Sound Advice on Handling Lawsuits

Although not directly related to labor and employment law, the thoughts of Stewart Weltman in a column in law.com's In House Counsel forum, Think Like a Plaintiffs Attorney to Lower Litigation Costs, are spot on.

Almost every point he makes is one I have come to understand over 30 plus years of handling employment law suits of various sizes, from small to big.

You really should read the article to get his take on things but here's the big picture:

• Prepare every case as if it was going to trial, that's the most certain way to get it settled favorably;
• Don't waste your time (and money) fighting over little things; and more things than you think are little things;
• Don't get involved in discovery disputes, but bend over backwards to provide all documents that are within the discovery requests of the other party;
• Use fewer, but more experienced lawyers; make sure that your trial lawyer knows the facts of the case well;
• The earlier you settle a weak case the better;
• Keep your "story" simple, and know what it is early on

Although he doesn't say it quite this way, have trial lawyers on your side, not "litigators."

Two 5th Circuit Approved Jury Instructions in Discrimination Case

In the age of the vanishing jury trial it is rare to get decisions on the validity of jury charges, so it is always nice to have 5th Circuit endorsed language. In Price v. Rosiek Construction Co. (5th Cir. 12/10/07) [pdf] the Court upheld a jury determination of no discrimination in the face of a challenge to two instructions.

The first was on the effect of a determination by the TWC-CRD or EEOC (here the TWC -CRD had issued a cause finding). The lower court had instructed that:

[a]ny finding or determination of the EEOC that discrimination occurred or that it could not find sufficient evidence of discrimination “is not dispositive of whether discrimination occurred."

The court further instructed:

The findings or determinations of the EEOC are therefore not binding on the trier of fact. You may, but are not required, to accept the findings in the EEOC reports. The reports do not relieve you of your obligation to review all of the evidence in the case and to make your decisions based on the facts as you read them.

The trial court had also given this instruction that employers will find helpful:

Title VII does not shield against harsh treatment in the workplace. Nor does the statute require the employer to have good cause for its decisions. Title VII is not a vehicle for second-guessing business decisions. The employer may take adverse action against an employee for a good reason, a bad reason, a reason based on erroneous facts, or no reason at all, so long as its action is not for a discriminatory reason.

Of course the Court was considering these instructions in light of a favorable jury verdict and under an abuse of discretion standard, but still they are now "5th Circuit" approved.

The Court also dealt with an issue currently pending before the Supreme Court -- whether so called "me too" evidence of discrimination should be allowed. And just as some of the U.S. Supreme Court justices apparently had concerns about allowing such evidence at oral argument, the 5th Circuit did as well.

It upheld the trial court's exclusion of evidence by a fellow employee of Price concerning discrimination against him. The Court was cautious, not wanting to get out too far ahead of what the Supreme Court might do, emphasizing that the other employee did not have any evidence about the decision maker in Price's case and in any event the testimony could have had only a slight effect.

Payday Claim Divides Texas Supreme Court

Those who view the Texas Supreme Court as a monolithic force against employees in employment cases might be surprised by the closeness of today's 5-4 decision holding that an untimely Payday Act claim pursued to conclusion through the administrative process bars a timely common law action for breach of contract for the unpaid wages on the ground of res judicata. Igal v. Brightstar Technology Information Group, Inc. (Tx. 12/7/07) [pdf].

Justice Dale Wainwright authored the majority opinion, and was joined by three of his fellow Supreme Court Justices, Green, Willett and Johnson and joined for all but one section by Justice Bob McCoy of the 2nd Court of Appeals sitting by designation for Justice Hecht who was recused.

Justice Brister wrote the dissent, joined by C.J. Jefferson and Justices O'Neill and Medina.

Although all agreed that the 180 day limit for filing a Payday claim is not jurisdictional, they disagreed over whether the finding that the claim was untimely was an adjudication on the merits, which they also seemed to agree was necessary for res judicata.

Although Justice Wainwright's opinion offered two reasons for the preclusive effect, one that the TWC had actually decided the merits (adjudication of disputed fact), that portion was not joined by Justice McCoy so the opinion of the Court is only on the second grounds, "a court’s dismissal of a claim because of a failure to file within the statute of limitations is accorded preclusive effect."

Although a far cry from the rhetoric of Justice Scalia in many of his dissents, Justice Brister's parry of the majority's statement that it was merely prohibiting a plaintiff two bites at the apple -- "this is not about biting apples twice; this is about a man’s wages" -- is fairly unusual in recent years.

The actual impact of this decision (beyond of course a very disappointed Igal) is not likely to be much since the facts will not often occur. My guess is for those who look for such things, the slight divide amongst justices may well be the intriguing aspect.

Eight Years in the Making - Employer Pay for PPE

I really haven't digested the details of the new OSHA regulation on personal protective equipment, but here's a link to the final rule: Employer Payment for Personal Protective Equipment; Final Rule.

What I was struck by was the commentary I read elsewhere summarized in this opening paragraph about the history of this regulation (emphasis and bracketed material added by me):

In 1999 [March 31], OSHA issued a proposal to require employers to pay for all protective equipment, including personal protective equipment (PPE), with explicit exceptions for certain safety shoes, prescription safety eyewear, and logging boots (64 FR 15402). The proposal cited two primary reasons for requiring employers to pay for PPE. First, OSHA preliminarily concluded that the Occupational Safety and Health Act of 1970 (OSH Act, or the Act) implicitly requires employers to pay for PPE that is necessary to protect the safety and health of employees. Second, OSHA preliminarily concluded that an across-the-board employer-payment requirement would result in safety benefits by reducing the misuse or non-use of PPE (64 FR 15406-07). Following an initial notice and comment period, an informal rulemaking hearing, a second notice and comment period on specific issues [July 8, 2004], and careful Agency deliberation, OSHA finds that its preliminary conclusions are appropriate and is therefore issuing this final standard requiring employers to pay for PPE, with limited exceptions.

According to an article on the SHRM website, OSHA was managing to make both management and labor unhappy, and finally got a little nudge:

Business-related and organized labor groups have been highly critical of the delay in issuing the final rules. Many employer and work safety groups had complained that OSHA appeared to be dragging its feet and had ignored the pleas of employers to create guidelines that would make it clear who would be responsible for paying for workers’ safety equipment.

Organized labor also criticized the long delay, claiming that the Bush administration was maneuvering to shift costs away from employers and place them on the shoulders of workers. Several proposals to reform federal health and safety laws have faltered in Congress since 1999. Several of the proposed measures included PPE provisions.

In January 2007, the AFL-CIO and United Food and Commercial Workers filed a lawsuit in the federal appeals court for the District of Columbia to force OSHA to issue the final rules. The court has not issued a final ruling on the case. In March, Rep. George Miller, D-Calif., chair of the House Education and Labor Committee, introduced legislation to force OSHA to act on the final regulations.

I know regulations are complicated things, and I really have no knowledge about the background on this, and I am assuming that it is a fairly sizeable cost shift from employers to employees and perhaps the looming inevitablity of such a regulation allowed for that to be taken into account in ongoing pay decisions in the interim, but still -- are we now so partisan, or is our government so inefficient, that we need to take eight years to come up with a regulation?

There may well be answers for that question on this particular regulation, and I welcome any commenters who can shed light on it. But even if there are, there is a nagging sense underlying this post that this is not a good sign for how things should work.

ADA Standard in 5th Cir is "Motivating" Not "Sole" Factor

Deciding a question, that probably few thought was in real doubt, a panel of the 5th Circuit last week joined seven other circuits in setting the proper causation standard for Americans with Disabilities cases. Pinkerton v. Paige (5th Cir. 11/13/07).

According to the Court:

Under a plain reading of the statute, and in accord with the position of other circuits, we conclude that the “sole causation” standard is not the appropriate standard for ADA claims. We hold that under a straightforward reading of the statute, the “motivating factor” test should be applied to ADA claims. This is consistent with the law of most other circuits,33 and it is in line with the causation standard we have applied to similar anti-discrimination statutes.

If there was any surprise in the decision for me it was that it had not been decided before.

Another interesting issue was how the Court came to decide it. The case is brought by an employee of the Department of Education under both §501 and §504 of the Rehabilitation Act. The question was whether the "sole" causation standard of §504 or the "motivating factor" standard of §501 was applicable.

Rather than just deciding that specific question, the Court first held that the §501 standard was the same as the ADA, and then resolved the previously undecided issue in the 5th Circuit. Such a departure from the conservative principle of only deciding the question before you may be what caused Judge Jones to concur only in the judgment.

It was also a good reminder to me that even though I don't do public sector work, I shouldn't ignore or read those decisions too hastily as they often have hidden gems applicable to the private sector when you would hardly expect it. Pinkerton is a case in point.

The Unloyal Employee - May End Up Owing a Tidy Sum

That's the lesson to be learned from the 5th Circuit's affirmation of a $3 million dollar jury verdict in a case where two employees were found guilty of breaching their fiduciary duty when they negotiated behind their employer's back to sell the portion of the business in which they were engaged. Navigant Consulting, Inc. v. Wilkinson (5th Cir. 11/15/07).

Interestingly even though the employees in question had non-competes, it was the broad Texas law on breach of a fiduciary obligation that was the basis for the recovery. The trial court had eliminated damages for misappropriation of trade secrets finding it duplicative of the breach of fiduciary claim.

One of the "bad acts" was negotiating and signing a 4 year lease and then using the lease as "leverage" against their employer in attempting to force a sale of the business to them. An additional "bad act" was that they had been negotiating with several buyers to sell the business that they were hoping to acquire.

Navigant Consulting is a good overview of the law in an area where I think we are going to see more litigation.

One of the Better Headlines: Shirking Working: The War on Hooky

Congrats to Business Week for their story and what struck me as one of the more clever headlines in awhile, Shirking Working: The War on Hooky. Among other things the article points out how businesses are going to software analysis to determine when and more importantly why, people aren't showing up for work when they are supposed to.

And as anyone but certain bosses might think, the problem doesn't always lie with the employees. For example:

At one manufacturing company, a group of employees loathed their manager's style. The sentiment went unnoticed by the C-suite until a software program created by Convergys started scouring the department's data and found it had a high absence rate compared with other units. At that point, Convergys performed an "intervention" with the manager's employees: confidential focus groups where the workers could vent. Once the company attended to the problems, attendance rose.

Imagine that.