Jottings By An Employer's Lawyer

Monday, October 28, 2002

One not two year SOL for business related defamatory statements by a fellow employee


A clever attempt to avoid the 1 year statute of limitations for defamation, claiming that a defamatory statement by a fellow employee that cost an employee his job, was 'business disparagement' with a 2 year SOL, was fortunately for the employer unsuccessful. Brod v. Newman, (Tx Ct. App - Houston [1st]) (10/17/02).


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Wednesday, October 16, 2002

Legislative fever


Although the election for the entire group of Senators and Representatives who will serve in the next term of the Texas legislature is three weeks away, it is not too early to begin thinking about legislative schemes that may already be forming in some legislator's mind. As an example, New York has just passed a law broadening the religious accomodation obligation of Empire state employers. Although not a likely candidate for adoption in Texas, it does show the type of issues that can crop up on the state level. The bill, signed by Governor Pataki on October 13th, was jointly approved by the Governor, the legislative leadership and the Attorney General as it was submitted to the legislature as bill A-7340.


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Tuesday, October 15, 2002

Oral COBRA notice is sufficient


Although not recommended, the 8th Circuit holds that oral notice following an employee's termination is sufficient to meet an employer's COBRA obligations. Chesnut v. Montgomery[pdf]. (8th Cir. 10/8/02) Obviously, relying on oral notice clearly leads to a tough factual issue.

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Trucking company arrangement upheld


A driver who owned his truck leased it to a company and entered into a separate employment agreement. The latter allowed him to obtain medical insurance. The issue was whether he had been defrauded because the employment agreement said the employer would pay the employer's share of social security etc. and the effect of the lease agreement was to pass those costs to him. The court upheld summary judgment for the trucking company. Bridges v. Andrews Transport, (Beaumont 10/10/2002).

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Legal issues surrounding temps


A couple of University of Pennslyvania lawyers have a good summary of various issues that can arise when you utilize temporary employees, either directly or through an agency in a Workforce Week article.


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Monday, October 14, 2002

No Class Action For Determining Validity of Covenants Not To Compete


Although in the past class actions were primarily a creature of federal courts, more parties are turning to state courts to bring such actions. A group of insurance agents who sought to represent a large class of such agents in an effort to declare the covenants not to compete contained in employment agreements were invalid succeeded in convincing a trial judge that they should be allowed to do so. The Beaumont Court of Appeals felt otherwise, finding that the individual determinations of reasonable geographical scope and the requirement to revise each agreement if were not, make it unsuitable for class treatment. American National Insurance v. Cannon (Beaumont 9/26/02).

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Admissibility of EEOC letters of determination - judge's discretion


A recent 3rd Circuit case, Coleman v. Home Depot [pdf] discussed a split in the circuits over whether an EEOC letter of determination can be excluded by the trial judge under FRE 403, which permits otherwise admissible evidence to be excluded because of its prejudicial effect, that it would cause undue delay, is duplicative and other delineated reasons. The 3rd Circuit held that it was within the judge's discretion to do so. Interestingly it cited an early 5th Circuit case as one that arguably provided less discretion to the trial judge. That is not the case, as the 5th Circuit's subsequent view is that the determination of admissibility is within the Court's discretion. Cortes v. Maxus.

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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


While large jury verdicts often get reversed they are still good indicators of how serious juries take firings. One type of case that seems to resonate strongly is the termination of an injured employee. An Indiana jury awarded almost 2 million to a land fill employee who suffered the most severe job ever at the workplace and was terminated 8 days after he returned to work. Forguson v. National Serv-All.. But there are clearly cases that juries don't buy. That happened to Nicole Bass, a 6 ft 2 inches, 230 pound female wrestler who took on World Wrestling Entertainment, Inc. seeking $120 million for sexual harassment, but found herself bounced by a Brooklyn jury. Bass v. WWE, Inc.

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Tuesday, October 08, 2002

Wisconsin law of consideration for arbitration agreement


For a similar decision to the Texas view of consideration for an arbitration program set forth in In Re Halliburton [pdf], and a good description of the successful implementation of a mandatory arbitration program without getting signatures, see the Seventh Circuit's decision in Tinder v. Pinkerton Security. [pdf].

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Release of everything, means everything


It is nice when the courts provide clarity. In today's decision of Chaplin v. NationsCredit [pdf], the 5th Circuit did just that. Following a disputed claim for benefits, a payment was made in return for a release which included the following language:

"[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


With mandatory arbitration clearly the law of the land, we are now down to those cases where specific flaws in the program render them unenforceable. One failure recognized by several courts is where the employer (usually as a result of poor drafting) retains the right to change the arbitration program at any time. Dumais v. American Golf Corp. decided in August by the 10th Circuit is another example.

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Friday, October 04, 2002

How far can an arbitration agreement go?


Not far enough to protect a law firm accused of giving bad legal advice to a reporter for WFAA. After having been told it was permissible to tape wireless phone conversations, a reporter and WFAA were sued by the individuals taped, resulting in a settlement of over $5,000,000. The reporter then sued the law firm. In discovery the firm obtained his employment agreement with WFAA which had an arbitration agreement. As do many, it contained broad language covering:

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)

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Wednesday, October 02, 2002

Davis vetoes arbitration ban


Governor Gray Davis vetoed S.B. 1538 which would have prohibited employers from requiring that employees agree to arbitrate employment disputes as a term of employment. With the demise of Duffield, arbitration agreements seem to now be the law of the land.

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Tuesday, October 01, 2002

No Faragher defense, but no punitive damages


The possibility that an employer could prove unsuccessful in establishing the Faragher affirmative defense, but prevail on the issue of punitive damages under Kolstad is borne out in today's ruling by the Fifth Circuit. In Hatley v. Hilton Hotels [pdf] the Court found that a jury verdict that the company had not established the affirmative defense was supported by evidence that the complainants were not separated from the harassers, that the harassment continued, that a prior complaint of sexual harassment reported to the same person had 'fallen through the cracks' and that others had previously complained about the two harassing supervisors. However, since the company did have an announced policy and did attempt to investigate the claim, it was enough to meet the Kolstad standards and so the court's decision not to instruct the jury on punitive damages was appropriate. Although, there is not a lot of discussion, it is a good recognition of the difference in the two standards.


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