Merry Christmas to All and to All A Good Night!

I hope every one is enjoying time with family and friends. Off for a week with mine and Lorna's. Depending on the vagaries of internet connections, egg nog and snow conditions, it may well be next year before I jot again!

Time Honors Whistleblowers as Persons of the Year

Lest we forget what the major story in 2002 was, Time's naming of three female whistle blowers from Enron, FBI and Worldcom as its "Persons of the Year" is a good reminder. BBC has the story. Although some may argue that the three were really not whistleblowers in the truest (and most risky) sense, that is not the point. Rather the fact that 6 of 10 Americans find whistleblowers heroes, makes it clear for all who practice in the employment law area that the protection of whistleblowing, and its first cousin, anti-retaliation statutes, are going to be prominent long after the current headlines and magazine covers are gone.

Dangerous Precedent with Punitive Damages

Although not an employment law case, Friday's decision by the Ohio Supreme Court on punitive damages, caught my eye. Dardinger v. Anthem Blue Cross & Blue Shield(Ohio 12/20/02). The story itself is a sad one, with the denial of a request for an experimental cancer fighting drug being delivered the day after the insured's funeral. The Indianapolis Star has the story, and its headline has it right, calling it an 'historic ruling'.



Unfortunately, punitive damages, and particularly the threat of them is a driving force in many employment law cases. What the Ohio Supreme Court did was to affirm a large punitive damage award ($30 million) but the historical act was to specify that $20 million should go for cancer research at a state medical institution. Although a number of states have statutory mechanisms to divide punitive damages between plaintiffs and the state, this if the first time that a court has accorded itself such powers under common law. The dissent talks about the dangers of a court assuming such power.



In addition to taking on a clearly legislative function, for which it could be argued that courts are not particularly well suited, it increases the risk of potential defendants when juries think that they are empowered to fund civic needs out of 'punitive damages'. The court made clear that attorneys fees would be awarded out of the whole of the punitive damage award, so there will probably be little outcry from that quarter. In the on-going debate over punitive damages, this seems one idea that should not survive.

When Workers Can't Get Along - Who Pays?

Ms. Robel, a short term employee of a Fred Meyer deli brought a large number of claims including disability harassment, workers compensation retaliation, intentional infliction of emotional distress and defamation. Although one would hope that the facts that were found were not all that common, many employers may feel uncomfortable that they strike a little too close to home, especially when the facts are reported from the dissent's viewpoint. The majority of the Washington Supreme Court found the following facts:

On July 14 Robel sustained a workplace injury and filed a workers' compensation claim. In late July, she was given a light-duty assignment, a four-hour shift during which she stood 'at a display table outside the deli area offering samples of food items to customers. On August 1, as Robel worked at the display table, two deli workers 'laughed' and 'acted out a slip and fall,' as 'one of them yelled 'Oh, I hurt my back, L&I, L&I!'' [L&I is a reference to the Labor and Industries Dept. of the state of Washington]. They "audibly called her a 'bitch' and 'cunt.'' .



In journal entries for August 2, 3, 10, and 11,Robel wrote that the assistant deli manager, Smith, and others made fun of her, laughed, pointed, and gave her 'dirty looks.' On August 13, Smith and other deli workers would 'stare at {her}, whisper out loud, & laugh, pretend to hurt their backs & laugh.' Robel reported the incidents to her union representative, Banka, who met with the store director on August 16. After the brief meeting, Banka stopped by the deli and told Robel that the store director was convening a meeting of all deli employees on August 19.



At that meeting, the store director warned the employees that future harassment could result in termination. On August 22, deli workers 'laughed and audibly admonished each other not to harass Robel. On August 28 and 30, Robel noted in her journal that co-workers were talking about her and laughing at her, and she recorded that on September 2, the assistant manager and other workers 'had a great time making fun of her, pretending to hurt their backs & yelling L&I."



On September 13, 1996, Robel secured a two-week work release from her doctor and gave it to the assistant manager, Smith. Before Robel left the deli, she overheard Smith comment to other deli employees, ''Can you believe it, Linda's gonna sit on her big ass and get paid.'' Robel again contacted Banka, who in turn contacted the store director. On September 28, Wissink terminated one employee. Robel never returned to work at Fred Meyer.

A divided Washington Supreme Court, almost 18 months after hearing oral argument, held those facts sufficient to uphold her claim for all but defamation. Robel v. Roundup Corp. dba Fred Meyer, Inc.(Wash. 12/13/02). In order to do so, the majority said these facts were sufficient to both state a cause of action for disability harassment and to create a fact question as to whether the conduct was outrageous. The Court noted the latter fidning required that the conduct meet the high standard of the Restatement that it is so "outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." This is the same standard Texas courts require for intentional infliction of emotional distress.



What is most disturbing is how these same facts can be viewed in a different context, that will be all too familiar too employers. As the dissent noted, the real problem here was not the company, but personal animosities between employees:

Linda Robel began work at Fred Meyer in the deli department in December 1995. The following month, Robel and co-worker Tiffany Ware had a falling out over Ware's relationship with Robel's son. Unfortunately for Robel, Ware was a close friend of the deli's assistant manager, Amy Smith. The unhappy result of this situation was that the mutual animosity between Robel and Ware inevitably spilled over into the workplace, subjecting Robel to various verbal taunts and tricks by her co-workers. Robel was distressed by her co-workers' abusive behavior, but that behavior was clearly the result of a personality conflict, not action by or on behalf of her employers. Nor, as Robel claims, was the behavior caused by her back injury or her filing a workers' compensation claim--in fact, much of the offensive behavior predated both of these events. This clash, no matter how distasteful, is insufficient to support a claim for outrage or negligent infliction of emotional distress against Robel's employer. In fact, once the responsible agent of her employer became aware of the situation, action was taken. Ultimately, Robel's 'harasser' was fired. Therefore, I respectfully dissent from the majority's holdings as to disability discrimination, retaliation, and outrage.

In a statement all too many employers can identify with, the dissent cautioned that the truly culpable, in this case the co-employees, should bear the responsibility, not just the 'deep pockets' of the employer.'

E-mail Policies and Generation X (and the rest of us too!)

Dana Knight in the Indanapolis Star has a good reminder of the problems that e-mail can cause an employee in E-mail jokes not so funny if they end up getting you fired. Almost every human resource professional and employment law attorney is beginning to gather a collection of computer related termination stories.

Wal-mart Loses Wage and Hour Class Action

An Oregon jury found that Wal-mart had a practice of making employees work 'off the clock' in violation of wage and hour laws. The AP story in the Austin American Statesman gives a few of the details. Damages will be decided in a subsequent trial. The size of potential awards, and the difficulty of defending against such claims in a class action proceeding, have made this type of claim one of the most dangerous for employers this decade.

Winning the Lottery, the Jury Way - Another Million Dollar Verdict

The Courier Journal has the story of a husband and wife's 4.3 million jury verdict last night for their wrongful termination from the Kentucky Lottery Corp. After 10 years of employment, they were both fired on charges of misconduct, but only shortly after the wife testifed on behalf of a blind colleague in a discrimination claim. The wife testified she was pressured to testify falsely at an unemployment hearing for the colleague. This is clearly a case that boiled down to a credibility call. The jury, although not unaminously, went for the former employees. The lesson it teaches is that where there is a clear cut credibility issue, especially over inflammatory facts, and the employer loses, the damages awarded are likely to reflect not only the loss of the plaintiffs, but the anger of the jury over being 'lied to' as well.

New Union Leader, Not Exactly Great for Image

Obviously, not all unions or all union leaders are bad, but you still see stories that make you just stop and wonder, why? The Herald Tribune in Southwest Florida ran the AP's story of the election for International Longshoremen's Local 1408. The newly elected pres, will take office the day before his scheduled court hearing on a felony witness tampering charge. The case he allegedly 'tampered' with, involved the trial of his brother, who was sentenced to life for rape and armed kidnapping. In the union's defense, at least it was a close election, 350-331.

Sexual Orientation Discrimination to be Banned in New York

New York is poised to become the 13th state to outlaw discrimination in employment, housing and eduction on the basis of sexual orientation. See the story at Advocate.com.



The New York Senate passed the law today. It had earlier been passed by the Assembly, so now only needs Governor Pataki's signature, which has been promised.



Sexual orientation is defined as "heterosexuality, homosexuality, bisexuality or

asexuality, whether actual or perceived. However, nothing contained

herein shall be construed to protect conduct otherwise proscribed by

law." S. 720.

More Million Dollar Verdict Lessons - From Iowa to Alabama

A female researcher whose work once was critically acclaimed, has now obtained a 1.3 million dollar verdict on her sex discrimination claim. You can read the story in the Ames Tribune. Problems arose when her work was challenged by her superiors and she was prevented from attending conferences to present it. Even the limited facts in the newspaper point out a couple of good lessons. One, it is not just termination cases that result in large jury awards. Here the plaintiff was employed during all of the litigation and plans on staying there for two more years until she can retire with full benefits. Also, although the legal claims that made it to trial were sex discrimination and retaliation, the real complaint seems much more directed to her professional pride and reputation. I would not be surprised if this were a case with weak facts on sex discrimination and retaliation, but where the jury really felt she was wronged with respect to the treatment of her work. The only way to find for her was on the legal questions related to sex discrimination and retaliation. As is often said by plaintiffs' lawyers, once you get past summary judgment, it's ALL about fairness. At least until the post-trial motions and appeal.



In Alabama, the story was also a familiar one. An injured miner, can't return to work in his old job. (In this case for certainly understandable reasons.) When no other job can be found, he is terminated, or so he says. The employer says not really, his job is waiting for him when he can return and he is still receiving benefits from the company. Timing is bad as he was ordered back to his old job shortly after filing his workers compensation claim. Jury's verdict: 1.5 million against Jim Walter Resources for workers compensation retaliation as reported in The Birmingham News. Separating, or like here failing to separate, from injured workers is often a tricky question.



Both of these cases just re-enforce another belief held by many defense trial lawyers, that you shouldn't be trying these type of cases close to Christmas.

H1-B Challenge - The New Claim Du Jour Against High Tech Companies?

CNET's Ed Frauenheim has the story on yesterday's administrative law hearing on the claim of a former Sun employee who is alleging favoritism was given to H1-B employees during the lay offs at Sun, and that he was retaliated against when he challenged the practice. The Department of Labor denied his claim, but he appealed to the administrative hearing stage. The administrative law judge excluded the testimony of his expert witness, Norman Matloff, a professor at University of California Davis who has been a long time opponent of the H1-B program. According to an out of work programmer, who runs an anti-H1-B website, there are more legal challenges on the way. Just what the high tech industry needs right now.

Another Million Dollar Verdict (MDV) - Dallas

This one actually closer to home, and a couple of weeks ago while I was on vacation. Dallas jury awards a Mary Kay representative or employee (that was one of the battles), $11.2 million dollars. Just a review of the facts lets you see how the plaintiff could weave a sympathetic tale. Stellar performer, fired when she had cancer, even though she battled to work while sick. Obviously, the company had another story, but also was relying heavily on a legal point that she was not an employee but an independent contractor. This may be a classic example of a 'bad facts, good law point' case. The employer may ultimately win, but there can be considerable pain and discomfort before that stage rolls around. See the story on law.com.

Covenants Not To Compete - Pro-enforcement holding

The trial court refused to grant a temporary injunction because he found there was no proof of irreparable injury or lack of adequate remedy at law, which are traditionally required for a temporary injunction. The First Court of Appeals, relying on its earlier opinion in Butler v. Arrow Mirror & Glass, Inc., 51 S.W.3d 787, 795 (Tex. App.—Houston [1st Dist.] 2001, no pet.), reversed finding the trial court abused its discretion in denying the injunction on those grounds. The money language is as follows:

Section 15.52, entitled “Preemption of Other Law,” provides, “The criteria for enforceability of a covenant not to compete provided by section 15.50 of this code and the procedures and remedies in an action to enforce a covenant not to compete provided by Section 15.51 of this code are exclusive and preempt any other criteria for enforceability of a covenant not to compete or procedures and remedies in an action to enforce a covenant not to compete under common law or otherwise.” Tex. Bus. & Com. Code Ann. § 15.52 (Vernon Supp. 2002); Butler, 51 S.W.3d at 795. Thus, a showing by the promisee of an irreparable injury for which he has no adequate legal remedy is not a prerequisite for obtaining injunctive relief under the Covenants Not to Compete Act. Tex. Bus. & Com. Code Ann. §§ 15.50, 15.51(a); Butler, 51 S.W.3d at 795.

Norlyn Enterprises, Inc. v. APDP, Inc.



The plaintiff still might not prevail as the Court sent it back for a further hearing. However, at least in the First Court of Appeals, the traditional injunction requirements seem to be trumped by Section 15.52.

Senate Bills for Next Legislature

Senators have pre-filed many fewer bills that would require changes in employment law practices than their House counterparts. To date, only three have been filed.



SB 61 Judy Zaffirini D - Laredo. Modifies the existing law on criminal background checks for nursing home employees and applicants.



SB 33 Judy Zaffirini D - Laredo. Establshing a right to leave to attend certain school functions for employees.



SB 137 - Rodney Ellis - D- Houston. Preventing 'dead peasant's insurance.'

How much is enough to create a hostile environment?

The facts were simple: plaintiff meets with her boss, the President of the company. In that one meeting he requests sex three times: a request for oral sex, that she participate in a threesome, and that she call him for phone sex. She refused all three. The district court finds that the conduct, occurring only within a few minutes and one time, was not pervasive enough to create a hostile environment and grants summary judgment. The Seventh Circuit reversed, sending it back for a jury trial. It points out that the test is 'severe or pervasive', either one will do, both are not required. It also held that although "infrequent, [President's] alleged outright solicitation of numerous sex acts from [plaintiff] is considerably more "severe" than the type of "occasional vulgar banter, tinged with sexual innuendo" that has previously been deemed to fall short of the hostile workplace standard." Quantock v. Shared Marketing Services, Inc. (7th Cir. 12/12/02) [pdf] Clearly, there is less than a bright line for judges and litigants to follow.

Race in Hiring: What's in a Name? Perhaps Plenty if You're a Job Seeker

With Trent Lott making racial issues the headline of the day, this is a reminder that not all is necessarily well in the employment field. And the problems are not limited to the South. Check out the story in today's NYTimes on a recent study.

Wondering How to Explain No or Low Raises to the Troops?

The magazine CFO story, cleverly titled: Raises? Get Out the Microscope at least offers some cover.

No Right to Sue Letter Required for Age Claim - Fifth Circuit

The plaintiff filed an EEOC charge alleging age discrimination, and then amended his lawsuit to add his age claim within 2 years of the allegedly discriminatory act. What he did not have, at any time, was a right to sue letter for his age discrimination claim. Defendant argued this deprived the court of jurisdiction. Neither the district court, nor the Fifth Circuit bought the argument. Finding the language of the age act different from Title VII, the Court found a right to sue letter is not required under the ADEA. The window for suing under the ADEA runs from 60 days after filing the charge to 90 days after receipt of a right to sue letter, if one is received. Julian v. City of Houston (5th Cir. 12/11/02). This is the second time in the past 2 years, the Fifth Circuit has had to deal with procedural issues involving the ADEA. Last summer, the Fifth Circuit made the opposite finding: merely having a right to sue letter from the EEOC is not sufficient, when the plaintiff never filed a charge. Steve Mierl, one of my colleagues here in Austin, was instrumental in making sure that the EEOC practice of issuing a right to sue letter to an individual who had not filed his own charge of discrimination was shot down and that the Court did not apply the piggyback rule where the one party who filed a charge, never filed a lawsuit. Bettcher v. Brown Schools (5th Cir. 2001).



In Julian, the City not only lost its jurisdictional argument, but it also suffers the possible loss of front pay as the Fifth Circuit sent the case back to the lower court to consider whether or not instatement to the position he had been denied a promotion too was feasible, and if not, whether front pay would be appropriate. Among the court's rulings were that the mere fact that his position would be at will was no reason alone to deny front pay, and that even though any award was somewhat speculative, that risk was to be borne by the discriminating party, not the employee.

Million Dollar Verdicts - ADA case in California

Over the years, I have kept a file of reports of $1,000,000 plus jury verdicts in employment law cases. I hoped that I could learn something from them, thus avoiding having my name ever mentioned prominently in such a story. Jottings seems a perfect place to collect those reports and quite often, the stories give a sense of what did go wrong at trial or with the case. Here's the latest involving a 59 year old employee, a long time 'temporary employee' who had apparently been doing the job for some time, but couldn't pass a physical agility test to become a permanent employee, which would have provided benefits. You can read the initial story here.

Cash Balance Plans To Get Green Light

The Department of Labor has issued proposed regulations that would give guidance (and clearance) for employers wishing to convert to so called cash balance benefit plans. You can read the New York Times story here or check out the actual proposed regulations [pdf].

Texas Legislature - Proposed House Bills

The legislative session doesn't open until January 3, 2003, but many of the Representatives-elect have already begun to pre-file legislation. Among the bills that would impact employment practices are the following:



HB 50 Sylvester Turner D - Houston. Mandatory leave for employees to attend school conferences, and penalties against retaliation for exercizing that right.



HB 105 Norma Chavez, D - El Paso. Would allow unemployment benefits, without charge to an employer's account, if an employee is forced to leave employment because of domestic violence.



HB 126 Lonnie Burnam D - Fort Worth. Requires parity for mental illness in disability policies sold in state of Texas.



HB 145 Burt Solomons R - Carrollton. Provides for modification to enforcement of interlocutory orders of the Texas Workers Compensation Commission.



HB 152 Ron Wilson D - Houston. Placing limitations on an employer's ability to obtain so called 'dead peasants insurance' [pdf] which has led to substantial litigation.



HJR 18 Suzanna Hupp R - Lampasas. A constitutional amendment to grant a broad right of privacy.



A look at the pre-filed Senate legislation will be forthcoming.

Forbes Points Out Rise In Wage & Hour Class Action Suits

Yesterday's article focuses on a procedural step in an on-going case against C.H. Robinson to add a class of 3,000 employees, but goes on to note the growing trend of such suits. Although suits under California's more pro-employee wage and hour law are the most common, more and more suits are being brought under the Fair Labor Standards Act which applies to employers in all states.

Basic Employment Law Fact - Judges Fly Too

Over the years I have noted that in employment law cases involving airlines, particularly if flight safety might be involved, the plaintiff often loses. I have attributed this to the fact that judges also fly. Nothing in yesterday's decision in Frank v. Delta Airlines (5th Cir. 12/3/02) challenges that rule. An aircraft mechanic's urine sample showed traces of an adulterating substance. Delta treated it as a refusal to take a drug test, terminated him and reported him to the FAA. He sued for negligence, intentional infliction of emotional distress and defamation. Fortunately for Delta, the 5th Circuit found that all the common law claims were pre-empted by the comprehensive drug testing scheme implemented by Congress in the Transportation Employee Testing Act and subsequent FAA regulations. Any recourse would be an administrative one, not through common law causes of action. So once again, air safety prevails! Now if they could just do something about the tape on United's planes.

SOA Confidential Reporting Requirement - An Internet Solution?

Probably not the last, but one company is out to provide an internet solution for the Sarbanes-Oxley requirement that audit committees of publicly traded companies establish a "confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters." Interestingly, the executive team of Ethicspoint includes a former Deloitte partner and the former General Counsel of Ernst & Young.

Cell Phone Use - Employer's Next Liability?

The news the last couple of days has been full of cell phone stories. First, a Harvard survey is being reported as having concluded that 6% of all U.S. auto accidents are caused by drivers talking on their cell phones. Nedra Pickler's AP story was picked up by the Washington Post among others. And then Jonathan Glater of the NY Times weighs in with how employers are the deep pockets those 6% are pursuing. There are already some big settlements, which means more suits are sure to come. Glater gets some different views on the pro's and con's of having a policy about cell phone use. (First, let's start by banning them in restaurants!)

HR Nightmare: Special Diversity Program, Successful OFCCP Audits, but Now A Certified Class of 2500 Black Employees

Nothing would be worse for an HR Director than to have implemented a long running diversity program, come through several OFCCP audits, including a glass ceiling one in good shape, and still find yourself the subject of a class action for racial discrimination. Even more chilling were the words of the District Judge in certifying the class of over 2500 current and former employees:

Plaintiffs have made a 'significant showing' . . . that Sodexho's lack of uniform promotion policy or guidelines has had a disparate impact on the promotion of African-American employees, and has enabled or even fostered an environment at the company in which officials intentionally discriminate against blacks by denying them promotions to upper-level managerial positions.

A large number of companies' promotion practices, might be found to be less than uniform. The details of the case were laid out by Neely Tucker in a Washington Post article this past week end.

Alabama Supreme Court Enforces Arbitration Agreement

Overruling a lower's court refusal to compel arbitration, the Court found that at will employment can be a satisfactory basis for an arbitration agreement, that the fact the employment has ended does is not a sufficient ground to avoid the arbitration and in determining whether or not interstate commerce is involved, and thus the FAA is applicable, the focus is on the scope of the employment not the dispute. Ameriquest Mortgage Co., Inc. v. Bentley, No. 1011791 (Ala. 11/27/2002).

Arbitrator's Power to Sanction Lawyer Limited by Maryland Court

Courts are becoming more concerned about the pervasiveness of arbitration agreements, particularly in employment and consumer settings. A Maryland court noted those concerns as it set aside an arbitrator's award of attorneys fees and sanctions. MCR America v. Greene (Md. Ct. of Spec. Appeals 11/26/02) [pdf]. The agreement between the parties did not allow the award of attorneys fees, so the arbitrator was acting outside the scope of the agreement to award them. And there were numerous grounds for setting aside sanctions against one of the parties' counsel, including that he was not a party to the arbitration agreement. As, or perhaps if, arbitration becomes more common, courts will be faced with more questions about the scope of an arbitrator's power and the interaction with judicial oversite.

Post-Thanksgiving Announcement

Turning blogging rituals backwards, rather than announce a future period of no postings, since the last posting of 11/21 I have been on a wonderfully relaxing trip to San Francisco and the Wine Country, ending up with a 3 day stay at The Inn at Occidental. The innkeeper, Jack Ballard, a former legal administrator has clearly gone to a higher calling! And if you are headed that way, I couldn't recommend his Inn or the trip highly enough. In fact, even if you weren't planning on heading that way, I would suggest you do so.