Jury Duty, An Obligation Sure, But Also a Large Reward
by Michael Fox
I just happened on this post today by Adam Rich, talking about his 5 Lessons From Jury Duty that was posted on an American Express Forum for small businesses. I think his points are valid, although frankly, my role is more as a consumer of juries than as a participant.
So perhaps it is a little stretch for me to claim how large a reward jury service can be, but from jurors I have talked with or heard talk about their experiences, even those who thought a case was silly or a waste of time, have never the less come away with a renewed respect for the judicial process.
We are all binded by our own biases, but from my seat in trial representing employers, I am always amazed at how it is the individuals we would typically identify as those most likely to share the employer's perspective who are the least able to serve because they are too busy (an excuse that never works by the way) or because they just can't set aside their long held beliefs about the frivolousness of laws suits or whatever and listen to the evidence and be fair and impartial.
Call me cynical, but I am inclined to think that much more often they have figured the "out" than that they are any less able to be open minded jurors than all the other folks who seem to be able to put aside their past experiences and be fair.
Which if you are an employer type, you might think about when you hear that time honored phrase in reference to your particular law suit being tried by a "jury of your peers. " What that often means is a jury panel where all those who will at least understand the context in which the decisions you are defending were made, are the most likely to be gone well before the time that peremptory strikes are made.
Friday, June 22, 2012
Texas Supreme Court Advisory on Attorneys' Fees in TCHRA Cases
by Michael Fox
A short message to plaintiff's attorneys in TCHRA cases from the Supreme Court: join your defense brethren in "measuring out your life with coffee spoons," i.e. keeping contemporaneous time records of what you do.
Actually Justice Medina's opinion did not reference T. S. Eliot's The Love Song of J. Alfred Prufrock, that was my literary spin, but the message from today's decision El Apple I, LTD. v. Olivas (TX 6.22.12) makes just that point.
Thus, when there is an expectation that the lodestar method will be used to calculate fees, attorneys should document their time much as they would for their own clients, that is, contemporaneous billing records or other documentation recorded reasonably close to the time when the work is performed.
The Court also cast a doubtful eye on the lower court's doubling of the lodestar amount. Although the majority found that because in this case there was no appropriate lodestar, it was too soon to address the validity of the doubling, it gave a general standard to be applied:
We accordingly accept the premise that [a] lodestar presumptively produces a reasonable fee,
but that exceptional circumstances may justify enhancements to the base lodestar.
But by noting that while state courts are not bound by federal standards, that they "may appropriately consider them," it seems clear that the Court was signaling that such adjustments should be rare.
All of this came about because an award of just over $100,000 to the plaintiff had resulted in an attorneys fees award of $464,000 for the trial of the case with another $99,000 for defending post-judgement motions and appeals.
Monday, June 18, 2012
Function Over Form: The Supreme Court's Realistic View of the FLSA
by Michael Fox
For those who think that one of the travesties of the recent history of employment law has been the explosion of FLSA collective action litigation, today's 5-4 decision by the Supreme Court holding that pharmaceutical representatives are in fact exempt employees under the outside sales exemption is a re-affirmation that common sense can in fact prevail. Christopher v. SmithklineBeacham Corp. (6/18/12).
Although a critical decision for the pharmaceutical industry in its own right, the case has generally been viewed more importantly for its insight as to the weight the Supreme Court would give to agency views of the laws they enforce. Here the DOL had weighed in as amicus in a series of law suits arguing that the pharmaceutical sales reps were not exempt, although the DOL had given differing views as to why that was so.
The majority opinion begins with Justice Alito's description of why the DOL's position is not entitled to deference. Perhaps more significantly, the dissent written by Justice Breyer, the member of the court with the most claim to administrative law expertise, agrees. In fact, on this key point, it would be fair to say that this is a 9-0 decision. Justice Breyer writes:
In light of important, near-contemporaneous differences in the Justice Department’s views as to the meaning of relevant Labor Department regulations, I also agree that we should not give the Solicitor General’s current interpretive view any especially favorable weight.
Although casting the blame on the Department of Justice, not the Department of Labor, it is clearly a rebuke to the DOL.
Having jointly rejected the DOL's view, the two wings of the Court still reach a different outcome on their own independent review of the exemption.
The problem is that we have a 1938 statute designed for a very simple economic model which existed at the time was adopted. The FLSA was designed for an even pre-Leave it to Beaver world, where a factory was divided between the white collar workers in the front office and the blue collar workers in the back, whose product was sold by the Willy Loman's of the world, who packed their sales bag and left on Monday through Thursday and returned to do their paper work on Friday. Trying to use regulations written for that world, in today's workplace results in often ludicrous results.
It seems clear to me that the Supreme Court understands this historical fact, at least as relevant to the outside sales exemption, as it noted that the DOL had been authorized by the statute to issue regulations, and that those regulations were issued in 1938, 1940 and 1949, and in 2004 "following notice-and-comment procedures, the DOL reissued the regulations with minor amendments." Although they limit that historical reference to the outside sales exemption, I think a review would indicate that it is applicable for much of the remainder of the FLSA and its regulations as well.
The points relied on by the majority in rejecting the formalistic view of the minority are significant and could be utilized by other courts to rein in what has been an overly mechanistic view of the FLSA:
- that until 2009, the pharmaceutical industry had "little reason to suspect that its longstanding practice of treating detailers as exempt outside salesmen transgressed the FLSA."
- that the DOL had never initiated any enforcement actions or otherwise suggested that it thought the industry was acting unlawfully.
- the realization that pharmaceutical sales reps, whose average income is $90,000 a year according to the opinion, "typically earn salaries well above the minimum wage" and enjoyed other benefits that "set them apart from the nonexempt workers entitled to overtime pay." Hardly the kind of employees the FLSA was intended to protect.
- That it would be "challenging, to say the least" for pharmaceutical companies to compensate reps for overtime going forward without significantly changing the nature of that position.
- Rejecting a legalistic argument, that requires title to pass, to instead taking a more "realistic approach" of what the outside salesman exemption is meant to reflect.
Let me be clear what my argument is. At least with respect to mis-classification cases, in the last 10 years plus, the FLSA has been used to extract tremendous sums from employers, who had no intent to cheat or abuse their workers. The beneficiaries of that extraction have been employees, who generally knew what their job involved and knew what they were going to be paid for doing it. In other words, the true economics were already baked in, and an after the fact application of a formalistic approach, with its accompanying lack of "fair warning" discussed by Justice Alito, is not a good economic use of resources.
The biggest beneficiaries of course have been the repeat players, lawyers who represent the plaintiffs in those cases, who of course have taken their share of the extraction, and lawyers who represent the defendants (including me and my firm) in those cases.
In a world where there are many issues that call out for righting, for the most part mis-classification under the FLSA has not been in my mind a worthy fight. Today's decision is by no means the end, but it is at least a bright and correct light.
Labels: FLSA, Supreme Court
The NLRB in the Non-Union Setting: Making A Point
by Michael Fox
For years I have been a member of seminar planning committees, and inevitably the talk gets round to an NLRA topic. In Texas, that usually meets groans and comments to the effect that no one is really interested because very few practitioners actually deal with union related matters.
Inevitably, one solution was to title the program slot, something along the lines, The NLRA for the Non-union Company. And while that often at least made the program, it was still hard to generate much enthusiasm.
However, the current Board seems intent on getting out the message that indeed concerted activity, not just union activity, is what is protected, including today's launch of a web page describing Protected Concerted Activity, complete with state by state links to cases where the Board has found such activity.
For example, clicking that link and the button located prominently in Texas, pulls up 16-CA-025349:
A supervisor at a dental association was fired after she refused to divulge the names of employees who had anonymously signed a petition protesting top management. The Board found the discharge was unlawful because she had rightfully refused to violate federal labor law by punishing concerted activity. In a settlement, the supervisor and another former employee waived reinstatement in exchange for $900,000 in lost wages and benefits.
It will not take too many stories of that nature to get the word out.
That's a far cry from what life was back in the late 1970's and early 1980's. I can't remember the exact date, but I was in the San Antonio office of the NLRB waiting to see some one and the phone rang. The secretary answered the phone, and sitting right across from her I could tell that it was an employee calling with a possible complaint. After listening a moment, she asked, "Is there a union involved?" and obviously getting a negative response, hung up the phone with a "Well, we only handle matters where there are unions."
Oh how times have changed.
Labels: NLRA, traditional
Wednesday, June 13, 2012
Intentional Infliction of Emotional Distress, A Dangerous Cause of Action
by Michael Fox
This headline, Steelworker awarded $25 million in New York racial lawsuit might seem to come from a typical Title VII or Section 1981 case for racial discrimination.
According to the story in the Cleveland Plain Dealer, the plaintiff Elijah Turley, who is black, testified that
"KKK" and "King Kong" graffiti were written on the walls of the plant and a stuffed monkey with a noose around its neck was found hanging from his driver's side mirror.
But it was not as if the company did nothing in response as evidence indicated that the company hired a private investigator, installed security cameras and suspended some of the employees involved in some of the incidents.
But it's my guess from another quote in the story that although based on racially based behavior, it was not a race discrimination claim, but instead a claim for intentional infliction of emotional distress. That's based on the quote from Turley's lawyer that the conduct was "atrocious and intolerable in a civilized society," which is language taken from the Restatement of Torts discussion of the tort of intentional infliction of emotional distress.
Texas struggled with this as an employment law tort, with approximately 10 cases passing the muster of that supposedly high standard at both the trial and appellate level only to be rejected by the Supreme Court. (One case did survive the Supreme Court's review.) Finally, the Supreme Court basically eliminated the tort from Texas employment law, finding that it was designed as a gap-filler, one that was to be used only if no other cause of action existed.
Unfortunately, for the defendants, they weren't in the Lone Star state.