Jottings By An Employer's Lawyer

Disability Discrimination Law Is a Mess in More Than Ohio

2012-01-08T20:23:00.001-06:00

Jon Hyman, at Ohio Employer's Law Blog who does a great job of keeping up with developments in the Buckeye state and beyond, has an interesting post about the differences of the definition of disability under the ADA and the Ohio state version. Because of that difference, it's hard not to agree with his conclusion, Disability discrimination law in Ohio is a mess.

While true, it raises the bigger problem with disability discrimination laws at all levels. Unlike race, age, gender, color and national origin which are immutable and known characteristics, whether one is disabled or not, is a legal determination.

Employers must make that determination, and make it correctly at the outset, when faced with dealing with an employee. The fact that it is not always clear cut needs no more evidence than all the cases that have been decided by different courts, often where an appellate court has reversed a district judge. If after full development and briefing, it remains a hard decision for judges, where's the fairness of requiring that employers get it right, or be in violation of the law?

Of course the default position is to treat every possible disability as a disability. While that is a potential solution, is it really effective? And even if it is, is the net gain to society worth the costs that go with it?

The real problem is that in an effort to ensure that people with non-obvious disabilities are protected, as well as those with a condition which no one would dispute is a disability, we have created this rather odd situation, where we toss out a complex legal definition, subject to many variables and interpretations, and require that employers who have hundreds of personnel decisions a week, get it right or else.

It is ironic that we have a much clearer means of identifying who is entitled to utilize parking spaces reserved for the disabled, you either have a government or company issued permit or you don't, than we do making the potentially costly deteremination of whether an individual is disabled under the ADA or one of the state versions.

We are not going to change (the Fox rule of employment law -- Congress does not roll back rights it has given employees) -- but it would be nice if everyone at least realized this unique aspect of this area of law. Particularly as they see how much in the way of judicial and employer resources it is going to consume over the next decade and the ones that follow.

One Prediction That Had Some Legs

2011-12-22T16:22:00.000-06:00

Forecasting is an art not a science, and truth be known luck is probably the most single important factor if one gets it right, still I could not help but think back to one of my first posts of this year, 2011 --- the Year of the Non-minority? where I thought that we might see

more cases where what might be thought to be "non-minority" employees are claiming that they have been treated differently because of their race.

Now a few days before year's end the 5th Circuit decides Vaughan v. Woodforest Bank (5th Cir. 12/21/11). Ms. Vaughan, a white bank manager who managed a work force that was almost all black was terminated for what was described as "inappropriate comments in the presence of employees and customers that created a perception of racial discrimination and uncomfortable environment due to lack confidentiality."

The Court reversing a summary judgment in favor of the employer discussed the three comments that were said to underlie this conclusion. Without really saying so, the Court seemed to be saying that the comments did not seem to them to set a racial tone. Although its unclear how much it influenced the decision, it did note that the manager who made the decision to terminate Vaughan had a view that any discussions of race were problematic: "we cannot talk about race in the workplace" and "if you talk about race in the workplace it's racial discrimination."

Probably pushing my luck, but I sense that this particular type of case may have more than a one year run.

Why Employers Don't Like Statutes Creating Causes of Action

2011-12-20T12:56:00.000-06:00

One of the responses by the employer community to almost any proposed statutory cause of action is not that it supports employers who engage in whatever conduct is going to be prohibited, but that by adding yet another statutory cause of action, there is yet one more way for a lawsuit to be brought.

If you accept my basic premise, when a a lawsuit has been filed, the employer has lost, and from that point on, the only question is how much, then that argument makes sense. The issue is finding the balance, and I would argue that we have plenty of such legislation and could have a "holiday" to use a phrase currently in the political discussion from any additional new statutory causes of action. Particularly since causes of action never go away.

What brought about this particular post was a decision last week by the 7th Circuit which is a true head scratcher, DeGuelle v. Camilli (7th Cir. 12/15/11) [pdf].

Among other things you had a

A Sarbanes Oxley complaint filed against a privately held company, so there was no coverage;
A RICO action predicated on the actions related to tax accounting that the terminated employee had been raising for years, and where
the Court relied on the provision in SOX that prohibits termination of a whistleblowing employee, because it is a listed statute for a predicate act for RICO purposes.

But I think what got me even more than the unusual legal aspect of the case was the account of the type of situation that anyone who has been doing this long enough has seen before. An irreconcilable difference of opinion develops between an employee feels who feels there is serious wrongdoing, an allegation that the company does take seriously, but disagrees with, and the inevitable bad outcome that occurs.

Because it is a review of summary judgment in favor of the employer, which was reversed, the Court had to accept all the allegations as true, and by doing so you have to assume egregious conduct including intentional tax violations and cover up.

But what is also true is that the employer had already sued the employee in state court for disclosing confidential information and obtained a judgement of $50,000 against him. To be fair, that is on appeal.

I obviously have no knowledge of who is right and who is wrong, but I do know that we have created in a relatively short period of time a very complex web of legal arguments for employees who are fired to say their termination was illegal. This decision points out how such statutes interact to create even more ways.

Whether that is good or bad is a legitimate question, but we really are reaching the point where a weighing of the good and bad is in order. Not just an automatic more is better.

The 9th Circuit Does Their Part On Oracle Case, Extending California Labor Laws

2011-12-16T17:50:00.000-06:00

One of the issues that I think has the potential to cause a lot of trouble for employers is the application of one state's labor and employment laws to employee who travel to work in another state. In today's mobile world that is a lot of folks, especially employees located near state borders.

Basically, what happened is that Colorado based trainers who work for California based Oracle, brought a suit claiming that they should be paid in accordance with California wage and hour laws for the days they did training in California. The District Court rejected the claim. A 9th Circuit panel reversed. After a request for en banc hearing, the question was certified to the California Supreme Court. The Supreme Court basically gave the same answer the 9th Circuit had -- California law is applicable for the days the instructors worked more than a full day in California. See, Sullivan v. Oracle Corp. (Cal. S.Ct 6/30/11).

This week, the 9th Circuit completed the round trip (and engaged in a little mutual back patting), allowing as how, just like they did in their original opinion, the California Supreme Court got it right. They threw out some constitutional arguments on the part of Oracle and remanded the case for further proceedings. Sullivan v. Oracle Corp. (12/13/11).

How much training did they do? Not all that much. One plaintiff did 150 days in Colorado, 32 in California and 52 days in other states. The next year, 150 in Colorado, 12 days in California and 20 days in other states and the third year of the period, 150 in Colorado, 30 days in California and at least 19 days in other states. The other two plaintiffs had even less time in California.

The only thing that prevents this decison from being a total disaster is the following paragraph:

The contacts creating California interests are clearly sufficient to permit the application of California’s Labor Code in this case. The employer, Oracle, has its headquarters and principal place of business in California; the decision to classify Plaintiffs as teachers and to deny them overtime pay was made in California; and the work in question was performed in California.

Which keeps alive an argument that the case is only applicable to California based employers, although I am sure that cases are already in the works to challenge that aspect of the case.

Ultimately, I think this is an issue that the Supreme Court has to take up. From my prior experience there is precious little law on how we deal with state laws on "traveling" employees.

Talk about an impact on commerce.

Hopefully I am wrong, but I would not be surprised if this were one of the hot new things in 2012. And after enough are filed, maybe we will start to get some answers. Hopefully better ones than this weeks ruling.

The Law of Unintended Consequences: Immigration and E-Verify

2011-10-31T14:15:00.000-05:00

A recent article in Businesweek, A Verification System for New Hires Backfires makes clear just how complex the immigration issue is.

The story of one flower grower's attempt to utilize E-Verify, the national registration system that allows an employer to check on worker's eligibility (after they are hired) has made it very difficult to staff his green houses, particularly during the spring growing season. Even accounting for some hyperbole his quote is fairly chilling: "Those who want to work fail to pass E-Verify, and those that pass fail to work."

The system, now utilized by about 5% of America's employers according to the article, would be mandatory if a bill, H.R. 2885 introduced by Representative Lamar Smith (actually my congressman) were to become law. If you want to check out the E-Verify website for yourself, go here.

The bill has been passed by the House Judiciary Committee, and is still pending in the House Education and the Workforce and Ways and Means. See here for Congressional action.

The stop in Ways and Means is not just an idle one, since according to a 2008 Congressional Budget report, a national mandate would cut federal tax revenue by more than 17 billion dollars (that's billion with a B).

Everyone knows that immigration is a major problem that actually needs a solution. And it seems to me to be area where the law of unintended consequences could be particularly relevant.

A hat tip to Kriss Dunn at [the hr capitalist] for his post, 99 Problems: E-Verify Ain't One ...

Missed This New Jersey MDV the First Time Around

2011-10-21T10:18:00.000-05:00

I was in Lubbock yesterday talking to their SHRM chapter about retaliation and the dangers of those cases, along with its first cousin whistleblowing, and this headline did nothing to change my mind. Former Warren Township prosecutor awarded $1.26M for whistleblower complaint.

A city prosecutor, Michele D'Onofrio won a verdict of $1.38 earlier this year when a New Jersey jury determined she had been terminated for reporting that a municipal judge had been drunk on the bench. Today's headline was about an additional $1.26 million awarded by the court for attorneys fees and costs.

Another powerful reminder that when you lose an employment law trial, at times the attorneys fees can be just as big a hit as the underlying award.

A 2007 post at the Victim of (Judicial) Greed blog, Heating Up has much more detail about the underlying suit which appears to have been against a law firm headed by a former New Jersey governor and was for sexual harassment as well as the whistleblowing complaint.

Which underscores another point, there is often much, much more to any story than appears on the initial reading, and that is particularly true in most cases of legal reporting.

A Timely Follow Up -- The Importance of Action Not Words

2011-10-07T17:44:00.000-05:00

Given the topic of my previous post --- the need for employers to step up and make sure they dealt with bullying behavior rather than leaving it to legislation --- it was ironic to come across Bob Sutton's post, Adopting The No Asshole Rule: Don't Bother If The Words Are Hollow.

The first part of that title is a big step for employer's solving the bullying problem; but it only works, it you follow through.

Giving Aid to the Enemy: The Healthy Workplace Act Explained

2011-10-07T12:04:00.001-05:00

David Yamada who posts at Minding the Workplace is also the author of a model bill, The Healthy Workplace Act (HWB), designed to address bullying in the workplace. A recent post, The Healthy Workplace Bill: What’s it all about?, gives a bit of the procedural history but also links to what he calls an "excellent slideshow that explains the need for, and basic provisions of the HWB," that was prepared by Deb Falzoi, a professional web designer and computer graphics expert who doubles as communications director for Massachusetts Healthy Workplace Advocate.

I concur -- it is an excellent slideshow. And if you have any interest in the issue (or just want to see a very impressive presentation) I encourage you to check it out.

Recommending that you check it out, could seem strange given my repeated opposition to the passage of the HWB. And to be clear, the "enemy" referred to in my headline is not really accurate. Bullying behavior is wrong and should be addressed and with that I am in common cause with David and the other supporters of the HWB.

Our difference, and it is a substantial one, is how best to get there. I do not believe the legal system, the HWB's preferred method, is capable of making the types of nuanced distinctions required to enforce the HWB.

As Exhibit A, I offer the presentation. When you check it out, pay careful attention to the types of behavior that can be called "bullying":

false accusations
yelling, shouting, screaming
exclusion and "the silent treatment"
withholding resources necessary to do their jobs
behind-the-back sabotage and defamation
put-downs, insults, and excessively harsh criticism
unreasonably heavy work demands

and please explain how a legal system that is stressed deciding whether an employment decision was based on race or gender, is going to distinguish between what is a reasonable and and unreasonable work demand, or appropriate, constructive criticism versus excessively harsh criticism, just to cite two of the categories.

I know that the HWB attempts to put in procedural protections to ensure that a suit can't be based on "just a bad day at the office," but as someone who is in the trenches where those battles are fought, I know it will not work. (Let me rephrase that, it could work, but at a tremendously prohibitive cost in both judicial and employer resouces. Lawyers, however, would benefit tremendously.)

Relying on trial courts to be effective gatekeepers on this issue is simply a flawed strategy. First, it ignores the basic principle that when an employer is sued they have lost. See my earlier post, Bullying As a Cause of Action: One Large Step Closer. Given the HWB to work with, any lawyer who could not craft a viable complaint on what he or she is told by any employee who is unhappy with their workplace, should turn in their bar card. Remember the standard for chucking it out at that stage, which would still cost the employer the cost of retaining counsel and making an initial pleading, generally requires the court to accept as true anything that is alleged in the complaint.

Secondly, it has not worked even when there was a much higher bar. In Texas, the Supreme Court has repeatedly lamented the failure of lower courts to serve in the gatekeeper function in cases of intentional infliction of emotional distress, where the standard is:

only where the conduct has been so outrageous in character, and so extreme in degree, so as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Restatement (Second) of Torts, Section 46 cmt. d (1965).

If the trial courts can't screen out cases where the test is "outrageous conduct" we can't possibly expect them to do so where they are being asked to make subtle distinctions involving the kinds of conduct listed above. In fact, it would require what courts from the Supreme Court on down have frequently insisted they are not interested (or capable) of being, "super personnel departments" as the 1st Circuit described it.

The key to regulating inappropriate conduct lies in employer action. And in the presentation, there is a section on how such conduct is harmful to business. That is the case that needs to be made.

Let's just make it in the C-Suite, not the courthouse.

Disparate Impact and the Non-Traditional Plaintiff

2011-10-04T15:47:00.003-05:00

At the start of the year, I noted that one thing that seemed to be a "trend" was litigation by non-minority plaintiffs. See, 2011 -- the Year of the Non-Minority?

Throughout the year I have noted other cases. And now Molly DiBianca who is always on top of things at the Delaware Employment Law Blog has picked up yet another case recently decided by the 3rd Circuit, Disparate Impact of Newark, NJ’s Residency Requirement .

In Meditz v. City of Newark, (9.28.11) [pdf] a white male analyst job applicant was rejected by the City of Newark because he did not live within the city limits. The Court summarized the case in perfect disparate impact terms:

Meditz alleges that the residency requirement adopted by Newark for its non-uniformed work force has a disparate impact on white, non-Hispanics because Newark‟s population does not reflect the racial make-up of the relevant labor market in the surrounding area. As a result, white, non-Hispanics are under-represented in Newark‟s non-uniformed work force.

Although there were a number of statistical comparisons, one was between the City of Newark and Essex County, the county had 42.96 % white, non-Hispanic employees in the non-uniformed ranks compared to Newark's 9.24%.

The decision has a good discussion not only about the statistical basis for finding disparate impact, but how to determine the relevant job market and the correct standard for the business necessity defense.

About the only thing that this case does not stand for is that lawyers are being more receptive to bringing claims on behalf of non-minority plaintiffs. Mr. Meditz represented himself, including at oral argument.

Maybe Not So Ho Hum at the Supreme Court: FLSA and Wal-Mart v. Dukes

2011-10-04T10:35:00.000-05:00

In addition to denying cert on the USERRA hostile environment case (see yesterday's post), the Supreme Court yesterday also reversed an FLSA case from the 9th Circuit:

10-1202 CHINESE DAILY NEWS, INC. V. WANG, LYNN, ET AL.
The petition for a writ of certiorari is granted. The judgment is vacated, and the case is remanded to the United States Court of Appeals for the Ninth Circuit for further consideration in light of Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___ (2011). Justice Breyer took no part in the consideration or decision of this petition.

The use of Wal-Mart Stores, Inc. v. Dukes in an FLSA case is a key link for those who are advocating for greater control by the courts of FLSA collective actions. Unfortunately, as the 9th Circuit opinion shows, while the case is an FLSA case it is also a Rule 23 case on the state law claims. So, the linkage is not as definitive as one would like.

And according to the Employment Law 360 story ($) Citing Dukes, Supreme Court Vacates $7.7M FLSA Award, which tipped me off to the case, the argument that got the Supreme Court's attention was in fact the 9-0 portion of Wal-Mart v. Dukes:

In its petition, the Chinese Daily News leaned heavily on the decision, in which the Supreme Court unanimously ruled that claims for injunctions or declaratory rulings in class actions typically don’t allow for monetary payments.

For a more aggressive attempt to use the Dukes decision in a pure FLSA context check out the mandamus action recently filed in the 6th Circuit, In Re HCR ManorCare ($). The employer which had been ordered to send notice under the two-step Lusardi standard had challenged the court's continued use of such standard in light of Dukes. Unfortunately, last week, the Court denied the petition.

However, if (like me) you are looking for glimmers of hope, the Court did note "Moreover, “because mandamus is a discretionary remedy, a Court may decline to issue the writ if it finds that it would not be ‘appropriate under the circumstances’ even if the petitioner has shown he is ‘clear[ly ] and indisputabl[y]’ entitled to it.”

To be fair, the Court did not find that the employer was entitled to the writ. However, with these cases and others, it does appear that small chinks in what heretofore has been a fairly impermeable wall protecting easy passage to conditional certification for FLSA collective actions are beginning to occur.

Although it would be disruptive to the financial income of lawyers who practice on both sides of the FLSA docket, I can't think of a single trend in employment law that could be more important.

First Monday in October - Ho Hum for L&E Types

2011-10-02T17:52:00.018-05:00

Tomorrow marks the start of the Supreme Court's new term, and at least for private sector Labor and Employment types, there's not a lot to get excited about. (From the employer side of the docket at least the Court has not taken a retaliation case!)

In fact, at least according to one of the Justices the Court does not have many exciting civil cases in general for a somewhat surprising reason, Justice Kennedy says fewer “big civil cases” on Supreme Court’s docket due to arbitration.

It's not as if there are none and as always, the SCOTUS Blog is great source of information. The current cases with a labor and employment flavor include:

10-553 Hosanna-Tabor Church v. EEOC. Whether the ministerial exception, which prohibits most employment-related lawsuits against religious organizations by employees performing religious functions, applies to a teacher at a religious elementary school who teaches the full secular curriculum, but also teaches daily religion classes, is a commissioned minister, and regularly leads students in prayer and worship.

This is actually set for argument in the first week of the Court's term and is a private sector case. As a general rule the lower courts have interpreted the ministerial exception to Title VII broadly, and I would anticipate the same by the Supreme Court.

Update: Although I doubt that it has little relevance to the decision, I was struck by this article, Red Mass Marks Start of Supreme Court Session from today's New York Times discussing The Red Mass, at least the Supreme Court style which is held on the 1st Sunday in October at St. Matthews Cathedral in D.C. This Court now consists of six Catholics, three Jewish members and no Protestants.
10-1016 Daniel v. Maryland Court of Appeals. Whether Congress constitutionally abrogated states’ Eleventh Amendment immunity when it passed the self-care leave provision of the Family and Medical Leave Act.Whether Congress constitutionally abrogated states’ Eleventh Amendment immunity when it passed the self-care leave provision of the Family and Medical Leave Act.
10-1121 Knox v. SEIU. (1) May a state, consistent with the First and Fourteenth Amendments, condition employment on the payment of a special union assessment intended solely for political and ideological expenditures without first providing a notice that includes information about that assessment and provides an opportunity to object to its exaction? (2) May a state, consistent with the First and Fourteenth Amendments, condition continued public employment on the payment of union agency fees for purposes of financing political expenditures for ballot measures.

If you were looking for a case that might have some indirect impact, you might look at a case involving EPA procedures

10-1062 Sackett v. EPA. (1) Whether petitioners may seek pre-enforcement judicial review of the administrative compliance order pursuant to the Administrative Procedure Act, 5 §704; and (2) whether, if not, petitioners’ inability to seek pre-enforcement judicial review of the administrative compliance order violates their rights under the Due Process Clause?

Although I have not compared the statutes I can see some parallels to whistle blower statutes, e.g. Sarbanes Oxley, which allow for pre-hearing reinstatement during the pendency of the case.

Probably more important are potential cases where cert is pending that could be accepted.

10-1546 Carder v. Continental Airlines. Whether the Uniformed Services Employment and Reemployment Rights Act (“USERRA”) provide service members a cause of action when their civilian workplace is sufficiently poisoned with harassment based upon military status so as to alter conditions of their employment.

The 5th Circuit decision held as a case of first impression that there was no cause of action. (The matter was handled by Jeff Londa and Flynn Flesher of the Houston office of Ogletree Deakins.)

Update 10.3.11: The Court has denied cert in today's Order List.
10-1163 Opp v. Office of the State's Attorney of Cooke County. For purposes of the Age Discrimination in Employment Act, who is a worker “at the policy making level”?

Update 10.3.11: The Court has denied cert in today's Order List.
11-204 Christoper v. SmithKline Beacham Corp. (1) Whether deference is owed to the Secretary of Labor's interpretation of the Fair Labor Standards Act's outside sales exemption and related regulations; and (2) whether the Fair Labor Standards Act's outside sales exemption applies to pharmaceutical sales representatives.

After last year's blockbuster session on labor and employment issues, it wouldn't be the end of the world for a year without anything of great significance.

On a personal note, I can never note the opening of the Court's new term without remembering fondly one of my former partners, Bob Mebus, who always used the occasion to change to his fall wardrobe. (In Texas a somewhat arbitrary line I can assure you.) Although Bob, who was one of the great traditional labor lawyers in Texas is now retired, I would be surprised if he does not still mark the occasion.

Workplace Violence Gains Formal OSHA Investigation Procedures

2011-09-29T10:49:00.000-05:00

On September 8, OSHA issued Directive CPL 02-01-052, which for the first time establishes procedures for investigating workplace violence complaints.

Two industry groups get singled out for particular focus:

Healthcare and Social Service Settings

This category covers a broad spectrum of workers who provide healthcare and social services in psychiatric facilities, hospital emergency departments, community mental health clinics, drug abuse treatment clinics, pharmacies, community-care facilities, residential facilities and long-term care facilities. Workers in these fields include physicians, registered nurses, pharmacists, nurse practitioners, physicians’ assistants, nurses’ aides, therapists, technicians, public health nurses, healthcare workers, social and welfare workers, security personnel, maintenance personnel and emergency medical care personnel.

Late-Night Retail Settings

This includes entities such as convenience stores, liquor stores and gas stations. Factors that put late-night retail employees at risk include the exchange of money, twenty-four hour operation, solo work, isolated worksites, the sale of alcohol and poorly-lit stores and parking areas.

In determining whether to conduct an investigation, OSHA personnel are to take into consideration known risk factors as identified by NIOSH; whether it is in one of the high risk industries identified by OSHA (see above) and whether feasible abatement methods exist to address the hazard(s).

There is no specific violence in the workplace standard, but there is the general duty clause, and the Directive mentions some other standards that might come into play:

29 CFR 1904 Recording and Reporting Occupational Injuries and Illnesses.
29 CFR 1910.151 Medical Services and First Aid.
29 CFR 1926.23 First Aid and Medical Attention
29 CFR 1926.35 Employee Emergency Action Plans

This Directive is a must reading for these two industries and for all those who are on your crises management team . (You do have a crises managment plan and team, don't you?)

ADA Cases Are No Longer Unwelcome in Plaintiff Counsel's Offices

2011-09-28T12:48:00.000-05:00

Lynne Seabrook was working as an assistant registrar for Upper Iowa University focusing on its Malaysia campus when she was terminated in February 2009. She felt that the termination was because she had been diagnosed with depression, post-traumatic stress disorder and anxiety.

Based on several conversations I have had in the last few months with attorneys who regularly represent employees, the most significant aspect of that scenario was that she was not terminated two months earlier. If she had been terminated in December, 2008, before the broad amendments to the Americans with Disabilites Act became effective, she might never have been the happy beneficiary of this headline from last week's WCF Courier, Former UIU employee awarded $1.1M by civil jury.

Many of those attorneys I have talked with said while they formerly turned away ADA cases because they were such summary judgment targets, they were now giving them a much closer look.

Headlines and jury awards like this, will do nothing to discourage that view.

Suit By EEOC Not Covered Under EPLI Policy

2011-09-28T11:59:00.000-05:00

It probably seemed like such a simple proposition. EEOC sues employer for sexual and racial harassment, racial discrimination, retaliation and constructive discharge. Employer has an EPLI policy.

Big claims, big settlement -- $2,000,000 plus another $700,000 in legal fees.

No question but that all of the allegations are clearly covered under the policy.

But the definition of covered "claim"? That was a different story. It read simple enough:

a civil, administrative or arbitration proceeding commenced by the service of a complaint or charge, which is brought by any past, present or prospective ‘employee(s).’

Since the underlying case settled, the law suit was between the employer and the EPLI carrier, who argued that the claim was not covered because it was not brought by a 'past, present or prospective employee.'

You know it is no longer a simple proposition, when the Court summarizes some of the arguments in this way:

In its Response to [the Insurance Company's] Motion, [the Employer] elaborates that the use of a comma followed by the word “which” means that the qualifying phrase modifies only the subject that immediately precedes the comma – in this case, only to “complaint or charge.” [The Employer] asserts that if [the Insurance Company] intended to require that the “proceeding” be brought by an employee, the entire phrase “commenced by the service of a complaint or charge” should have been offset with commas.

Hard to believe, but it gets even worse when the Court goes on to note that what the Employer was really referring to was the grammar principle of the "last antecedent rule."

But the bottom line in the trial court -- no recovery as not covered by the policy. Cracker Barrel Old Country Store, Inc. v. Cincinatti Insurance Co., 3:07-cv-00303 (M.D. TN 8/11/11). If you are the employer, that's a big ouch.

Two thoughts:

Given the dollar amount and the result, it is likely the 6th Circuit will get to weigh in on this decision;
In corporate risk departments right now, EPLI policies are being re-read and calls are being made to brokers making sure that suits brought by governmental entities on behalf of employees are covered.

Life is never as simple as it seems.

Federal/State Cooperation on Independent Contractor Issue

2011-09-20T11:26:00.000-05:00

It does not seem very often that any headline that involves government can properly use cooperation these days, but yesterday's story on NPR, Labor Dept. Expands Enforcement Of Wage Violations, indicates that the Department of Labor is signing agreements with various state agencies to share information that will allow both to go after companies which "mis-classify" individuals as independent contractors.

For governments the bottom line is that when an individual is an employee, it gets more money and it is more easily collected, than when an individual is an independent contractor. If you are an adherent of the "follow the money" line of reasoning, that is enough to make you take notice that you should make sure that your independent contractors, really are that.

The states that have signed agreements so far (and thus states where you really should turn up your own scrutiny, rather than wait for someone else to do so) are Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah and Washington, with New York and Illinois lurking in the wings.

Fact Checking Me -- Congressional Rollbacks of Pro-employee Legislation

2011-09-14T17:56:00.000-05:00

Three times a year, my good friend Connie Cornell and I give a presentation called Essential Employment Law for our law school alma mater's continuing legal education program.

We have been doing this several years now (I can't quite remember how it started, but I think it had to do with too much wine at some speaker's dinner.) In several of these presentations I have said, and will probably do so tomorrow unless someone saves me from error by fact checking me, that I am not aware of a time since the Portal to Portal Act of 1947, when Congress has rolled back or taken away any pro-employee legislation that it has passed.

Can any one think of anything to the contrary?

Bullying Litigation -- Not in the Workplace Yet

2011-09-14T17:13:00.000-05:00

It's been awhile since I posted on bullying, but an article earlier this week in the Law Blog of the WSJ reminded me the topic is not going away. Back Off: Bullying Litigation on the Rise.

Fortunately, the article is confined to bullying litigation (and the underlying legislation which gives rise to that litigation) in educational institutions.

But in case you didn't catch my earlier post about the camel's nose in the tent strategy for those who seek to legislate against such behavior in the workplace check out Anti-bullying Legislation for Schools, An Inevitable Tie.

Coming to a Bulletin Board Near You on November 14th, Or Maybe Not ...

2011-09-13T18:06:00.001-05:00

On planning committees for seminars, one topic that inevitably gets discussed is that we need to cover some traditional labor law. Almost inevitably someone will point out that in Texas, very few employers have unions and so any discussion of the NLRA or the actions of the NLRB will no doubt turn off a large part off the audience. And that of course, always gets the suggestion -- let's emphasize that the NLRA covers "concerted activity" not just union activity.

All true, true, and true. In fact my very first 5th Circuit argument was just such a case, NLRB v. Datapoint (5th Cir. 1981).

But unless a suit filed by the NAM, or some other similar action is successful, this November 4th, this poster, in its final formatted version that was published by the NLRB today will grace the bulletin board of every employer covered by the NLRA regardless of whether or not they currently have a union, as of November 14th.

This was the result of rule making on the part of the Board, a technique rarely used in the past.

In addition to a list of things that are illegal for either an employer or a union to do, the poster provides the following information:

Under the NLRA, you have the right to:

• Organize a union to negotiate with your employer concerning your wages, hours, and other terms and conditions of employment.

• Form, join or assist a union.

• Bargain collectively through representatives of employees’ own choosing for a contract with your employer setting your wages, benefits, hours, and other working conditions.

• Discuss your wages and benefits and other terms and conditions of employment or union organizing with your co-workers or a union.

• Take action with one or more co-workers to improve your working conditions by, among other means, raising work-related complaints directly with your employer or with a government agency, and seeking help from a union.

• Strike and picket, depending on the purpose or means of the strike or the picketing.

• Choose not to do any of these activities, including joining or remaining a member of a union.

One view of postings is that they are much like the warning on the side of a lawnmower that you should not stick your hands into the blades, they are so ubiquitous that no one pays any attention.

But one never knows, although it may well be that we will soon find out.

A hat tip to Jeffrey Hirsch at Workplace Prof Blog, who was the first to call to my attention that the final version, in his words, "suitable for framing" was now released, although he gives his own hat tip and cautionary warning.

Update: Thanks to Russell Samson at the Dickinson Law Firm in Des Moines for catching that I was trying to force posting 10 days earlier than required. The effective date of the new rules which require the posting is 75 days after they were released or November 14, 2011. The Board's equivalent of an FAQ on the new posting requirement (which confirms the correct date) is here.

Labor Day, A Day After - Should We Put This To A Vote?

2011-09-06T13:17:00.001-05:00

Any thoughts on how the following legislative finding might fare in today's Congress?

It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.

And if we wanted a second proposition to vote on, does the following stand up?

The inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract, and employers who are organized in the corporate or other forms of ownership association substantially burdens and affects the flow of commerce, and tends to aggravate recurrent business depressions, by depressing wage rates and the purchasing power of wage earners in industry and by preventing the stabilization of competitive wage rates and working conditions within and between industries.

I think the answer is self-evident. The chances of passage of either is nil.

Still they do currently reflect what is the stated policy of the United States as contained in the existing National Labor Relations Act.

I hate to add to the burdens of our already strained political system, which quite frankly does not look as if it can solve any of its too many pressing problems, but at some point, we need to come to a concensus on what we want our labor policy to be.

For too long now, the political attention paid to the NLRB has been one of neglect and acceptance of the fact that with each political turn we should anticipate the wholesale reversal of "established" law. That has happened with the Obama Board, as it happened with the Bush Boards, as it happened with the Clinton Board etc.

When you can't agree on what the policy should be, it is ludicrous to think that the current one is apt to be successfully implemented.

Regrettably, I think that is something all should be able to agree on.

More Things I Have Learned Recently: Virtual Polygraphy

2011-08-31T17:45:00.000-05:00

Nothing says you are on top of things like keeping up on your jargon, so I was grateful to Chris Pentilla, otherwise known as the Workplace Diva, for her post Would You Take A Polygraph To Get A Job? and my first notice of "virtual polygraphy."

The term was taken from Michael Schrage's article on the Harvard Business Review Blog network (something else I learned about), The Future of Lie Detection in the Workplace.

Because Schrage is a research fellow at MIT, some of what he says is even too much jargon for me:

But the real revolution emerging is not the greater transparency of a LinkedIn here and the statistical significance of a "lie detection" algorithm there; it's their linkage, fusion and aggregation. Verification is becoming multimodal. Multimodal verification assures greater personal veracity. In other words, networking these technologies creates a rising deterrent to dishonesty. The odds dramatically increase that deceivers will be tripped up by their misrepresentations and mannerisms.

but I think I get the general idea.

More importantly, I think the bigger point is that it seems as if more and more of our fellow Americans are willing to bend the truth on things big as well as small.

Whether or not we can develop technology to cope with it is an interesting question, but the reasons why more people are willing to not tell the truth, if in fact that is correct, is an even more important question, one that causes for more soul searching.

Which reminds me that on my summer reading list was James B. Stewart's, Tangled Webs: How False Statements are Undermining America: From Martha Stewart to Bernie Madoff.

Not much time left in the summer.

Blogging As a Habit, Or Not

2011-08-30T12:41:00.000-05:00

When I started this little venture more than nine years ago now, I knew nothing about blogging. Almost a decade later I now know more, but I continually learn new things.

This summer what I have learned is that just as with many other things, posting is a habit. For a long time, I posted with great regularity, but this summer I most definitely have not. In fact, to quote my friend and Canadian counterpart, Michael Fitzgibbons who has been at this almost as long as me, "I just can't believe it's been nearly 2 months since I wrote my last post.... the longest gap in 8 years."

Modify the time frames slightly and it works for me as well.

Michael of course is growing his new law firm which is a better excuse than I have. I have been busy with my regular law practice, working on some special projects for my firm and spending way too much time griping about the hottest summer in Austin's history.

But most of all what I have learned is that if I don't post regularly, like any other good habit, it doesn't take long before posting slips out of the conscious mind.

Mea culpa.

Making Government a Little Less Bothersome - Here May Be an Opportunity

2011-07-11T13:59:00.000-05:00

In a May address to the American Enterprise Institute, Cass Sunstein of Nudge fame, and also the administrative czar of the the Obama administration, announced the result of a four month study of regulations whose costs out weighed their benefits.

Not too surprisingly in today's atmosphere, almost no one was pleased -- one group saying it was at best only a small step and their polar opposites arguing it was a step in the wrong direction and at best was taking resources away from more important regulatory action. See the Huffington post article for the comments, Obama Regulatory Review Announcement Finds Few Fans.

(Or if you actually care to see exactly what Mr. Sunstein said, here's a link to his prepared remarks.)

What brought this to mind was the BNA DLR ($) story this morning about a May 31st informal opinion letter from the EEOC dealing with confidential data from both an ADA and GINA perspective. The conclusion:

maintaining personal health information and occupational health information in a single Electronic Medical Record, particularly one that allows someone with access to the EMR to view any information contained therein, presents a real possibility that the ADA, GINA, or both will be violated.

I didn't read the opinion letter close enough to know whether I agree with its conclusion. Nor do I know enough to say that there is a substantial benefit to keeping both personal and occupational health information in a single electronical medical record, although intuitively it sounds as if there would be. But assuming the letter is right, and that having one EMR is both a cheaper and more satisfactory alternative than having to keep them separate, this would seem exactly the sort of undertaking that I would hope governmental agencies are looking at.

Although the individual cost might not be all that great, the collective costs to all employers could be substantial, and there is also something appealing about thinking that government was in fact thinking of how things could work better for everyone, but in a way that protects interests of both employers and employees.

It might take some revising of regulations, or perhaps even some statutory adjustments, but it would be nice to think rather than just advice to keep them separate, there is even now within the EEOC some one following up to see if there might not just be a better way.

Hopefully, if there is, they will let us know.

A Reminder to Trial Lawyers -- As If We Needed It

2011-07-05T16:19:00.000-05:00

Not only to trial lawyers, but their clients, when wondering what can happen in a jury trial, to the name OJ Simpson, you can now add Casey Anthony.

Wal-Mart Stores, Inc. v. Duke -- A Sigh of Relief

2011-06-20T09:33:00.047-05:00

Analysis will come later as all I have done is read the highlight and the line up of judges. Judge Scalia's majority opinion was joined in some parts by all justices, while Justices Ginzberg, Breyer, Sotomayor and Kagan dissented from some.

The loud sound you heard was corporate America finally relaxing.

Frankly, I don't think anyone who is serious about an orderly resolution of disputes, where all parties have a fair shot at proving their allegations or defenses, has any other feeling.

The court's opinion is here.

Update: Now that I have read the opinon, here are some more substantive thoughts.

First, an ironic and sad footnote to today's opinion. Professor Richard Nagareda achieved what I assume is something highly desired by any academician, have one of your articles play a key role in a seminal Supreme Court decision. Professor Nagareda achieved that today, as both opinions the majority by Justice Scalia and a concurrence and dissent by Justice Ginzberg cite frequently from his Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97 (2009). Unfortunately, Professor Nagareda died last October at the much too early age of 47, shortly after taking a position with Vanderbilt University School of Law.

Today's case deals with the fine points of Rule 23, which is the vehicle for creation of class versus individual trials. It was widely used in the early days of Title VII, but its use had fallen off until the last few years. In part this was tied to the Civil Rights Act of 1991 which for the first time permitted jury trials and compensatory damages. Courts generally held the compensatory damages were not suited for class actions.

In the last few years though, a new plaintiffs strategy emerged. Get a large enough class together, don't seek compensatory damages, just back pay and punitive damages, get it certified and then force the defendant to settle because of the costs of defending and the uncertainty and difficulty of trying such a large case. Wal-Mart v. Dukes was the largest of all, and frankly was a good case from an employers standpoint to end up before the Court.

Today's decision is going to severely restrict the use of class actions in discrimination cases going forward. The details will be fleshed out, but the Court unaminously made clear that cases where monetary issues, including back pay dominate (i.e. almost if they exist) then certification under Rule 23(b)(2), plaintiffs' preferred suit and the one it tried in Wal-Mart, is not appropriate. (Kudo's to the 5th Circuit, for having this position in advance.)

Much more important to Wal-Mart, and probably going forward, all of us, the 5-4 majority made it much more difficult to meet the standards for any class without a very tangible, specific job practice that it can be tied to. A standardized test with a disparate impact probably meets the standard but on first blush that seems to be about the closest bright line that we have.

The 5-4 opinion seems to pull the teeth from what I have always considered one of the more dangerous Supreme Court opinions, Watson v. Fort Worth Bank and Trust, a 1988 decision which seemed to permit a disparate impact case any time an employer's promotion practices were subjective (which was every employer) and there was a disparate impact (almost every employer).

For the short term, I think the focus will shift back to individual law suits and plaintiffs, or more aptly, the plaintiffs' bar, will regroup and decide what avenues there are left to pursue cases within a class framework.

Although this case does not deal with the Fair Labor Standards Act and the collective action it permits, which are outside the purview of Rule 23, much of what the Court said could clearly be applicable to the way such cases are now being certified and handled. I think you can start seeing Wal-Mart v. Dukes cited to district courts in FLSA cases starting today. What I will be looking for is when the district court cases start citing it back.

Here are a few of the early reports on today's decision:

While I Am in the Land of Aloha, the Legislature Permits Guns on Employer Parking Lots Premises

2011-06-05T23:48:00.000-05:00

I am vacationing on the Garden Island, but taking some time tonite to catch up on what's been going on. When I left Texas the legislature was still in session, although I thought all the economic problems would keep them from doing too much mischief potentially harmful to employers.

But I was as wrong about that, as I was right about how great Kauai would be.

While I was playing, Russell Cawyer at Texas Employment Law Update was posting on the passage of S.B. 321, which puts Texas in company with those states which prohibit employers from barring employees who are licensed to carry weapons from having them in their locked cars in the employers parking lot. There are a couple of exceptions, but they are not going to pick up many employers. Like other states, there is indemnity protection for the employer, although there is that troublesome exception for "gross negligence."

I am not a fan of these laws, although I can't say that I can post of any adverse consequences that have occurred in other states. Hopefully, I won't have occasion to update this post in the future with such a report.

Aloha.

Arizona Immigration Law Valid According to Divided Supreme Court

2011-05-26T11:49:00.001-05:00

To the political bonfire of illegal immigration, the U.S. Supreme Court has just dumped several gallons of petrol, with its decision upholding the Legal Arizona Workers Act, which places penalties for hiring illegal workers on most Arizona employers and requires that employers use E-verify. U.S. Chamber of Commerce v. Whiting (5/26/11) [pdf].

The nitty-gritty of the legal argument is this. When Congress passed the Immigration Reform & Control Act, it expressly pre-empted ""any State or local law imposing civil or criminal sanctions (other than through licensing and similar laws) upon those who employ . . . unauthorized aliens."

It is the parenthetical phrase "(other than through licensing and similar laws)" that the Arizona legislature has driven the proverbial truck through, and now the Supreme Court has backed them up.

I will leave it to the immigration experts to talk about the impact on that particular body of law. The politico's can talk about what will happen from a political standpoint. My amateur observation is that many states, including Texas, will pass similar laws, a move will be made in Congress to roll back the savings clause, and all of these actions will be more for political purposes than for resolution of a national problem.

From a positive perspective, it is possible given that the defendant in this case was the U.S. Chamber of Commerce that this will be the spark (or explosion) that leads to serious discussions to come up with a rational national solution. (And I say to myself, and pigs may fly.)

One concern raised by the Chamber and the dissenting justices is that employers will choose not to hire Hispanic employees in order to avoid any threat of the rather severe sanctions that can be imposed on them. The majority opinion authored by Justice Roberts rejected that argument:

The Chamber and JUSTICE BREYER assert that employers will err on the side of discrimination rather than risk the “‘business death penalty’” by “hiring unauthorized workers.” [cites omitted] That is not the choice. License termination is not an available sanction simply for “hiring unauthorized workers.” Only far more egregious violations of the law trigger that consequence. The Arizona law covers only knowing or intentional violations. The law’s permanent licensing sanctions do not come into play until a second knowing or intentional violation at the same business location, and only if the second violation occurs while the employer is still on probation for the first. These limits ensure that licensing sanctions are imposed only when an employer’s conduct fully justifies them. An employer acting in good faith need have no fear of the sanctions.

As a textbook statement of what the world should be like, I would not quarrel with the logic of Justice Robert's statement.

As someone who every day sees how the real world works, it could not be further from reality. Employers who have had too many instances where their proper actions have been sustained only after lengthy and expensive court processes, will be hard to convince at the sub-conscious level that this scheme does not pose potential problems for them and alter their actions accordingly.

Today's decision leaves me with two distinct thoughts about the Supreme Court, not the merits of this case.

First, I regret that we no longer look for regular practicing lawyers for the Supreme Court, but choose them from judges, government lawyers and appellate specialists. From my small niche of labor and employment law, it seems to me that the Court is far out of touch with what happens in the real world of the workplace.

Secondly, it makes me think about the political rhetoric against "judicial activism" and that "judges should not make law."

I don't think anyone seriously believes or can even say with a straight face that when Congress passed the savings clause that is the subject of this lawsuit that they were consciously deciding that states should be able to gain such a dominant place in the enforcement of the immigration laws. The situation was much different then, but no one really believes that the Congress which passed IRCA, which contains the language quoted above, made a conscious decision to endorse legislation like the Arizona statute. The fact is Congress didn't think about it in this context, nor was there probably any reason for them to do so.

That is not a criticism of the Supreme Court for doing their job. Because Congress didn't think about it in this case, and can never think of every possible situation, we have given to the courts the powers to fill in the gaps, to supply the answers where Congress gave us none. Hopefully that is done using consistent legal principles, but even doing so will rarely point to one correct answer; in this case it clearly resulted in multiple answers. The only way we know what is the "correct answer" is by counting the number of judges on each side.

Which means nothing more than that all the political rhetoric about appointing judges who will not make law, just follow it, is just political bs. Everyone wants judges who will apply the principles the way they want them applied in these situations. That's our system and that's fine.

What bothers me is politicians who either don't understand the system, or more cynically understand the system, but are not honest about it and hide behind the false statement that judges' job is not to make law, just interpret it.

I have not studied it enough to know whether I think today's decision was a legally correct one or not. What I do know is that in making it and in his opinion for the court, it would be ludicrous to say that Justice Roberts was just acting as an umpire. His job is very different, and frankly much more important, than that. In this case, Congress did not give us the clear cut answer and now the Court has.

DOL Help for Employer On OSHA Reporting

2011-05-19T09:25:00.000-05:00

Last week I posted about DOL's new app for employees to keep records of their hours worked, so to be fair, the DOL does not limit its computerized assistance to employees. It also has on line assistance designed to help the employer community comply with their obligations under various statutes.

Although not as cool as an "app" the DOL's various elaws are helpful. The most recent, and what prompted today's post, is one to help an employer know if an incident is recordable under OSHA. To walk you through the regulations in a systematic form, check out theOSHA Recordkeeping Advisor.

For an employer not sophisticated in OSHA requirements, it's a good first step.

Legislative Override of Supreme Court

2011-05-17T14:47:00.002-05:00

What a difference three years makes. Unlike the opening weeks of the prior Congress when it could not act fast enough to get the reversal of the Supreme Court's decision in the Lilly Ledbetter case to President Obama's desk, the offering of the Arbitration Fairness Act by Senator Franken, faces much more difficult sledding. Franken bill would block mandatory arbitration clauses in cell phone contracts.

Although this bill has been introduced now for several sessions, the latest is at least tied to the Supreme Court's recent decision in ATT Mobility LLC v. Concepcion which upheld an arbitration agreement that prohibited class actions. See Franken's press release from earlier today here. The bill would ban mandatory arbitration both in consumer transactions and in the workplace (with an exception for arbitration provided for by collective bargaining).

Still, having testified at the Judiciary Committee hearing in the fall of 2009 where Senator Franken challenged mandatory arbitration, I have some personal experience with how strongly he feels about this bill. Here's a link to the testimony on the arbitration issue (fortunately for me I was testifying about the Gross decision).

For supporters of arbitration, although it would seem that passage of the AFA would be out of the question in this Congress, I wouldn't necessarily turn out the lights. If, and that' certainly is a big if, the idea that arbitation is unfair in a consumer setting could touch a chord in a large number of people (and it does not seem to have done so yet) this is one that could catch momentum quickly.

Particularly since arbitration is not something that most legislators have strong feelings about one way or another. For those who think it is a good thing in employment matters, the fact that prohibiting in the employment context always gets linked to banning it in consumer transactions is not comforting.

Update (05/19/2011 ) - Although the text of the bill is not yet posted on the official Senate website, it is S.B. 987 and should be available in the next few days. From seeing a copy of the bill on BNA's Daily Labor Report, one interesting thing is that the bill has dropped the ban on arbitration in franchise agreements which was present in prior versions. Presumably, that was done to remove the objections of some. See the comment from the Defense Research Institute, which also points out that the bill contains a provision that would nullify another Supreme Court arbitration decision, Rent-A-Center West, Inc. v. Jackson, 120 S. Ct. 2772 (2010). The 2011 version of the Arbitation Fairness Act requires that decisions on the enforcibility of the arbitration agreement be made by the court, not an arbitrator.

Now an iPhone App for Wage and Hour Litigation

2011-05-10T09:28:00.001-05:00

This is clearly a first for this blog. A link to the apple app store.

But when the Department of Labor releases an app for iPhone, iPod and iPad with this description:

... a timesheet to help employees independently track the hours they work and determine the wages they are owed. .... This new technology is significant because, instead of relying on employer's records, workers can now keep their own records. This information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.

DOL-Timesheet for iPhone, iPod touch, and iPad on the iTunes App Store, it sounds blog worthy to me.

Technology, as employers have found with email, can be a two-edged sword. It will be interesting to see how this one plays out down the line.

A hat tip to my Indianapolis colleague, Christopher Murray, for pointing this out.

Arbitration As Protection Against Class Actions

2011-04-27T14:05:00.000-05:00

Today the Supreme Court gave a powerful tool for employers to avoid collective and class actions when it overturned the 9th Circuit's decision in ATT Mobility LLC v. Concepcion (4.27.11) [pdf]. Justice Scalia writing for a sharply divided court, split on the now familiar lines, rejected attempts by states (in this case California) that would prohibit arbitration agreements which prohibit class treatment of claims.

Here, it was a consumer agreement under a system that could hardly be called unfavorable to the individual, in fact the district court had found that the individual couple who were attempting to lead a class action over the purchase of a phone, were undoubtedly better off in arbitration than as members of a class action that would last several years and likely result in a nominal payment to class members. Still to be fair, it is also hard to argue with the point made by Justice Breyer in dissent that it is unlikely that many lawyers would have been interested in taking such a case on an individual basis.

On first blush, given the rage of FLSA collective actions and the desire for larger systemic class actions reflected by the Dukes v. Walmart case, every company that does not have in place a requirement that all disputes be settled by arbitration, and in that arbitration agreement, a provision that prohibits class treatment, will now be considering it again.

This is not to say that arbitration is a panacea ---the cost advantage is being lost as more and more arbitrations are proceeding just like a lawsuit that is being litigated in court, and the lack of any ability to effectively appeal the decisions is a serious danger, both of which have to be weighed against the risk of large collective or class actions. What today's decision permits is a re-calculating those odds with more certainty that you can accomplish the aim of defusing collective/class action liability if you are willing to pay the price of accepting the downsides or arbitration in individual cases.

Everyone has and continues to wait with concern the Court's decision in Dukes v. Walmart, which offers the Court an opportunity to put parameters on broad scale class litigation if it wishes. It might be argued that today's decision augurs well for the employer community on how that case may turn out. Many employers may well wait until July when that shoe drops to do the recalculation between barring class/collective actions via arbitration or continuing to take their chances in the court system. Assuming the Court decides that case fully, it should at a minimum give even more certainty when making that calculation.

Besides companies engaging in that rebalancing, the other thing that is likely to happen is renewed talk about passage of the Arbitration Fairness Act, which would ban pre-dispute arbitration agreements between employers and employees (and also with consumers and in franchise agreements.) It seems unlikely that bill will pass during this Congress, but the there will surely be more discussion.

If the American Arbitration Association were a traded stock today, its price would be soaring.

Arbitration (Awards) Not Necessarily Private in Texas

2011-03-28T10:53:00.000-05:00

Thanks to Professor Ross Runkel for calling my attention to a case decided in my own backyard, McAfee, Inc. v. Weiss, (Tx. App. - Dallas 3.16.11), which held that a trial court's refusal to seal an arbitration opinion and award attached to a motion to confirm the award was not an abuse of discretion.

If you are not aware of the several excellent publications Ross has, you should be. This one was in his Arbitration Law Memo March 2011.

The case turned on an application of Rule 76a of the TRCP which deals with the sealing of records. Since one of the benefits of arbitration is privacy, this is an interesting twist.

The case was only decided a couple of weeks ago, so it is possible that this is not the last word as the full Dallas Court of Appeals might be asked to reconsider, or even the Texas Supreme Court.

Since the Texas Rules of Civil Procedure, including the sealing of documents, are promulgated by the Supreme Court and that Court, through its decisions has been a strong proponent for arbitration , it poses an interesting policy issue for them.

It could be addressed through a case like this one, or addressed through the rule making process. However, it is addressed it does seem worthy of serious focused review between two worthy goals, alternative dispute resolution and the open court proceedings.

With a Friend Like Justice Scalia ... Cat's Paw Decision Not Very Employer Friendly

2011-03-01T12:25:00.000-06:00

Although viewed as one of THE most conservative justices, I am not sure anyone who is very knowledgeable about employment law relishes the idea of Judge Scalia writing the majority opinion in an employment law case. If they did before this term, their view would be strongly challenged by today's decision in Staub v. Proctor (S.Ct. 3.1.11) [pdf] and coupled with his earlier opinion in Thompson v. North American Stainless, should readily disabuse them of that notion.

Nothing is rarely as bad as it appears on first blush, and perhaps a closer reading will lessen my angst over today's opinion. But at least I am not the only one feeling the same way. Jon Hyman at Ohio Employer's Law Blog, calls it a "huge victory" for employees.

One immediate concern is that the Court takes what is a relatively narrow range of cases, where a decision maker is deemed to have been "used" by another to carry out his or her discriminatory intent, and by focusing on the underlying disciplinary actions and the motives of those who carried them out, seems to invite numerous fights over each and every warning or other disciplinary activity that were given to an employee in the past and that might could arguably have been a factor in the termination decision. It is almost certain that there will be many more "Staub cat's paw cases" after today's decision than we have dealt with before.

Proponents will argue that this is not so, that it is only those that rise to the high level of proximate cause that are at issue. But those who do, probably do not deal with day to day employment litigation where every opportunity to raise a fact issue is yet another arrow in the plaintiff's quiver. Today, I am afraid, at least until courts below fill in the gaps, the Court has created more complexity and less certainty.

And in a time when there is confusion enough over what is the standard for determining the basic question "what is discrimination," the addition of the negligence tort doctrine of proximate cause into the mix seems to me less than a beneficial step.

Although as Paul Secunda of Workplace Prof Blog points out in his approving comment on the decision, there is an argument that it does not apply to ADEA cases, it appears likely that the Court intended it for Title VII and other statutes that use similar language:

The statute is very similar to Title VII, which prohibitsemployment discrimination "because of . . . race, color,religion, sex, or national origin" and states that suchdiscrimination is established when one of those factors "was a motivating factor for any employment practice,even though other factors also motivated the practice."

If there is any good news, it is that the Court remanded the case to the 7th Circuit for application of its newly articulated rule in determining whether the jury verdict for Staub should be re-instated or a new trial granted. The basis is that the trial court's instruction did not conform to the "rule we adopt today". Perhaps that learned bench can shed some early guidance.

Goodness knows we will all need some.

This is another case where not only bad facts, but a bad procedural background made it an unfavorable case for employers. The Court was faced with a case where the appellate court had reversed a jury verdict, which meant that all facts had to be construed in the most favorable of light to the employee. Also the fact that it was a USERRA case, here a military reservist, is not the best context in today's world with two wars and numerous military personnel being asked for extraordinary measures, for any case focusing on the whether or not an employee was treated badly.

Although I have long felt this, I think today's decision makes it more clear that the Supreme Court although still adhering to the broad notion that courts should not function as super-human resources departments, second-guessing the decisions of an employer, have and continue to create a set of rules that at least encourages, if not requires, the lower courts to be just that.

Checking Out the Judge's Family

2011-02-18T11:41:00.000-06:00

Since in employment law we routinely deal with cases involving gender, this bit of social science reported on in The Volokh Conspiracy, might be worthwhile checking out: Do Daughters Influence Judges?.

Short answer as reflected from the abstract of the article. Yes.

Check out the abstract, and check out your next judge.

There's That Word Again - Bully

2011-02-02T15:37:00.000-06:00

Hat tip to the folks at the Daily Labor Report, who found a case that will fold into my presentation that I will be giving at the 2011 Gulf Coast Symposium on Human Resource Issues later this spring. My presentation is Civility in the Workplace: Now It Is a Legal Issue.

And the case is Street v. U.S.Corrugated, Inc. (W.D. Ky 1.25.11) [pdf], in which the district court granted the employer's summary judgment in a case brought by four employees (one man, three women). The employer had hired a turn around specialist who was accused by the employees, both men and women, of abusive behavior.

Unfortunately, for the plaintiffs' Title VII gender discrimination claim, the employer was able to establish the "equal opportunity harasser" defense. Noting that there was no allegation that the conduct was motivated by sexual desire, the burden on the plaintiffs' was to show that "the critical issue ... is whether members of one sex [were] exposed to disadvantageous terms or conditions of employment to which members of the other sex [were] not exposed." The short answer from the Court:

The record here indicates that both men and women fell victim to Greathouse's abusive management tactics. .... Greathouse's actions were certainly inappropriate, but this does not establish a Title VII claim absent the intent to target a specific gender.

For retaliation under Title VII, the employees alleged that following their complaints about Greathouse's management style, including a five page "Formal Harassment Complaint" by one of the plaintiff employees, they were terminated. There was no question that they had complained and had alleged a causal connection between the complaints and adverse employment actions, but the Court still granted summary judgment.
What was missing? protected activity. According to the Court:

Plaintiffs obviously believed that Greathouse’s conduct made their work environment a hostile one and they opposed his presence at the factory and his intolerable management style. However, Title VII only protects employees from retaliation for having opposed an employer’s unlawful actions, such as discrimination based on gender, age or race. There is no protection under the act for employees who simply complain about the boss being a bully. (emphasis added)

This is the type of case where advocates for anti-bullying legislation will argue this shows the need for such a legislative solution. (The Court threw out another handful of claims including intentional infliction of emotional distress and terroristic threat.)

But maybe not. Although the timing is not clear, this is not a case where the employer turned a deaf ear. The abusive manager was hired near the end of August, 2007 and after the employees made the formal complaint, investigated and relieved him of his duties by the first of June, 2008. To me, employers who listen to their empoyers and truly don't tolerate jerk like behavior are the most appropriate solution. Far better than the ills of legislation that no matter how carefully tailored, is in my view almost certain to spin out of control.

Employers, to me the lesson is clear: if you don't want a legislative fix, it's time to make sure that you solve problems of this type of behavior yourself. And now.

Kansas City Verdict - Another Successful "Reverse Discrimination" Claim

2011-01-27T14:02:00.002-06:00

Earlier this month I commented that one trend we might see this year was more "reverse discrimination" claims. See, 2011 -- the Year of the Non-minority? The outcome of a suit in a Kansas City courtroom yesterday does not prove me right, but it certainly does nothing to prove me wrong.

Like many local governmental units, Kansas City faced with declining revenues dealt with the issue as is often the case by eliminating employees. In the 75 laid off were two, long service, white, female budget analysts, Jordan Griffin and Colleen Low. one in her early 50's, one in her early 60's.

After they were laid off they sued complaining that "younger employees or minorities with less experience and lower performance evaluations were kept on." Agreeing with their claims, the Jackson County state court jury awarded each $900,000 in punitive damages and compensatory damages of nearly $350,000 and $500,000 respectively. See, Two former workers win $2.6 million from KC.

Two things that can be drawn from the newspaper account of the story that will be all too familiar to those who try employment lawsuits.

First, the two plaintiffs both had "always received exemplary performance evaluations." And their boss had considered them "spectacular, fantastic employees." In this case those performance reviews may have been deserved, as were the comments, but anyone who has any significant experience in this area knows all too well of cases where such comments and reviews decidedly did NOT represent the true opinion of management that went into the decision making process.

Secondly, one of the things that likely offended the jury was the assertion that their manager had lied to them by telling them that they were not on the list. According to their lawyer:

He repeatedly and affirmatively lied to Jordan and Colleen. He wanted to lull Jordan Griffin and Colleen Low into a false sense of security.

While that could be true, my guess is that the manager had other more noble motivations. He testified that while he did tell them that they were not on the lay off list it was because:

the list hadn’t been finalized,
he was hoping they wouldn’t have to be on the list,
that they could find jobs elsewhere in city government, and
he was trying to protect the confidentiality of the list.

All of those reasons are certainly understandable, but it is also clear how actions that seem, even in hindsight to be reasonable, can play in the tinderbox of a court room.

And potentially underlying both of the lessons is the difficulty managers have in delivering bad news. That's one of the biggest reasons for erroneously inflated performance appraisals and why managers tell "white" lies in situations where there is at least a chance that the bad news won't have to be delivered.

I hasten to add I am by no means faulting these or any particular managers, delivering bad news is hard for most people. That and a thousand other reasons are why being a manager of people is one of the hardest jobs in America.

We should not be surprised that it sometimes leads to results such as this one. What is perhaps more amazing is how rarely it does.

Update: A Kansas City Business Journal article adds some additional information and does make it clear that this is the type of case I thought we might see more of this year. According to the article:

Jordan Griffin claimed that she applied to become Kansas City’s commissioner of revenue, a position that was vacant in 2006. Griffin alleged that the city would not consider her application or grant an interview because it hired an outside recruiter that specialized in diversity recruitment and that former City Manager Wayne Cauthen had a contract that provided financial incentives for minority hires.

See, Kansas City faces $2.66M discrimination verdict.

Trying to increase diversity, certainly a notable aspiration, and not discriminate on the basis of a protected category, both a noble aspiration and the law, is easy to talk about, but fraught with potential peril. No one ever said being an employer was easy.

MMA Body Slam of $3.2 Million

2011-01-25T16:30:00.000-06:00

$3.2 million is the total jury award to former Tapou T sales representative, Michelle Thomas, from a Los Angeles state jury. The jury first awarded $840,000 in compensatory damages, and then after finding the acts of the employer were with malice, added an additional $2.4 million. Jury Awards $2.4 Million in Punitive Damages to Ex-Employee of Apparel Firm

Although the newspaper article calls it a wrongful termination claim, the facts emphasized in the article were that Thomas was not paid the commissions she was promised, had to work 70 to 80 hours a week without overtime compensation, had to pay out of pocket for cable subscriptions that would allow her to watch the Tapou T show which airs on the Versus network, and one that particularly seemed to be galling that

she was roundly criticized by a supervisor for not watching one required program on her birthday.

I must admit that I had never heard of Tapou T and don't know a whole lot more about Mixed Martial Arts fighting, much less that there was a reality tv show about developing new fighters. And so my headline reference to body slam is probably an inappropriate reference that goes back fifty years ago when I watched professional wrestling from the Dallas Sportatorium with my grandfather.

At least back then, body slams were a big thing. Regardless of whether its an MMA term or not, it's likely that Tapou T is feeling pretty slammed today.

Retaliation in the Supreme Court - Danger Zone for Employers

2011-01-24T10:56:00.001-06:00

If there is one area of Supreme Court jurisprudence that employees can certainly not complain about it is the law of retaliation Today's decision in Thompson v. North American Stainless (S.Ct. 1/24/11) certainly does nothing to change that. A unaminous Court (with Justice Kagan not sitting) held that an employee who had been fired for his fiancee's protected activity was also protected by Title VII.

If I had any hope for an employer favorable decision, I had thought it would come from the strict constructionists, who could read the language of Title VII:

because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.

to mean that Congress had said it was the individual who actually engaged in the protected activity that was protected, since it did not read because "he, or someone he is close to" had done certain acts. Which is what the en banc 6th Circuit had done.

I thought that they might have also noted that Congress knows how to expand the zone when it wishes, e.g. the Americans with Disabilities Act which contains a specific provision for association type discrimination where of course Title VII does not.

But when I saw today's opinion was authored by Justice Scalia, I knew it was not to be.

As of now, employers have an unclear line (conceded by Justice Scalia) about what relationship will be considered sufficient to extend one employee's concerted activity to another:

Applying the Burlington standard to third-party reprisals, NAS argues will place the employer at risk any time it fires any employee who happens to have a connection to a different employee who filed a charge with the EEOC.

Although we acknowledge the force of this point, we do not think it justifies a categorical rule that third-party reprisals do not violate Title VII. As explained above, we adopted a broad standard in Burlington because Title VII’s anti-retaliation provision is worded broadly. We think there is no textual basis for making an exception to it for third-party reprisals, and a preference for clear rules cannot justify departing from statutory text.

The easy way to look at today's decision is that the zone of protected activity is now expanded beyond the protection of the one who engages in the activity. Just how far and under what circumstances that zone will reach will be fought out in the courts. A battle that no doubt starts today.

The guidelines, to the extent we have them are this:

We must also decline to identify a fixed class of relationships for which third-party reprisals are unlawful. We expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize. As we explained in Burlington, “the significance of any given act of retaliation will often depend upon the particular circumstances.” Given the broad statutorytext and the variety of workplace contexts in which retaliation may occur, Title VII’s antiretaliation provision is simply not reducible to a comprehensive set of clear rules. We emphasize, however, that “the provision’s standard for judging harm must be objective,” so as to “avoi[d] theuncertainties and unfair discrepancies that can plague ajudicial effort to determine a plaintiff’s unusual subjective feelings.”

I am afraid those 'guidelines' leave a lot of "filling in" for the lower courts to do.

So I was right -- the "strict constructionist view" controlled, just not the way I had hoped. Which may just show that even when one is "strictly construing" legislative wording, it is possible for judges to "make" not just "interpret" the law. Imagine that.

A Ray of Sanity in the FLSA Collective Action Morass: Half-pay in Misclassification Cases

2011-01-19T11:11:00.000-06:00

Given the overwhelming number of FLSA collective actions that continue to be filed, it is hard to find very much encouraging news, but one ray of sanity is the 4th Circuit's opinion in Desmond v. PNGI Charles Town Gaming, (4th Cir. 1/18/11) [pdf].

The issue was the not inconsequential question of how do you calculate damages in a misclassification case. Here, the employees were thought to be exempt under the administrative exemption, but the court held otherwise.

Plaintiffs of course seek a 150% premium (time and one-half) of the newly computed hourly rate, while defendants argue that overtime has already been calculated in. and so the premium should only be 50% or half-pay. The counter by the plaintiffs is that it gives the defendants the benefits of a fluctuating work week calculation, without having to comply with the regulations.

Noting that it was joining four other circuits and the DOL itself, the Court found the correct way of calculating damages in such cases to be set out by the Supreme Court in Overnight Motor Transportation Co. v. Missel (1942), one of the Court's early FLSA decisions.

According to the court

The First, Fifth, Seventh, and Tenth Circuits all have determined that a 50% overtime premium was appropriate in calculating unpaid overtime compensation under 29 U.S.C. § 216(b) in mistaken exemption classification cases, so long as the employer and employee had a mutual understanding that the fixed weekly salary was compensation for all hours worked each workweek and the salary provided compensation at a rate not less than the minimum wage for every hour worked.

Although there may be examples of where individuals were badly served by misclassification, in most cases, it is a case of individuals paid higher than most employees,who clearly understood that they were not receiving any pay for overtime, and were willing to work under those terms. Thus in many respects, any recovery under the FLSA really is a windfall for them.

The 4th Circuit decision does not eliminate the penalty for misclassification, but it does at least rein it in, so that it is more appropriate.

One other lesson to be learned from this case is how it started. It has been a highly contested (and no doubt expensive) case. Yesterday's decision is the second time it has been in the 4th Circuit and the second time it has been sent back to the district court for additional action.

Its genesis was when three racing officals were discharged because they unaminously declared the wrong horse to have won a race. It certainly was not the first, nor will it be the last, case where an employee unhappy with his discharge, which may be perfectly legal makes it to counsel who can not help with the "presenting problem," but can help in other ways.

Is Retaliation for Complaining About Sexual Orientation Discrimination a Violation of Title VII?

2011-01-12T14:35:00.000-06:00

The headline in today's Daily Labor Report caught my attention, Court Revives Fired Gay Employee's Retaliation, Harassment Claims ($). I thought maybe it was another another step down the road for protection against sexual orientation discrimination, but still within the limits of Title VII.
But when I looked at the decision, Dawson v. Entek International (9th Cir. 1.10.11) [pdf] what I found was even more confusing.

The Court had in fact discussed the line of cases I was thinking about -- where a number of courts have found Title VII protection for sexual orientation based on gender stereotyping. However, the Court specifically found that there was no evidence of gender stereotyping in this case, and so dismissed what it called claims for sexual discrimination under both Title VII and Oregon state discrimination law.

The Court held that it was error to dismiss Dawson's sexual orientation discrimination claim under Oregon state law. (There was a question about the effective date of the statute versus the conduct. The 9th Circuit side stepped that question by noting that even before the effective date Oregon had recognized a common law claim for sexual orientation discrimination.)

The part that obviously prompted the DLR headline, and caught my attention after reading the opinion, was the Court's holding that the trial court erred in dismissing his retaliation claim under both Title VII and Oregon state law. There was no question Dawson had complained, but there was also no question that he had complained only about taunts based on his homosexuality, i.e. his sexual orientation, not anything based on gender stereotyping.

I think the problem in the court's analysis is here:

Title VII prohibits an employer from discriminating against an employee for opposing an unlawful employment practice, such as filing a complaint alleging sexual orientation harassment and hostile work environment.

After making clear that sexual orientation is not protected under Title VII, the Court seems to have made a logical error in calling sexual orientation discrimination an unlawful employment practice.
In this case, depending on the remedies under Oregon state law, it may not matter, but as the decision is currently written it would certainly impact Title VII retaliation law.

It would be quite a step forward, not to mention ironic, if you could be fired for your sexual orientation, but could not be fired for complaining that you were being discriminated against because of your sexual orientation.

Surely we are not that much in the Alice in Wonderland world, at least not yet.

2011 --- the Year of the Non-minority?

2011-01-09T20:16:00.000-06:00

Predicting what a new year will bring is a time honored tradition, but much like resolutions, most predictions rarely last longer than the first flip of the calendar. So rather than a long list, let me just start with one thing that I am guessing we might see, more cases where what might be thought to be "non-minority" employees are claiming that they have been treated differently because of their race.

One example of such a case comes from Peter Thompson's Maine Employment Lawyer's Blog, Can an employer fire a white employee for using the n-word if it lets black employees say it?. The employee in question was a news broadcaster at Fox 29 in Philadelphia before he was fired for using the n-word, while black employees were not disciplined for their use. According to Thompson's blog post,

Fox 29 argues that Mr. Burlington's comparison between his use of the n-word and black employees' use of the n-word ignores the fact that his use of the n-word offended some black employees; whereas no one took offense when the black employees used the n-word.

District Judge R. Barclay Surrick's 36 page opinion is a worthwhile read not only for the factual background, but for the complexity of the legal issues (which also includes a discussion of a cat's paw theory). Turning to the central issue he noted:

We begin by addressing an issue that does not appear to have been decided by the federal courts: can an employer be held liable under Title VII for enforcing or condoning the social norm that it is acceptable for African Americans to say “nigger” but not whites? ...

Historically, African Americans’ use of the word has been ironic, satirical, or even affectionate. Id. at 28-31. Too often, however, the word has been used by whites as a tool to belittle, oppress, or dehumanize African Americans. When viewed in its historical context, one can see how people in general, and African Americans in particular, might react differently when a white person uses the word than if an African American uses it. ...

Nevertheless, we are unable to conclude that this is a justifiable reason for permitting the Station to draw race-based distinctions between employees. It is no answer to say that we are interpreting Title VII in accord with prevailing social norms. Title VII was enacted to counter social norms that supported widespread discrimination against African Americans. See McDonnell Douglas, 411 U.S. at 800 (stating that the purpose of Title VII was “to eliminate those discriminatory practices and devices which have fostered racially stratified job environments to the disadvantage of minority citizens”). To conclude that the Station may act in accordance with the social norm that it is permissible for African Americans to use the word but not whites would require a determination that this is a “good” race-based social norm that justifies a departure from the text of Title VII. Neither the text of Title VII, the legislative history, nor the caselaw permits such a departure from Title VII’s command that employers refrain from “discriminat[ing] against any individual . . . because of such individual’s race.” 42 U.S.C. § 2000e-2(a)(1).

In El Paso, right before Christmas, a jury returned a verdict in a case that also seems to make the point. The Odessa American headline over an AP story told the story, Anglo worker wins discrimination suit.

The case was brought by a white benefits manager who had an altercation with his Hispanic supervisor. The company fired both. The employee's lawyer, John Wenke, argued that:

The company feared the human-resources manager, who is Hispanic, would file a discrimination lawsuit if fired, so company officials fired both Duncan and the manager. Wenke claimed the company feared the human-resources manager, who is Hispanic, would file a discrimination lawsuit if fired, so company officials fired both Duncan and the manager.

The jury apparently agreed, returning a $5.8 million verdict.

Two cases are hardly a trend, but they are enough to get one's attention.

Polyglot for Wage and Hour Administrator

2010-12-06T17:33:00.001-06:00

Almost two years into his term, President Obama is making a 2nd try at an Administrator for the Wage and Hour division of the Department of Labor, with his nomination of Leon Rodriguez, currently a DOJ lawyer and formerly County Attorney for Montgomery County, Maryland. See, President Obama Announces More Key Administration Posts.

The White House did not use the polyglot label, but when he was announced as County Attorney in April 2007, it was noted he spoke, "English, French, Spanish, Hebrew and Italian".

President Obama's earlier nominee, Lorelei Boylan from New York had asked that her name be withdrawn more than a year ago. See, Wage & Hour: Not Just Collective Actions Anymore.

Disparate Impact Suit - Credit Checks

2010-11-29T12:34:00.001-06:00

Three times a year for the last several years I have done a program for the UT School of Law, CLE group called Essential Employment Law. In the morning, I talk about theory and in the afternoon my good friend (and great lawyer) Connie Cornell talks about the practical application.

One of the things I always cover are the three theories of discrimination, including disparate impact. Since disparate impact is not something that always readily comes to mind when you first think about discrimination I always try to mention an example that might cause people to relate to something that they could be doing.

This year, based on the EEOC's recent interest, I talked about credit checks. See, EEOC Public Meeting Explores the Use of Credit Histories as Employee Selection Criteria.

Given that history, it was not rocket science to predict such actions might be coming, but I did find it affirming to see the headline in today's Employment Law 360, School Sued Over Use Of Credit Checks In Hiring ($), challenging the University of Miami's Medical School's hiring practices.

According to the article:

The lead plaintiff in the case is Loudy Appolon, a black woman who lives in Miami. In the summer of 2009, she applied for and was offered a position as a senior medical collector at the university's medical school.

Just before her employment was about to commence — and after she had resigned from her previous position at North Shore Medical Center — the university reneged on its job offer due to her credit history, the complaint alleges.

It says that her credit history showed no pending delinquencies and just a few defaults from prior years that had been remedied to the satisfaction of lenders.

As noted by the term "lead plaintiff", the case was filed as a class action. Unfortunately, almost by definition disparate impact claims lead to class claims.

And if you have not looked in awhile at how savvy plaintiffs' employment lawyers are using the net in these cases, check out the website Credit Discrimination Lawsuit, by one of the plaintiffs' counsel in the suit (Outten & Golden LLP), which include a link to the complaint filed in the S.D. of Florida along with reports and case studies. It also poses the following three questions:

Have you been a victim of Credit Discrimination while applying for a job at the University of Miami?
Have you been denied a job based on your Credit History?
Have you been denied a job based on your Criminal History?

Note that while the first question is limited to the University of Miami, the other two cast a much broader net. If you can answer yes to any of the three, the site kindly notes that "we" would like to talk with you and provides a questionnaire where you can furnish the details.

It may not be a bad time to brush up on disparate impact law.

University of Texas School of Law and Labor Law

2010-11-26T15:11:00.000-06:00

When I graduated from UT Law School in 1975, I had taken the only labor law course that was offered (if you didn't count the 2 hour Employee Rights course, which was solely about workers compensation claims). It was a traditional labor law course about the NLRA and was taught by Jerre Williams, who later served on the 5th Circuit. Professor Williams was active as a neutral.

The current labor law expert on the UT Campus is Julius Getman and his latest book, How to Restore the Power to Unions is reviewed at Today's Workplace.

In Defense of the EEOC? No, Just a Reminder About Pancakes

2010-11-23T07:00:00.001-06:00

Tom Crane, at the San Antonio Employment Law Blog, had a very interesting post last week that complains about an EEOC investigator turning an employee away when it appeared she had a valid complaint, EEOC Would Not See Retaliation If It Was in Front of Its Face.

And I must admit the story is fairly compelling.

After receiving a report of sexual harassment, the investigator asked whether she had told the HR department. After answering no, the employee called HR and made a report from the EEOC office. Then the story continues:

Within ten minutes, the owner calls the employe, still at the investigator's office. She puts him on speaker phone. The owner says, "I understand you complained about me. You don't need to return to the office." The owner fired the employee over the EEOC's own phone within ten minutes of her complaint. The investigator heard it all.

One might think, great, what great evidence! The silly owner called and fired the employee for pursuing her rights with the EEOC - right where the EEOC could observe the whole chain of events.

Wrong. The invstigator still insisted she had no case and refused to allow her to file a claim for discrimination or for retaliation. He tells the employee she should just go collect her last paycheck and move on with her life.

It is certainly not my place to defend the EEOC, they are big enough to do that themselves, nor can I say that I have not heard of events happening at the EEOC that are probably not the best course of action. (But hey, what large organization doesn't have some incidents that don't put them in their best light.)

But I do have to say, when I read the story, a saying by one of my former law partners came to mind:

Every pancake, no matter how thin, has two sides.

My guess is that there is another side to this story.

The Technology Changes -- But the Principles Stay the Same

2010-11-22T11:52:00.000-06:00

I have seen several posts about the NLRB issuing a complaint based on an employee's facebook post about their supervisor, that led to additional comments by fellow employees. See Nolo's Employment Law Blog's post as an example, NLRB Sues Employer for Firing Employee Over Facebook Post.

When I talk about social media, I always make the point that although the technology is new, the principles that need to be applied already exist. The law about concerted activity is quite developed; shoot, it was well developed when I had my first 5th Circuit argument back in 1979. There the issue was a comment made at a meeting about an announcement that the employer was going to require everyone to take two weeks off as they moved the printing plant where the employees worked. It's that same body of law that now gets dusted off, because instead of a comment made at a worker's meeting, it is a comment issued through a new mode of communication.

Although it is not to say that there is nothing ever new, it is true that it is probably more rare than we think.

Another Interesting Development from Last Tuesday - $4 MDV for FLSA Retaliation

2010-11-08T17:40:00.000-06:00

While most eyes were turned to the election results last Tuesday night, a former Los Angeles policeman was enjoying a $4 million dollar verdict in his favor, after a jury agreed that he had been fired because of his testimony in a federal wage and hour lawsuit brought against the city by another officer.

Richard Romney had testified that he had followed the "unwritten policy" of denying officer's pay for less than a full hour of overtime. After his testimony, an investigation was initiated and he was ultimately discharged for violating the city's written rules on overtime. L.A. County jury awards $4 million to former LAPD officer.

Although all jury verdicts have a long way to go before they become collectable judgments, this one has an additional and somewhat unusual hurdle. It could be severely influenced by the Supreme Court's decision in Kasten v. Saint-Gobain Performance Plastics, which was argued on October 13th. The transcript of the argument is here.[pdf]

Part of the issue is that the FLSA was really the first statute to provide employee rights and a prohibition against retaliation outside the union context, and Congress had not yet had the ability to focus on all the aspects of what protected activity really needed to be covered. Whether the statute is applied as it was written or as Congress would no doubt write it now, may make all the difference.

And in this case, that's a big difference.

Putting Me and Other Employer's Lawyers Out of Work

2010-10-18T17:27:00.000-05:00

David Yamada and I have never met but have developed a friendship via the net. Even though we often have different views, usually not on the desired result, but on the ways of getting there, based on our civil conversations in an area where that is not often the case, I think it is fair to say that David would never wish me ill, in a financial sense or otherwise.

However, clearly in his most recent post, What if we applied the Golden Rule at work?, he has intentionally or otherwise stumbled on a concept that if followed would clearly lessen the need for those on both the defense and plaintiff sides of the employment law bar, including yours truly.

Just to emphasize David's post, for all the training I have done about employment law, best hr practices, employment law trials, not making juries mad, positive employee relations, etc. at the end of the day, the Golden Rule is a most apt summary for each of those topics. And actually one which is really hard to improve on.

Unfortunately, I don't think it is likely the need for employment lawyers is going to end any time soon.

But a basic tenet, well known and available to all, that really could lessen the need, is there for all of us to see.

A SAD Story In So Many Very Different Ways

2010-10-07T10:09:00.000-05:00

Commenting on lawsuits based on newspaper stories is risky business. I do it frequently and I probably should remind myself and those who read this blog of the dangers more often. It is not because newspaper reporters are incompetent or that they are not trying to do a good job, it is just that reporting a lawsuit is a very complicated piece of work that requires far more time than is available or really necessary to get some of the high points, which is about the best one can reasonably hope for. So the real question is whether or not the lack of depth which is almost inevitable, prevents even a glimpse of the why something happened, as opposed to just the results.

I say all of this based purely on my own experience. In the relatively few cases I have had which have been the subject of much publicity, I can accurately say that the stories often were less than adequate in portraying reality. The most obvious was a six week trial in a smaller Texas city which at the time had two newspapers. In most common terms, one "was for the plaintiff" and one "was for the defendant." Each day for most of the six weeks and even leading up to it, the story was the front page headline on both papers and was quite detailed, frequently running over to multiple inside pages. A neutral observer might fairly have wondered if they were even reporting on the same case. And although I was certainly not neutral, I did know what was going on and would have to admit that neither was very close to really expressing it.

Which brings me, long way round so to speak, to the report in Eau Claire Leader Telegram of Tuesday's verdict in a Madison, Wisconsin trial of a teacher's disability claim. Former Somerset teacher wins $2 million lawsuit.

If the newspaper report is accurate (see above) then all it would have taken to accommodate Renae Ekstrand's disability, depression caused by Seasonal Affective Disorder, would have been allowing her to switch classrooms to one with a window. An accommodation that another teacher would have been willing to make.

The fact that such a simple thing didn't happen, makes me think there is much more to this story.

In fact, we know there is because this case had an appellate history before going to trial. First, a district court granted summary judgment for the school district. That was partially reversed by the 7th Circuit, which rejected Ekstrand's constructive discharge claim, but sent the failure to accommodate claim back for trial, presciently holding that "we disagree with the district court that no reasonable jury could find in favor of Ekstrand's failure-to-accommodate claim."

But even in sending that claim back to trial, Judge Bauer, who authored the court's opinion offered this:

From the sparse record in this case I assume that the School District of Somerset has high standards. Its Web site proclaims its motto: Learning Today to Succeed Tomorrow. In a district like this, parents quite naturally take an interest in who is teaching their children. And I can't imagine that many parents would be too pleased to have their first-graders in a classroom taught by a teacher who, to quote the court's opinion, suffered from “fatigue, anxiety, hypervigilance, tearfulness, racing thoughts, and trouble organizing tasks” plus “inability to concentrate ․ retrieve words, make decisions ․ focus on the needs of her students ․ hypersomnia ․ panic attacks, uncontrollable crying, inability to eat, and thoughts of suicide” in the fall of 2005. While I can imagine that an employer like UPS might be able to accommodate a delivery person with these kind of issues, I have a hard time understanding how a school district could do the same for a first-grade teacher. This makes me wonder if Ms. Ekstrand, in the context of teaching, could ever establish that she was a “qualified individual with a disability” under the ADA in the fall of 2005 or that an accommodation that would be necessary to ameliorate her condition would be “reasonable.” This issue deserves, I suggest, a close look on remand.

Ekstrand v. School District of Somerset(7th Cir. 10/6/09).

So it is easy to see why this case went to trial.

Still, the bottom line result is the same. A jury didn't like what the school district did and let it know with its $2 million plus verdict. The reporter did catch, which many don't, the distinction between verdict and ultimate recovery noting that under the ADA it would be greatly reduced by the statutory damage caps.

When I started this post, I had intended to offer my thoughts on why it is that so many MDV's involve public sector defendants, but having rambled on about the difficulties of newspaper reporting, that subject is best saved for another day.

Unfortunately, I doubt that I shall have to wait long for the opportunity.

If You Have a Choice, Would You Bifurcate Punitive Damages?

2010-10-05T17:47:00.001-05:00

That was a question I was discussing with a colleague Friday just before we gave a seminar presentation on Things that Employers Do to Make Juries Mad, and Pay for it with Big Verdicts. Fortunately in our case it was purely hypothetical.

But I was reminded of it when I saw today's report of a follow up punitive damage award of $4.8 million, after an earlier award of $3.4 million in compensatory damages. See, Former Rite Aid Employee Wins $4.8 Million Punitive Damages Award.

The award to Maria C. Martinez came in a disability and retaliation case, with the retaliation following her complaint that she had been sexually harassed.

The Beverly Hills Courier story says the defense counsel urged the jury not to award punitive damages, saying they "had already sent the chain store a strong message with the compensatory award." The sad fact is that is pretty much all there is to say.

In Texas state courts, the defendant gets to make the election. Unless there are strong and unique reasons not to, I opt against bifurcation. Basically, I don't want to be in the position of the defense attorney, having to come back after the jury has already hammered you, and your message is "now we get it." A hard sell when you have pushed hard to win on liability.

The clearest benefit is that you get to keep out the net worth of the company in the trial on the merits, but unless it is a stealth company, most jurors know that you are big.

I don't think that small benefit comes close to the cost of losing the opportunity of having it all settled in one bite, where if you have any jurors on your side, they probably have the best opportunity to effect a reasonable compromise.

And another factor I had not really considered is the anger of the jury. Sure, they are angry with you, because they found against you, including the issue, usually some sort of malice, that will justify punitive damages. But it's not that anger I am talking about.

It is the anger that they had to come back and do it again. Since jurors are not told about the possibility of punitive damages (at least in Texas), they are not aware when they answer that magical question a certain way they have just insured another day or two of jury service. Not exactly something that most of them are excited about.

Maybe that's why it only took one-half hour of deliberations to more than double the amount awarded.

McDonnell Douglas Bites the Dust in Tennessee

2010-09-22T10:43:00.000-05:00

Yesterday I wrote about Texas' own little corner of the workers' comp world, today it is the Volunteer State's turn to take the spotlight for its unique view of an element of employment law. In Gossett v. Tractor Supply Co. (Tenn. 9/20/10) a sharply divided Supreme Court dumped one of the long time stalwart's of employment discrimination and retaliation, the McDonnell Douglas shifting burden of proof for evaluating a plaintiff's claim.

The Cour rather unceremoniously concluded,

we hold that the McDonnell Douglas framework is inapplicable at the summary judgment stage because it is incompatible with Tennessee summary judgment jurisprudence.

Actually the headline to this post is technically inaccurate, since the Court went on to say

Furthermore, when applied at the summary judgment stage, the shifting burdens of the McDonnell Douglas framework obfuscate the trial court's summary judgment analysis. The McDonnell Douglas framework "is intended to progressively sharpen the inquiry into the elusive factual question of intentional discrimination" or retaliation. Burdine, 450 U.S. at 254 n.8. Although such inquiry is particularly appropriate at trial, it is ill-suited for the purpose of determining whether "there is no genuine issue as to any material fact."

Most employment law practitioners outside Tennessee state court will be somewhat surprised with that view, since most of the jurisprudence is that once a case actually gets to trial, the McDonnell Douglass framework is particularly inappropriate.

Although it might be found on a closer reading of the opinion, what seems to be missing from the majority's opinion is a basic understanding of what the McDonnell Douglas framework was intended to do. The United States Supreme Court that created it was faced with how does an employee prove intentional discrimination based on a protective category, when it is highly unlikely that employers will admit to such.

One way they concluded was to set up a prima facie case of factors that do not conclusively prove discrimination, but if totally unrebutted, would be sufficient to permit an inference of discrimination to be drawn. They placed the burden of establishing the prima facie case on the plaintiff, allowing them to create an inference of discrimination. However, when the employer articulates a legitimate business reason that would explain the facts that were used to establish the prima facie case. When that happens the burden then reverts to plaintiff to show that the real reason for the discrimination was their membership in a protected class.

Now clearly the formulation has gotten a little more complicated and some well known federal judges, most notably Judge Posner of the 7th Circuit, are clearly not fans, but to merely toss it out without even making it clear that they understood how it came to be, seems somewhat odd.

Good News for Texas Non-subscribers, Bad News for Excess Carrier

2010-09-21T17:47:00.000-05:00

Texas has its own little corner of the workers' compensation world, as I think it is now the only state that permits employers to opt out of the workers compensation system. It does not come without a penalty, because a non-subscriber employer loses the bar against being sued by its employees for negligence, and when it is sued, loses a number of its common law defenses to negligence such as assumption of the risk, contributory negligence etc.

Still, given the costs of workers compensation, particularly before the system underwent some radical changes a decade or more ago, many major employers opted out, and have come up with fairly sophisticated programs that give them more flexibility and that are backed at least in some respect by insurance.

One of those disputes played out in a case that was decided today by the 5th Circuit, which was required to make an "Erie guess" as to what the Texas Supreme Court would do. American International Specialty Lines Ins. Co., v. Rentech Steel LLC et al (5th Cir. 9/21/10) [pdf].

The question is what would the Texas Supreme Court do in interpreting an insurance policy in this situation which excluded coverage:

under any workers’ compensation, disability benefits or unemployment compensation law, or any similar law.

The excess carrier which was looking at a $10,000,000 judgment against for a negligence claim if it was unsuccessful, argued that since the Texas Workers Comp Law penalized the non-subscriber employer and insured by stripping it of some defenses, it should be excluded as being under a "workers' compensation" or at least "any similar law."

Unfortunately for the insurer, the Court found not only did it believe that the statute does no more than modify the common law claim, and thus as it framed the question, the exclusion was not applicable; more importantly it found that is what the Texas Supreme Court would say as well.

Although the insurance carrier is on the short end of the stick of this opinion (and at $10 million it is a pretty big stick) it is not as if the employer fared all that well. The day before the initial trial was scheduled, the employer/insured tossed it wholly into the insurance company's lap by filing Chapter 7 bankruptcy.

Only in Texas. Literally.

Latest DOL Opinion On Donning and Doffing, Not So Fast - 6th Circuit Says

2010-09-01T13:04:00.000-05:00

Although it may no longer be true, donning and doffing cases at one time were clearly the big ticket FLSA collective action. And for those still fighting those fights who have been concerned about the thumb that the DOL put on the scale with their June 16 Administrator's Interpretation (No. 2010-2), which reversed course from two earlier opinion letters issued this decade (yes, Obama administration vs. Bush administration), you now have some very favorable authority from yeseterday's decision by the 6th Circuit in Franklin v. Kellogg Co. (6th Cir. 8/31/10) [pdf].

Looking to determine the meaning of the phrase "changing clothes" in § 203(o) of the FLSA, the Court surveyed the DOL's view of that portion of the FLSA and found the following:

1997 Opinion Letter - "clothes" in section 3(o) does not encompass protective equipment and section 3(o) is an exemption to the FLSA that should be read narrowly;
2001 Opinion Letter - reiterated the position taken in the 1997 Letter;
2002 Opinion Letter - "changing clothes" in section 3(o) refers to the putting on and taking off the protective safety equipment typically worn in the meatpacking industry;
2007 Opinion Letter - reiterated the position of the 2002 Letter;
June 16, 2010 Administrator's Opinion - section 3(o) exemption does not extend to protective equipment worn by employees, that is required by law, by the employer, or due to the nature of the job.

Looking at this revolving door of opinions, the Court gave them what seems to me to be the appropriate amount of deference ---none:

First, "an agency interpretation of a relevant provision which conflicts with the agency's earlier interpretation is entitled to considerably less deference than a consistently held agency view. [cite omitted] The DOL's position on this issue has changed repeatedly in the last twelve years, indicating that we should not defer to its interpretation. Additionally, we find its interpretation to be inconsistent with the language of the statute.

For the fans of burden of proof (the most important vestige of employment at will), the Court addressed the question of whether section 3(o) is an exemption to the FLSA where the employer has the burden or a definition, where the employee has the burden. Although it does so, the Court really did not have to look much further than which section of the FLSA section 3(o) appears, is it § 203, Definitions or § 213, Exemptions?

As it appears in §203 not §213 the Court placed the burden on the employee, siding with the 5th and all other circuits which have decided the question, except for the 9th Circuit.

Up to this point the opinion is very employer friendly, but at this point it diverges for some other holdings:

in determining whether changing clothes can be a "principal activity" which thus launches the "workday," the Court held that whether or not the time was compensable does not impact the determination;
here, changing clothes was a "principal activity".

Although there was a dissent, it did not seem to be over either of these principal issues. Still given the circuit split, it is not inconceivable that it could take the next step up.

If it does, given the somewhat limited nature of section 3(o) which requires a collective bargaining agreement to be applicable, the most important point could well be the deference given to agency interpretations. While it may always have been the case, it is now more clear than ever, particularly in the field of labor and employment law, regulatory agencies are much more bound to an Administration's viewpoint than stare decisis.

My own view is that is not a very good way to run a railroad, but no one has asked my opinion, nor are likely to give it much weight. It is however a fact of life, and if we are going to deal with it, we might as well know exactly what view the courts are going to give such changing views. My ~~guess~~ hope is that it is the same as the 6th Circuit here.

Cautionary Comments as the ADA Nears Adulthood

2010-08-11T13:01:00.001-05:00

Turning 21 is a much bigger deal than turning 20 if you are one who is looking forward to consuming adult beverages legally. But if you are a statute, twenty years is a nice point for others to weigh in on your success.

So in the the last two weeks various pundits have weighed in with their views on the Americans with Disabilities Act. (Although remember in terms of effective date, the ADA has just reached voting age. See, Happy ~~15th~~13th Birthday to the ADA).

Someone has no doubt collected a number of the articles about the good things the law has done, but I wanted to point out two cautionary notes because I think they make a serious point. They come from the employer side of the docket and are made by other "employer's lawyers" so you are more than welcome to take them with however big of grain of salt that you wish.

Both Jon Hyman at Ohio Employer's Law Blog and John Phillips at The Word on Employment Law raise a valid concern about the breadth of the ADA and its susceptibility to those who would game the system (my word, not theirs). See, Celebrating the ADA, but bemoaning its breadth and ADA's 20th Anniversary: A Contrary View.

To their contributions, I would add two more points. First, as I have pointed out in the past, there is at least some research that says notwithstanding its good intentions, the ADA may actually have hindered the ability of those that we would all consider disabled, to enter the workforce. See, Hurting by Helping? The Law of Unintended Consequences.

The other point is really an expansion on Jon and John's thoughts on the breadth the ADA and the problems that are caused by extending coverage to conditions that are at least further from the core of what have traditionally been considered disabilities.

Think about the law works.

The legality of an employer's conduct in almost all circumstances turns on the fundamental question --is the employee who has complained of discrimination under the ADA, disabled? (I know technically -- whether the person is a qualified individual with a disability). To put it another way, until you know whether someone is disabled, you do not know whether you have to comply with the law or not.

But whether a person is disabled as defined in the original Americans with Disabilities Act was very much a legal question. And not an easy one. Just think of the cases where that was the threshold question and the answer was not available until it went through EEOC, the district court, a court of appeals and in a handful of cases even the supreme court, before that fundamental question was resolved. By then of course many years after the employer had made its own fateful 'guess' as to what the ultimate answer would be.

In other words, in order to comply with the law you have to "know" the answer to what has been the key question over which most ADA lawsuits were fought -- was the person disabled. And in many cases you absolutely could not know for sure, until the lawsuit was decided, which obviously is too late to ensure that you act appropriately

With other types of discrimination it is rare that you have that initial hurdle. You know whether someone is male or female, young or old, black or white, of Hispanic descent etc. In those cases, there is rarely a legal question as to whether the law was applicable.

But are they disabled? As defined under the ADA, not nearly as easy.

And even after all the litigation that occurred after the first 20, oops 18, years, it was not much easier for an employer to make that decision, especially in the middle of the 1,000 other things that were on their plate when they were faced with answering the question.

And even if you had mastered that body of precedent, it has been drastically altered by the recently passed ADAAA, making for more difficulties as we head into the next 20 years.

There is a built in Catch 22 of many ADA cases, particularly those of the type that were mentioned in the two articles -- that in many such cases you don't know whether you have to comply, until you have been tried and found guilty of not complying.

I find it particularly ironic every time I notice a car with a government issued permit pulling into a parking space reserved for those with disabilities.

Dealing a $2 Million Dollar Verdict in the California Wine Country

2010-08-05T09:19:00.000-05:00

Sexual comments and jokes, including a Levitra pen that apparently grows in length, followed by a complaint with no follow up and then a termination were what a Sonoma County jury apparently believed was the hand Shannen De La Cruz , a minimum wage card dealer, had been dealt. $2 million harrassment verdict against Petaluma card room

Although it is easy to imagine how the comments contained in the newspaper story could have been made and taken by everyone as funny, it is equally clear that as it came across in the court room, the jury was offended, not amused.

One factor that certainly did not help the company was the testimony of four other women, including one who had settled her own case. Making that testimony probably even more powerful, she was the human resources chief to whom De La Cruz had reported the harassment. The unresolved issue of how much "me too" evidence should be admitted is an on-going danger of these types of cases.

Although with $5 million year in revenues it's hard to think of the casino on the receiving end of the jury verdict as a really small business, it is certainly no colossus. And what would tend to get almost any small business owner's attention is that the jury verdict amounts to 2/3 of the company's net worth.

Now as I repeatedly mention in reports of MDV's, there is a long way between jury verdict and payment and it is highly likely that any amount ultimately paid, if any, will be considerably less. But that a jury knowing the employee's financial net worth, felt it appropriate to give 2/3 of it to one ex-employee, has to be a sobering thought when contemplating placing one's fate in the hands of a jury.

Kudo's For Giving the Bad as Well as the Good

2010-08-04T15:40:00.000-05:00

I am not a fan issuing press announcements following a trial victory. To quote an over used Seinfield line, "not that there's any thing wrong with it ..... ", it's just not my cup of tea.

Similarly, I have never mixed (at least that I can remember) my own personal practice results and my blogging, or at least not in any way that they were identifiable.

Others do, although generally they only give the favorable results.

So I was pleasantly surprised to find the following post, Kent County Jury Finds for School District in O’Neill v. Warwick, on the blog of the Employment Law Group. If you check out the story you can see that in this case their client did not prevail before a Rhode Island state court jury.

I admire anyone who actually tries employment law cases to a jury. And if someone is going to announce their wins, I would suggest that they follow the example of the Employment Law Group and shows us all the results, not just the wins.

If you are clicking through to look at their blog, you might look around as it is also an excellent site for developments in the employment law area, particularly in one of the fastest growing parts, whistleblower cases.

CBA-FLSA-State Law? Is It Like Rock-Paper-Scissors?

2010-08-03T10:59:00.000-05:00

Unfortunately for companies that operate in more than one state or are intently focused on the Fair Labor Standards Act, the answer is no.

Unlike the kid's game, where the winner is variable, when deciding wage and hour compliance questions, the answer invariably seems to be -- state law tops all.

Judge Easterbrook's short 7 page opinion in Spoerle v. Kraft Foods Global, Inc. (7th Cir. 8/2/10) [pdf] is a good example and (surprisingly) the first appellate decision to address at least one variation of this non-preemption issue. The question was what happens when a CBA which specifically excludes donning and doffing from time worked as permitted under Section 203(o) of the FLSA, runs into a state statute which does not have a similar exclusion? The answer under Section 218(a) according to Judge Easterbrook: state law prevails; employer loses. Here that translates to a $2.2 million dollar judgment on behalf a group of employees against the employer.

This may be the first for this specific issue, but it is not the only time it is a problem. See Union Bargaining Agreements Likely Cannot Waive Overtime Pay Rights, at the Overtime Advisor for a similar issue brewing in Nevada.

If I were rewriting wage and hour law, and I wish someone would ask me to do so, starting with Section 218(a) might not be a bad place to start. Compliance for companies that truly want to comply is hard enough when it is one law, but one law and 50 possible variations is a little too much federalism at times.

If it were truly protecting individuals from abusive treatment that would be one thing. But here, Local 538 of the UFCW, the employees' representative, and the company agreed that donning and doffing time would not be paid. No doubt elsewhere in the CBA that benefit to the company was offset by a benefit to employees, more than likely higher hourly wage rates.

So who really benefits from this $2.2 million decision?

The workers get all that they bargained for, plus a substantial windfall. Lawyers for the company and the plaintiffs (assuming that the judgment is not reversed by the Supreme Court) will have been well compensated. The Company will be out $2.2 + million dollars, which in classic economic terms likely means consumers will now have to pay more for their products.

I am sorry I must have missed something. Why is any of this a good thing?

The Difference Between Cloth and Leather Gloves? Just Over a Million Dollars

2010-07-23T09:57:00.000-05:00

At least that is the thought one might take from a jury verdict at the end of May in Maine state court. As reported by Michael Afthim's counsel, Peter Thompson and Associates in their blog, Maine Employment Lawyer, his complaints about the working conditions of the men he supervised led to his termination and subsequent suit under the Main Whistleblowers' Protection Act.

According to his counsel:

Mr. Afthim became concerned about a number of safety issues in the warehouse that he ran including the lack of ventilation, the company's decision to use cheaper cotton gloves instead of splinter resistant leather gloves, and the insufficient staffing on the second shift. Mr. Afthim noted that the ventilation was so poor in the warehouse that his employees were inhaling significant amounts of dust and dirt. Mr. Afthim made multiple reports and complaints to ALR's management about the ventilation issue but ALR did nothing. Mr. Afthim also noted that the company's switch to cotton gloves from leather gloves was leading to significant splinters for his employees who spent their days constructing and repairing wooden pallets. Mr. Afthim also brought this concern to ALR without an adequate response. Mr. Afthim then noticed that due to understaffing that the workers on the second shift were rushing to keep up with their duties and he became very concerned that this would inevitably lead to a serious injury such as a fall or an accident with the fork lift.

CUMBERLAND COUNTY MAINE JURY AWARDS WHISTLEBLOWER $1,015,000 IN DAMAGES.

A year earlier, the Maine Human Rights Commission had passed on filing a lawsuit in the case. See Commission Meeting Minutes of June 29, 2009. Although I am not sure of the significance since I don't know about Maine's process, apparently there had been no written objection filed to the investigator's report. Commission Meeting Minutes of April 13, 2009.

With the current popularity of whistleblowing in legislatures including Congress, and quite frequently with juries, this is a story that may frequently be repeated.

Some Facts on Breast Feeding Requirement Under Healthcare Bill

2010-07-23T09:12:00.000-05:00

A hat tip to Employment Law 360 for their story, DOL Releases Guidelines On Breaks For Breastfeeding [pdf] ($) and inclusion of Fact Sheet #73 from the Wage and Hour Division, Break Time for Nursing Mothers under the FLSA.

It's the first official word I have seen on a provision contained in the major healthcare reform bill passed earlier this year, that was scant on details.

I am not sure this answers all the questions, but at least it's a start.

One Stop Shopping for Whistleblowers

2010-07-20T12:49:00.000-05:00

A hat tip to Today's Workplace, the blog of the Outten & Golden firm, for their link to OSHA's new whistleblower website, Office of the Whistleblower Protection Program.

It is worth its weight in gold, if for no other reason than to find a link to all 18 statutes that OSHA currently is responsible for:

Section 11(c) of the Occupational Safety and Health Act, 29 U.S.C. §660

Surface Transportation Assistance Act (STAA), 49 U.S.C. §31105

Asbestos Hazard Emergency Response Act (AHERA), 15 U.S.C. §2651

International Safe Container Act (ISCA), 46 App U.S.C. §1506

Safe Drinking Water Act (SDWA), 42 U.S.C. §300j-9(i)

Federal Water Pollution Control Act (FWPCA), 33 U.S.C. §1367

Toxic Substances Control Act (TSCA), 15 U.S.C. §2622

Solid Waste Disposal Act (SWDA), 42 U.S.C. §6971

Clean Air Act (CAA), 42 U.S.C. §7622

Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. §9610

Energy Reorganization Act (ERA), 42 U.S.C. §5851

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR21), 49 U.S.C. §42121

Corporate and Criminal Fraud Accountability Act, Title VIII of the Sarbanes Oxley Act (SOX), 18 U.S.C. §1514A

Pipeline Safety Improvement Act (PSIA), 49 U.S.C. §60129

Federal Rail Safety Act (FRSA), 49 U.S.C. §20109

National Transit Systems Security Act (NTSSA), 6 U.S.C. §1142

Consumer Product Safety Improvement Act (CPSIA), 15 U.S.C. §2087

Section 1558 of the Affordable Care Act (ACA), P.L. 111-148

The statutes are up to date through the health care bill, but don't yet include those included in the Financial Reform Act which will not be signed into law until tomorrow. For a preview of those, which I am sure will be joining the list soon, see my earlier post, Financial Reform Passes - Major Whistleblowing Changes as Well.

And for two final tidbits, before the next OSHA investigation into a whistleblower complaint, you might want to look over the 190 page Whistleblower Investigations Manual and when you get ready to settle check out OSHA's policy for Approval of Settlements with Future Empoyment Waivers. Spoiler alert, it's on a case by case basis and they look at five factors.

As ENDA Lingers in Congress, a MDV in Maine

2010-07-20T10:54:00.000-05:00

Just recently I was having what is a frequent conversation about what I do for a living, basically -- how interesting it is. And how although I am now 35 years into the practice I am still amazed at the new situations and the complexity of issues that I see, or as in this case read about.

And this one really does not even qualify very high on an unusual scale, except that it does reflect how often employers have to battle human nature.

The facts leading up to a $1,047,000 verdict from a Maine jury for Edward Russell are apparently these: Russell had filled in at least four times as General Manager for Express Jet at the Portland airport when the position was vacant. When he applied for the position on a permanent basis and did not get it, he sued arguing it was because he was gay.

So far, straight enough (no pun intended). The complicating factor is that in 2003-04 there had been a complaint from three female employees who had unsuccessfully applied for an open supervisory position. At the time, all of the Express Jet managers at the facility were gay men. The women complained that the gay general manager would only hire other gay men.

The theory of the case for the plaintiff -- the company did not want another gay man in the position. Toss in a few untoward comments and it all ends up to $1 million dollar plus verdict, which as the article notes will be reduced by some amount due to damage caps. See, Man wins gay discrimination suit, from the Portland Press Herald.

Discrimination is of course an individual act, and if his sexual orientation was the reason for his not being promoted, Russell clearly was entitled to recover.

But before one gets all righteous about how the wrong the company was, it is easy to imagine a circumstance, where an employer could, justifiably or not, be saying to themselves -- you're damned if you do, and you're damned if you don't.

I said my job was interesting, I never said it was easy. Each piece of legislation, valid as it may be, just makes it more so.

When "Sabotgage" Becomes Illegal

2010-07-19T10:41:00.000-05:00

I continue to see a number of articles about the need for anti-bullying legislation, much to my dismay. When there is an article about it in the weekly Sunday supplement that's in my local newspaper, you know the movement is gaining traction. See Workplace Bullying: Do We Need a Law?

At least the article had the good sense to include this quote from Victoria Pynchon, who blogs regularly at Settle It Now Negotiation Blog:

Making a federal or state case over the day-to-day management of any workforce is just plain nuts. At best, it’s a jackhammer solution to an Emily Post problem. At worst, it’s a new scheme for extortion.

What prompted the chain of thought that led to this post was this article from the Official Wire, California Pizza Kitchen Sued By Former Employee For Harassment And Sabotage Due To Sexual Orientation.

The connection to anti-bullying legislation? Sabotage at work is one of those ills that the statute is designed to protect against. A brochure supporting the Healthy Workplace Bill, includes this definition of bullying:

Verbal abuse, threats, humiliation, intimidation, work interference or sabotage. All of which prevent work from getting done and harm employee health. [emphasis added]

And what kind of allegations might we see in such "sabotage" cases?

Well according to the harassed pizza employee Kenneth Abramowitz it was a homophobic kitchen manager who:

allegedly sabotaged Aramowitz by delaying his food orders, when Abramowitz tried to expedite his customer’s food orders Aguilar would degrade Abramowitz’s homosexuality with verbal and physical slanders.

While I don't want to minimize the problem, and here the verbal abuse might make this a case that would seem actionable, I have griped about slow food service too many times myself to think that it should give rise to a cause of action.

I don't think there is a disagreement that the workplace should be more civil, but adding another layer of legislation is surely not the only way to get there.

He keeps saying and saying and saying .....

Has It Really Been 8 Years?

2010-07-19T09:26:00.000-05:00

Since I posted my first jot here? For Lack of a Green Card

Apparently so.

Thanks for all who stop by.

Financial Reform Passes - Major Whistleblowing Changes as Well

2010-07-15T17:13:00.000-05:00

Thanks to Jacob Zuckerman at the Employment Law Group for his on the spot reporting about the new whistleblowing provisions contained in the major financial bill that was passed earlier today. See Dodd-Frank Bill Provides Robust Whistleblower Protection, including a link to a download of all the whistleblower provisions contained in the legislation.

Among the interesting provisions:

A reward to whistleblowers who provide information to the SEC which results in monetary sanctions exceeding $1 million. There are lots of caveats and discretion given to the SEC, but if the award is below 30% of the amount recouped, the individual can file an appeal to a federal court of appeals.
There is also protection for retaliation against anyone who provides information in accordance with this incentive program.
There is a new Whistleblower statute for Financial Services employees which focuses on conduct related to consumer financial product or services, but has quite a broad scope of coverage.
A reward to whistleblowers who provide information to the Commodity Futures Trading Commissions, with similar provisions relating to an appeal if the individual does not like the award they received, although it differs from the similar statute under the SEC in that it does not have a 30% standard that must be met before an appeal is filed.
Closes a possible loophole in Sarbanes Oxley coverage by making it clear that subsidiaries of publicly traded companies are included if their results are included in the consolidated financial statements. The statute of limitations doubles to 180 days and precludes SOX claims from being covered by mandatory arbitration agreements.
There is also a strengthening of the False Claims Act whistleblowers retaliation provision and sets the statute of limitations at three years.

Given that it takes a number of years for employment law legislation to work its way into the framework of the law of the workplace, it may be a few years before the impact of today's legislative action is really determined. And because they are statutory and industry specific, it may even take longer for these particularl statutes.

But it is a pretty impressive body of new law and those in the affected industries would do well to take note.

Relational Retaliation: More Than A Mouthful, Another Step Forward?

2010-06-29T13:13:00.000-05:00

Jon Hyman at Ohio Employer's Law Blog has been all over the reporting of the 6th Circuit decision of Thompson v. North American Stainless, whose latest iteration at that level was an en banc rejection of a retaliation claim brought by an employee fired three weeks after his fiancee' filed a charge of discrimination against the same company. Since he himself did not engage in any protected activity, the en banc court overturned a panel decision which had held he was within the zone of protection of the anti-retaliation provisions.

Jon is understandably concerned that the Supreme Court granted certiorari yesterday in this case, noting in what if anything is an understatement that "this Court has proven itself favorable to employee rights in retaliation claims." Check out his post. Supreme Court agrees to hear associational association retaliation claim, for links to his past coverage and his promise to follow this one through next term's argument and decision.

However, this is ultimately a question of statutory construction, which calls to mind Jackson v. Birmingham Board of Education, where the dispute was whether Title IX prohibited retaliation, although there was no anti-retaliation provision in the statute itself. In a 5-4 decision, the court's opinion finding retaliation was prohibited was authored by Justice O'Connor. Significantly one of the dissenters was Justice Anthony Kennedy.

Although that was only five years ago, there will be four new justices on the Court that decides North American Stainless, Justices Roberts, Alito, Sotomayor and presumably Kagan. Substitute Sotomayor and Kagan for Souter and Stephens, Roberts for Rehnquist and Alito for O'Connor and if Kennedy's vote had remained the same Jackson would have gone the other way. So maybe North American Stainless will be better for employers than one might think on first blush.

The Potential Impact of Today's Supreme Court's 5-4 Decision on Arbitrability

2010-06-21T10:14:00.004-05:00

It is never too much a surprise when the Supreme Court reverses the 9th Circuit, nor in recent years is it a surprise when the Court hands down a decision favoring arbitration of disputes, even in employment law matters. In a narrow sense, that is the substance of today's 5-4 decision in Rent-A-Center, West, Inc. v. Jackson, (S.Ct. 6/21/10) [pdf].

The dispute was a procedural one, who has the power to determine the initial question of arbitrability in a particular set of circumstances, the court or the arbitrator. In one sense, all the Supreme Court did was lay down the guideline for how the challenge should be made if the party wishes the Court to be the interpreter. If that were the only consequence, it would be an important case for practitioners dealing with these issues, but at least the applicable law would be more clear and parties could make their arguments accordingly.

If that is the only result of today's ruling, then at least to me, this will ultimately be a rather inconsequential decision. In the short term, this employer will have won a victory (although not on the merits of the case) and parties will adapt their positions going forward to comply with the holding.

However, rather than being another good day for employers in the Supreme Court, which is much rarer than most believe, it is quite possible that employers may rue the day that Justice Kennedy cast his lot with Justices Scalia (the author of the opinion), Thomas, Roberts and Alito on this case.

I can almost guarantee, in fact it may very well occur before I finish drafting this post, that there will be a hue and outcry by Senator Leahy and others that the Supreme Court has dealt yet another vicious and erroneous blow to employee rights and that the only recourse is swift and sure Congressional action. (If that occurs, I think most objective commentators will agree that it a tremendous overstatement of what really happened today.)

The problem for employers is that the swift and sure Congressional action if it should come, is unlikely to merely undo Rent-A-Center. It is much more likely to be the enactment of the Arbitration Fairness Act, which notwithstanding what you may hear, will be the end of arbitration as a means of dispute resolution in the employment setting except for collective bargaining agreements.

I am not sure what term one uses to describe something that is far worse than a mere pyrrhic victory, but if the result of today's decision is the passage of the Arbitration Fairness Act , then the employer community will certainly need one.

Update: The first linkage (at least that I have seen to the AFA):

Public Citizen's Gupta noted that the House Judiciary Committee on June 23 is scheduled to consider the proposed Arbitration Fairness Act. "The timing is interesting," he said, adding, "The Court and Congress are moving in very different directions. I think this decision will help provoke a legislative response. It really is an attempt by the Court to take away the last safety valve available to consumers and employees."

from a National Law Journal article discussing today's decision.

2nd Update: I am not quite sure when Senator Patrick Leahy's statement on today's case was released, so I can't say how accurate I was on the timing, but I did nail the content pretty well:

Today, five members of the Supreme Court struck a blow to our nation’s civil rights laws and the protections that American workers have long enjoyed under those laws.

And while there is no mention in the press release about the pending Arbitration Fairness Act, it doesn't take much reading between the lines to see where Senator Leahy stands:

There is no rule of law in arbitration. There are no juries or independent judges in the arbitration industry. There is no appellate review. There is no transparency. And as a result of today’s divisive ruling, there will likely be no justice for millions of American workers and their families. The courthouse doors have simply been closed to them. Today’s opinion also gives big business a disincentive to treat their employees fairly and will no doubt lead to virtually all companies requiring their employees to sign one-sided arbitration agreements as a condition of employment.

This is a big issue, although it may not seem so to the general public. Unfortunately, that means it may be easier than some other legislation to slide by under the radar.

If you have an interest in retaining arbitration as part of a dispute resolution program, it is high time to be making sure your senators and representatives are aware of your position.

Post-Vacation, On the Road Again, Posting

2010-06-15T12:15:00.001-05:00

Back when there were only two or three of us bending your ear on employment and labor law related matters, I felt a weird compunction to announce when I was going to be on an extended trip with no posting. Now that employment law related blogs are both numerous and more importantly of extremely high quality, it seems much less important, and in fact somewhat grandiose. (Not to say that it wasn't before, I just feel differently about it now.)

So, all last week I was enjoying Portland and the Oregon coast and the cool weather. The rain, well not as much, but it was better than the heat in Austin.

Today, I am back on the (business) road again and was curious to see Workplace Diva's post, More Business Travelers Have Roommates.

I am not surprised to find that more companies are asking employees to share given the economic times, I am surprised that an increased group seems more willing to put up with it. I think that probably is more a true measure of how really concerned about their jobs individuals are than as Chris so nicely puts it, looking forward to "making conversation with a co-worker who is trimming his nose hair and wearing Simpsons pajamas."

What it also did was remind me that one of the most clicked through posts of this blog dealt with the same subject more than four years ago, Requiring Rooming on the Road - A Caution From Your Lawyer.

Since my advice has not changed, maybe it would not be a bad idea for anyone considering it to click through again.

And speaking of traveling, congratulations to Prof Rick Bales, who was kind enough to help me with some information for an upcoming speech while he was getting prepared for work/study, and I hope a little time for pleasure, in Malaysia this summer. See, Bales Receives Special Fulbright Grant to Study and Teach in Malaysia.

When "inside" Witnesses Support the Other Side -- Recipe for an MDV

2010-06-01T15:56:00.000-05:00

In a speech I have given about trying employment law suits, one of the first points is that not all lawsuits should be tried. And one of the things that would make me look twice is if there were a key witness, who appeared to have really good inside knowlege, who is not supporting my story.

That seemed to be what happened in the case of an Egyptian born Muslim doctor, who was supported by his immediate supervisor, but claimed discrimination and retaliation from another doctor. See, Medical center ordered to pay Egyptian-born doctor $3.6 million for discrimination. (Actually the headline is ahead of itself as the jury verdict was just returned last Wednesday in federal court in Dallas and the presiding judge has yet to enter a judgment.)

The defendant was the prestigious Texas Southwestern Medical Center. It apparently staffed Parkland's Hospital's AID Clinic, which is where Dr. Naiel Nassar worked. The key witness was his direct supervisor at the AIDS clinic who said that statements made by the head of his Department at Southwestern described a "disconnect between [her] statements and the reality of Dr. Nassar's work." He also at least implied there was a religious bias, since the witness noted the head of the department made it clear that she was Jewish and thought he (the witness) was as well (he was Christian.)

To compound problems, after Dr. Nassar resigned, the same witness said he recommeneded a Pakistani born Muslim to replace Dr. Nassar but the same director "offered the man the job at an unattractively low salary and ultimately hired a less qualified white doctor for more money."

Obviously, that's one side of the story and a bit of the other was the medical school's statement after the verdict that the record introduced at trial showed letters of support and recommendations for Dr. Nassar from the same director of his department being accused of discrimination and retaliation.

Thinking the evidence will support a view that your main was actually a supporter of the Plaintiff, not someone who discriminated against them, could seem fool hardy, but is easier to understand since Dr. Nasser was not fired, but resigned.

Unfotunately, it is hard for both stories to co-exist no matter how they are spun. It might also be one where you would anticipate that an "insider" witness' testimony might carry some additional weight.

If the defendant is the one who has not accurately predicted the view that a jury will take when faced with a binary choice, the result far too often is a large adverse award.

In a case where the positions are diametrically opposed, the jury that rules against your position has found you not only discriminated, but also that you have lied to them about it. An unfortunate double bind, that any employment lawyer practicing on the defense side should know and fear.

Bullying As a Cause of Action - One Large Step Closer

2010-05-31T20:26:00.002-05:00

As long time readers may remember, I have for a long time been concerned about a proposed cause of action for bullying. My first post about bullying goes all the way back to January 12, 2003, Newest Workplace Problem? Bullying?

But later that year, my first mention of it as a cause of action was a post about a case decided in England, Can't Wait For "Bullying" Cause of Action to Cross the Atlantic. Four days later though, I had found mention of a proposed statute that would make bullying a cause of action, You Thought I Was Kidding About A Cause of Action For Bullying.

So I have been writing about bullying almost as long as I have been blogging. Still, I have been remiss in reporting on a major development.

And the reason is simply that I am stunned and discouraged.

I really thought that it would be sometime before the Healthy Workplace Act, the model bill drafted by Professor David Yamada would advance through even one side of a state legislature. But thanks to the New York State Senate's action on May 12th, that threshold has been crossed. See, Anti-Bullying Legislation Passes NY Senate.

Discussion of that act has gotten some media attention which hopefully is a good thing. Professor Yamada has taken some of it on in a recent post, Why the Healthy Workplace Bill is not a "job killer".

Because David and I have engaged in a back and forth on this topic in our respective blogs, I am taking the liberty of setting forth his arguments in that article in full and giving my view on why I think his arguments miss the key point.

David's has five points in his rebuttal (in fairness to David, he was replying to a specific article and so I don't mean to say that these may be his only five points):

1. High standard for proving a case — The HWB requires an individual to prove that the bullying behavior was malicious and harmful to physical and/or mental health. By legal standards, that’s a high threshold.

2. Damage cap for lesser claims — In cases where the bullying did not include a negative employment decision such as a demotion or termination, emotional distress damages are limited to $25,000 and no punitive damages are allowed. In other words, the HWB blocks runaway jury verdicts for comparatively modest claims.

3. Preserves management prerogatives — The HWB expressly maintains traditional management prerogatives to evaluate employees. It does not do away with the rule of at-will employment.

4. Incentives — The HWB imposes liability on employers, but it provides them with incentives to reduce or avoid liability by taking adequate preventive and responsive measures toward bullying.

5. Notice – The New York version of the HWB requires employees to put employers on notice of bullying behavior as a pre-condition for filing a lawsuit.

Here is the problem. The limitations above are for the most part only defenses against liability or limitations on the ultimate damages that an employer may have to pay to if an employee sues.

What that ignores is the most basic principle of employment law litigation. Once an employer is sued, they have lost.

I can not over emphasize this point. Once an employer has been sued, they have lost.

Lawsuits once filed go away only one of four ways --

voluntary dismissal (unlikely or it would not have been filed in the first place);
by summary judgment (obtainable only after substantial discovery has been involved);
settlement (only by payment of some sum that the plaintiff and his or her counsel will accept and rarely before substantial defense costs have been incurred); and
at the conclusion of a trial and all appellate processes when a final judgment is entered.

As a practical matter, there is no recourse for the employer. While winning by summary judgment or trial is sometimes emotionally satisfying, it never comes close to matching either the hard dollar costs (the biggest component which is likely to be fees to law firms, including mine) or the "hidden" costs of employee time and stress that the human beings defending an employer's decision undergo over the course of litigation, which at a minimum is likely to extend over months, and where it goes all the way through the process, over years.

Here's a graphic way of saying basically the same thing that appeared as part of an April 23, 2007 cover story in Business Week.

Although legal standards may allow under certain circumstances employers to recover their attorneys' fees, as a practical matter the chance is so slim as to not exist.

Although creating a bullying cause of action would be bad enough, it is made even worse because courts will be hard pressed to grant summary judgment. Ask any plaintiff's employment lawyer what is their single biggest interim goal in any employment lawsuit, and they will tell you to avoid summary judgment. If they can force a trial on the merits, they know that the settlement value of the cases goes up substantially.

So, when you create yet another cause of action, this time based on conduct that is so subjective, you will have opened the door for almost any employee in any environment to bring a lawsuit, and worse, a law that is written in a manner so that summary judgment is almost impossible, it is in my view both a very dangerous and certainly very costly step.

Arguments can be made that cost is present in any employment law and in any event is justifiable. The first part of that is true.

Some causes of action do justify the costs. Discrimination tied to certain characteristics for example, passes that test. I do not believe bullying or in the words of the Healthy Workplace Bill, protection against an "abusive work environment," does, or even comes close.

Many will say that I am overstating how big a problem permitting employees to file suits based on "bullying behavior" will be.

Check out the language from S.1823B passed in a 45-16 vote by the New York Senate. You tell me how hard it would be to initiate a lawsuit under this bill or to get past summary judgment.

The way the statute works, it is is illegal for an employer to "subject an employee to an abusive work environment." An abusive work environment is one where"abusive conduct" causes the employee to suffer physical or psychological harm.

Then look at the definition "Abusive conduct" and notice how many "fact questions" exist. It means:

conduct, with malice,
taken against an employee by an employer or another employee in the workplace, that a reasonable person would find to be hostile, offensive and unrelated to the employer's legitimate business interests.
In considering whether such conduct is occurring, the trier of fact should weigh the severity, nature and frequency of the conduct.
Abusive conduct shall include but not be limited to, repeated infliction of verbal abuse, such as the use of derogatory remarks, insults and epithets; verbal or physical conduct that a reasonable person would find threatening, intimidating or humiliating; or the gratuitous sabotage or undermining of an employee's work performance. A single act shall not constitute abusive conduct unless the trier of fact finds such act to be especially severe or egregious.

Although it goes without saying that I deplore bullying behavior both as a moral matter, because it is bad business and because it puts employers at risk for numerous other adverse consequences, I remain adamant that it would be a disaster for the legislation to pass, in New York or anywhere else.

My thanks to my friend Jeff Polsky, who had one of the best headlines in reporting on this, The meek shall inherit their own protected category, at California Employment Law where he posts, for prompting me to finally respond.

Update: This is my quickest update ever. Probably before anyone has read it and that's because I had not checked my RSS reader or I could have linked to David Yamada's latest, New York workplace bullying legislation is in the news. In that post, he points out a number of negative comments about the New York bill and notes that many of them focus not on the employees who have been injured, but on litigation costs etc.
But there are times when those costs are so high and the disruption so great, that it can not be discounted so lightly. This is one of those times.

ARB Needs Your Help on SOX Coverage of Subsidiaries

2010-05-26T07:30:00.001-05:00

Well, that may be a bit of an overstatement, but the Administrative Review Board, which gets the final appellate say at the administrative level of Sarbanes Oxley claims has asked the Assistant Secretary of OSHA and the SEC, and it appears other amici, to submit briefs addressing four specific questions:

Is a subsidiary categorically covered under §806 (e.g., Morefield/Walters)? If so, does the level of ownership of the subsidiary play a factor in that coverage?
Under SOX's whistleblower protection provision, must a nonpublicly held subsidiary respondent be an agent of a publicly held company? What are the factors under a §806 agency test?
Is the integrated enterprise test applieable to §806? If so, should the Board consider the "centralized control of labor relations" the most appropriate factor?
Is there any other theory under which you contend that subsidiaries would be covered under §806? If so, explain.

The Order Requesting Additional Briefing by the Parties and the Amici Curae all comes in the context of an actual case, Johnson v. Siemens Building Technologies, ARB Case No. 08-32, ALJ Case No. 2005-SOX-015.

This all comes about because of the way Congress drafted the Whistleblower section of SOX, originally §806 and now recodified as 18 U.S.C. §1541A:

Whistleblower Protection for Employees of Publicly Traded Companies.— No company with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l), or that is required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o (d)), or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of any lawful act done by the employee—

When I was drafting the SOX chapter (28) of the Texas Association of Business Texas Employment Law Book, I mentioned that since most publicly held companies were holding companies with few employees, it was possible that arguments would be made that whistleblowers who worked for non-public subsidiaries might not be covered, which would of course have been a major loop hole. And I was at least right that the argument has been made, not terribly successfully I am afraid.

In fact in the last edition, after noting that the entity often registered with the SEC is the holding company, with only a small number of employees, I had to say:

Although some of the initial decisions by the Administrative Law Judges adopted this view, the Administrative Review Board has taken a broader approach, finding such companies liable under an agency theory. The only Circuit Court to address the issue has adopted a similar view.

But from their request for help, what's clear is that the ARB is still puzzled as to what the right rationale for answering the question is.

Not to be a cynic, it's an interesting question, but it's sort of like asking a condemned man if he has a preference for his method of execution. Polite to be sure, but it's highly unlikely to change the ultimate outcome.

Opening the Door to Facebook: Severe Emotional Distress May be the Key

2010-05-25T13:16:00.000-05:00

A well reasoned opinion by Magistrate Judge Debra McVicker Lynch of the Southern District of Indiana dealing with a request for information from what she dubs Social Networking Sites (SNS) should be a starting point for anyone who is seeking (or opposing) information from an employment law plaintiff's facebook or myspace profile. The 13 page decision in EEOC v. Simply Storage Management that was issued on May 11, 2010 is a textbook example of what a good discovery ruling should be.

Regardless of whether you agree or disagree with how she decided, there is no doubting that the Judge understood the dispute, did not seem irritated by it, balanced the defendant's legitimate need for discovery and plaintiff's right to privacy, within the context of a premise of broad discovery and drew limits. Even better, she noted that the limits themselves might need further interpretation and provided some additional guidance.

Here's how the suit started according to the EEOC press release last October.

The discovery dispute arose when defendants requested Facebook and MySpace profiles, plus related communications and photos and videos, of two individuals on whose behalf the EEOC brought the sexual harassment claim.
The heart of the Court's ruling was as follows:

the court determines that the appropriate scope of relevance is any profiles, postings, or messages (including status updates, wall comments, causes joined, groups joined, activity streams, blog entries) and SNS applications for claimants .... for the period from April 23, 2007, through the present that reveal, refer, or relate to any emotion, feeling, or mental state, as well as communications that reveal, refer, or relate to events that could reasonably be expected to produce a significant emotion, feeling, or mental state.

Additionally the Court held that third party communications to the claimants should be produced if "they place these claimants’ own communications in context."

With respect to videos and photographs, the Court applied the same test but gave more direction:

For example, pictures of the claimant taken during the relevant time period and posted on a claimant’s profile will generally be discoverable because the context of the picture and the claimant’s appearance may reveal the claimant’s emotional or mental status. On the other hand, a picture posted on a third party’s profile in which a claimant is merely “tagged,” is less likely to be relevant. In general, a picture or video depicting someone other than the claimant is unlikely to fall within the definition set out above.

A few other points (but you really should read the whole opinion):

Judge Lynch was quick to emphasize the limits of the Order, "This Order is directed toward two claimants who have alleged severe emotional distress, including post-traumatic stress disorder; it does not address the proper scope of discovery for “garden variety emotional distress claims.”
Although not explained, in connection with photos and videos the use of the verb "taken" during the applicable time frame stood out, although later the court did refer to "posted" in the context of third party pictures;
Although noting that the precision was not as precise as the lawyers might like, the Court also added that the EEOC should err on the side of production.
There was no mention of the additional dimension in this case. Because it was brought by the EEOC, it is possible that the claimants whose information is now being discovered might in fact be unwilling to sacrifice their privacy for the right to keep the suit alive. Given how carefully crafted the opinion is, I have no doubts if that were an issue (or at least if the Court were aware that it was an issue) it would have been addressed.
It is clear that Judge Lynch is much more comfortable with the internet world than those who currently sit at the top of her chain of command, see Sexting Case Befuddles Supreme Court: 'What's The Difference Between Email And A Pager?' and also
Unlike some on the Supreme Court she has no qualms about seeking assistance from jurisdictions out of United States as she discusses two Canadian decisions dealing with the same issue.

The case has already received considerable comment. My hat tip for catching it is Jon Hyman's post at The Ohio Employer's Law Blog, but following his hat tip leads to others, including some by non-lawyer bloggers:

Facebook can be used against you in court, by Robert Iafolla;
Social Network Discovery and Discovery Regarding Past Employers, by Robert Fitzpatrick which covers the 2nd part of Judge Lynch's ruling about employment records from past employers (basically not automatically discoverable, must show some particular relevance);
Court Rules Facebook Is Fair Game in Discovery, from the Baker & Daniels law firm; and
Employers beware: Social network comments can be used in court by Cath Everett writing at the HR Zone.

It's Not EFCA, But for Some Cities It Might Be Worse

2010-05-24T17:55:00.003-05:00

Because today, Senate Majority Leader offered the Public Safety Employer-Employee Cooperation Act as an amendment to the Supplemental Appropriations Act that is being considered by the Senate. The amendment (number 4147) could be voted on as early as tomorrow.

Here is the Heritage Foundation' summary of the bill:

The Public Safety Employer-Employee Cooperation Act (PSEEC) would require all state and local governments to collectively bargain with public safety employees'--police officers, firefighters, and emergency medical personnel--by creating a federalized collective bargaining system for public safety officers.

PSEEC allows the Federal Labor Relations Authority (FLRA) to determine whether a state's collective bargaining arrangements meet the standards as defined by the act.
States and localities must collectively bargain with public safety employees.
They must permit bargaining over wages, hours, and all terms and conditions of employment.
They must provide a dispute resolution mechanism, such as binding arbitration.
The FLRA will have considerable authority to enforce the act, including:
Determining the appropriateness of units for labor organization representation;
Conducting hearings and resolving complaints of unfair labor practices; and
Supervising or conducting elections to determine whether a labor organization has been selected as an exclusive representative by a voting majority of the employees.
States would be granted the authority to pass laws more expansive than those the federal government imposed.
States would not, however, be allowed to pass narrower laws than those contained in the act.

For more on the reasons why the Heritage Foundation thinks this is a bad idea, go here.

A more supportive view, not surprisingly, comes from the International Association of Fire Fighters, an AFL-CIO affiliate.

My quick review of the bill did not indicate that size of the governmental entity makes any difference. Here is the key definition for coverage:

"The terms `employer' and `public safety agency' mean any State, or political subdivision of a State, that employs public safety officers."

In Texas, many of the major cities already have the obligation to bargain (often not very successfully) with their police, fire and emergency medical personnel, although they will still have to be certified as meeting the national standards.

Many other Texas cities do not. But if this passes the current Texas procedure (which is in itself several complicated pieces of legislation) will be set aside if the Federal Labor Relations Authority does not deem them equal to the new federal standard. In tough economic times, not a financial burden that many governments are going to be excited about taking on.

For those not too concerned about Public Sector labor relations, the legislative tactic might be a precursor to see how other labor and employment legislation may be moved through this Congress. By attaching the bills to "must pass" legislation, such as an appropriations bill, we may soon see just how filibuster proof this Congress is when it comes to employment and labor matters.

Update May 25, 2010: Labor Relations Today covers the same topic and closes with the following:

On March 10, 2010, the House Education and Labor Committee held hearings on the bill, transcripts of which are available here. Seeing as there were at least five GOP co-sponsors to Sen. Gregg’s similar bill, it is highly likely that this amendment will pass and become part of the Supplemental.

Ouch.

Update May 29, 2010: Senator Reid pulled the PSEEC from the Supplemental Appropriations bill in light of a parliamentary challenge that it was non-germane. The Supplemental passed without it, although the bill itself remains pending in both houses. Thanks for Labor Relations Today for the update.

463 to 1 Vote in House on Mine Safety Investigation

2010-05-24T14:41:00.000-05:00

A story in the Daily Labor Report that the House of Representatives voted 463-1 to give authority to House Education and Labor Committee staff members to take depositions as part of the investigation into the Massey Energy Company mine accident of April 5th raised my curiosity about the one no vote.

I must admit that I was not surprised when I double checked the Roll Call 289 on H RES 1363 and found that the lone dissent was Congressman Ron Paul of Texas.

No matter what you think of him, there clearly is no doubt that he does not feel obligated to go his own way, regardless of popular sentiment.

Another Texas View from the Other Side of the Docket: Texas Employee Rights Blog

2010-05-18T10:01:00.000-05:00

A long time friend, and sometimes adversary, Danny Wash of Waco, has entered the world of employment law blogging with Texas Employee Rights. He joins at least two others that I follow that also write from the employee's perspective, both oddly enough from the city where I practiced law for more than 20 years, San Antonio -- Chris Mckinney's HR Lawyers Blog and and Tom Crane's San Antonio Employment Law Blog.

Besides adding some geographical diversity, I know Danny also has an interest in technology and if we are lucky will mix that in as well. For example, probably unknown to him, he is the reason that rather than use two monitors (which I tried and was not very pleased with) I moved to one very large monitor and with the program Splitview, found I accomplished the same thing, much better.
Much different than when I started this blog, there are many more voices in this particular niche of the blogosphere. I can't think of any better way to stay current in our field.

The Note From the Jury That You Didn't Want

2010-05-17T12:27:00.002-05:00

At least if you are on the defense side: Novartis Jury Asks About 'Range' of Damages . The note comes in a sex discrimination case brought by twelve named plaintiffs againt Novartis.

Although it does indicate that the jury is beyond liability, any one who has been waiting (im)patiently in a court room while a jury deliberates, knows that it is quite difficult to tell what is going on based on just a single request.

Some of it depends on the wording of the charge. If the questions are not predicated, then a damage question may or may not mean anything on damages.

And you never know, the range they could be contemplating could be from zero to $1,000. Or not.

In any event, although not that easy to do, the basic answer is to wait and see.

Updated 4:44 p.m. CDST: Yep, it was not a particularly good sign. According to the report from Bloomberg, Novartis Must Pay Punitive Damages in Sex-bias Case, $3.4 million for the 12 named plaintiffs. This case has a lot of procedural steps still to resolve including a punitive damage hearing which I think will be tomorrow, and a second finding of compensatory damages on behalf of the class. Where in those steps the appeal, which Novartis has already promised, comes I don't know.

Updated May 25, 2010S: A little late to the party on reporting this, but by now everyone is probably well aware that the punitive damage award was $250 million. The NYT story is here. As it notes, the company still has to deal with claims for compensatory damages from almost 6,000 class members. Bloomberg Businessweek quotes the plaintiffs' counsel as saying they believe that figure could ultimately reach close to one billion dollars.

Unlike many trials, the actual tactics and trying of this lawsuit have gotten a fair amount of attention and press, including a link to the defense counsel's final argument at the liability phase. See for example, I’d Like Some Sex With That Drug Order, by Ann Woolner at Bloomberg.com and ‘Beyond Tone Deaf’: A Scathing Look at Novartis’s Defense Strategy, from the WSJ law blog.

I don't have a category for multi-million dollar verdicts, and of course this is a class case, but still I think it clearly belongs in the MDV category.

Although it should go without saying, these are at this point verdicts, and there are still many hurdles before Novartis will be foreced to pay the first dollar to any of the named plaintiffs or class members.

The Employment Law Decisions of Supreme Court Nominee Elena Kegan

2010-05-10T11:17:00.000-05:00

President Obama's nomination of Elena Kegan to the Supreme Court is the fourth since Jottings was started in the summer of 2002.

In the past I have published links to the employment and labor law decisions of the nominees. See,

First Obama Supreme Court Nominee - Sonia Sotomayor

Now on First - Samuel Alito -- Let the Feeding Frenzy Begin

A More Complete List of Judge John Roberts' Labor and Employment Related Decisions

And now for soon to be Justice Kegan:

Yep, that's it, zero -- nada -- nothing.

For the first time since President Nixon nominated Lewis Powell and William Rehnquist on the same day, President Obama has nominated for the Court an individual who has not previously served as a judge. Of the two, Kegan's background is much more similar to Rehnquist than Powell. Powell had been in private practice as a corporate lawyer. Rehnquist had been a government lawyer for the bulk of his career.

Kegan has been a government lawyer but also an academic, serving in her last stint as Dean of the Harvard law school.

In any event, her first Supreme Court opinion on a labor and employment law matter will be her first judicial opinion on a labor and employment lawyer.

A non-judge has been desired by many, me included, although I would have actually preferred someone with more extensive private sector experience. Since confirmation seems to be likely, barring something unforeseen, it is likely that we will have an opportunity to see if that was a good or bad thing.

Compliance Plans -- Showing How You Are Not Breaking the Law

2010-04-30T13:35:00.000-05:00

Seth Harris, the number two person in the Department of Labor, has announced the intention of the DOL to require employers to adopt compliance plans "aimed at ensuring they do not violate wage, job safety and equal employment laws," according to Steve Greenhouse's report in yesterday's New York Times, U.S. Outlines Plan to Curb Violations of Labor Law.

This will be in the form of regulations, which the article notes will be more than a year long process. Additionally, many of the ideas are still being "worked out" but the one concrete example is an interesting one, the use of independent contractors. According to the article, Harris forsees the rules requiring an employer who uses independent contractors, to provide a written explanation of why they should be considered independent contractors rather than employees and give these workers a copy.

Obviously, the battle lines are being drawn. This announcement does nothing but re-enforce my view that just like a river, when one area of advance is blocked, the river does not go away, it just moves in a different direction. Without the ability to pass legislation, it seems ever more clear the new focus of the Obama administration in labor and employment will be on the regulatory front.

No Class Arbitration Under the FAA Unless Specifically Agreed, At Least for Now

2010-04-27T09:45:00.002-05:00

Today the Supreme Court decided a case important in the employment law field although the underlying case was a commercial dispute. The question in Stolt-Nielsen v. AnimalFeeds International (S.Ct. 4.27.10) [pdf] was whether under the Federal Arbitration Act, arbitrators could decide that class action was appropriate if the arbitration agreement was silent on that issue. Holding that the answer was no, Justice Alito wrote:

From these principles, it follows that a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.

The vote was the now familiar one with Justice Alito being joined by C.J. Roberts and Justices Scalia, Kennedy and Thomas. Justice Sotomayor did not participate and Justice Ginzberg wrote the dissent. In an argument that too has become familiar, she argued that the Court was prematurely answering the question.

This is extremely good news for all the employers who have arbitration agreements which are silent on class action.

However, just like the members of the majority, the members of the dissent, and even the argument for the dissent, we all know what comes next -- the cry for Congressional reversal.

Hopefully I will be wrong, as class arbitration is something that should be undertaken only after a long and careful study. In fact, class actions may be in for such a look in the Duke v. Wal-Mart decision which ultimately has to end up on the Supreme Court's plate.

The possible pyrrhic nature of today's victory for employers could come if it sparks greater interest in passage of the Arbitration Fairness Act, which would in its present form solve the question of employment law class action cases in arbitration by doing away with arbitration in such matters altogether.

Round 2 in Dukes v. Wal-Mart to Plaintiffs

2010-04-26T15:24:00.000-05:00

Today, in a 6-5 decision the 9th Circuit has affirmed the lower court's certification of a 1.5 million person class in a Title VII sex discrimination claim again Wal-Mart. See the article at Yahoo Finance, Court: Wal-Mart to face massive class action suit.

The decision itself checks in at 137 pages, which includes what the Yahoo Finance article calls a "blistering dissent." I have not read it yet, but I will hopefully get around to it before Round 3, which could be when the application for certiorari is filed, although there may be some more interim skirmishing in the 9th Circuit.

POWER To The People and Unintended Consequences

2010-04-22T17:10:00.000-05:00

Immigration is a political hot button, which may be one of the greatest understatements of the year. It is certainly an issue on which people disagree, unfortunately, often disagreeably.

I certainly don't want to add to that unhelpful dialogue, but I have to admit my first reaction on reading the substance of the POWER Act (Protect Our Workers from Exploitation and Retaliation Act) was to quickly jump to what I forsee as unintended consequences. The bill was introduced by Senator Menendez (D - NJ) and at this point has only three co-sponsors, Senators Gillibrand (D-NY), Murray (D-Wash), and Harkin (D-Iowa).

In short, the bill would prevent the deportation of individuals during the pendency of certain proceedings. One is criminal prosecutions where the individual is important to the prosecution. I can see how that could help overall crime enforcement and since the initiating action, a crime, is by some one other than the person tryng to avoid being deported, not that easy to abuse.

The other type of proceeding hower is serious labor violations. Under that section, an individual could avoid deportation if the individual:

(2)(A) has filed, or is a material witness to, a bona fide workplace claim (as defined in section 274A(e)(10)(B)(iii)(II) of such Act, as added by section 3(b)); and

(B) has been helpful, is being helpful, or is likely to be helpful to--

(i) a Federal, State, or local law enforcement official;

(ii) a Federal, State, or local prosecutor;

(iii) a Federal, State, or local judge;

(iv) the Department of Homeland Security;

(v) the Equal Employment Opportunity Commission;

(vi) the Department of Labor;

(vii) the National Labor Relations Board; or

(viii) other Federal, State, or local authorities investigating, prosecuting, or seeking civil remedies related to the workplace claim.

A summary of key provisions by the National Immigration Law Council makes it seem that protection from deportation would extend to a civil claim:

Stay of removal and employment authorization. Workers who have filed workplace claims or who are material witnesses in a workplace claim may receive a stay of removal and employment authorization until the workplace claim is resolved. This would allow workers to more effectively claim their labor rights and would allow the U.S. Department of Labor (DOL) to effectively prosecute employers who break the law.

It is not clear whether the suit has to be prosecuted by the government or if protection is extended to a suit where the individual employee is the plaintiff.

Although there is a provision that filing a claim just to avoid deportation will not be allowed, it does not take a genius to figure out that this statute will lead to a lot more suits and that "protection" against suits filed for that purpose is feeble to non-existent.

One of the aims of the legislation is certainly laudable, to provide a counter-balance to those unscrupulous employers who hire illegal aliens, take advantage of them and use either actual immigration enforcement or the threat of it to insulate them from liability for their wrong doing.

I won't argue with that aim, but on first blush, I have to believe there is a better solution.

Hat tip to Prof Marcia McCormick at Workplace Prof Blog, Bill to Protect Non-Citizen Workers.

The Future of Unions: A Key Question

2010-04-22T16:14:00.000-05:00

BNA's Daily Labor Report ($) has an article based on its in depth interview with the soon to be former head of the SEIU, Andy Stern, that is well worth the read. See, As Retirement Nears, SEIU's Stern Says Shift in Work Processes Top Issue Facing Unions.

The money quote for me:

Are there different ways workers can be successful in the 21st century in addition to unions or a different role for unions in the 21st century?

Regardless of how you feel about him, Stern has to be viewed as one of the more innovative leaders of the union movement, certainly in my career (and this week end is my 35th year law school reunion).

Although my practice has been much more oriented to employment than labor law, as an interested and somewhat better informed observer than many, that sentence says succinctly what I have thought about unions for a long time.

I believe unions have not adapted to the changing world as fast as needed. In what is a gross over-simplification, unions are operating on a blue collar model in what has increasingly become a white collar workplace; a world where a career is marked by multiple jobs and even free lance type assignments from multiple companies, not one job with one company for your working life.

One could quibble and suggest that by assuming, not questioning, that there is a continuing role for unions that Stern may not be really getting to the ultimate core of the issue. That could well be merely semantics and saying it that bluntly could hardly be expected of someone who has spent his life in the organized labor movement.

Stern hopes to find a spot at a university or other organization to think about things that he didn't have time to do as he was meeting the daily duties of running a large organization.

It will be interesting to see what thoughts and/or actions emanate from Stern's reflections. The common wisdom would be that whatever it is, it will be strenuously opposed by the business community. But his underlying point is a good one:

If you want to have a middle class in America there has to be some way for workers to share in the gains, not just share in the pain.

While it might well be that I would disagree with the conclusions that Stern, and whatever group he gathers arounds him, reaches, I am glad to see someone with his experience embarking on the journey.

He has posed the right question. I wish him well.

First Employment Law Test for Justice Steven's Replacement: Figuring Out the Cat's Paw

2010-04-19T10:19:00.000-05:00

Assuming that notwithstanding the current posturing, come the first October in 2010 there is a replacement for Justice Stevens, one of their first tests may be helping to define the parameters of the Cat's Paw theory in discrimination cases. An issue that has been lurking around the Supreme Court agenda for awhile. See my earlier post, 5th Circuit Panel Looks At Cat's Paw Theory .

As is almost always the case, the first to bring it to my attention is Ross Runkel at his LawMemo Employment Law Blog, SCOTUS will review "cat's paw" case. The issue in the 7th Circuit case of Staub v. Proctor Hospital(3/25/09):

In what circumstances may an employer be held liable based on the unlawful intent of officials who caused or influenced but did not make the ultimate employment decision?

A couple of quick points. The underlying cause of action is USERRA which is not a statute that often comes under Supreme Court review. Since the Cat's Paw theory is more general in nature, I don't think that means we will necessarily get much insight into how the Supreme Court views USERRA. However, given the group that it protects, one would expect most courts to give it as pro-employee favorable view as any statute.
And one of the frequently mentioned candidates for the Supreme Court position is Judge Diane Wood of the 7th Circuit. She was not on the panel that decided Staub. It would be somewhat ironic if she were appointed and one of her first employment law cases as a Supreme Court Justice was reviewing the handiwork of her generally more conservative former peers.

Medical Marijuana: Accomodation Required? Which Way Do You Think Oregon Went?

2010-04-16T10:36:00.000-05:00

Probably depends on how liberal you view Oregon. Since I have spent little time there (which will hopefully be somewhat ameliorated by a vacation week there in a couple of months) my guess is based more on perception than actual knowledge. If pushed, I would have guessed for a pro-employee outcome.

But I would have been wrong. In Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries (Oregon 4/14/10), the Oregon Supreme Court dealt with it succinctly:

The Oregon Medical Marijuana Act authorizes persons holding a registry identification card to use marijuana for medical purposes. ORS 475.306(1). It also exempts those persons from state criminal liability for manufacturing, delivering, and possessing marijuana, provided that certain conditions are met. ORS 475.309(1). The Federal Controlled Substances Act, 21 USC § 801 et seq., prohibits the manufacture, distribution, dispensation, and possession of marijuana even when state law authorizes its use to treat medical conditions. Gonzales v. Raich, 545 US 1, 29, 125 S Ct 2195, 162 L Ed 2d 1 (2005); see United States v. Oakland Cannabis Buyers' Cooperative, 532 US 483, 486, 121 S Ct 1711, 149 L Ed 2d 722 (2001) (holding that there is no medical necessity exception to the federal prohibition against manufacturing and distributing marijuana).

The question that this case poses is how those state and federal laws intersect in the context of an employment discrimination claim; specifically, employer argues that, because marijuana possession is unlawful under federal law, even when used for medical purposes, state law does not require an employer to accommodate an employee's use of marijuana to treat a disabling medical condition. ...We also hold that, under Oregon's employment discrimination laws, employer was not required to accommodate employee's use of medical marijuana. (emphasis added)(all interior cites removed)

It will be a long time before that question ever arises in Texas, but I have been surprised how many times it has come up for the employers that our firm represent in those states where some form of medical marijuana use is legal.

Given that legalization is on the ballot in California in November, see a summary of the proposal and get the actual text here, this could become an even bigger issue.

Hat tip to the locals who called this to my attention, the folks at Stoel, Rives who not only posted about the result, Oregon Supreme Court: Employers Are Not Required to Accommodate Medical Marijuana, but filed an amicus brief on behalf of the Pacific Legal Foundation and the National Federation of Independent Business, and to Ross Runkel, Professor of Law Emeritus at Willamette University College of Law (Salem, Oregon).

The Supporter Side Politics of EFCA

2010-04-13T17:27:00.000-05:00

At least for now, conventional wisdom has consigned EFCA to a post-mortem phase, which from the union perspective means, what went wrong? For some interesting background on Majority Leader Harry Reid's interest in obtaining its passage and what actually kept the bill from being voted on in the Senate, see Jane Hamsher's insightful views at What Happened to the Employee Free Choice Act? posted at the progressive blog, FDL.

If you are not familiar with Jane Hamsher, she is a film producer who started Fire Dog Lake as an individual blog. According to the Wikipedia article about her, it is named for Hamsher's favorite activity at the time it was started, sitting by the fire with her dog while watching Lakers' games. That's such a great story, if it is not true (and I have no reason to believe it is not) it certainly should be!

MDV with a Twist: Union v. Union

2010-04-09T17:46:00.002-05:00

A San Francisco jury has just returned a verdict in a lawsuit brought by the SEIU against a rival union, the National Union of Healthcare Workers. This is the next step in what has been a long battle between the SEIU and the faction that that broke away from it to form a new union. For some of the background, check out A Battle for Labor's Future by Dan Clawson which was published in Z Magazine in June, 2009.

BeyondChron writer Randy Shaw, in his own words, "rushed right from the courtroom to get out this story, and some of my numbers on the verdicts may be slightly off," on story that is headlined, BREAKING: SEIU Wins $1.5 Million Verdict in Trial Against NUHW.

I have not followed this internecine fight, but from the tone of Shaw's article it seems he is taking the NUHW side. Noting that the $1.5 million was far less than the $25 million SEIU sought, he also takes the view that the suit had four purposes and perhaps the strongest reason was merely personal. He thinks the suit failed in that goal. With respect to the other three goals he attributes to the SEIU for this litigation, he had this to say:

The first three [goals] were to deplete NUHW resources by forcing its leaders to spend time and money defending themselves, send a message to hospital and home care workers facing elections that NUHW cannot not be trusted, and turn the Rosselli leadership team into a cautionary example for other SEIU locals that are considering publicly questioning President Stern’s agenda. None of these goals were achieved by the verdict.

First, NUHW has far more organizing resources today than at any point since the trusteeship began. NUHW’s organizing was not impeded by the trial. Second, the verdicts say nothing about workers not being able to trust NUHW. To the contrary, the verdicts punished former SEIU-UHW leaders for providing too much loyalty to members. Had NUHW leaders gone along with the transfer of home health care workers out of the local without a vote, the trusteeship would not have been imposed and many would not have jury awards against them today.

Significantly, Sal Rosselli, long described by SEIU as the leader who single-handedly pushed SEIU-UHW over the edge, did not get an award much larger against him than the others (the award against Rosselli was $70,600, Borsos, Lewis, Martin was $66,600, Goldstein $73,850, with Cornejo and others at $36,600. Paul Kumar won a defense verdict). Third, as for the lawsuit deterring internal SEIU criticism, since the lawsuit began two major SEIU locals -- 888 in Boston and 1021 in the San Francisco Bay Area -- have elected reform slates.

His view of the real winner from the case is also interesting:

The chief beneficiary of this trial is likely to be hospital owners USC University Hospital in East Los Angeles, who will use the jury verdict as part of their ongoing strategy to convince workers to vote for “no union.” Management will not only make the case that an independent jury has confirmed that workers cannot trust NUHW’s leadership to protect members, but will also argue that workers should avoid being caught in the middle of inter-union disputes so rancorous that they end up in federal court.

Rarely do parties say nice things about each other during the heat of litigation and it does seem quite likely that testimony taken from this trial is apt to appear in future union campaigns.

Update (4.12.10): Thanks to Rick Bales at Workplace Prof Blog for picking up that Randy Shaw has revised his story to indicate that the collectible verdict will be not quite 3/4 of an MDV as reflected in his revised story, which the above link should still reach. Of course, verdicts are just a jury's answer and the real number doesn't appear until the Court enters a judgment after consideration post-trial motions.

iPad and the Global Workplace

2010-04-08T10:03:00.000-05:00

Two topics that I don't write about a lot, globalism and workplace safety, are merged in a Technomix Fast Company post written by Kit Eaton, Is Pressure at iPad Maker Foxconn Behind Four Recent Suicide Tries?

Because China based Foxconn is the maker of some of the principal parts of the newly released Apple iPad, the quick and easy conclusion is that there must be a link between the build up related to its highly anticipated release and the four attempted suicides.

But as is frequently the case quick conclusions are not always founded on good information. Eaton didn't go there automatically and the information about the personal nature of some of the problems and the fact that suicide is more common in China than in other countries provides a more rounded view.

On a more general note, one statement in particular caught my attention:

Statistical random clustering is also a surprising phenomenon that occurs more frequently than "common sense" thinking would suggest.

There's no attribution for the comment but it does pique one's curiosity and is another reminder that caution in drawing conclusions from "the obvious," is often wise.

The Flavor of the Season: Disparate Impact?

2010-04-06T15:08:00.000-05:00

In times past, one could go a fairly long time without much discussion of disparate impact, but two posts in other blogs today caught my attention. First, Paul Secunda has a post about new scholarship Seiner and Gutman on the New Disparate Impact.

Professor Secunda calls it a "very worthwhile read among the increasing literature on this watershed case [Ricci v. DeStefano (S.Ct. 6/29/09)]. He quotes the abstract of the article in full, but the last paragraph and one-half is enough to give you a flavor and a tease:

... After Ricci, however, in a broad category of disparate-impact cases liability now turns on what the employer knew when it took the challenged action. If the employer had no reason to think that the practice would have an unlawful disparate impact, it is immune from liability for its past actions.

This is a dramatic development, and it suggests that the Court sees disparate impact as not fundamentally different from intentional discrimination. Beyond its doctrinal importance for disparate-impact claims—which itself is considerable—the Ricci affirmative defense reflects an entirely new direction for this area of law. In this Article, we parse the language of Ricci to derive the new affirmative defense. We explain its significance for disparate-impact theory and discuss the limited safe harbor it has created for employers. We also situate the new defense within the broader context of federal employment-discrimination law, including other affirmative defenses that the Court has created for policy reasons. We thus explain how Ricci heralds a new disparate impact.

Then my fellow Texan, Russell Cawyer, who blogs at Texas Employment Law, had this note, Is the EEOC Getting Interested in Disparate Impact Claims? It was two informal discussion letters from the EEOC, one on the subject of requiring a master's degree and the other on "credit checks" as they relate to the possibility of a claim for disparate impact that caught his attention.

Like any field of endeavor, there tend to be trends, hot buttons, flavors of the week,month etc. in the employment law field. Is it disparate impact's turn? Maybe you should think of it as being on a trip to Ben and Jerry's -- it's too early to order, but not too early to think about what other scoop you want to go with your ~~disparate impact~~ Chunky Monkey.

Hidden Healthcare Gems

2010-03-30T11:33:00.000-05:00

I have not (and probably will not) taken the time to read the two pieces of legislation that passed Congress last week and which are generically being called Healthcare Reform, but fortunately others who have an interest in employment law are doing so. Although in many ways the whole bill is very much an employment law bill because of the impact on employee benefits, some portions of it are more employment law related.
The top two that have been found so far:

Jon Hyman at Ohio Employer's Law Blog, has found an amendment to the Fair Labor Standards Act that will require employers to provide reasonable unpaid breaks for nursing mothers. Do you know? Healthcare bill requires lactation breaks;
Jason Zuckerman writing at today's workplace discusses new whistleblower provisions, also added as amendments to the Fair Labor Standards Act, Health Care Reform Bill Creates New Whistleblower Protections.

Since it appears that the Fair Labor Standards Act was the vehicle of choice for many employment law related aspectes, a quick scan of the texts for that statute found the following:

In H.R. 3590 [pdf] (the Senate Bill that was passed by the House without change):

Sec. 1511 - automatic enrollment (into health benefit plans) for employees of large employers (200 full time employees);
Sec. 15122 - Requirement of all employers to inform employee of coverage options, including the existence of the newly created Exchanges;
Sec. 1588 - Protections for employees, the whistleblowing statutes that Jason Zuckerman wrote about;
Sec. 4207 - Reasonable break time for nursing mothers that Jon Hyman found.

The "fix-it" bill, H.R. 4872 [pdf] which may be signed into law today, has no references to the FLSA.

It's Here: The Obama Board

2010-03-28T11:57:00.001-05:00

Although it took longer than expected, and required using the recess appointment mechanism, Saturday's expected announcement that Craig Becker and Mark Pearce would be appointed to the Board marks the transition to an Obama majority on the NLRB. President Obama Announces Recess Appointments to Key Administration Positions. The fifth potential member, Republican Bryan Hayes'nomination is still pending in the Senate (the Becker and Pearce nominations remain as well.)

Also on the list of the 15 recess appointments are three members of the EEOC, Jaqueline A. Berrien as Chair, Chai R. Feldblum and Victoria A. Lipnic as members. P. David Lopez receives a recess appointment as General Counsel. Of those, Feldblum was the one who had drawn the most attention.

Because these recess appointments will expire when the Senate adjourns in December, 2011, it will be interesting to see how quickly they begin acting. Given the length of time the Board has been operating with only two members, and thus deciding only those cases where Democratic and Republican members could agree, there is a substantial backlog of cases to be decided. Additionally, there has been much talk about the possibility of rule making to accomplish at least some of the objectives of the legislatively stalled Employee Free Choice Act.

As a reminder of some of the changes that could be coming check out the monograph prepared by two of my colleagues, Hal and Chris Coxson, The National Labor Relations Board in the Obama Administration: What Changes to Expect.

If you had put off getting up to speed about what would happen with an Obama Board, time is up. For better or worse, it is here.

Four Pillars for Immigration Reform

2010-03-26T12:01:00.000-05:00

Having just finished with one hot potato, at least two Senators are ready to tackle yet another. And surprisingly enough, it is a bi-partisan effort. In a Washington Post opinion piece, Charles E. Schumer and Lindsey O. Graham - The right way to mend immigration offer four premises on which any new legislation should be based:

Our plan has four pillars:

requiring biometric Social Security cards to ensure that illegal workers cannot get jobs;
fulfilling and strengthening our commitments on border security and interior enforcement;
creating a process for admitting temporary workers;
and implementing a tough but fair path to legalization for those already here.

Obviously, the biometric card will set off concerns in some circles. Trying to get ahead of the curve on that one, the Senators were quick to point out:

Each card's unique biometric identifier would be stored only on the card; no government database would house everyone's information. The cards would not contain any private information, medical information or tracking devices.

Given how stormy the last time immigration reform was raised and given the hard feelings generated by the healthcare battle, it would not seem like an auspicious time.

Still stranger things have happened and if the bipartisan spirit continues, with even a low level of Republican support in the Senate, there should have a fighting chance for reform.

However, it should be remembered that this is an issue which does not necessarily divide only along partisan lines, but also has a geographic element. Even more importantly, there is a long way between agreement on concepts and agreement on final language of a bill. And just like biometric cards, the pathway to citizenship is a concept that will be a non-starter for many.

I don't think President Obama needs to set aside any days in the near future for a signing ceremony, but it certainly is an interesting start.

5th Circuit En Banc Request on Smith v. Xerox, Please!

2010-03-25T11:04:00.001-05:00

A three judge panel of the 5th Circuit yesterday divided sharply on a case that poses a number of interesting legal issues of great importance for discrimination and retaliation cases in the 5th Circuit. It cries out for an en banc review. Smith v. Xerox Corp. (5th Cir. 3/24/10) [pdf].

Among the issues decided:

the Gross analysis is not applicable to Title VII retaliation cases;
that a case seemingly tried on a pretext basis will support a mixed motive submission, and plaintiff is not forced to concede that there is some valid basis for termination in order to obtain a mixed motive instruction; and
where there was good evidence of the basis for the termination decision, and no real focus on the subjective intent of the managers making the termination decision, there was insufficient evidence to support a $250,000 punitive damage award.

Although Xerox lost on the first two points, it did prevail on the third in a monetarily big way, so either side could be asking for additional review, or both sides might decide they were better off with their victory. I could certainly see the arguments for each position.

But as a bystander unhampered by any stake in the outcome, I see this as a case where all three are extremely important practical issues, particularly the second one, where the trial bench and bar really need clear guidance.

Judge Jolly, who dissented from the opinion written by Judge Reavley, joined by Judge Wiener, had the following to say about that issue:

Smith’s entire claim in this case was presented to the jury as pretext. Smith alleged that every reason given by Xerox for her termination was pretext for age and gender discrimination or, alternatively, pretext for retaliating against her because of her EEOC charge. Smith did not argue or acknowledge that the reasons for her discharge were valid; she argued that the employer’s reasons were pretextual, i.e., false, an illegal sham. And, both with respect to discrimination and retaliation, the jury was instructed accordingly: “If you disbelieve the reason(s) Defendant has given for its decision, [i.e., pretext,] you may infer Defendant terminated Plaintiff because she engaged in protected activity.” In short, if discrimination in an alleged mixed-motive case must be shown by pretext, it is not a mixed-motive case at all, it is a pretext case. It should be that short and simple.

In an important footnote in that paragraph, Judge Jolly noted, "we have long required plaintiffs who ask for a mixed-motive instruction to acknowledge the employer’s legitimate motives for discharge," a requirement now expressly disavowed by the majority.

On the other issue that Judge Jolly took issue with, the applicability of the Gross analysis, he wrote:

The majority disagrees, however, asserting the lame distinction that, although the language is identical, Gross was an age discrimination case under the ADEA and the case today is a retaliation case under Title VII. Given the uniform principle set out in Gross, the majority’s distinction is the equivalent of saying that a principle of negligence law developed in the wreck of a green car does not apply to a subsequent case because the subsequent car is red—a meaningless distinction indeed.

Given the clear divide, and the importance, en banc, please!

Update (4.21.10): En banc review is not going to happen. The most recent entry on the docket sheet is a 4/19 letter to the court transmitting a joint Satisfaction and Release of Judgment filed with the district court on 4/19. That pleading states that Xerox has satisfied the original judgment, less the vacated punitive damages, in the amount of $208,159.03. Impossible to argue with the business decision, but it is a shame that there is no clarification of the opinion.

Tired of Card Check, Rapid Elections? Harv Prof Offers a Different Approach

2010-03-25T07:30:00.001-05:00

Benjamin I. Sachs, an Assistant Professor of Law at Harvard has a recent Harvard Law Review article evaluating card check and rapid elections, and suggesting that neither is the optimal approach. Enabling Employee Choice: A Structural Approach to the Rules of Union Organizing.

Before employers get excited that there is yet another potential academic convert to the anti-EFCA movement, it would be helpful to note a couple of items in Professor Sachs' resume -- a clerkship with Judge Reinhardt of the 9th Circuit and a stint in the legal counsel's office of the SEIU.

Given that background it is not surprising that he finds:

The central question raised by EFCA, therefore, is whether enabling employees to limit or avoid managerial intervention in union campaigns is an appropriate goal for federal law. This Article answers this foundational question in the affirmative.

His two proposed solutions would keep secret ballots, but would both require a process of continuous voting that would be conducted without the employer explicitly being told that an election was in process.

While, those ideas are radically different from the current method, if you pose and answer the "central question" as Professor Sachs does, they do follow.

And although there could be much interesting discussion about those suggestions, Professor Sachs, may really, intentionally or not, have raised the real elephant in the room:

What is the policy of the United States with respect to unionization of the work place?

Some would argue that the policy is clearly articulated in §151(d) of the National Labor Relations Act :

It is declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self- organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection. (emphasis added)

In other words, a pro-union position. But, I think many would be surprised to hear that was the official U.S. policy, and would believe, if it were in fact true, that the real question should be:

What should the policy of the United States be with respect to unionization of the workplace?

Is the answer the same as when the Wagner Act was adopted in 1935, or even when it was modified by the Taft-Hartley Act of 1947?

EFCA, although discussed in terms of procedure, is really just the most recent proxy fight about that basic question.

For me, the next question becomes: Is it time to address that issue squarely?

In this era when there seems to so little hope of consensus on any controversial issue, it does not seem that it would be particularly helpful.

Still, just because it is a difficult question, does not mean that it does not exist.

5th Circuit to Hear Katrina Related FLSA Labor Case En Banc

2010-03-24T10:54:00.001-05:00

Yesterday the 5th Circuit announced it would hear Castellanos-Contrera v. Decatur Hotels en banc.

The case turns on whether an employer who brought foreign workers in post-Katrina under the H-2B visa program was required to reimburse them for recruitment, transportation and visa expenses in order to meet requirement that wages be paid "free and clear" under the FLSA.

The original panel said no, although it took two opinions to do so. I know that the 5th Circuit has a lot of Katrina related cases that deal with insurance coverage and it may be that there are other H-2B FLSA cases.

Or maybe a majority of judges just thought the panel got it wrong.

For links to the panel opinon and replacement opinion, see my original post from February 2009.

Name, Rank and Serial Number: A Good Policy, But You Have to Follow It

2010-03-23T15:34:00.002-05:00

That's the message I would take from the latest MDV report. Credit Agricole was sued by a former employee, William Raedle, who alleged that his former supervisor cost him a job as a financial analyst when he told Raedle's potential employer that he had "mental issues" and what the BusinessWeekarticle refers to as "other disparaging remarks," including difficulty working with others. Credit Agricole Loses Trial Over Poor Job Reference.

The net result a $2.4 million dollar verdict from a New York federal jury that deliberated for just 5 hours following a week long trial.

Of course, if anyone knows that a verdict is not the same as money it is Mr. Raedle, as an earlier trial had also resulted in a favorable verdict, but it had been set aside by the District Judge, who said allowing it to stand would result in a "serious injustice".

It is unclear from the article exactly what the what the legal cause of action that was the basis of Raedle's complaint. Although in this situation it is often defamation, here it appears it could have been tortious interference with a potential business relationship.

What is also clear is that Credit Agricole, like many companies, had a policy that was only to confirm that a person had been employed there, without giving a performance evaluation.

Writing a policy is rarely the hard part; implementation, every day by every one, is. Some days, it is a million dollar problem.

Update 4.16.10: As a good illustration that a jury verdict is just a step along the way to what ultimately an employer will have to pay and what an employee and their attorney will actually receive, the trial court this week granted judgment as a matter of law to the defendants on the punitive damage award, striking $800,000. However, the other side of the story, the Court has not ruled on plaintiff's request for approximately $609,000 in costs and attorneys fees. I would be surprised if there are not other motions pending by the defendant that could ultimately impact other portions of the award as well. And, of course when the trial court finally enters its judgment, there's always the appeal. See $2.4M Award For Ex-Credit Agricole Analyst Trimmed, at Employment Law 360. ($)

Another Retaliation Case in the Supreme Court: Deja Vu All Over Again?

2010-03-22T18:22:00.001-05:00

According to Paul Secunda at Workplace Prof Blog, a number of bloggers have already commented on today's granting of certiorari Supreme Court Grants Cert in Saint Gobain FLSA Case.

Paul says he has no idea how the case will come out. The issue is whether as the 7th Circuit says, only written complaints, not oral ones, qualify as protected activity under the FLSA. I think Paul may just being nice.

Consider the following posts on how retaliation has fared in the Supreme Court since the birth of this blog in July 2002.

Supreme Court Unaminous in Retaliation Case, Crawford v. Metropolitan Government of Nashville (S.Ct. 1/26/09).
Supreme Court Scoreboard: Retaliation 2, Employers 0, CBOCS West, Inc. v. Humphrey (S.Ct. 5/27/08) and Gomez v. Potter (S.Ct. 5/27/08).
Supreme Court Answers the Question: What Is An Adverse Employment Action? , Burlington Northern Railway v. White (S.Ct. 6/22/06)
Whistleblowing in the Supreme Court, A Good Day, Jackson v. Birmingham Board of Education (U.S. 3/29/05).

Based on that track record, and the fact that there was a vigorous dissent by 3 judges in the 7th Circuit (including Supreme Court short lister, Judge Diane Wood) to the court's refusal to hear the case en banc, I am not optimistic that the 7th Circuit's holding that only written complaints constitute protected activity will stand.

That's the view of another Paul, Paul Mollica, at Daily Developments in EEO Law.

If the Court follows its own in lead in its unanimous decision from last term, Crawford v. Metropolitan Government of Nashville, 129 S. Ct. 846 (2009), it will give the statute a common-sense construction that safeguards employees' rights to inquire or complaint about wage-and-hour violations. A decision affirming the Seventh Circuit's construction, though seemingly unlikely, would reverberate in all federal-law retaliation cases.

But left out of the Supreme Court record above is Justice Thomas' decision in Graham County Soil & Water Conservation District v. United States ex. rel. Wilson (U.S. 6/20/05) (see No Federal Statute of Limitations for Retaliation Claims Brought Under Qui Tam Act.) That just happened to be a case that turned on statutory construction.

And the rest of Professor Secunda's sentence refusing to predict the outcome finishes, "but the decision may be an interesting example of how different Justices engage in the exercise of statutory construction."

So the decision may be more up in the air than I would initially think.

But I doubt it.

Update (3.25.10): For a little more factual background on the case itself check out the article in Corporate Counsel, Sooo, Just Keep My Mouth Shut: Can Workers Only Complain in Writing?

Social Media and Hiring -- Interesting Data, But So What?

2010-03-18T10:08:00.001-05:00

Jon Hyman at Ohio Employer's Law Blog has a great post on a recent survey conducted for Microsoft on how employers world wide are using internet research in making hiring decisions, 70% of hiring managers report rejecting candidates following internet searches.

A detailed powerpoint has the January 2010 report prepared by Cross-Tab Marketing Services for a Microsoft division.

The points from the Executive Summary of impact on professional life are fairly telling (my comments in red):

Nationality plays key role in determining whether online content will harm reputations.

It's not clear if this is the nationality of the manager (which it could be given the global nature of the study) or the candidate. Obviously, if it is the latter, it is a huge red flag from an employment law standpoint.

Companies have formal policies for checking online reputational data, but male recruiters are more likely to check - except in France.

I would be curious if those formal processes meant written. The 75% number of U.S. employers that said it was "part of their organizational process" sounds high to me. And what is it about males? Or the French for that matter.

Recruiters typically conduct deeper searches than most consumers are aware of, and feel justified in doing so.

Hiring may be the most important decision that a company makes and so it does not surprise me that employers want to know as much information as they can about potential employees. Hiring is important not only to the general success of a company, but is also an important factor in mitigating employment law litigation. I think most experienced management side employment lawyers will agree that most "wrongful termination" cases are really cases of "bad hiring."

Not all online content is true – but candidates may be rejected nonetheless.

I certainly don't doubt the former, nor really the latter, but when you look at the reasons that such data leads to rejection (see below) I am not sure the two are necessarily connected. Still, any time an employer is acting on false information it is not good.

Recruiters say they tell candidates if online content factored into their rejection, but consumers do not seem to be hearing it.

I would be surprised if is a very clear message.

Good online reputations matter to recruiters.

Duh! (although I would not have answered that way a year ago.)

There are also big differences in the use of such data. Worldwide 25% of recruiters do such checks "all the time", in the U.S. the "all the time" number is 44%, with 70% having rejected a candidate based on such a check compared to 14% for the French.

One interesting thing is the wide variety of sites that U.S. recruiters report they are checking:

Search engines (78%)
Virtual worlds sites (32%)
Online gaming sites (27%)
Classifieds/Auction sites (25%)
Social networking sites (63%)
Personal websites (48%)
Photo/video sharing websites (59%)
Blogs (46%)
Online forums/communities (34%)
News sharing sites (41%)

And probably the most important set of U.S. data from an employment law standpoint, reasons for rejection:

Inappropriate comments/text written by the candidate (56%)
Unsuitable photos/videos/information (55%)
Concerns about the candidate's lifestyle (58%)
Comments criticizing previous employers/co-workers/clients (40%)
Inappropriate comments/text written by friends/relatives (43%)
Inappropriate comments/text written by colleagues/work acquaintances (40%)
Groups/Networks the candidate was a member of (35%)
Discovered that information the candidate shared was false (30%)
Poor communication skills displayed online (27%)
Concern about the candidates financial background (16%)

Jon quotes himself to make a good point about the use of this data:

I have another problem with HR departments willy-nilly performing internet searches on job applicants – the risk that such a search will disclose protected information such as age, sex, race, or medical information.

I think that is a legitimate concern. I also think it may work against hiring activists or what Tom Peters calls "mavericks" in his latest book, The Little Big Things," which at least he would say is a bad thing.

A couple of other points on a post that is now way too long. If ENDA passes, which would extend anti-discrimination protection to sexual orientation, I think the searches could be even more problematic.

Still to answer the question I posed in the headline, so what?

I think this data should be a very big deal to those seeking work.

For employers? This may change, but the fact is, in my now 35 years of doing this, I can probably count the number of cases that I have handled based on failure to hire on the fingers of my two hands and it certainly would not exceed my fingers and toes.

Still just because it has been that way in the past doesn't mean it will in the future, and you can be sure data like this will be making for some interesting inquiries at depositions in the future.

Well I Would Hope So

2010-03-17T09:45:00.000-05:00

This is the description of the 4th Circuit's decision lifted entirely from today's Daily Labor Report ($):

A medical intern who misdiagnosed patients, prescribed wrong medications, and identified a living patient as deceased could not show he was a qualified individual with a disability under the ADA.

Shin v. University of Maryland Medical System (4th Cir.)(3/11/10) [pdf].

For Those Who Fly

2010-03-16T16:38:00.000-05:00

The Workplace Diva has a telling comment about unintended consequences and airplane baggage fees. Yep, you know what it is. More on board luggage. Airlines' Per-Bag Fees Create New Baggage.

The post makes the point that humans are much better at adapting to changes than management is in anticipating those adaptations. And one of those in this case is unhappy flight attendants and increased work place injuries (not to mention unhappy fliers, including those who have had luggage dropped on their head!).

I have noticed it, and most of my flights are on SWA, still a baggage fee free zone.

Ohio MDV for Disability, Race, FMLA and Retaliation

2010-03-16T15:06:00.002-05:00

Covering about as many bases as you can, Charlene Thirion, a former employee of Bedford Heights, Ohio sued the village over her termination saying it was because of her race, disability (anxiety and depression according to the news article), and retaliation when she protested against the disability and race discrimination. And just in case, there was also an FMLA violation.

The net result, a pretty good jury verdict for her, Twinsburg woman wins $1.83M verdict against Bedford Heights.

Update 3.17.10: Peter Krause's story in the Cleveland Plain Dealer gives some more detail about the trial and allegations, including making it clear that this was a case of "reverse discrimination." Thirion, who is white, alleged that the Mayor and a City director, both of whom were black and the white city attorneys discriminated against her. In a slight twist on the cat's paw theory, plaintiff's counsel is quoted:

"We believe the attorneys were doing what the mayor directed them to do," said Thirion attorney Chris Thorman of Thorman & Hardin-Levine in Cleveland.

"But He's an Illegal Immigrant" Argument Held Prejudicial by Texas Supreme Court

2010-03-12T11:56:00.001-06:00

Given that President Obama turned his attention to immigration reform this week, see NYT story, it is somewhat ironic that the issue also surfaced in a more unlikely place, the Texas Supreme Court. The issue before the Court -- whether or not a jury should be informed (repeatedly) that the driver involved in a fatal collision was an illegal immigrant. The underlying suit was against his employer for negligent entrustment.

In TXI Transportation Company v. Hughes, (Tx 3.12.10) [pdf] the Court held that such information was not only inadmissible, but was in fact prejudicial so that its admission was not harmless error and required a retrial.

The Court's holding was no doubt influenced by the fact that plaintiff had made the illegal status, and in fact the issue of illegal immigration, a central part of its trial theme.

Justice Medina wrote for the Court:

Hughes [the plaintiff] faced a difficult conceptual burden. He had to convince a jury that a collision involving on-coming traffic, that unquestionably occurred in the eastbound lane of Highway 114, was the fault of Rodriguez, the eastbound driver. The task was all the more difficult because Rodriguez possessed a clean driving record and commercial driver’s licenses from both Texas and Mexico. Hughes had some evidence of how Rodriguez might have been at fault for the collision in his lane, but the issue was hotly contested.

The record indicates that Hughes sought to hedge his theory by calling attention to Rodriguez’s illegal immigration status whenever he could....

That "hedge" including calling Rodriguez as the very first witness and the first questions were about his immigration statuts. As the Court noted that was followed by:

over forty references to Rodriguez’s status, including thirty-five to his status as an “illegal immigrant” and seven to his prior deportation.

And it was not just questions to him, TXI representatives were also cross-examined regarding whether they owed a “duty” to the public to prevent an “illegal” from driving a TXI truck:

“Do you think he is entitled to drive here if he’s illegally here?”
“And you don’t think you owe any duty . . . to the public . . . to the people who are driving up and down [Highway] 114 . . . to decide whether he’s illegal or not?”
“Mr. Rodriguez is still illegal in the United States, is he not? . . . Will anybody ever turn him in, or will he just continue to drive for TXI?”

In fact, there was a lot of evidence that was available about Rodriguez, since he:

was an undocumented Mexican alien who had illegally entered the United States on multiple occasions;
invented a false Social Security number, which he used to apply for a Texas commercial driver’s license;
falsely answered “no” in his deposition when asked if he had ever lied to obtain a Texas driver’s license;
falsely answered “yes” on his TXI employment application when asked if he had the legal right to work in the United States;
pleaded guilty to and was convicted of a misdemeanor immigration violation, serving four months in jail; and
was previously deported and ordered not to return to the United States for ten years.

Still the Supreme Court rejected the use of such evidence both on substantive grounds and for impeachment. Under the substantive law of negligent entrustment it was not relevant, since his illegal status had not caused the collision.

By its holding that it was also improper impeachment evidence, the Court has made it a case of broader importance.

Justice Medina concluded forcefully for the eight members of the court who participated in the decision:

Such appeals to racial and ethnic prejudices, whether 'explicit and brazen' or 'veiled and subtle,' cannot be tolerated because they undermine the very basis of our judicial process.

Hard to argue with that.

Ironically, in this case the ruling bailed out an employer, but from an employment law context it is employers who are most likely to feel stymied by its reach.

Supplemental information (3.12.10): For more background information on the case itself see the AAS article about the oral argument last May. One aspect that is significant is that the underlying judgment was originally $22.4 million but was reduced to $15.8 million by the appellate court. Four members of a single family were killed in the accident.

Caught in Between -- Another MDV

2010-03-11T19:00:00.001-06:00

When you see this kind of headline, I Spy With My Little Eye... Hotel Baker Gets $3 Million from Starwood you know that it is no doubt a complicated story. That it came at the end of a more than three week jury trial in federal court in NYC, confirms that.

Moises Mendez, a baker had complained about being "bullied" (that word again) based on national origin and also some surgical scars. But as the article points out, it was not only the verbal taunts that led to the award, but also the fact that the hotel had installed a camera in the kitchen where he worked.

Mendez of course (and apparently the jury) saw it as spying on him. On the other hand, the hotel said the camera was “supposed to protect Mendez from harassment and was approved by his union.” Its hard from the limited reports to know what was really going on, but it is quite easy to see that this was not your usual situation.

And since I have not had the chance to point it out lately, a gentle chide to the headline writer, for "Gets $3 Million". Mendez has not received anything. What he has is a jury verdict, that still needs to go through a considerable process even before it becomes a judgment in favor of him. Even then, Mendez will not "get"anything, until the end the often long appellate process. To quote my former professor Pappy Jones (again), "there is no cash register at the back of the courtroom."

Update (3.11.10): Apparently, the statement that the union approved of the camera was retracted. See this update from the Daily News.