Jottings By An Employer's Lawyer |
Tuesday, December 24, 2002
Merry Christmas to All and to All A Good Night!
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Sunday, December 22, 2002
Time Honors Whistleblowers as Persons of the Year
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Dangerous Precedent with Punitive Damages
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.
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Friday, December 20, 2002
When Workers Can't Get Along - Who Pays?
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.'' . 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.'
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E-mail Policies and Generation X (and the rest of us too!)
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Thursday, December 19, 2002
Wal-mart Loses Wage and Hour Class Action
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Winning the Lottery, the Jury Way - Another Million Dollar Verdict
Labels: MDV
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New Union Leader, Not Exactly Great for Image
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Tuesday, December 17, 2002
Sexual Orientation Discrimination to be Banned in New York
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.
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More Million Dollar Verdict Lessons - From Iowa to Alabama
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. Labels: MDV
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H1-B Challenge - The New Claim Du Jour Against High Tech Companies?
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Monday, December 16, 2002
Another Million Dollar Verdict (MDV) - Dallas
Labels: MDV
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Covenants Not To Compete - Pro-enforcement holding
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. Labels: competing employees
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Senate Bills for Next Legislature
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.'
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Sunday, December 15, 2002
How much is enough to create a hostile environment?
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Friday, December 13, 2002
Race in Hiring: What's in a Name? Perhaps Plenty if You're a Job Seeker
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Wondering How to Explain No or Low Raises to the Troops?
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Thursday, December 12, 2002
No Right to Sue Letter Required for Age Claim - Fifth Circuit
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.
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Wednesday, December 11, 2002
Million Dollar Verdicts - ADA case in California
Labels: MDV
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Tuesday, December 10, 2002
Cash Balance Plans To Get Green Light
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Sunday, December 08, 2002
Texas Legislature - Proposed House Bills
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.
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Friday, December 06, 2002
Forbes Points Out Rise In Wage & Hour Class Action Suits
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Wednesday, December 04, 2002
Basic Employment Law Fact - Judges Fly Too
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SOA Confidential Reporting Requirement - An Internet Solution?
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Tuesday, December 03, 2002
Cell Phone Use - Employer's Next Liability?
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Monday, December 02, 2002
HR Nightmare: Special Diversity Program, Successful OFCCP Audits, but Now A Certified Class of 2500 Black 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.
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Sunday, December 01, 2002
Alabama Supreme Court Enforces Arbitration Agreement
Labels: arbitration
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Arbitrator's Power to Sanction Lawyer Limited by Maryland Court
Labels: arbitration
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Post-Thanksgiving Announcement
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Thursday, November 21, 2002
Defining Appropriate Law Enforcement Authority
Labels: retaliation
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Wednesday, November 20, 2002
No ERISA Loophole for the Ban on Waiver of Unemployment Benefits
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Monday, November 18, 2002
A New Board and Why It Matters
Robert J. Battista, designated chairman. December 2007, fomer management labor lawyer with considerable experience in NLRA. Peter C. Schaumber, August 2005, labor arbitrator, active in Presidential campaign for Bush, not a tremendous amount of NLRA work experience. R. Alex Acosta, August 2003, young lawyer currently at DOJ, member of the Federalist Society. Wilma R. Liebman, August 2006, the only current Board member before the approval of the package. Dennis P. Walsh, December 2004, returning to the Board. Formerly served a one year term as a recess appointment of Clinton until December, 2001. The first three are Republicans, the second two Democrats. The Detroit Free Press, the hometown paper for the new Chairman, has a story about him in their on-line publication. Although unclear whether it is a trend, union issues may be more of a factor in these tough economic times. On December 6th the NLRB will hold an election for the 70 banquet workers at the Westin La Cantera according to a story in the San Antonio Express News. If it is successful it will be the first unionized hotel in San Antonio.
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Saturday, November 16, 2002
Class Action Denied in Wal-mart Oral Contract Claim
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Friday, November 15, 2002
Arbitration is Supposed to Be Simple
Labels: arbitration
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Thursday, November 14, 2002
Administrative Actions under Sarbanes-Oxley
I will be talking about these developments as well as the law itself at the UH CLE program Employer-Side Employment Law on December 5-6 in Houston and repeated in Dallas on December 12-13.
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Alabama Supreme Court Knocks Out Arbitration Agreement Because No Class Actions Permitted
Labels: arbitration
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Wednesday, November 13, 2002
Closing The Plant Not Always Enough To Cut Off Damages and Those Dangerous Attorneys Fees
Even more important, particularly from a dollars standpoint was the way attorneys fees were handled. The company argued the plaintiff had waived her claim to attorneys fees by not submitting it to the jury. The Court held however that in a TCHRA claim, the judge was the appropriate party to make the award so it need not be submitted. In this case, even though the award to the plaintiff totaled about $55,000 the Court awarded $158,000 to newly elected State Representative Aaron Pena.
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Tuesday, November 12, 2002
EEOC Suit Based on Obesity as Perceived Disability
Labels: EEOC
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Monday, November 11, 2002
California Gets It Wrong on 3rd Party Sexual Harassment
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Vicarious liability - an issue that needs resolving
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Wednesday, November 06, 2002
Denver Jury Tags Yellow Freight for 3.3 Million for Retaliation
Labels: MDV
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Tuesday, November 05, 2002
No Attorneys Fees for Sabine Pilot Cause of Action
Labels: attorneys fees
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EEOC Active in West Texas - Two Large Settlements
Labels: EEOC
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Monday, November 04, 2002
HIV positive employee not disabled under any of the 3 prongs of ADA disability definition
Labels: ADA
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The danger of the 'Reply to All' button -
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Valuing Stock - Important Texas Supreme Court decision
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Friday, November 01, 2002
12 million jury verdict for 26 year employee for taking family leave
Labels: MDV
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Hooray! Threatening HR a Terminable Offense
Seeming not to understand, Ms. Romero told an HR employee that she would not be attending a company dinner where the HR Director would be present because she didn't know what her husband would do when he saw "that man". She also added that she "hoped someday somebody puts a bullet in that man", although she said it wouldn't be her because she "wouldn't go to jail for that man". When the fellow employee asked her if she meant it, she replied affirmatively. Having thought about, she left a voice mail saying she didn't want the employee to think if anything happened to the HR Director that she had anything to do with it. But she did re-iterat that if some one else did something she would "shed no tears and be happy". In other words she said, "her hands are clean [although] her mind isn't." The fellow employee was, understandably, upset, not to mention the Director of HR. Ms. Romero summoned to a disciplinary meeting refused to talk without her lawyer and soon found herself an ex-employee, without the benefits of the enhanced severance package. Her ensuing litigation was unsuccessful. HR folks often feel they are an endangered species, but it's nice to know at least someone cares! Romero v. Smithkline Beacham [pdf] (3rd Cir. 10/30/02).
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Monday, October 28, 2002
One not two year SOL for business related defamatory statements by a fellow employee
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Wednesday, October 16, 2002
Legislative fever
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Tuesday, October 15, 2002
Oral COBRA notice is sufficient
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Trucking company arrangement upheld
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Legal issues surrounding temps
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Monday, October 14, 2002
No Class Action For Determining Validity of Covenants Not To Compete
Labels: competing employees
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Admissibility of EEOC letters of determination - judge's discretion
Labels: EEOC
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Wednesday, October 09, 2002
Land fill dumping worth 2,000,000, but female wrestler's sexual harassment claim thrown out of the ring
Labels: MDV
Tuesday, October 08, 2002
Wisconsin law of consideration for arbitration agreement
Labels: arbitration
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Release of everything, means everything
"[Plaintiffs] hereby agree to release NCDF from any and all claims, suits, demands, or other causes of action of any kind . . . arising at any time in the unlimited past . . . [including] all claims arising by reason of or in any way connected with [plaintiffs’] employment relationship with NCDF. . . .” In seeking to reverse a summary judgment, plaintiffs argued that the language was insufficient since it did not specifically mention ERISA. The Court noted: "It would be an odd public policy that favored settlements and releases, but then forced employers to scour the United States Code and the state statutes and reports to identify every possible cause of action." Thankfully, by its holding that a release of all claims, means all claims, unless there is a specific statutory prohibition, the Court provided a bright line for all litigants. And congratulations to my partner, Bill Strock, who argued it on September 4th.
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Saturday, October 05, 2002
Another way to blow the arbitration agreement
Labels: arbitration
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Friday, October 04, 2002
How far can an arbitration agreement go?
all disputes between you and [WFAA] . . . which relate to, or arise from the employment relationship, the parties agree to forego litigation . . . and the parties consent to the final and binding arbitration of all claims and disputes which may arise between the parties including, but not limited to, disputes arising from your employment and the termination of your employment. Such claims and disputes will include any claims or disputes that [WFAA] may have against you, as well as those that you might have against [WFAA], its parent corporation, owners, affiliates, officers, directors, employees, and/or agents. Relying on the extension of the contract to agents of WFAA, the law firm argued that when it gave advice it was acting as the agent of WFAA, citing established case law that attorneys are the agents of their clients. The employee argued, and the Dallas Court of Appeals agreed, that the language was intended to cover only those parties for whom WFAA would be vicariously liable for their conduct. Since both parties agreed that WFAA was not liable for legal advice given by the law firm, the arbitration agreement did not apply and the motion to compel arbitration was properly denied. Jenkens & Gilchrist v. Riggs (9/17/02) Labels: arbitration
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Wednesday, October 02, 2002
Davis vetoes arbitration ban
Labels: arbitration
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Tuesday, October 01, 2002
No Faragher defense, but no punitive damages
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Wednesday, September 25, 2002
Duffield gone by a split decision
Of course some in California just can't let it go, including not only the dissenting judge, but the California legislature. It recently sent S.B. 1538, prohibiting mandatory arbitration under the FEHA, the state equivalent to Title VII, to the Governor for his signature. Watch now for a request for en banc consideration for Luce, Forward, what the governor does with S. B. 1538, and if he signs it, for the quick challenge that it is pre-empted by the FAA. What would we do without California? Labels: arbitration
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Thursday, September 19, 2002
More Sarbanes-Oxley speeches!
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Saturday, September 14, 2002
UH Law School Foundation Speech
The new whistle blower cause of action is potentially a big issue for publicly traded companies, and their officers and employees, although of more general interest and perhaps trouble is the criminalization of whistle blowing. The potential impact and how we got that particular section of the Act are probably worth a post of their own.
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Wednesday, September 11, 2002
Negligent investigation, not a cause of action in Texas
Arguably, the Court found that any negligence type claim tied to a termination will not be valid. ("Engrafting a negligence exception on our at-will employment jurisprudence would inevitably swallow the rule.") The Court was also once again forced to substitute its opinion of what is outrageous conduct in denying the employee's intentional infliction of emotional distress claim. This time, a unaminous Supreme Court had to overturn a decision that certain conduct was outrageous. That decision was made by a jury, the trial judge and the court of appeals. That such decisions have to be made, quite often, argues strongly for the abolition of the intentional infliction of emotional distress, at least in the employment context. It too runs the risk of being the exception that swallows the at will rule. The Court will perhaps have its chance, or at least a chance to limit its reach in sexual harassment cases, in Roche v. Zeltwanger, currently pending before the Court.
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Tuesday, September 10, 2002
No state wide forum shopping under Title VII
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Friday, August 30, 2002
Labor Day Hype or A True Shift?
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Tuesday, August 27, 2002
Merger on the horizon?
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Wednesday, August 14, 2002
No Waffles at the DOL?
In his August 9th directive, Scalia makes it clear that in many cases the DOL should in fact defer to such arbitration agreements. One area most appropriate for deferral is matters involving individual claims for relief in the form of back pay and reinstatement, such as various whistle blower statutes. He does single out wage and hour claims as likely to not be good subjects for deferral. It will be interesting to see how the directive will interact with the new whistle-blower claim created by Sarbanes-0xley. Obviously, this is very much a pro-arbitration position. It will be interesting to see what sort of reaction it gets, if any, from the anti-arbitration element in Congress. My guess is that particularly given who it is coming from, it will definitely get some attention. Just as an example of some who might harbor such feelings, Senator Leahy from Vermont, the current chair of the Senate Judiciary Committee offered a version of a whistle-blower bill, that fortunately was ultimately not accepted in Sarbanes-Oxley, which would have prohibited the new whistle blower claims from being arbitrated, unless consent were given after the claim arose. Probably not likely to see much more than rhetoric in the remainder of this Congressional session, although who knows what will happen as election time gets nearer. However, I think those interested in arbitration as a viable method for dispute resolution should keep their eyes carefully tuned to what is going on in Congress in the future. Labels: arbitration
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Tuesday, August 13, 2002
A distinction with a difference: using words that have legal significance in their every day sense
My response, which didn't get posted due to a technical glitch was as follows: I think part of the problem with this issue is the use of a term in its every day sense, without being sensitive to its legal meaning. Certainly working in an environment where a supervisor yells at you daily is clearly a hostile environment as defined in a dictionary (not offering a pleasant or sustaining environment). However, if the question is: is it a hostile work environment as prohibited by Title VII of the Civil Rights Act of 1964 and similar statutes?. The answer is no; unless it can be shown that the reason the supervisor is yelling is because of the employee's sex, race, age, disability or some other protected category. Just because it is not actionable under a specific statute, does not necessarily mean that there may not be some way to bring a successful law suit. For example, if the conduct is severe enough, it might rise to the level of intentional infliction of emotional distress, or the tort of outrage as it is known in some states. A classic example is the case of the retired drill sergeant who should have been permanently retired. GTE Southwest, Inc. v. Bruce (Tex. 1998). The confusion of every day words and legal terms would not normally make a difference as employers should make it clear that unpleasant working conditions, legal or not, will not be tolerated. However, it does make a difference when you are being sued and you wish to make the legal distinction. One way that employers frequently hurt themselves is by using the legal term "sexual harassment" when the conduct, no doubt inappropriate, may not rise to a level that meets the legal standard, or at least the employer wants to make that argument. If in their documentation, the employer had used the term 'inappropriate conduct' or something similar, it would still clearly connotes that it was not acceptable, without passing judgment on whether it is legal or not. Without a flat statement that the conduct was sexual harassment, the employer would be in a much better position to argue that the conduct while not acceptable under the company's standards, was nevertheless not conduct for which it should be liable in damages.
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Wednesday, August 07, 2002
Even when first passed, those who supported the Family Medical Leave Act, the Clinton administration's only employment legislative legacy, admitted it was only the first step. What was really desired, and needed, to be equal to most other industrial nations, was to have paid leave. The attempt to use the national unemployment compensation system for partial payment seems to have fizzled, but now a major battle is underway in California. The Paid Family and Medical Leave Act is working its way through the California legislative process. Many states rights enthusiasts, George Will comes to mind, believe that the states are great testing grounds for initiatives, offering a way to see if the ideas work, before inflicting them on the nation as a whole. (Obviously, that is posed in the most negative fashion, as such initiatives could prove to be a good idea. On this one I have my doubts.) The arguments are being formulated, but I am game to let California have a go at it. Let's see if it benefits workers as a whole, as opposed to those individuals who may, at least in the short term, get the paid leave. For views pro and con, see E. Kay Trimberger's piece in the Mercury News and the the California Chamber of Commerce's position paper. The impact of employment legislation is widespread and often brings into play the law of unintended consequences. I think particular care should be given when it is entitlement employment legislation. Even if it has no other effect (and it will), at a minimum it diminishes the abilities of a superior employer who wishes to distinguish itself for the purposes of retention and competition for talent from setting itself apart from other employers by being unique in providing such benefits.
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Monday, August 05, 2002
Day to day violence, on whose nickel?
Most recently, the Mississippi intermediate court addressed a case with these allegations: On or about the 10th day of October, 1997, Defendant Oye, in his office on the premises of Defendant Pioneer, Inc. wilfully assaulted and battered Plaintiff Robert Davis by lunging across his desk, grabbing the Plaintiff at his throat and slinging Plaintiff against a wall. Plaintiff was the Manager of Information Systems and the 'flinger' was the Company Comptroller. Just as an aside, isn't it fairly ludicrous to say "on or about October 10th"? No matter how many of us have been frustrated with the IT department, surely it is still rare enough that one will remember precisely the date they were flung "against said wall." (Said with tongue in cheek.) In any event, the Mississippi court held that even though the injured employee had received workers comp benefits, he could proceed with his suit against the employer. It may be the correct ruling under Mississippi precedent, but it seems indicative of a growing trend to hold employers liable for the intentional acts of others. There may be cases where a good argument can be made for that, although I think the whole area of employer responsibility for such conduct, the interactions of various theories of liability such as vice-principal, and the reach of the workers compensation exclusivity bar is ripe for review. I did note that, although not writing the opinion, a law school classmate, Leslie Southwick was on the panel that heard the case.
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Sunday, August 04, 2002
It's Not Just About Money
Although frequently having made this point in union prevention training (mainly on the basis of a study quoted by a former partner, but personally never seen), it is good to see that some one actually did a study to show that when it comes to what is really important to employees, it is not all about money. As Andrew Sullivan is fond of saying in his blog, this is the money paragraph: Myth No. 5: It’s all about money. Fact: When employees ranked what was most important, money finished out of the money - it was only the fifth most important value. The most important values were, in order, the ability to balance work and outside life, the meaningfulness of work, trust among employees and the employees’ relationship with their supervisor or manager The survey is by DDI, a human resource consulting firm and here's the rest of the story about employee retention and the data behind the survey.
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Friday, August 02, 2002
Although straying into the area of employee benefits and ERISA is something that seems to happen more frequently to employment lawyers these days, one of the most critical issues has to occur at the drafting of the plan, long before we generally are allowed to meddle. Any first year law student knows that there is considerable difference whether or not a decision is reviewed for an abuse of discretion vs. a de novo review. The difference -- between winning and losing. If you are the decision maker, you clearly favor the the former which will cut you some slack; if you are the one whose claim has been denied, you want a fresh, independent look. The Supreme Court clearly set out the rules for ERISA plans in Firestone Tire Rubber v. Bruch, 489 US 101 (1989), with the basic rule being de novo, but allowing any drafter to avoid the rule by using appropriate language. A concept ERISA lawyer Michael McKuin discusses in his cleverly titled, When the Exception Becomes the Rule and the Rule Becomes the Exception, of What Value Is the Rule? In any event, the 9th Circuit, the favorite of every employee in employment related matters, recently showed the difference those few words can make. Discussing a practice which has drawn more judicial attention than one might think, the court in a 2-1 decision awarded life insurance benefits because it found that death by autoerotic asphyxiation was barred neither by the suicide or intentionally inflicted self-injury clauses. Padfield v. AIG, decided May 17, 2002. The benefits had been denied by the plan administrator and the district court. Unfortunately, the plan lacked the magic Firestone words. Thus rather than being required to give the administrator's decision deference, the 9th Circuit was free to supply its own rationale. Finding the cases applying these two clauses to deaths of autoerotic asphyxiation split, the court noted that reasonable men could disagree, which would meet the standard for upholding the administrator's decision under Firestone. But alas, for the lack of a few words ....
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Monday, July 29, 2002
Interesting to note that the NAACP is opposing the nomination of Naomi Churchill Earp, a career government worker, to the EEOC. (One small irony is that Earp is African American.) One of the complaints raised in an edition of the federal eeo advisor is that she has cost the government nearly half a million in settlements and awards of federal EEOC charges filed against her. Borrowing from Senator Roman Hruska's famous endorsement of Supreme Court nominee, G. Harrold Carswell ("Even if he is mediocre there are a lot of mediocre judges and people and lawyers. They are entitled to a little representation, aren't they, and a little chance? We can't have all Brandeises, Cardozos, and Frankfurters, and stuff like that there."): Aren't those accused of discrimination entitled to a little representation on the Commission as well? Labels: EEOC
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Friday, July 26, 2002
More than just for the financial types ... Sarbanes-Oxley of 2002 As soon as President Bush attaches his signature to it, Congress will have created a new cause of action for employees and thrown criminal penalties into the mix for employers considering terminations under certain circumstances. No doubt there will be a lot more talk about it in the future, but for a first look try checking out Employment Obligations -- How the New Corporate Accountability Law Will Impact Employment Law Practices.
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Tuesday, July 23, 2002
Sign ... or else Not sure that I would recommend this strategy, but it does provide an answer to the question that gets asked frequently of speakers at employment law programs: What do I do if an employee refuses to sign? From Ron Lehman, the employer's representative on the Texas Workforce Commission, comes the idea of making it a condition of employment. For the rationale and suggested wording see p. 10 of the Spring/Summer 2002 Texas Business Today.
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Was it the kettle to the pot? As Congress is on its high horse about corporate accounting shenanigans this interchange was amusing: From Inside Politics, July 22, 2002: Credibility gap Rep. Tom DeLay, in an interview on CNN's "Saturday Edition," was asked by host Jonathan Karl if Congress doesn't have a "credibility problem" when it lectures corporate America, given its own track record "with its own books." Mr. Karl offered the following examples of slick federal accounting and appropriations practices: "Congress, in the last budget last year, classified $4.5 billion for the census as emergency spending. We've been doing a census since 1790. They also shifted a military payday from the first day of 2001 to the last day of 2000, creating savings of $2.3 billion that wasn't there. And they also shifted a corporate tax deadline from the end of 2000 to the beginning of 2001. That move created an extra $23 billion in mythical income for the federal government." Mr. Karl said those practices are "almost exactly the kind of thing Enron and WorldCom are accused of, this kind of moving of numbers around to make one year look better than the other." Mr. DeLay did not disagree, and he readily acknowledged "those kinds of actions cause a credibility problem." "But we're trying to stop them. We fight every day against the big spenders in Congress to stop the cooking of the books, to stop playing games as you described. In most cases, we're able to stop them," said the Texas Republican, the House's third-in-command.
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With the legislative correction to the evils of the corporate world barreling down the tracks like a runaway train, one thing that is almost certain to come out of it is more litigation caused by new causes of action for corporate whistle-blowing. While there is some irony (see post supra) in Congress rising to fix ethical issues in companies, it is difficult for the corporate world to seriously contest the need given the recent publicity. And while certainly there is a good case to be made for the dangers of creating new causes of action that will undoubtedly be misused and shortly even abused by some, we should not lose sight of the value that the value that those pointing out wrongdoing can provide. For a good look at the 'other side' of whistle-blowing' see a recent Workforce article.
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Thursday, July 18, 2002
The Supreme Court's Faragher/Ellerth standard holds employers strictly liable for sexual harassment committed by their supervisory personnel, unless they can establish a two pronged affirmative defense: establishment of an effective plan to preclude sexual harassment, and the failure of the plaintiff to reasonably avail themselves of that plan. The purpose of the affirmative defense was to provide an incentive for employers to establish effective mechanisms to prevent sexual harassment and an incentive for employees to report sexual harassment, with the underlying assumption that once reported it would be corrected. However there is an important proviso to the affirmative defense, it is unavailable if the plaintiff has suffered a 'tangible employment action'. The last four years have seen the courts struggle to define what is a 'tangible employment action.' Given the consequence, strict liability, it is not a small stakes fight. Much of the fighting has been over whether acts against those who remain employed, a lateral move, an unsatisfactory evaluation etc. are sufficient to meet the standard. There is no question that termination is a tangible job action. However, allowing one particular form of termination, constructive discharge, to serve as a bar to the use of the affirmative defense seems contrary to the underlying incentive the Supreme Court was trying to create. Last week, the 8th Circuit with little discussion took that approach. It approved the trial court's conditioning instruction to the jury that it could not consider the affirmative defense if it found that the employee had been 'constructively discharged.' Jaros v. Lodgenet Entertainment. Although the facts in the Jaros case do not really raise the issue since the plaintiff did in fact complain, this central question of whether or not constructive discharge will block use of the affirmative defense, seems to be a question worth considerable more scrutiny. It remains an open question in at least the 3rd Circuit, Cardenas v. Massey, 269 F.3d 251 (3d Cir. 2001) and the 7th Cir. Wolf v. Northwest Indiana Symphony Society, 250 F.3d 1136 (7th Cir. 2001). If the 8th Circuit approach is followed, the net result is that an employee without filing a complaint, can quit, and if he or she can overcome the admittedly higher bar of showing constructive discharge, impose strict liability on an employer who had no notice of the misconduct. Perhaps the higher bar that must be met to show constructive discharge, or the underlying philosophy of the Supreme Court that strict liability is appropriate in the first place because employers are the one who control the selection and supervision of their managerial personnel, is sufficient to prevent abuse in this area. It would seem that an approach more designed to avoid 'game playing' and to bolster the incentive to report acts of harassment, would be to hold that constructive discharge, which by its definition is at least on the surface self initiated, is not a tangible employment action.
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Wednesday, July 17, 2002
For lack of a green card .....
The argument for the three days is the period applied in the Federal Rules of Civil Procedure for service of documents by mail. That would make sense, and hopefully will be the standard applied when the Court is forced to decide that issue. Labels: EEOC
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