendment (number 4147) could be voted on as early as tomorrow.

Here is the Heritage Foundation' summary of the bill:
The Public Safety Employer-Employee Cooperation Act (PSEEC) would require all state and local governments to collectively bargain with public safety employees'--police officers, firefighters, and emergency medical personnel--by creating a federalized collective bargaining system for public safety officers.

PSEEC allows the Federal Labor Relations Authority (FLRA) to determine whether a state's collective bargaining arrangements meet the standards as defined by the act.
  • States and localities must collectively bargain with public safety employees.
  • They must permit bargaining over wages, hours, and all terms and conditions of employment.
  • They must provide a dispute resolution mechanism, such as binding arbitration.
  • The FLRA will have considerable authority to enforce the act, including:
    • Determining the appropriateness of units for labor organization representation;
    • Conducting hearings and resolving complaints of unfair labor practices; and
    • Supervising or conducting elections to determine whether a labor organization has been selected as an exclusive representative by a voting majority of the employees.
  • States would be granted the authority to pass laws more expansive than those the federal government imposed.
  • States would not, however, be allowed to pass narrower laws than those contained in the act.

For more on the reasons why the Heritage Foundation thinks this is a bad idea, go here.

A more supportive view, not surprisingly, comes from the International Association of Fire Fighters, an AFL-CIO affiliate.

My quick review of the bill did not indicate that size of the governmental entity makes any difference. Here is the key definition for coverage:
"The terms `employer' and `public safety agency' mean any State, or political subdivision of a State, that employs public safety officers."
In Texas, many of the major cities already have the obligation to bargain (often not very successfully) with their police, fire and emergency medical personnel, although they will still have to be certified as meeting the national standards.

Many other Texas cities do not. But if this passes the current Texas procedure (which is in itself several complicated pieces of legislation) will be set aside if the Federal Labor Relations Authority does not deem them equal to the new federal standard. In tough economic times, not a financial burden that many governments are going to be excited about taking on.

For those not too concerned about Public Sector labor relations, the legislative tactic might be a precursor to see how other labor and employment legislation may be moved through this Congress. By attaching the bills to "must pass" legislation, such as an appropriations bill, we may soon see just how filibuster proof this Congress is when it comes to employment and labor matters.

Update May 25, 2010: Labor Relations Today covers the same topic and closes with the following:
On March 10, 2010, the House Education and Labor Committee held hearings on the bill, transcripts of which are available here. Seeing as there were at least five GOP co-sponsors to Sen. Gregg’s similar bill, it is highly likely that this amendment will pass and become part of the Supplemental.

Update May 29, 2010:  Senator Reid pulled the PSEEC from the Supplemental Appropriations bill in light of a parliamentary challenge that it was non-germane. The Supplemental passed without it, although the bill itself remains pending in both houses. Thanks for Labor Relations Today for the update.

463 to 1 Vote in House on Mine Safety Investigation

A story in the Daily Labor Report that the House of Representatives voted 463-1 to give authority to House Education and Labor Committee staff members to take depositions as part of the investigation into the Massey Energy Company mine accident of April 5th raised my curiosity about the one no vote.

I must admit that I was not surprised when I double checked the Roll Call 289 on H RES 1363 and found that the lone dissent was Congressman Ron Paul of Texas.

No matter what you think of him, there clearly is no doubt that he does not feel obligated to go his own way, regardless of popular sentiment. 

Tuesday, 18 May 2010

Another Texas View from the Other Side of the Docket: Texas Employee Rights Blog

A long time friend, and sometimes adversary, Danny Wash of Waco,  has entered the world of employment law blogging with Texas Employee Rights. He joins at least two others that I follow that also write from the employee's perspective, both oddly enough from the city where I practiced law for more than 20 years, San Antonio --  Chris Mckinney's HR Lawyers Blog and  and Tom Crane's San Antonio Employment Law Blog.

Besides adding some geographical diversity, I know Danny also has an interest in technology and if we are lucky will mix that in as well. For example, probably unknown to him, he is the reason that rather than use two monitors (which I tried and was not very pleased with) I moved to one very large monitor and with the program Splitview, found I accomplished the same thing, much better.
Much different than when I started this blog, there are many more voices in this particular niche of the blogosphere. I can't think of any better way to stay current in our field.

Monday, 17 May 2010

The Note From the Jury That You Didn't Want

At least if you are on the defense side: Novartis Jury Asks About 'Range' of Damages . The note comes in a sex discrimination case brought by twelve named plaintiffs againt Novartis.

Although it does indicate that the jury is beyond liability, any one who has been waiting (im)patiently in a court room while a jury deliberates, knows that it is quite difficult to tell what is going on based on just a single request.

Some of it depends on the wording of the charge. If the questions are not predicated, then a damage question may or may not mean anything on damages.

And you never know, the range they could be contemplating could be from zero to $1,000. Or not.

In any event, although not that easy to do, the basic answer is to wait and see.

Updated 4:44 p.m. CDST:  Yep, it was not a particularly good sign. According to the report from Bloomberg, Novartis Must Pay Punitive Damages in Sex-bias Case, $3.4 million for the 12 named plaintiffs. This case has a lot of procedural steps still to resolve including a punitive damage hearing which I think will be tomorrow, and a second finding of compensatory damages on behalf of the class. Where in those steps the appeal, which Novartis has already promised, comes I don't know.

Updated May 25, 2010S: A little late to the party on reporting this, but by now everyone is probably well aware that the punitive damage award was $250 million. The NYT story is here. As it notes, the company still has to deal with claims for compensatory damages from almost 6,000 class members. Bloomberg Businessweek quotes the plaintiffs' counsel as saying they believe that figure could ultimately reach close to one billion dollars.

Unlike many trials, the actual tactics and trying of this lawsuit have gotten a fair amount of attention and press, including a link to the defense counsel's final argument at the liability phase.  See for example, I’d Like Some Sex With That Drug Order, by Ann Woolner at and ‘Beyond Tone Deaf’: A Scathing Look at Novartis’s Defense Strategy, from the WSJ law blog. 

I don't have a category for multi-million dollar verdicts, and of course this is a class case, but still I think it clearly belongs in the MDV category.
Although it should go without saying, these are at this point verdicts, and there are still many hurdles before Novartis will be foreced to pay the first dollar to any of the named plaintiffs or class members.