Jottings By An Employer's Lawyer

Wednesday, September 29, 2004

More Attention to USERRA - A Bureaucratic Happening


The Department of Labor and the Department of Justice have signed a Memorandum of Understanding purporting to "ensure that the employment rights of men and women returning from military service are vigorously protected." More specifically it "streamlines and strengthens" enforcement of USERRA according to the DOL press release. Although I must admit to having a knee-jerk reaction against what I can envision as a hotly negotiated document between two executive departments, that will probably never see the light of day, that is probably both unfair and not true. But whether it is or not, what clearly is of interest is what the Department has been doing to educate the public and military members about the protections of USERRA. Quoting from the press release, DOL has been:

Providing briefings to more than 158,000 service members and others on USERRA;
Responding to almost 26,000 requests for technical assistance;
Distributing more than 240 televised Public Service Announcements, with a second announcement to be released shortly; and
Addressing most of the major human resource and employer organizations.

It sounds as most, if not all, returning soldiers (and sailors, marines and air force personnel) will be well aware of their rights (or at least their understanding of what DOL told them about their rights) when they get back home. Probably makes sense for employers to be equally aware. One place to start is the recently released proposed rules under USERRA, discussed in this earlier post.


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Tuesday, September 28, 2004

Why the FAA Is Important If You Want To Arbitrate - A Texas Lesson


Texas is unique in that it is the only state where workers compensation insurance is not mandatory. Because a substantial number of employees are not covered (between 25 to 30% according to the last information I have heard) there is a whole body of law that has grown up around the rights of employees who are injured on the job, but have no workers compensation insurance. Many (in fact I would say most) employers who do not carry workers compensation insurance have alternative plans, frequently set up under ERISA, which provide similar benefits and most substitute binding arbitration for litigation of any disputes. Originally many of those plans permitted pre-injury waivers of negligence claims. That option has since been removed by legislative action.

But what happens when one of those plans with a pre-injury waiver and binding arbitration becomes the subject of a lawsuit? Here, the plaintiff argued that the waiver provision invalidated the agreement, thus negating the arbitration agreement. The trial court agreed and refused to order the case to arbitration. But on appeal, the Court of Appeals, reminds us all of the trumping effect of the Federal Arbitration Act. Where it is applicable, as it was here, it overrides any state law waiver arguments, thus the case was sent to arbitration. In Re: R & R Personnel Specialists of Tyler, Inc. (Tx. App. - Tyler 8/1804) [pdf].

Although the choice of forum is lost, the plaintiff is not without hope as it appears nothing would prevent the arbitrator from holding the waiver provision invalid in accordance with Texas law. The arbitrator is also clearly entitled to address other issues raised by the plaintiff as to whether the employer had failed to comply with the pre-requisites to arbitration.

While this particular situation is unique to Texas, the powerful impact of the FAA is not.

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Monday, September 27, 2004

Speaking of Wasting Time - Let's Sue the Employee


At least that seems to be the idea of one British employer, Coleman Bennett International which is suing one of its salesman who instead of spending time making sales was allegedly making passes at the personal assistant to the Managing Director. The company calculates its loss at just over 450,000 pounds and seeks about half from its former straying employee. According to the story, Love work, not colleagues in the Hindustan Times, the company is claiming breach of contract from the distracted salesperson. The amount is based in part on the number of phone calls and text messages sent by the employee. Given American employers' aversion to court, it seems unlikely that we will see such suits this side of the pond, but you know there is all that time being spent on Fantasy Football!

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Canada Comes To the Criminalization of Employment Law Party


Maybe they have been there before on other issues, but now they join the United States in the post Sarbanes era making it a criminal offense to take adverse action against whistleblowers. Michael Fitzgibbon at Thoughts of A Management Employer, the Canadian employment law blog, has the story and a link to what he calls a great legislative summary. And although I am not sure of the exact meaning, but you should know that this is an offence punishable on "summary conviction." Sounds pretty scary to me.

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Up In Smoke - The Difference Between a Private and Public Employer


In a class just last Friday, Essential Employment Law, sponsored by the University of Texas School of Law, I made the point when discussing privacy rights that public sector employers have additional responsibilities arising from their constitutional obligations that are not visited on their private sector counterparts. Today's decision from the 7th Circuit is a good example of the difference. An employee (soon to be ex-employee) of the City of Evanston was arrested for the possession of a small amount of marijuana. Once it learned of his arrest through the local paper, the City began termination proceedings notwithstanding the pending criminal charge. Although in a similar situation, the employee would have had limited recourse, the same was not true for his employer. Instead, the Court found that the City had acted improperly:
Pursuant to an express policy as stated by its appellate counsel, the City refused to continue Franklin’s disciplinary hearing until after his criminal case was resolved, and the City asked Franklin to respond at the hearing to the criminal charges against him without advising him that his responses could not be used against him in his pending criminal proceedings. Franklin was thus effectively
forced to choose between his job and his Fifth Amendment rights, and this was an impermissible violation of his Fourteenth Amendment right to procedural due process.The net result, a reversal of his claim for violation of his civil rights under Section 1983.
Franklin v. City of Evanston (7th Cir. 9/27/04)[pdf]. The case which began with Franklin's arrest on November 7, 1997, thus heads back to district court for more proceedings.

One other interesting side note -- for those who argue the unfairness between laws regulating the use of marijuana and alcohol, the Court notes that although both possession of small amounts of marijuana and driving under the influence were similar misdemeanors, the fact that Franklin had been treated differently from employees arrested for DUI means only that, "rightly or wrongly, the City simply treats DUI less harshly than the possession of marijuana. This does not amount to unlawful discrimination."

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5th Circuit Takes Limited View of Reverse False Claims Act


While not a whistle-blower claim, today's decision by the 5th Circuit under the so-called Reverse False Claims Act is significant as it limits a company's potential exposure to those types of claims brought by would be whistle-blowers. Here an employee maintained that the company falsified environmental reports, that if made truthfully, would have exposed the company to fines. The company argued that the possibility of imposition of fines was too uncertain to qualify under the Reverse False Claims Act. The United States which had intervened, agreed with the company although it would have a slightly more nuanced position. Holding it did not have to decide if there was a real difference in the two positions, the 5th Circuit reversed the district court holding the mere avoidance of regulatory action alone was not the type of reverse false claim covered under the statute. USA v.Georgia Gulf Corp. (5th Cir. 9/27/04)[pdf].

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Fantasy Football - A Major League Work Problem?


Apparently so, at least big enough to get the attention of the NYT today. But their story is based on a report by a consulting firm that was blogged much earlier by a number of folks, including this post as Shel Holtz's site. If the consulting firm's estimate of lost time due to fantasy football is even close to correct, then it's a pretty expensive hobby, assuming it's done on 'work time.' The consultants calculate each 10 minutes spent on fantasy league activities has a collective cost of nearly $40 million in lost productivity. While the Times notes some employers are cracking down, Holtz gets specific, citing a story that GM has now barred access to a number of fantasy football sites. One nostalgic viewpoint, what about baseball? Telling when one doesn't even consider that the "national pasttime" might be causing a similar loss to employers.


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Thursday, September 23, 2004

Red Cross Volunteer Falls Short in Claim For Insurance Based on Oral Representations


Following 9/11, volunteers from across the country went to New York to provide assistance, some under the aegis of the American Red Cross. The tenure of one volunteer, Terry Gilmour, tenure was cut short when she contracted Legionnaire's Disease shortly after her arrival. Although a volunteer, Gilmour was entitled under Red Cross policies to a $10,000 insurance policy that was to supplement her own insurance. Unfortunately, her own policy fell short and even the $10,000 in coverage ultimately tendered by the Red Cross was not sufficient either. Based on oral assurances that her needs would be covered, Gilmour sued based on various theories including breach of contract, promissory estoppel and negligent misrepresentation. Misfortune struck again as the district court granted summary judgment against her, which was affirmed by the 11th Circuit today. Gilmour v. American National Red Cross (11th Cir. 9/23/04) [pdf].

Although it is unclear whether an employer would fare quite as well as the charitable Red Cross, the Court dispensed with the various claims in short order:
The contract claim failed for lack of consideration. The claim of negligent misrepresentation failed because speakers who made the statements lacked a pecuniary interest in whether Gilmour’s insurance was supplemented by Red Cross and because Gilmour’s reliance on statements made to her was unreasonable. The promissory estoppel claim failed because Gilmour’s reliance on the written Red Cross manuals and the oral statements was unreasonable as a matter of law and the written statements lacked mutuality.
Good language, if you find yourself the with a case based on oral promises.


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Wednesday, September 22, 2004

Party To A CBA By Conduct - A 7th Circuit Reminder


Although normally relations between a union and a company are fairly straightforward, in the construction world where 8(f) agreements are permitted and workers tend to be project to project, things are often more fluid. It can be a dangerous world for a company that is being pressured by the union and in an attempt to get "peace" goes along. Here the price of complying with a union collective bargaining agreement over the course of 7 years, was a finding that even though it had never signed the agreement it was in fact bound. Bricklayers Local 21 of Illinois Apprenticeship And Training Program v. Banner Restoration, Inc. (7th Cir. 9/22/04) [pdf]. A word to the wise for a smaller business facing union pressures.

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EEOC, Good Morning. Can We Help You?


But the voice at the other end of the line will not be an EEOC employee, but an employee of Pearson Government Solutions once the new national call center contract is implemented. And that voice may well have a Kansas twang, as that is where the center will be run according to the story in today's Washington Post of the newly let $4.9 million contract.

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Tuesday, September 21, 2004

EEOC - "Youth At Work" Focus for the Next Year


The Washington Times details an innovative plan from the Commission, EEOC looks out for teenage workers, noting the problems that often arise, particularly in the fast food and retail industries, where lots of young workers are found. A good idea and also a good idea for employers who have teenage workers to make sure that things are not happening in their workplace that would not withstand official scrutiny.

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Pigs Get Fat, Hogs Get Slaughtered - Still True in Arbitration Cases


A few years ago, my now fellow shareholder Pat Stanton, used the old adage as the title for his portion of a panel in a Palm Springs presenation on the drafting of arbitration plans. (Although some might question the legal authority of such a statement, I am sure Pat took it from the 7th Circuit opinion in Finance Investment Co. (Bermuda) v. Goodman:"We do not look forward to another round of extended collateral litigation and appeal. Before Geberit hurries back to the trough for seconds, we remind it of the adage that "pigs get fat, but hogs get slaughtered.")

Unfortunately, the authors of the arbitration agreement that was challenged and rejected in a decision earlier this month by a Texas Court of Appeals probably didn't hear Pat's humorous but legally sound speech, advising against reaching too far when drafting an arbitration agreement. Otherwise, they might have dropped the requirement requiring an employee to pay up to one month's wages for the arbitration fees and precluding certain relief that would be allowed in court, in this case punitive damages and reinstatement. Because of those provisions, the appellate court reversed the lower court and denied the employer's motion to compel arbitration. In Re Johnny Luna (Tx. Ct. App. - Houston [1st Dist.] 9/9/04). The plan's provisions which limited discovery and shortened the statute of limitations fared better, although care still should be taken in those areas.

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Proposed Regulations Under USERRA


The Uniformed Services Employment and Reemployment Rights Act of 1994 is more than just a mouthful, in today's world where citizen soldiers are much more in use it will be more prominent on an employer's list of things to worry about. Yesterday, for the first time in the Act's history, the Department of Labor proposed regulations that will control how USERRA is implemented. The public has 60 days to comment on the proposed regulations. The Department of Labor once again uses the question and answer format first used with the FMLA regulations.

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No En Banc Hearing on 9th Circuit Ruling Forbidding Inquiry on Immigration Status


Earlier this year, the 9th Circuit refused to reverse a magistrate's order prohibiting the defendant from inquiring into the immigration status of a group of plaintiffs alleging they had been adversely impacted by an employer's English language testing policy. Rivera v. NIBCO, Inc. (9th Cir. 4/13/04) [pdf]. Yesterday, over the vigorous dissent of four judges, the full Court declines to hear the case en banc. Rivera v. NIBCO, Inc. (9th Cir. 9/20/04) [pdf].

Spanish born Judge Carlos T. Bea, the newest member of the 9th Circuit writing for the four dissenters to the denial for en banc rehearing sets out his basic argument:
The panel’s decision allows a plaintiff who claims that racially discriminatory firing caused backpay and frontpay lost wages, to refuse to answer deposition questions touching on her place of birth and immigration status.

Thus, the panel’s decision impedes the ascertainment of the truth in advance of trial, thereby profoundly subverting the purposes of liberal Discovery in civil cases. The decision also frustrates the purposes of national Immigration policy: to limit employment benefits to American citizens and foreign persons authorized to work in this country.

It may be tempting to increase the settlement value or the award of a minority worker’s racial discrimination lawsuit by allowing her to include claimed lost wages and bar questioning of her immigration status. After all, the employer hired her and benefitted from her labor. While she was working, the employer did not dig too deep into whether her papers were in order. Now that she asserts her civil rights against the employer’s claimed discriminatory firing, the employer gets righteous, and for all the wrong reasons.

If estoppel by the employer’s acts could bar enforcement of our country’s Immigration laws, the panel’s opinion might not be so objectionable. Of course, we know such private conduct cannot frustrate explicitly stated congressional public policy. See Hoffman Plastics Compounds, Inc. v. NLRB, 535 U.S. 137, 151-52 (2002) (holding that plaintiffs, who were unauthorized aliens, were not entitled to backpay as a remedy for violation of the NLRA because such remedy would “unduly trench upon” federal immigration policy expressed in the IRCA).

We risk corrupting an admirable civil rights policy to prevent discrimination when we rely on evasions to enforce it. ...



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Monday, September 20, 2004

Branded in the workplace - Tattoos and Piercing Don't Work


According to the Christian Science Monitor story, Branded in the workplace, those succumbing to the allure of tatoos and piercings are in for a lot more pain when they try to find paying work. If that is in fact the case, then many of the folks seen this past week end at the splendid, although hot, Austin City Limits Music Festival may have some vocational challenges in the years ahead.

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Follow the Money


Was the mantra from Watergate investigation days, but might also be applied to the powerful incentives of compensation programs, and resulting legal problems. For example, pay drivers based on mileage and guess what is encouraged? Say, faster driving, which could easily lead to legal problems. For a number of other ways that compensation schemes sometimes have unexpected consequences, check out the story in the Birmingham Business Journal.


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Thursday, September 16, 2004

Not Exactly New News - But Retaliation Is A Dangerous Thing


It must have been a slow news day yesterday around the Business Journal World as they reported on a $3.1 million verdict in a retaliation case where the employer won on the underlying gender discrimination claim but lost the retaliation claim. It looks like most of the Business Journal's carried the story, including the The Business Journal of Portland. While the article makes a good point, it was a little surprising they would highlight a case that was tried in the late 90's and decided on appeal in 2000. If you want to read the 9th Circuit decision affirming of the bulk of the award check out Passantino v. Johnson and Johnson Consumer Products, Inc.,212 F.3d 493(9th Cir.2000). Although the case is old, the warning to employers of the dangers remains sound.

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Tuesday, September 14, 2004

What A Can of Worms - Kerry v. Bush in the Workplace -Part III


Thanks to Julie Ferguson, a behind the scenes blogger at the Workers Comp Insider who was kind enough to pass on both kind words about this blog and the link to the following story, Moulton woman says she lost job for sporting Kerry sticker on car. This one is not a lawsuit yet and may never be, not exactly sure what the cause of action would be, and as I have mentioned frequently, I am fairly sure that there is a very different version of what happened that would come from the employer.

But it does make us (or at least me) think that one of the most dispiriting things about this political season, and it seems all politics now, is how little room for civil disagreement there seems to be. That shrill rhetoric is a viable campaign tool seems to be the one thing that both parties do agree on. I can't help but believe, that regardless of whether the candidate we favor or not prevails, that is ultimately a loss for us as a whole.


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Monday, September 13, 2004

Kerry v. Bush In the Workplace, Part II


Thanks to a reader who having caught my original post about the potential problems of politics in the workplace, passed on a link to this OSC Press Release highlighting a real problem for federal employees governed by the Hatch Act. Use of governmental e-mail to pass on political comment have led to formal complaints being filed against an EPA and an Air Force civilian employee. It is good to note in true bi-partisan fashion, of the two individuals, one is a Bush, the other a Kerry, supporter. One of the few bi-partisan acts of late it seems.

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This Ought To Be Interesting - Librarian Drugged and Abducted


One thing I have noted on these pages over the years (amazing to talk of a blog in term of years, but Jottings now is 2 years old) is the Million Dollar Verdict or MDV for short. But I also occasionally see reports of a new lawsuit being filed which just reminds me of why being an employment lawyer is so great and our war stories are just so much better than lawyers practicing other types of law. Rather than being selfish, I might as well share some of those from time to time. The first, this ought to be interesting or TOTBI for short, was filed last week in Harris County. A brief summary of the petition per the Courthouse News Service report
Sex discrimination and retaliation case in which the defendants fired the plaintiff, a librarian for the defendant, April 6, 2004, after she complained that the individual defendants and two others talked about drugging and abducting her. Plaintiff was drugged twice after overhearing that Feb. 27, 2004, conversation and then sprayed with hydrogen sulfide April 2, 2004.
Wonder if that was an OSHA violation as well?


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Saturday, September 11, 2004

MDV - $4 Million in Less than 3 1/2 Hours


That's how long it took a federal jury in Detroit to find that the City of Allen Park and its police chief had discriminated against one of its own police office officers, Marcos Madrigal, because he was a Mexican American. One thing of interest - Madrigal is still employed. The Detroit Free Press has the story, Jury awards Allen Park officer $4 million in suit.

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4th Cir - Constructive Discharge Requires Employer Intention


Although the Vice President of Human Resources ultimately ended up with a similar job at United Airways (although given what has happened one has to wonder at how good a prize that is), what he did not get was a favorable ruling on his claim for constructive discharge from his former employer Booz-Allen, the consulting firm. Although acknowledging that his tenure at Booz-Allen had not been a happy one, the court was not willing to find that Booz-Allen had intended to make circumstances so difficult that he would have to resign, the sine qua non, for constructive discharge in the 4th Circuit. Honor v. Booz-Allen & Hamilton, Inc. (4th Cir. 9/2/04) [pdf].


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Friday, September 10, 2004

Golf Course Superintendent Wins $1.5 Million in Denver Age Case


This is not exactly a MDV, since the jury awarded just under $420,000, but when all is said and done, it is the judgment that really matters. And there are lots of bad things that happen (for employers) after a jury verdict for the plaintiff. Here, those bad things included a doubling of the back pay damages because of a finding that the age discrimination was willful, front pay and most painful of all (for the defendant), an award of $680,000 in attorneys fees for the plaintiff's counsel. The Billings Gazette has the story. A good reminder that once a case actually goes to the jury, there are often many hidden costs that can push a six figure verdict into a seven figure judgment. Of course, there is always the appeal.

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ERISA Pre-emption of Bad Faith Claim For Denial of Disability Benefits


Reversing the lower court, the 3rd Circuit holds that the latest decision by the Supreme Court makes clear that a state claim that would allow punitive damages for bad faith denial of benefits under an ERISA plan is preempted. Barber v. Unum Life (3rd Cir. 9/7/04) [pdf]. Barber had been granted benefits under his employer's long term disability policy which was provided by Unum. Later, Unum found he was no longer disabled under the policy terms and stopped the benefits. When Barber sued under a Pennsylvania statute which allows punitive damages for bad faith denial of benefits, Unum claimed ERISA preemption. Noting the complexities of past Supreme Court pronouncements on ERISA preemption, the Court found clarity in this year's Aetna Health Inc. v. Davila, 124 S. Ct. 2488 (2004) [pdf].

After Aetna Life, legislation which attempts to add remedies to what would be an ERISA claim is clearly preempted. This case, decided at the district court level before Aetna Life, was important enough to draw amicus briefs by the Chamber of Commerce of the United States and an advocacy group, United Policyholders.

In an aside, the 3rd Circuit had some good words of advice for advocates forced to rely to on "dicta" from a Supreme Court decision, quoting from their own earlier opinion:

[W]e should not idly ignore considered statements the Supreme Court makes in dicta. The Supreme Court uses dicta to help control and influence the many issues it cannot decide because of its limited docket. “Appellate courts that dismiss these expressions [in dicta] and strike off on their own increase the disparity among tribunals (for other judges are likely to follow the Supreme Court’s marching orders) and frustrate the evenhanded administration of justice by giving litigants an outcome other than the one the Supreme Court would be likely to reach were the case heard there.”

Amen, assuming it is me relying on the "dicta."


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Thursday, September 09, 2004

Will It Never End? Political Wrangle Over DOL Rules Continues - House Votes to Bar Enforcement of New White Collar Regs


In yet another fight, with an eye much more on politics than merit, a few minutes ago the House voted in favor of an amendment that would bar expenditure of funds by the Department of Labor to enforce the new rules on the white collar exemptions under the FLSA. In typical, "it's a crazy world fashion," there is a dispute as to whether the law will do what its backers want. And of course it may never come to pass, since today's amendment still has to pass the Senate, the conference committee and a threatened veto. One possibility, nothing is finalized until after November 2nd. Here is the AP wire story, House Votes to Block New Overtime Rules. Just to make clear, for now, the new rules are effective.

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Tuesday, September 07, 2004

Concerned About the High Costs of Your Unemployment Tax


One of the nasty little side effects of terminations is the unemployment tax. Trying to rein in that monster is a real problem for big companies, but the impact of an unemployment claim may have even more significance to a smaller employer because of the effect a single adverse claim makes to the experience factor. For a little more insight into some of the reasons behind the unemployment tax rate see the story from the Jacksonville Business Journal.

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Out of Tune - Georgia Jury Gives $1 Million to Soprano


No, nothing to do with the HBO series, just another academic case of gender discrimination. This time it's a former Kennesaw State University Music prof who convinces an Atlanta jury that her tale of discrimination is worthy of the million dollar verdict club. You can see the AP story here at the Access Georgia web site. And based on this story this does not appear to be the first or perhaps last problem at KSU.

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Monday, September 06, 2004

Happy Labor Day 2004


from one who makes his living in and because of the world of work. For The History of Labor Day, check out the DOL's website.

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Kerry v. Bush - In the Workplace


Or maybe you are in Illinois and its Barack v. Keyes that is provoking the most heated discussion, but regardless of your location, its a good idea to think about the impact of politics in the workplace as the next 50+ days are bound to be full of them. The Kansas City Business Journal article has a couple of good pointers, first a Missouri law that threatens a "one-year prison sentence for Missouri employers who try to 'prevent an employee from engaging in political activities." And an enlightened comment from the ACLU which makes a valid distinction that is lost on a lot of the general public and based on personal experience testifying before the a committee of the Texas legislature, certain legislators:
The Bill of Rights has a pretty narrow focus -- it limits the power of government, and it has no application whatsoever to private settings.
But look for other ways that politics might cause trouble in the work place.


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