Happy New Year
Posted
2:50 PM
by Michael Fox
In the New Year my hope is to do better, but I am also going to be busy keeping New Year's resolutions to
- lose weight,
- exercise regularly,
- procrastinate less (maybe I need to think about that one some more) ,
- and at least half a dozen other worthwhile things
that should keep me thoroughly occupied till, oh, at least next weekend!
So rather than a promise of more regular posting perhaps I should just "borrow" and extend the Merry Christmas wish from the good folks at Wage Law, and offer this statement at this year's end:
"I may or may not post anything of substance between now and the New Year ......... 2009!"
But hopefully I will, at least on occasion.
FMLA Expansion - Maybe Not So Quick
Posted
10:30 PM
by Michael Fox
What's more impressive is that Dan is apparently the first to make the connection between the well publicized veto and the hit to the FMLA expansion, as my google news search a moment ago for "fmla and veto" came up with no hits. A huge tip of the hat for a scoop not only in the (relatively) small world of employment law blogging, but of the big time media as well.
It seems that the offending clause in a 1000+ page bill is § 1083 which provides in part:
Chapter 97 of title 28, United States Code, is amended by inserting after section 1605 the following:That particular provision was of great concern to the Iraq government and the concerns have convinced the White House of the need to take action.
`Sec. 1605A. Terrorism exception to the jurisdictional immunity of a foreign state
`(a) In General-
`(1) NO IMMUNITY- A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case not otherwise covered by this chapter in which money damages are sought against a foreign state for personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources for such an act if such act or provision of material support or resources is engaged in by an official, employee, or agent of such foreign state while acting within the scope of his or her office, employment, or agency.
,
Since the pocket veto (last heard about in your high school senior civics class) is causing some political waves for President Bush, see In Surprise Step, Bush Vows Veto of Military Bill, and the bill was passed overwhelmingly by both the Senate and the House, it seems quite likely that after the first of the year everything will be worked out and the expansion will go through.
But as Dan says, "it's fair to say that this situation is fluid."
Labels: FMLA
Staffing Firm Controller Scores Manhattan MDV
Posted
1:50 PM
by Michael Fox
Even worse than losing the verdict may be what happens on the first day of next year. According to the article:
Sydney Nurse, 43, isn't quitting her $100,000-a-year controller's job at the midtown employment firm, Concepts in Staffing. On Jan. 2, she'll be back running the accounting department. "She's going back to work because she should not have to give up her job because of racism," said Nurse's lawyer, Kenneth Thompson.Ouch.
If the evidence quoted in the paper is reflective of the plaintiff's case, it's clear that they got to use one of a plaintiff employee's best arguments -- the arrogance of the employer. When Nurse suggested to the owner of the company that harassing comments might violate the law he was alleged to have said:
"I am the law. I'm Artie A. This is my company and I can do whatever I want."
According to the company's counsel, rather than discriminating, the owner of the company had a lengthy track record of promoting people of color. Pretty clear which way this particular jury viewed the two approaches.
A press release from Nurse's lawyer made even more explicit allegations about the testimony that was presented at trial, saying it included:
- Ms. Nurse being repeatedly called "Black B****" in the workplace
- Ms. Nurse being repeatedly groped, including the CEO grabbing her breast and pinning her against his desk while pressing his pelvic area against her backside.
- An employee rubbing paperwork on his pelvic area before handing it to Ms. Nurse while seated at her desk and then pumping his pelvic area within inches of her face.
- Another employee unzipping his pants and telling Ms. Nurse to "kiss this," while pointing to his pelvic area.
- The CEO making racially discriminatory remarks, including statements that he "did not want any blacks or Hispanics pictured on his company's website" and that he wanted a newly hired employee of color to be seated "in the back of the bus in the black and Hispanic section of the office".
- When told by employees that his comments and actions violated the law, the CEO openly told his employees, "F*** the law. I am the law."
Of course that's just one side of it and you can be sure that the employer thought going in that it had a strong chance that it either was not believable or that it had something to counter act it. And of course the employer may very well have the best of it, because there is a long way between a verdict and money in the pocket of the plaintiff.
Still, at least for me, it re-enforces two points:
- when you have volatile evidence, if you lose, it's likely to be big; and
- don't try employment law cases around Christmas.
Labels: MDV
Court Won't Enjoin Arizona Legal Workers Act
Posted
12:24 PM
by Michael Fox
My Arizona colleagues including Kerry Martin and Scott Blaney, have been monitoring the situation closely and had this update late last night:
Arizona Legal Workers Act Survives First Challenge
Just hours ago, Judge Neil Wake of the U.S. District Court for the District of Arizona denied a temporary restraining order seeking to block enforcement of the Arizona Legal Workers Act. For now, it appears that Arizona’s sweeping new law aimed at stopping the employment of unauthorized workers in Arizona will take effect as scheduled on January 1, 2008. The Act allows for suspension and revocation of licenses of businesses that knowingly employ unauthorized workers.Judge Wake previously dismissed a challenge to the law because the plaintiffs failed to name the proper defendants. Today, he reiterated that the plaintiffs’ delay in naming the proper parties was a basis for his decision. The plaintiffs have appealed the previous dismissal of their complaint to the Ninth Circuit Court of Appeals and also asked Judge Wake on Tuesday for an injunction while the appeal is pending, which he denied today. Judge Wake cited statements by Arizona County Attorneys that they would not take legal action against any Arizona employers until after February 1, 2008 as a further basis for his ruling. It is important to note, however, that the County Attorneys were explicit during Tuesday’s hearing before the Court that they can and likely will begin investigating complaints filed pursuant to the law beginning in early January.
Given today’s developments and the County Attorneys’ statements, Arizona businesses should prepare for the new law to take effect as scheduled on January 1, 2008.
Here's a link to my colleagues complete report. If you want a feel for those who have been actively supporting the act check out their home page.
Labels: immigration
'Tis the Season
Posted
12:20 PM
by Michael Fox
Defamation, malicious prosecution, negligence and IIED actions where the defendant coworker planted merchandise in the plaintiff employee's bags to frame her for shoplifting.Always a new way for trouble to happen, no matter what time of the year.
MDV for Casino Whistleblower
Posted
4:53 PM
by Michael Fox
As is frequently the case, the story itself does not provide a lot of information about what caused the jury to decide the way it did. What is perhaps more interesting (to those looking on with only an academic, not personal, interest) are the three pages of comments that have come in from others about the lawsuit. It's a good way to get a feel for how strongly people react to employment law litigation, without having to put yourself in front of a jury for the experience.
Labels: MDV
8 Days of Christmas? No, 8 Parts of Executive Employment Agreement
Posted
9:18 AM
by Michael Fox
The eight parts listed by Portland lawyer, Paula Barran are:
- duties,
- obligations,
- timing,
- payment,
- extra benefits,
- parting,
- prenup and
- disagreements
Check the article for the details.
Labels: HR general
FMLA Expanded with Passage of Department of Defense Funding Bill
Posted
4:23 PM
by Michael Fox
It encompasses two kinds of leave --
- 12 weeks where "the spouse, or a son, daughter, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the Armed Forces in support of a contingency operation and there is a "qualifying exigency" which is to be defined by the Secretary of Labor by regulation; and
- 26 weeks where an eligible employee who is the spouse, son, daughter, parent, or next of kin of an injured servicemember needs to take care of them. This is apparently a one time leave.
In short, the expansion which is part of the Department of Defense funding bill is designed to provide possible leave for families of servicemen for both active duty call ups and cases of injury.
Although it is part of a much bigger bill, the relative portions expanding the FMLA can be found here. President Bush is expected to sign the bill.
It is unclear when it will be effective, although arguably it could be as soon as it is signed by the President which should be in the next few days, even though obviously there will be no regulations for some time.
Stay tuned for more details.
Labels: FMLA
More Gray Hair in the Cockpit - Commercial Pilots Can Now Fly to 65
Posted
8:08 AM
by Michael Fox
Although I am sure this has been in the works for sometime so that some of the kinks have been worked out, I can imagine that it is causing some major rethinking of personal plans as pilots who had been nearing forced retirement now have a decision to make, while many more junior pilots are now looking at more years in the second seat than they had planned.
I probably wouldn't have thought of this as an employment related topic had I not defended a most interesting lawsuit a decade or so ago caused by confusion about who this rule applied to. I knew it was going to be interesting when I read the complaint and it quoted from a comment written on the plaintiff's resume - "What, pray tell, do we do with this? He is approaching his 60th birthday." Sure enough Exhibit A to the complaint was a photocopy of the resume with what was clearly a yellow sticky note attached to it, that contained those words in the HR manager's handwriting.
How did it end up in the plaintiff's hands? A mysterious fax from the company's offices was all that was ever known.
As you might guess, "interesting" does not always mean fun.
* At least on the end I now most personally identify with!
Labels: HR general
A (Very) Belated Thanks To the Folks at Wage Law
Posted
2:09 PM
by Michael Fox
So it is very belatedly in my effort to catch up on some back reading that I finally made it to a November 9th post at Wage Law, where Mark and Michael Walsh, the authors of that blog were kind enough to list me in the top ten of their favorite blogs. See Wage Law: The Best Law Blogs.
Having just stuck my toe into the murky waters of California's version of wage and hour law earlier this year, I have an even greater appreciation than I did before of the service that the two principals in the Walsh & Walsh law firm provide in keeping the rest of the world abreast of late breaking developments in what has to be one of employment law's hottest area.
Sound Advice on Handling Lawsuits
Posted
1:35 PM
by Michael Fox
Although not directly related to labor and employment law, the thoughts of Stewart Weltman in a column in law.com's In House Counsel forum, Think Like a Plaintiffs Attorney to Lower Litigation Costs, are spot on.
Almost every point he makes is one I have come to understand over 30 plus years of handling employment law suits of various sizes, from small to big.
You really should read the article to get his take on things but here's the big picture:
- Prepare every case as if it was going to trial, that's the most certain way to get it settled favorably;
- Don't waste your time (and money) fighting over little things; and more things than you think are little things;
- Don't get involved in discovery disputes, but bend over backwards to provide all documents that are within the discovery requests of the other party;
- Use fewer, but more experienced lawyers; make sure that your trial lawyer knows the facts of the case well;
- The earlier you settle a weak case the better;
- Keep your "story" simple, and know what it is early on
Although he doesn't say it quite this way, have trial lawyers on your side, not "litigators."
Labels: trial
Two 5th Circuit Approved Jury Instructions in Discrimination Case
Posted
9:04 PM
by Michael Fox
The first was on the effect of a determination by the TWC-CRD or EEOC (here the TWC -CRD had issued a cause finding). The lower court had instructed that:
The trial court had also given this instruction that employers will find helpful:[a]ny finding or determination of the EEOC that discrimination occurred or that it could not find sufficient evidence of discrimination “is not dispositive of whether discrimination occurred."
The court further instructed:
The findings or determinations of the EEOC are therefore not binding on the trier of fact. You may, but are not required, to accept the findings in the EEOC reports. The reports do not relieve you of your obligation to review all of the evidence in the case and to make your decisions based on the facts as you read them.
Of course the Court was considering these instructions in light of a favorable jury verdict and under an abuse of discretion standard, but still they are now "5th Circuit" approved.Title VII does not shield against harsh treatment in the workplace. Nor does the statute require the employer to have good cause for its decisions. Title VII is not a vehicle for second-guessing business decisions. The employer may take adverse action against an employee for a good reason, a bad reason, a reason based on erroneous facts, or no reason at all, so long as its action is not for a discriminatory reason.
The Court also dealt with an issue currently pending before the Supreme Court -- whether so called "me too" evidence of discrimination should be allowed. And just as some of the U.S. Supreme Court justices apparently had concerns about allowing such evidence at oral argument, the 5th Circuit did as well.
It upheld the trial court's exclusion of evidence by a fellow employee of Price concerning discrimination against him. The Court was cautious, not wanting to get out too far ahead of what the Supreme Court might do, emphasizing that the other employee did not have any evidence about the decision maker in Price's case and in any event the testimony could have had only a slight effect.
Labels: discrimination
Payday Claim Divides Texas Supreme Court
Posted
12:43 PM
by Michael Fox
Justice Dale Wainwright authored the majority opinion, and was joined by three of his fellow Supreme Court Justices, Green, Willett and Johnson and joined for all but one section by Justice Bob McCoy of the 2nd Court of Appeals sitting by designation for Justice Hecht who was recused.
Justice Brister wrote the dissent, joined by C.J. Jefferson and Justices O'Neill and Medina.
Although all agreed that the 180 day limit for filing a Payday claim is not jurisdictional, they disagreed over whether the finding that the claim was untimely was an adjudication on the merits, which they also seemed to agree was necessary for res judicata.
Although Justice Wainwright's opinion offered two reasons for the preclusive effect, one that the TWC had actually decided the merits (adjudication of disputed fact), that portion was not joined by Justice McCoy so the opinion of the Court is only on the second grounds, "a court’s dismissal of a claim because of a failure to file within the statute of limitations is accorded preclusive effect."
Although a far cry from the rhetoric of Justice Scalia in many of his dissents, Justice Brister's parry of the majority's statement that it was merely prohibiting a plaintiff two bites at the apple -- "this is not about biting apples twice; this is about a man’s wages" -- is fairly unusual in recent years.
The actual impact of this decision (beyond of course a very disappointed Igal) is not likely to be much since the facts will not often occur. My guess is for those who look for such things, the slight divide amongst justices may well be the intriguing aspect.
Eight Years in the Making - Employer Pay for PPE
Posted
1:42 PM
by Michael Fox
What I was struck by was the commentary I read elsewhere summarized in this opening paragraph about the history of this regulation (emphasis and bracketed material added by me):
In 1999 [March 31], OSHA issued a proposal to require employers to pay for all protective equipment, including personal protective equipment (PPE), with explicit exceptions for certain safety shoes, prescription safety eyewear, and logging boots (64 FR 15402). The proposal cited two primary reasons for requiring employers to pay for PPE. First, OSHA preliminarily concluded that the Occupational Safety and Health Act of 1970 (OSH Act, or the Act) implicitly requires employers to pay for PPE that is necessary to protect the safety and health of employees. Second, OSHA preliminarily concluded that an across-the-board employer-payment requirement would result in safety benefits by reducing the misuse or non-use of PPE (64 FR 15406-07). Following an initial notice and comment period, an informal rulemaking hearing, a second notice and comment period on specific issues [July 8, 2004], and careful Agency deliberation, OSHA finds that its preliminary conclusions are appropriate and is therefore issuing this final standard requiring employers to pay for PPE, with limited exceptions.
According to an article on the SHRM website, OSHA was managing to make both management and labor unhappy, and finally got a little nudge:
I know regulations are complicated things, and I really have no knowledge about the background on this, and I am assuming that it is a fairly sizeable cost shift from employers to employees and perhaps the looming inevitablity of such a regulation allowed for that to be taken into account in ongoing pay decisions in the interim, but still -- are we now so partisan, or is our government so inefficient, that we need to take eight years to come up with a regulation?Business-related and organized labor groups have been highly critical of the delay in issuing the final rules. Many employer and work safety groups had complained that OSHA appeared to be dragging its feet and had ignored the pleas of employers to create guidelines that would make it clear who would be responsible for paying for workers’ safety equipment.
Organized labor also criticized the long delay, claiming that the Bush administration was maneuvering to shift costs away from employers and place them on the shoulders of workers. Several proposals to reform federal health and safety laws have faltered in Congress since 1999. Several of the proposed measures included PPE provisions.
In January 2007, the AFL-CIO and United Food and Commercial Workers filed a lawsuit in the federal appeals court for the District of Columbia to force OSHA to issue the final rules. The court has not issued a final ruling on the case. In March, Rep. George Miller, D-Calif., chair of the House Education and Labor Committee, introduced legislation to force OSHA to act on the final regulations.
There may well be answers for that question on this particular regulation, and I welcome any commenters who can shed light on it. But even if there are, there is a nagging sense underlying this post that this is not a good sign for how things should work.
Labels: safety
: 4:07 PM
ADA Standard in 5th Cir is "Motivating" Not "Sole" Factor
Posted
3:52 PM
by Michael Fox
According to the Court:
Under a plain reading of the statute, and in accord with the position of other circuits, we conclude that the “sole causation” standard is not the appropriate standard for ADA claims. We hold that under a straightforward reading of the statute, the “motivating factor” test should be applied to ADA claims. This is consistent with the law of most other circuits,33 and it is in line with the causation standard we have applied to similar anti-discrimination statutes.
If there was any surprise in the decision for me it was that it had not been decided before.
Another interesting issue was how the Court came to decide it. The case is brought by an employee of the Department of Education under both §501 and §504 of the Rehabilitation Act. The question was whether the "sole" causation standard of §504 or the "motivating factor" standard of §501 was applicable.
Rather than just deciding that specific question, the Court first held that the §501 standard was the same as the ADA, and then resolved the previously undecided issue in the 5th Circuit. Such a departure from the conservative principle of only deciding the question before you may be what caused Judge Jones to concur only in the judgment.
It was also a good reminder to me that even though I don't do public sector work, I shouldn't ignore or read those decisions too hastily as they often have hidden gems applicable to the private sector when you would hardly expect it. Pinkerton is a case in point.
Labels: ADA
But, as a practical matter, I'm not sure it matters to a jury who won't appreciate these subtle distinctions anyways....
The Unloyal Employee - May End Up Owing a Tidy Sum
Posted
3:17 PM
by Michael Fox
Interestingly even though the employees in question had non-competes, it was the broad Texas law on breach of a fiduciary obligation that was the basis for the recovery. The trial court had eliminated damages for misappropriation of trade secrets finding it duplicative of the breach of fiduciary claim.
One of the "bad acts" was negotiating and signing a 4 year lease and then using the lease as "leverage" against their employer in attempting to force a sale of the business to them. An additional "bad act" was that they had been negotiating with several buyers to sell the business that they were hoping to acquire.
Navigant Consulting is a good overview of the law in an area where I think we are going to see more litigation.
Labels: competing employees
One of the Better Headlines: Shirking Working: The War on Hooky
Posted
5:53 PM
by Michael Fox
Congrats to Business Week for their story and what struck me as one of the more clever headlines in awhile, Shirking Working: The War on Hooky. Among other things the article points out how businesses are going to software analysis to determine when and more importantly why, people aren't showing up for work when they are supposed to.
And as anyone but certain bosses might think, the problem doesn't always lie with the employees. For example:
Imagine that.At one manufacturing company, a group of employees loathed their manager's style. The sentiment went unnoticed by the C-suite until a software program created by Convergys started scouring the department's data and found it had a high absence rate compared with other units. At that point, Convergys performed an "intervention" with the manager's employees: confidential focus groups where the workers could vent. Once the company attended to the problems, attendance rose.
Labels: HR general
Not Quite Halloween, But Still A Scary (MDV) Story
Posted
3:48 PM
by Michael Fox
The underlying claim appeared to be national origin discrimination as Kiran Pande, the plaintiff, was born in India. That angle was certainly played up in the headline from an Indian website, The Economic Times, Fired NRI engineer gets $5.5 mn over racist remarks, but even as that article points out, the claim that appeared to carry the day was her retaliation claim.
Although punitive damages were certainly a large part of the verdict ($2.5 million) the past and future economic damages were over $3 million. Although the articles don't say what Kiran Pande was making before she did not take an offered transfer to Houston, my guess is that it was pretty high. Which is another good reminder that certainly plaintiff's lawyers do not forget -- the higher the former income of the plaintiff, the more valuable the case.
Labels: MDV
: 10:12 AM
Speechless by Bruce Barry - A Mini-review
Posted
9:08 PM
by Michael Fox
If Professor Barry has a law degree he has gone to great pains to hide it on his professional c.v. on his website, but nevertheless his book has one of the best explanations of state action as a pre-requisite for constitutional protection that I have seen. I only wish he had written it sooner, so I could have used it as a reference when I was testifying before a Texas House Committee several years ago and was taken to task for making the comment that in the private sector employees didn't have first amendment rights. In fact the Chair of the Committee asked where I went to law school with a sarcastic tone that indicated he didn't think much of my legal education. (Hopefully I didn't cost UT Law School anything in the way of appropriations that biennium.)
Professor Barry has a viewpoint, he is after all an academic and President of the board of directors of the American Civil Liberties Union of Tennessee, but I found his book quite balanced in its approach to the issue of free speech in the workplace. It is the type of thoughtful writing about a serious issue that one wishes many more current writers would aspire to emulate.
In addition to providing good insight into the current state of the law, he makes the argument that it would be good for society, including employers, if they could get over their basically reflexive anti-free speech reactions, while acknowledging there is little current legal basis to require them to do so, and conceding that freedom increases conflict which runs against employer's "enduring goals of employee compliance, conformity, complacency and efficiency." Perhaps a little too cynical view of modern employers.
If you wanted to quibble, and there certainly is no reason to, one might question the use of "erosion" in the sub-title, as it perhaps implies that at one time free speech rights in the workplace were more than they are now. I don't think that's right, nor does Professor Barry really attempt to make that point. A couple more examples of small flaws from my viewpoint --he buys into organized labor's argument that the NLRB's recent decisions on who are supervisors is some watershed moment, and in his critique of employment at will probably overstates the impact of Montana's statutory alteration of that standard. And there are other similar points where arguments could be raised.
But if you are at all interested in the workplace, and I assume you are or you wouldn't be reading this post, then this is a serious book that too deserves a place in your library.
In Korb v. Lehman, the Fourth Circuit recognized that although a private employer can fire an employee for his speech, a government official can't pressure the employer to do so.
In Truax v. Raich (1916), an equal protection cases, the Supreme Court observed that the fact that employment is at the will of the parties does not mean it is at the will of the government, which can be sued under the Constitution for pressuring a private employer to fire one of its employees.
Hans Bader
: 3:50 PM
5th Circuit's Newest Judge - Leslie Southwick Confirmed
Posted
4:33 PM
by Michael Fox
Having served as a Teaching Quizmaster at UT Law School with Leslie more than 30 years ago, I am fairly confident that the individual portrayed by those trying to defeat the nomination is not who will be sworn in and serve admirably for however long he ends up sitting on the bench. Here is the NYT story, Southwick Wins Confirmation.
Interesting Thought About Electronic Discovery and Arbitration
Posted
2:35 PM
by Michael Fox
More notable because as a general rule, Rosenberg thinks that arbitration is not as cost effective as it could be and may not be worth the bother, particularly for complex cases. His thesis: if the federal courts don't reign in the cost and expense of e-discovery, getting arbitrators to carve out more narrow (less costly) rules might make it more appealing.
There's no question e-discovery is the "in-thing" now. One aspect that may not be getting enough attention is its scalability — should the same rules apply in a $100 million suit and a $10 million one and a $150,000 one?
Labels: arbitration, discovery
MDV for the Still Employed
Posted
10:44 AM
by Michael Fox
Oliver, a mechanic still works for BART, although he did transfer from the Richmond facility, where the actions occurred to Concord.
Although the SF Chronicle story doesn't make it perfectly clear, it seems as though one of the acts that he alleged was harmful was a 21 month paid psychiatric leave following a complaint by a supervisor that Hill had made threats against him and the employee who Oliver claims harassed him.
If you have been thinking million dollar verdicts don't seem to be happening quite as often based on my postings of the last six months, I am afraid you are wrong. They are there, I just haven't been as faithful a reporter. Many of them are collected as potential posts, so perhaps I will do some catch-ups in summary fashion one of these days.
For me reports of MDV's are helpful reminders of what can happen in a court room. Not that it should scare employers away from trying cases that should be tried, but it does help with a sense of urgency — there are no 100% sure winners.
Labels: MDV
American Employment Law More Liberal Than Europe
Posted
9:19 AM
by Michael Fox
For more background on the dispute that was brought by Felix Palacios de la Villa after he was forced to retire from Spanish retailer Cortefiel SA when he turned 65, see the International Herald Tribune article, Court ruling upholds mandatory retirement in Europe.
One caveat of the ruling — it is necessary to also provide adequate provisions for retirees.
This ruling must be particularly painful to those remaining partners at Sidley, Austin who have recently agreed to not only give up their mandatory retirement requirement, but also kick in $27.5 million to some former partners. See the EEOC press release here.
Labels: age
Why Employment Lawyers Worry About Defamation
Posted
9:30 AM
by Michael Fox
I first reported on the trial court decision as one of two million dollar verdicts in March 2005, Sticks and Stones May Break Your Bones. Although the 1st Circuit did knock out the $2.1 million dollar punitive damage award, it left intact an $850,000 judgment for compensatory damages.
The defamation occurred on the U-5 form that Merrill Lynch was required to complete when it terminated Ms. Galarneau. Among the statements contained in the form were these:
Ms. Galarneau was terminated after the firm concluded that she had (I) engaged in inappropriate bond trading in one client's account and (II) utilized time and price discretion in the accounts of three clients.When Galarneau's expert opined that the bond trading was appropriate it was left for the jury to determine the truth of the statement.
When it agreed with Galarneau, Merrill Lynch had only its defense that the conditional privilege was not barred because of malice. Unfortunately, the Court found the same evidence that supported falsity, also supported malice: "Evidence that Merrill Lynch approved the trading as it was taking place and defended the trading after it came under attack supports the jury's conclusion that the firm either knew the statement was false, or recklessly disregarded its falsity."
Merrill Lynch's protestations that it took those actions without knowing the true facts, while completely understandable to anyone who knows how things work in the real world, were merely a jury argument that Merrill Lynch lost.
One of Merrill Lynch's most intriguing defenses, that the Court should have applied a heightened standard of defamation based on the 1st amendment because the issue involved a matter of public concern, was left on the cutting room floor. Not because the argument might not have been successful, but because it was raised for the first time in the appellate court.
Merrill Lynch also argued that the trial court's exclusion of correspondence between "Galarneau's counsel and counsel for Merrill Lynch regarding the opportunity to review and comment upon the language Merrill Lynch proposed to use in Galarneau's Form U-5," was erroneously excluded. But showing how hard it is to reverse a judgment on the basis of an evidentiary ruling, the 1st Circuit held it was not an abuse of discretion.
Those two rulings might be enough to get Merrill Lynch an en banc hearing, which would be appropriate, but it may be that it has to settle for the 2/3 reduction in its overall liability.
For employers and their counsel, Galarneau it is a clear warning of the continuing dangers of defamation in the workplace.
Labels: defamation, MDV
Understanding Employment Law - A Book Review
Posted
9:12 AM
by Michael Fox
According to Ross:
I haven't read it yet, but based on the collective expertise of the authors and the reviewer, I will be adding it to my bookshelf. If you want to do so as well, you can find it here.If I were still teaching employment law, I would strongly recommend this book to my students. And I recommend it to any lawyer who wants to get a reliable overview of the legal tangle we call employment law.
Why You Have to Be Careful When Reading Blogs - Retaliation Claims Not Really in Danger in the Supreme Court
Posted
7:30 AM
by Michael Fox
Diversity, Inc. also has a viewpoint, and I am sure most of their posting are accurate, but a recent one, No More Discrimination Lawsuits? Supreme Court May Make It Easier to Retaliate, seems to be unnecessarily off the mark.
The basis for the article is the Supreme Court's granting of certiorari in CBOCS West, Inc. v. Humphries (06-1431) and it links to Ross Runkel's page with his description and links to the key documents.
Here's what the article says about the possible effects of the Supreme Court decision:
While perhaps technically true, when combined with the following statements:Should the Supreme Court side with CBOCS West, it would become easier for companies to retaliate against workers who file discrimination lawsuits. This would discourage many from disclosing illegal discriminatory practices.
it vastly overstates the potential significance of the case and I think unfairly castigates the Supreme Court.Federal law includes "retaliation against an individual for filing a charge of discrimination, participating in an investigation, or opposing discriminatory practices," according to the U.S. Equal Employment Opportunity Commission (EEOC).
In 2004, the EEOC received 22,740 charges of retaliation discrimination and recouped more than $90 million in monetary benefits.
A decision in CBOCS would have no impact on retaliation cases under Title VII of the Civil Rights Act of 1964, which are the the types of charges mentioned in the two quoted paragraphs and by far the vast number of retaliation claims brought in discrimination cases.
If the Court finds no retaliation is available under § 1981, it would only impact retaliation cases brought under that statute which is limited to racial claims, and basically parallels Title VII race claims with three key exceptions -- there are no statutory damage caps, a much longer statute of limitations and no administrative prerequisites.
Still the implication that retaliation law in discrimination cases is at grave risk, is a real stretch.
The case is an interesting one however as the Supreme Court will have to deal with the Title IX decision of two years ago authored by Justice O'Connor, where four of the justices felt the majority clearly exceeded the scope of the Congressional mandate to create a retaliation cause of action out of whole cloth. See my discussion at Whistleblowing in the Supreme Court, A Good Day .
I do agree with the writer of the article that it is quite likely that the outcome will be different here given the switch from O'Connor to Alito, but I don't think it is really fair to imply it is because of a hostility to retaliation claims by the present Supreme Court. Especially given that it was the Roberts court, including Justice Alito who wrote the other case which is referenced* in the article as broadening the protection provided by the retaliation provision of Title VII.
Blogs are helpful, but all of them, including this one, should be read carefully to make sure that any particular post is not one that may have missed the mark.
*The article says, "Last June, the Supreme Court enhanced protections for employees on the basis of retaliation under Title XII (sic) of the Civil Rights Act of 1964 ..." I believe that is referring to the Burlington Northern Railway v. White decision of June, 2006. See my post about that decision here.
Labels: retaliation
Family Responsibility Discrimination Doesn't Advance in California
Posted
7:04 PM
by Michael Fox
According to the Governor, the bill would not
Notwithstanding this temporary setback, I don't think anyone should write off family responsibility discrimination as an issue that employers should continue to be concerned about."only result in endless litigation to try and define what discrimination on the basis of “familial status” means, it will also unnecessarily restrict employers’ ability to make personnel decisions."
Hat tip to one of the better sources for information on current developments in California employment law, Storm's California Employment Law which has the Governor's veto message here.
Labels: family responsibility discrimination
Now That You Can't - DNA Testing - A Reason For Doing It
Posted
7:16 AM
by Michael Fox
But the good folks over at Workers Comp Insider have fortunately at least begun my education with their post, Brave new world: genetic testing and workers compensation. It will be interesting to see how the technology develops.
But clearly the laws, including the Texas version which prohibits discrimination for the refusal to take a test, will be an impediment.
What is a VEBA?
Posted
10:10 PM
by Michael Fox
See Jonathan Tasini's explanation in Post UAW-GM Deal.
Labels: traditional
Have You Tipped Your Salad Maker Lately?
Posted
10:15 AM
by Michael Fox
For example while a restaurant can pay its waitstaff $2.13 an hour, with the balance that gets them to the minimum wage (and often a lot more) coming from a tip pool, the pool has to comply with all the technical requirements set out by the department of labor.
One of those provisions that has led to litigation has been whether those participating in the pools are regularly tipped employees? One case I mention turns on whether a salad maker was a regularly tipped employee. (True confession -- I never have tipped a salad maker.)
If I had been more current on my reading I could have also mentioned the following story from the Austin Business Journals, Area restaurants served with lawsuits, to show these issues are not just an academic exercise.
I will make sure that I do that for the November 7th session to be held here in Austin, which you can still catch if you are interested. See here for registration.
Labels: FLSA
Employers and Domestic Violence
Posted
5:33 PM
by Michael Fox
I can't say that I have seen a groundswell of attention since then, but this article, Employers'play a role in preventing domestic violence, in the Birmingham Business Journal certainly does nothing to make me think the issue is going to go away.
If for no other reason, the $725 million per year in lost productivity cited in the article from a CDC study might get someone's attention. Probably not as much attention, at least right now as the $146 million spent on first and business class airline tickets by U.S. government officials, see CBS's story Flying High -- On Your Dime, but ultimately it may be a lot bigger story.
: 1:05 AM
Isn't It Time for Basketball Yet?
Posted
8:58 AM
by Michael Fox
Unlike the jury which was sent home for the night, Thomas was free to read the papers which were more than happy to help him understand what the note meant: With Defeat Looming, What's Next for Isiah Thomas, Knicks?
According to the ABC news story, the note indicated that there was one question that left the jury divided:
The members of the jury remained divided 6-1 on Question No. 4, which deals with whether Thomas will be held personally liable for punitive damages. And since the verdict form instructed the jury to skip Question No. 4 unless it had found in favor of the plaintiff, it was apparent the New York Knicks were headed for a defeat.Although this probably isn't the most significant point for Thomas and his counsel, the reporting indicates the difficulty that the press has in covering trials. I know something about employment law jury trials and I am confused about what exactly is left, because according to the various stories it could be:
- that the jury is divided on individual liability for Thomas and once that is divided, the jury will move to the "penalty phase" (not exactly a precise legal term) with the jury deciding punitive damages and the judge deciding compensatory damages;
- according to the Bloomberg story, the jury is divided on whether to award punitive damages and they can't be answering that question unless they have already decided to hold Thomas and his employer liable;
- Newsday seems to side with Bloomberg saying the issue left is "whether they should slap Thomas with punitive damages,"
- and the Detroit Free Press just leaves it open holding that the note makes clear "they have reached decisions against the defense on some of the nine claims," which appears to confuse claims with jury issues.
The good news (for us, not Thomas and the Knicks) is that it should all be a lot clearer later today as the jury returns to deliberation this morning. Of course it is not unheard of to have such notes spark serious settlement discussions.
Even Knicks basketball, bad as it is, has to be better than this for Thomas and company.
Update: Now it offficially makes it into the million dollar club: Jury awards $11.6 million in Knicks harassment case.
Labels: MDV
Employment and Labor Law Blogs - An Expanding Field
Posted
6:09 PM
by Michael Fox
While many of the "old-timers" like George Lenard, Ross Runkel, Michael Fitzgibbon and the crew at Lynch, Ryan whose Workers Comp' Insider just turned four last week, are still going strong, there fortunately has been a whole new group adding their collective insights. Just to mention a few recent articles from those relatively new, or probably more accurately, new to me (and my apologies to those I miss, although feel free to let me know):
- Alaska Employment Law - has a good post on Resources for Drafting Employment Contracts,
- Connecticut Employment Law - has a local take (for the Nutmeg state that is) on the law of Lactation in the Workplace - What Happens in Connecticut?
- The Union Free Employer - was on top of Congressional action on the RESPECT Act as it was headed for mark-up in the House with this post; and
- Pennsylvania Employment Law - with a cautionary note about reverse discrimination in Strictly Speaking Equal Employment Opportunity Means Neutrality
When I finally get around to updating my blog format and have a better blogroll, I can include all these and the many others that are now getting closer to being old timers as well, that have joined the fun.
Labels: HR general
P.S. Impressed with your knowledge of the "Nutmeg" state. Some prefer "Constitution" state, but I still like Nutmeg....
FLSA on the Cover of Business Week
Posted
9:50 AM
by Michael Fox
What is not mentioned is one of the reasons that the high settlements are being reached -- the structural process. Unlike other class actions governed by Rule 23, which have a relatively high burden for initial class certification, the courts have set a very low standard for the initial quasi-certification for collective actions under § 216(b) of the FLSA, which is sending out notice to potential class members.
Given that low standard, it is not uncommon for an employer to end up facing a class of hundreds or thousands, with very little evidence having been presented and frequently without any sort of hearing. You know it's not a good thing for employers when you read articles indicating that notice should be sought as early as possible in cases for the "settlement leverage" that it provides.
Although there is a procedure for "de-certifying" the class, it comes after the end of a long and potentially very expensive discovery period involving the "class", so there is a great pressure to settle cases rather than slug it out.
Ironically, the Supreme Court recognized the dangers of forcing the settlement of "marginal cases" because of the costs of discovery in anti-trust cases in Bell Atlantic v. Twombly decided just this past May.
In Twombly, the Court was affirming dismissal of a case based on the pleadings, and in explaining its rationale noted, "it is one thing to be cautious before dismissing an antitrust complaint in advance of discovery .... but quite another to forget that proceeding to antitrust discovery can be expensive." An apt description of an FLSA collective action as well.
Justice Souter (the author of the 7-2 decision) went on to perfectly describe the danger of launching the discovery juggernaut when very little is required:
Another problem is that the first notice is, at least in the circuits that have decided the issue so far, including the 5th Circuit, a non-appealable decision.It is no answer to say that a claim just shy of a plausible entitlement to relief can, if groundless, be weeded out early in the discovery process through "careful case management," post at 4, given the common lament that the success of judicial supervision in checking discovery abuse has been on the modest side. See, e.g., Easterbrook, Discovery as Abuse, 69 B. U. L. Rev. 635, 638 (1989) ("Judges can do little about impositional discovery when parties control the legal claims to be presented and conduct the discovery themselves"). And it is self-evident that the problem of discovery abuse cannot be solved by "careful scrutiny of evidence at the summary judgment stage," much less "lucid instructions to juries," post, at 4; the threat of discovery expense will push cost-conscious defendants to settle even anemic cases before reaching those proceedings. (emphasis added).
In many ways it is a perfect storm -- the current standard is set low and it is difficult to get cases in a position where an appellate court is going to write on changing that standard.
The roots of the easy notice standard lies in another 7-2 Supreme Court decision in an age discrimination case involving a class action based on a 1,200 person lay off by Hoffman La Roche. In a very short opinion, the Court approved the district court's facilitation of notice to the group.
Only Justice Scalia, joined by Chief Justice Rehnquist dissented:
One wonders if the Supreme Court really meant to start us down the path outlined in the BW article. Given the views expressed in Twombly, it seems highly unlikely that it did, or would do so again. The question now is how to get off that path.There is more than a little historical irony in the Court's decision today. "Stirring up litigation" was once exclusively the occupation of disreputable lawyers, roundly condemned by this and all American courts. See, e. g., Peck v. Heurich, 167 U.S. 624, 629-630 (1897); Grinnell v. Railroad Company, 103 U.S. 739, 744 (1881). But in the age of the "case managing" judicial bureaucracy, our perceptions have changed. Seeking out and notifying sleeping potential plaintiffs yields such economies of scale that what was once demeaned as a drain on judicial resources is now praised as a cutting-edge tool of efficient judicial administration. Perhaps it is. But that does not justify our taking it in hand when Congress has not authorized it. Even less does it justify our rush to abandon (not only without compulsion but without invitation) what the Court deprecatingly calls the courts' "passive" role in determining which claims come before them, but which I regard as one of the natural components of a system in which courts are not inquisitors of justice but arbiters of adversarial claims.
Labels: FLSA
Regards, Dan
The ENDA May Be in Sight
Posted
12:15 PM
by Michael Fox
"We're cautiously optimistic that we can be neutral on it when it goes to the House floor,"employers who thought that legislation which would prohibit discrimination on the basis of sexual orientation would be a long time coming, should start shortening their time horizon. The bill in question is known as the Employment Non-Discrimination or ENDA (H.R. 2015).
One reason for the change, more than 40 large companies including Coca-Cola and Marriott International are behind the bill. See Odds good for workplace protections for gays in the Atlanta Business Chronicle.
There are still some negotiations going on -- primarily over the specifics of the protection for transgendered employees and the scope of the religious employer exemption. This would seem a certainty for 2009 if it doesn't make it before then.
Labels: 2009 agenda
Discrimination Damages and Remedies in the 5th Circuit - the Palasota Story Continues
Posted
12:07 PM
by Michael Fox
Today, a 5th Circuit panel issued the second substantive decision in the case of Palasota v. Haggar Clothing Co. (5th Cir. 9/7/07). Its first decision almost 4 years to the day earlier, overturned the trial court's granting of a judgment notwithstanding the verdict.
On remand after the first decision, the trial court entered a judgment in favor of Palasota for
- $840,000 in economic damages,
- a like amount as liquidated damages,
- ordered reinstatement,
- with interim pay of $14,500 a month until he was offered a position,
- and awarded a lump sum of back pay in the amount of $525,000 for the period of time from the end of trial to the date of the second judgment
The Court found that the issue of liability was foreclosed by its first decision and that there was sufficient evidence (detailed in the opinion) to support a willful finding, and the accompanying $840,000 liquidated damage award.
In what appears to be a throw-away comment and without any citation, the Court added this unhelpful language:
Given that requesting a release is a standard practice when a severance package is being given, such evidence standing alone is unlikely to be sufficient to sustain a finding of willfulness. It's the sort of thing that if the Court is asked to revisit its opinion should be eliminated as being unnecessary, but not necessary harmless, dicta.Haggar’s unsuccessful efforts to have Palasota release it from ADEA claims upon his termination tended to show that Haggar had knowingly violated the ADEA or recklessly disregarded whether its conduct toward Palasota was prohibited by the statute.
Given the size of the judgment and that liability was already decided, the opinion is the rare case where the Court talks at length about damages and remedies. Among the holdings --
- affirmed the jury's finding of compensatory damages as supported by the evidence, even though it took into account the effect of improper discriminatory actions occurring before the limitations period;
- discussed the shifting burdens of proof on the issue of mitigation, outlining the burden on the defendant when challenging an adverse jury finding;
- reversed the court's order on reinstatement, finding that it would not be the same position he had before, would either displace or harm the income of existing employees and that there likely existed ill will among the parties that made reinstatement not a satisfactory remedy;
- sent the $525,000 front pay award back to the trial court to re-consider, with a strong hint that perhaps the liquidated damages would negate the need for such an award since it might well result in a windfall for Palasota and "ADEA damages are not meant to be punitive."
Although they may not be intended to be "punitive" given that the trial court did not believe that discrimination was proved, my guess is it would be hard to convince the employer of that.
Labels: age, damages, discrimination
Blogging for Good, and Now Evil
Posted
6:32 PM
by Michael Fox
Quoting from another blogger, Shockwave, Winegar offers this insight into the bigger idea behind this one campaign:
In the next few years about 2000 consultants and lawyers with $billions from 10,000 corporations who are doing everything they can to prevent 100,000,000 American workers from exercising their right to form a union will have to deal with 10,000 union organizers, 300,000 progressive political bloggers and 15,000,000 union members. I bet on us.I am not quite sure where the numbers in the first paragraph come from, but there is no doubting the missionary zeal with which they are spoken.
We have complementary strengths. Unions have boots on the ground, bloggers have keyboards on the Web (the most powerful and democratic form of communication and organization.) Unions have deep knowledge of union-busting and union organizing tactics, bloggers can help craft Internet based strategies that are effective and cannot be duplicated by the union busting forces.
Disseminating information, winning the war of ideas, digesting mountains of data, facilitating communications between all pro-worker stakeholders, educating union rank and file and workers on how to use the Internet to organize under the radar of union busters. We can do all this.
Winegar adds her own thoughts:
The past few decades have seen labor laws weakened, an increase in union-busting tactics, and the proliferation of vast multi-national corporations, and now many unions are looking for new, creative ways to organize. A partnership between unions and the netroots is a very powerful organizing tool that can help unions deal with these challenges.How successful this partnership will be in changing the decline in union membership remains to be seen. However, there is little debate that the internet and the communities it spawns have and will continue to make a significant cultural impact. Anyone dismissing out of hand the idea that they could be a force in union organizing, should probably think again.
Although it seems highly ironic to do so, I will tag this post "traditional", my nomenclature for that area of employment law which deals with unions and their relationships with employers.
Labels: traditional
Is the Blue Eagle Set to Fly? Minority Bargaining for Unions
Posted
3:04 PM
by Michael Fox
A simplified view of the practice Morris is advocating, minority bargaining, would work this way. If there were a bargaining unit of 100 and twenty-five joined a union and then requested that the employer bargain with them, the employer would have to. Any resulting agreement would cover only those 25 employees.
Obviously that would be a major change from the status quo where it is all or nothing. Currently using the 100 employee bargaining unit, if 51 want to be represented by the union, the employer must bargain and any agreement covers all 100 employees. On the other hand, if 49 employees want to be represented by a union, the employer has no obligation to bargain with the union.
Professor Emeritus Morris' first attempt to move beyond theory was to support an unfair labor practice charge when an employer refused to engage in such minority bargaining. That effort ran aground when the NLRB General Counsel refused to issue an unfair labor practice charge, thus ending the matter.
Undeterred, seven unions led by the Steelworkers have now petitioned the NLRB for rule-making procedures that would authorize such bargaining. In support of that effort, 25 labor law professors have indicated their support. Professor Morris is the contact person for that group. He did not get any of his fellow Texas professors to sign in support. (Actually Professor Morris now lives in San Diego.) He did get George Schatzski, formerly at University of Texas and now at Arizona State University school of law.
None of the three professors who blog at the Workplace Prof blog are on the list either, nor is the other blogging professor, Ross Runkel. (Just because they are not on the list of course does not mean that they do not agree with the position.) However, they and others are blogging about it.
For some other views and links to the documents that have been filed with the Board see:
Minority bargaining required? Professor Ross Runkel
Minority Unions Professor Jeff Hirsch
Minority Unions, Part Two - Professor Rick Bales
Other non-professors are interested as well, from what may have been the first story to break the latest developments by Steven Greenhouse in Wednesday's New York Times, Seven Unions Ask Labor Board to Order Employers to Bargain to the blog of the National Association of Manufacturers, ShopFloor, Minority Bargaining: Unions Make the Big Play and an earlier post.
The folks at Kilpatrick, Stockton who started a blog (EFCA Updates) during the Congressional fight over the Employee Free Choice Act have been following the story in depth, complete with the first links to the petition, the professor's letter and other background documents, here and here.
The general consensus, which I share, is that this is a non-starter with the current NLRB, but is another agenda item if the political winds in Washington should shift. That agenda is beginning to grow, so much so that it probably merits its own category, the 2009 agenda.
Labels: 2009 agenda, traditional
An EEOC Charge and the Local Congressman
Posted
10:12 AM
by Michael Fox
About the political issue the Court said:
Not exactly designed to assure employers about the decision making process. Guerra v. North East Independent School District (5th Cir. 8/14/07) [pdf].The EEOC letter was created under questionable conditions—the EEOC investigators initially determined that NEISD had not discriminated against Guerra but later, following complaints by Guerra to a member of Congress, reopened the file and reversed their decision without any new evidence. The district judge did not allow NEISD to subpoena the EEOC investigators to explain this matter.
For the more general comment applicable in every case, the Court said a second reason for upholding the trial court's discretionary decision to keep the determination out was that "the EEOC evidence spoke directly to the ultimate issue in the case. It would likely have prejudiced the jury since the EEOC made its own factual determination that age discrimination occurred."
Reminds me of the objection that doesn't seem to be used quite as much any more, maybe because there are relatively few trials, that an answer "would be invading the province of the jury."
Labels: EEOC
A "Sick" Business Model
Posted
12:39 PM
by Michael Fox
- Fake Doctor's Excuse, $9.95, which has the following Disclaimer: This Novelty Fake Doctor's Excuse is designed for printing and framing and although it may look real it is not a substitute for a real Dr. Excuse and should only be used for entertainment purposes.
- Create Your Doctor's Excuse Note Now, $9.99, with no disclaimer.
- Excuses, Excuses, no disclaimer per se, but the following warning: This is for entertainment purposes only. This site is not maintained by a real doctor or physician of any kind. Use at your own risk and discrestion [sic]. Not responsible for any lost wages or job. I was visitor number 14,019 according to the counter on the site.
- Excused Absences, $24.95 for five templates, including jury duty and a funeral, when you need variety I suppose.
And I thought the worse thing an employer had to worry about was a doctor being overly generous to their patient in passing out no work slips.
Labels: HR general
The Immigration Issue: Lighting the Fire
Posted
9:54 AM
by Michael Fox
The final regulations, first proposed in draft form last summer, had been delayed awaiting potential Congressional action on an overall solution to the immigration issue which of course did not happen.
Among the likely results of the final regulations between now and the end of the year —
- the Social Security office will be swamped with calls for clarification by employers;
- large numbers of individuals will lose their jobs;
- an increase in charges and litigation related to national origin discrimination; and
- more business owners prosecuted for hiring illegal aliens;
Among the possible results following the implementation of the regulation
- increased pressure on Congress to act on immigration;
- increased unemployment (official or otherwise);
- lower productivity for the nation's workforce as a whole; and an
- increased strain in relationships between the immigrant community and those supporting a hardline position on immigration
It may well be that some sort of catalyst is needed to provide the necessary foundation for a solution to this complex problem. It is possible these regulations will be that catalyst.
On the other hand, my apprehensions about the law of unintended consequences are quite high.
Update (8/10/07): Here is a link to the final "no match" regulations and also a brief summary prepared by my firm.
Additonally, the Department of Homeland Security indicated its intent to increase civil penalties as much as 25%. See the Fact Sheet: Improving Border Security and Immigration Within Existing Law, for more information on other steps announced by the Department today.
Labels: immigration, political
As Big 3 Bargaining Begins - Good News for the Bargainers
Posted
9:37 AM
by Michael Fox
After recounting the history of bargaining over the years that led to the current crises, Judge Sutton summarized the pre-settlement situation as follows:
In a decision that includes a discussion of the costs of the health care system, the condition of the the auto industry, the conduct of parties in negotiating and is a paean to attorney Billy Payne, who along with the Pittsburgh firm of Stember, Feinstein represented the class members, Judge Sutton affirms the trial court's approval of the settlement which was negotiated by UAW and the auto companies and presented to the class of retirees on a "take it or leave it" basis.These benefits are not inexpensive. Accounting for active and retired workers and their families, GM provides healthcare to 1,100,000 people, making it the “single largest private purchaser of health care in the United States,” with yearly expenditures of $5.4 billion in 2005 and with the lion’s share (nearly $3.7 billion in 2005) going to retiree benefits. GM JA 614. Ford tells a similar story. It spent $3.5 billion to cover 590,000 people in 2005, with $2.4 billion going to retiree benefits. In 2005, these aggregate healthcare expenditures added $1,525 on average to the cost of every GM vehicle and $1,100 to the cost of every Ford vehicle. But for the legacy expenses—the retiree benefits—the healthcare costs per vehicle at GM and Ford would be $480 and $346, respectively. Their Japanese rivals spend an average of $450 per vehicle for all healthcare costs, in other words for the healthcare benefits of active workers and retirees.
The Court did postpone for another day one portion of the settlement agreement that was not challenged by the 1/2 of 1% of the class members who had objected. The Court deferred what it called an unprecedented attempt to "freeze in time the 'case law' that will govern any future dispute over the vesting of the retirees’ healthcare benefits." Instead, the Court decided to "wait for another day, a day that may never come, to decide how or whether a party may enforce this provision."
For an industry that could use a few good breaks, this seems to be a good, although probably not unexpected, one.
Labels: traditional
The Legislative Front -- Employers Better Brace Themselves
Posted
12:30 PM
by Michael Fox
Except for the whistleblower provisions of Sarbanes Oxley, you have to go back almost fifteen years (the passage of the FMLA in 1993) for any significant federal employment legislation.
The Lily Ledbetter Act is a Congressional reaction to the Supreme Court's interpretation of Title VII's statute of limitations in Ledbetter v. Goodyear Tire & Rubber Co., although the potential change seems to go much broader than just reversing that one decision.
Two Republican members of the House Committee on Education and Labor, which would have been the appropriate committee to have reviewed the bill, if the House could have been bothered to have hearings, took this view:
“By gutting the long-standing statute of limitations, an employee could bring a claim against an employer decades after the alleged initial act of discrimination occurred,” noted Rep. Buck McKeon (R - CA). “That means the employee could have received wages and benefits for dozens of years, while the employer’s senior leadership could have changed numerous times during that same time period.”As I said earlier, any legal theory which requires a court's application of the equitable doctrine of laches to hold it within bounds, as Justice Ginsburg's Ledbetter dissent calling for this legislative action did, is completely out of touch with the reality of every day litigation. See Payday Blues at the Supreme Court.
“This loophole would allow a retiree to seek damages against a company now led by executives who had nothing to do with the initial act of alleged discrimination,” said Rep. John Kline (R-MN), Ranking Republican on the House Health, Employment, Labor, and Pensions Subcommittee. “The person who allegedly committed that act could have passed away – and in fact, his or her children could have passed away as well. But, under this Democrat bill, the potential for abuse and ambiguity would live on and on. Trial lawyers, you can be sure, are salivating at this very prospect.”
Although not yet announced on his website or available from the Senate's website, the Daily Labor Report is saying that Senator Kennedy has introduced the Equal Remedies Act of 2007. The intent is to remove the caps in Title VII which limits compensatory and punitive damages under that statute based on an employer's size. For an employer of more than 500, the cap is $300,000. That is in addition to back pay and other out of pocket damages, reinstatement and other equitable remedies and attorneys fees.
The stated reason -- to ensure equality for gender, disability and religious discrimination claims with those available to individuals who bring claims for race or national origin discrimination. Those claims can be brought under § 1981 which has no caps. (It also has a much longer statute of limitations and no requirement to file with the EEOC, so following the logic of this legislation, perhaps we could save some taxpayer money and abolish the EEOC.)
My only surprise is that it has taken this long to surface. Just from a political perspective it's a hard sell to argue that race and national origin claims are worth more than others.
The most appropriate action would be to place caps on §1981 claims to match those in Title VII. But that of course would violate the unwritten, but seemingly cast in stone, rule that no matter whether it is rational or not, no employee legislation is ever to be altered that could in any way be construed as adverse to a potential plaintiff. Congress can only give more; it cannot take away.
As important as it is, employment legislation and the impact the litigation that ensues from it has on employers is not very well understood by most members of Congress. If not now, perhaps in a new administration employers are going to have to make hard political choices whether to oppose totally or begin to negotiate to lessen the damage of coming legislation.
It is not too late, but certainly not too early, for employers to begin thinking about how their world may well be changing.
Labels: political
No Re-employment Clauses in Settlement Agreements
Posted
11:14 AM
by Michael Fox
The factors that will be considered are:
- the breadth of the waiver;
- the amount of the remuneration;
- strength of the retaliation case;
- representation by counsel; and
- other relevant factors.
Although there is nothing wrong with such review, as a practical matter such clauses are standard in the settlement of any employment dispute. It mirrors the reality, that very few are served by forcing parties whose last dispute ended up in the court house, to have a second try.
Let's hope it is the rare day that OSHA turns down such agreements.
Hat tip to the folks at the DLR for calling this to my attention.
Labels: whistleblower
MDV in Montana
Posted
1:59 PM
by Michael Fox
The Billings Gazette has done an admirable job of covering the story including links to numerous court documents including the complaint, the pretrial order, and depositions of the key players. For those interested in seeing what actually occurs in an employment lawsuit, this is a rare opportunity to see much of the pre-trial testimony and some of the key pleadings, including the jury instructions.
As many employment cases do, the story had a sexy side as it started with the suing officer complaining to his superior that two co-workers had provided narcotics that were used to train drug dogs to a civilian, with whom they were having a sexual relationship. According to him, the supervisor suggested "that they keep it to themselves," which started them down the long path that ended up in the court room.
After their initial story reporting on the verdict, Jury to city: Pay Feuerstein $1.3M, the paper followed up with a story focusing on what made the jurors decide the way they did. Jurors: Officer's case was strong. Although they only had substantive comments from two of the jurors, the things that led them to the award are things that frequently occur in employment law cases:
- Arrogance --
[The defense attorney] could only work with what he had, and what he had was a continuous group of smug and arrogant people who, not in their entirety, but for the most part, came off as if they're untouchable. ...
Testimony by Police Department supervisors "really swung us in the direction we went," one juror said.
- Witnesses with no axe to grind --
Some of the most compelling evidence supporting Feuerstein's claims included the testimony from three probation officers who, the male juror said, had no stake in the outcome of the case.
- Poor record keeping --
During the trial, a police sergeant acknowledged that records were kept only sporadically when training drugs in the K-9 unit were checked in and out. The male juror described the practice as "sloppy" and "embarrassing."
Again, how much money ends up in Feurstein's pocket, if any, remains to be seen. But the things that led to this interim stage, which is clearly not a pleasant one for the City and the Police Department, are issues that any employer headed to trial should be thinking about.
Labels: MDV
Daniel A. Schwartz
www.ctemploymentlawblog.com (coming 8.07)
: 6:22 AM
Some Unions Are For Outsourcing
Posted
12:07 PM
by Michael Fox
For details, see Outsourcing the Picket Line from the Washington Post
Labels: traditional
Tighten Up the Mailroom Procedures When Mailing Benefit Changes - 5th Circuit Says
Posted
12:31 PM
by Michael Fox
Unfortunately, the mail room personnel:
In light of testimony by four other employees that they did not recall having received the notice of change, the Court found a fact question existed.stated that the mail room does not keep, as a matter of practice, any records, reports, codes, or memoranda concerning what it sends out; the mail room does not know the contents of sealed envelopes received from the Benefits Department; and the computers and printers that would have been used to produce the lists to address the envelopes were discarded in February 2006. [The mailroom employees] provided no evidence, either physical or testimonial, to support Smith’s claim that the notices had been properly addressed and sent.
Although disappointing to the Company, the Court did make it clear that even if the plaintiff could establish a violation of the notification rules of ERISA, the Court was not addressing the more difficult question over which their fellow circuit courts are split — what remedy if any would be available.
Labels: ERISA
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