Jottings By An Employer's Lawyer

Tuesday, June 28, 2005

The World of Big Law - How the World Changes in 30 Years

My quick look at the top 10 of the soon to be released Am Law 100 took me back to when I first was exposed to the world of "big law firms" sometime in my freshman year at the University of Texas School of Law in the fall of 1972. Actually, naïve as I was, it may have even been the next fall when I interviewed for the first time. I remember the big talk of the law school was an article in a new magazine, Texas Monthly, about the "Big 6". That would have been the six largest law firms in Texas at the time, all Houston based. The six were Baker Botts, Vinson Elkins, and Fulbright Jaworski, all in the 200 lawyer range and Bracewell Patterson, Andrews Kurth, and Butler Binion, all approaching 100 lawyers. I have no clue what the annual revenues were, but I do know that the starting salaries when I graduated in the spring of 1975 was a princely $1,300 a month (the quick math is $15,600 a year.)

Although the Texas firms were significantly smaller than the then biggest New York firms, the difference between them pales in comparison to the difference in the world of "big law" as I first encountered it 30+ years ago and what exists today, when the combined lawyers in all of the Texas Big 6, would be less than all but one of today's top 10. And that's perhaps one of the smallest differences.

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Sunday, June 26, 2005

EEOC Reorganization Plan To Be Voted on July 8th

The EEOC has been attempting to reorganize its field offices, but has met resistance, primarily it appears from the union that represents its workers. Still the story in at EEOC officials answer critics of reorganization proposal makes it sound as the EEOC really has the better argument, since ultimately Gabrielle Martin, president of AFGE National Council of EEOC Locals No. 216, is left complaining about the plan because "it fails to address serious staffing shortages at the agency. Ideally, she said, any savings gleaned from the restructuring should be used to hire more employees." Since doing more with what they had was the whole purpose of the reorganization, it seems Ms. Martin's argument misses the mark.

Basically the EEOC is opening 2 more offices, but downgrading a number of district offices to the next lower rank, a field office. Those taking a step down would include Baltimore, Cleveland, Denver, Detroit, New Orleans, San Antonio, Seattle and Washington D.C. . Milwaukee gets bumped down two grades to an area office. The principal savings will be cheaper management because of the lower level offices.
For more information on the reorganization, including to see how where you would report under the new line up check out the EEOC Field Repositioning Plan. For Texas, San Antonio gets downgraded from a District to a Field office, now reporting to Dallas. Dallas and Houston would have altered territories:

DALLAS DISTRICT OFFICE - The State of Texas Counties of Anderson, Archer, Armstrong, Baylor, Ball Bosque, Bowie, Brown, Callahan, Camp, Carson, Cass, Cherokee, Clay, Coleman, Collin, Collingsworth, Comanche, Cooke, Coryell, Dallam, Dallas, Deaf Smith, Delta, Denton, Donley, Eastland, Ellis, Erath, Falls, Fanning, Fisher, Franklin, Freestone, Gray, Grayson, Gregg, Hamilton, Hansford, Harrison, Hartley, Hemphill, Henderson, Hill, Hood, Hopkins, Hunt, Hutchinson, Jack, Johnson, Jones, Kaufman, Lamar, Lampasas, Leon, Limestone, Lipscomb, McLennan, Marion, Milam, Mills, Montague, Moore, Morris, Navarro, Nolan, Ochiltree, Oldham, Palo Pinto, Panola, Parker, Potter, Rains, Randall, Red River, Roberts, Robertson, Rockwall, Runnels, Rush, Shackelford, Sherman, Smith, Somervell, Stephens, Tarrant, Taylor, Throckmorton, Titus, Upshur, Van Zandt, Wheeler, Wichita, Wilbarger, Wise, Wood, Young, Aransas, Atascosa, Bandera, Bastrop, Bee, Bexar, Blanco, Brazos, Brooks, Burleson, Burnet, Caldwell, Calhoun, Cameron, Coke, Comal, Concho, Crockett, De Witt, Dimmit, Duval, Edwards, Fayette, Frio, Gillespie, Goliad, Gonzales, Guadalupe, Hays, Hidalgo, Irion, Jackson, Jim Hogg, Jim Wells, Karnes, Kendall, Kennedy, Kerr, Kimble, Kinney, Kleberg, La Salle, Lavaca, Lee, Live Oak, Llano, McCulloch, McMullen, Mason, Maverick, Medina, Menard, Nueces, Real, Refugio, San Patricio, San Saba, Schleicher, Starr, Sutton, Terrell, Tom Green, Travis, Uvalde, Val Verde, Victoria, Washington, Webb, Willacy, Williamson, Wilson, Zapata, Zavala, Andrews, Bailey, Borden, Brewster, Briscoe, Castro, Childress, Cochran, Cottle, Crane, Crosby, Culberson, Dawson, Dickens, Ector, El Paso, Floyd, Foard, Gaines, Garza, Glasscock, Hale, Hardeman, Haskell, Hockley, Howard, Hudspeth, Jeff Davis, Kent, King, Knox, Lamb, Loving, Lubbock, Lynn, Martin, Midland, Mitchell, Motley, Parmer, Pecos, Presidio, Reagan, Reeves, Scurry, Sterling, Stonewell, Swisher, Terry, Upton, Ward, Winkler and Yoakum. The State of New Mexico Counties of Grant, Hidalgo, Luna, Sierra, Dona Ana, Otero, Eddy, and Lea.

San Antonio Field Office - The State of Texas Counties of Aransas, Atascosa, Bandera, Bastrop, Bee, Bexar, Blanco, Brooks, Burleson, Burnet, Caldwell, Cameron, Coke, Comal, Concho, Crockett, De Witt, Dimmit, Duval, Edwards, Frio, Gillespie, Goliad, Gonzales, Guadalupe, Hays, Hidalgo, Irion, Jim Hogg, Jim Wells, Karnes, Kendall, Kennedy, Kerr, Kimble, Kinney, Kleberg, La Salle, Lee, Live Oak, Llano, McCulloch, McMullen, Mason, Maverick, Medina, Menard, Nueces, Real, Refugio, San Patricio, San Saba, Schleicher, Starr, Sutton, Terrell, Tom Green, Travis, Uvalde, Val Verde, Webb, Willacy, Williamson, Wilson, Zapata and Zavala.

El Paso Area Office - The State of Texas counties of Andrews, Bailey, Borden, Brewster, Briscoe, Castro, Childress, Cochran, Cottle, Crane, Crosby, Culberson, Dawson, Dickens, Ector, El Paso, Floyd, Foard, Gaines, Garza, Glasscock, Hale, Hardeman, Haskell, Hockley, Howard, Hudspeth, Jeff Davis, Kent, King, Knox, Lamb, Loving, Lubbock, Lynn, Martin, Midland, Mitchell, Motley, Parmer, Pecos, Presidio, Reagan, Reeves, Scurry, Sterling, Stonewell, Swisher, Terry, Upton, Ward, Winkler and Yoakum. The State of New Mexico Counties of Grant, Hidalgo, Luna, Sierra, Dona Ana, Otero, Eddy, and Lea.

HOUSTON DISTRICT OFFICE - The State of Louisiana and the State of Texas Counties of Angelina, Austin, Brazoria, Chambers, Colorado, Fort Bend, Galveston, Grimes, Hardin, Harris, Jasper, Jefferson, Liberty, Matagorda, Montgomery, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Trinity, Tyler, Walker, Waller, Wharton, Shelby, Nacogdoches, Houston, Madison, Brazos, Washington, Fayette, Lavaca, Calhoun, Victoria, and Jackson.

New Orleans Field Office - The State of Louisiana.

Oklahoma which had been under the Dallas District office will now be under St. Louis.

If you have an objection, better raise it soon. The plan will be voted on at the Commission's meeting on July 8.


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Friday, June 24, 2005

Handling of Sexual Harassment Charge "Not Fully Endorsed" - But Good Enough To Reverse Jury Verdict

Jane Tatum, a nurse at a County Health unit, had what she and her attorney must have thought was a simple and straight forward sexual harassment case:
June 14 -- alleged act of harassment by co-employee ("He then grabbed Tatum’s hand, placed it on his penis, and asked Tatum, 'See how hard it is? Doesn’t that feel good?' ") Not reported by Tatum.
June 15 -- co-employee asks Tatum to come over for the weekend when his wife and granddaughter will be away. That afternoon Tatum report the incidents to the administrator of the unit, who took no action.
June 20 -- Tatum deicdes to confront the harasser and asked the administrator to accompany her. After she asked the harasser to quit harassing her, he told her to get out of his office, but never harassed her again. Leaving the office, the administrator told Tatum there would be "hell to pay" if she pursued the complaint further.
June 22 -- Tatum complained to the administrator's supervisor that no action with respect to her complaint had been taken.
June 29 -- The head of Human Resources and an in house attorney began an investigation, interviewing Tatum and her co-workers, about 19 in all.
July 11 -- investigators completed their investigation and concluded no sexual harassment because there were no witnesses and it was denied by the harasser. Another employee's report of similar (although less crude) behavior by the harasser was not credited as there was "a lack of corroboration."
September 6 -- Tatum resigned because she was being "shunned" by the other employees. About a month later, for the first time Tatum was told the results of the investigation.
The case was as compelling to a jury as to Tatum as it found for her not only on the harassment claim, but that she had been constructively discharged.

The trial court was less sympathetic, granting the employer's post-trial motion for judgment as a matter of law. The employer argued the conduct was not pervasive and it had taken prompt and effective action to end the harassment. The appeals court did not address whether the conduct was pervasive, agreeing that Tatum had not established that the the employer failed to take prompt and effective action to end the harassment.

Although not fully endorsing the handling of the investigation, the Court set out the issue and its finding in one paragraph:

Tatum contends that the Arkansas Department of Health failed to take her complaint seriously because of the amount of time it took to complete the investigation. Tatum presented evidence that the investigation was not begun until two weeks after her complaint and took eight weeks to complete. During the investigation, Tatum was required to work in the same office as her alleged harasser. While we do not fully endorse the Appellee’s handling of Tatum’s complaint, we do not find the investigation falls below the required standard. Tatum admits that no harassment occurred during this period. The fact that the investigation took two and half months does not lead us to the conclusion that the investigation was necessarily faulty. Two qualified professionals did a thorough job of investigating Tatum’s complaint and issuing a finding. There was no further harassment during the investigation period. We believe Tatum failed to show that the Arkansas Department of Health failed to complete a prompt and effective investigation. Without this showing, Tatum’s hostile work environment claim fails. (my emphasis)
Tatum v. Arkansas Department of Health (8th Cir. 6/20/05) [pdf]. The Court also reversed the constructive discharge finding, holding there was no evidence that her actions were objectively reasonable or that the employer was trying to force her to quit.

While on first blush, the Court's ruling may seem harsh, particularly in overturning a jury verdict, in the end the key factor was that the harassment stopped. That is the legal test, not the efficacy of the investigation. Although the lines may at first seem somewhat blurred, it is an important distinction. It is the difference between a court enforcing a legal standard versus imposing its own view of ideal personnel practices. Courts, for the most part, realize the latter role is one for which they are neither empowered nor particularly well suited.

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Tuesday, June 21, 2005

The Danger of Emails - You Can't Be Reminded Enough

Michael Fitzgibbons' post, Email Can Be Really Dangerous, is a good reminder of several recent email incidents, including this judicial comment by one of his former partners:
It is indeed tragic that a relationship of this duration ended in this fashion. It is also unfortunate that the parties chose to communicate their feelings to each other by e-mail. While e-mail is a useful method of conveying of information, it is less appropriate for debates in hotly charged circumstances. It seems odd that neither [the supervisor] nor [the employee] picked up the telephone and spoke to each other directly. This might have defused matters. In the end, it cost [the employer] a valuable employee and cost [the employee] her job.
How's that for common sense advice?

Even if you don't need to know anything about Canadian employment law, Michael's Thoughts From A Management Lawyer should be on your list of regular stops or in your RSS aggregator.

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Dwindling Resources - The AFL-CIO's Real Achilles Heel?

Even if, like me, you have not been carefully following the internecine battles of organized labor, today's post in A Working Life, Numbers Don't Lie, strikes me as significant. Although current AFL-CIO head John Sweeney had apparently tried to downplay it earlier this year, the organization had a $2.4 million defict for 2004.

Even more compelling to me:

As important, the reserves of the Federation have been declining steadily. In 1996, they stood at $56.3 million. By the end of 2004, the reserves were down to $30.9 million.

If I am a member of organized labor and trying to decide whether to continue to support the current powers or take a more untried approach, these figures might make me think there was nothing to lose, except perhaps by sticking with the status quo.

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No Federal Statute of Limitations for Retaliation Claims Brought Under Qui Tam Act

The last employment related case on this term of the Supreme Court's docket was decided yesterday. It involved a complicated case of statutory construction in a qui tam retaliation case rather than sweeping principles that make for good news stories. Still for individuals, including KarenWilson whose case was before the Court, it will be the difference between having a case, or having it dismissed as untimely.

Justice Thomas writing for the Court found the 6 year statute of limitations for qui tam actions, added in 1986, is not applicable to the retaliation provision of that statute which which was added the same year. Instead, courts should look to the most applicable state statute of limitations. Graham County Soil & Water Conservation District v. United States ex. rel. Wilson (U.S. 6/20/05) [pdf].

All of the justices agreed there is a problem with the language of the statute as drafted by Congress, but the solution adopted by the majority comes at a price according to dissenting Justice Breyer (joined by Justice Ginzberg):

It substitutes for a fairly lengthy - and uniform - 6-year limitations term, a crazy-quilt of limitations periods stitched together from the laws of 51 jurisdictions which, in some instances, might require a plaintiff to bring a retaliation claim within 90 days, six months, or one year after the retaliation takes place.

The Court does offer a starting point for finding the approriate state statute of limitations in a lengthy footnote three. But it stresses that the statutes listed "are only the likely candidates for analogous state statutes of limitations; it may well not be an exhaustive or authoritative list of the possibilities."

Just looking at the statutes listed for Texas makes clear that the federal courts will still have work to do to decide the appropriate limitations period, as the Court offered the possibility of the two year statute of limitations for personal injuries, Tex. Civ. Prac. & Rem. Code Ann. §16.003 (West 2002), or the much shorter 90 day statute of limitations under the whistleblower statute, Tex. Govt. Code Ann. §554.005 (West 2004).

These cases are not all that common so it will probably be some time before the law in each jurisdiction is fleshed out. But if I were filing a case based in Texas, I would be operating under the 90 day rule until a court told me otherwise.


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Sunday, June 19, 2005

How 3 Judges View MSJ

Judge Aldisert of the 3rd Circuit likes summary judgment as witness his dissent in Fasold v. Justice I mentioned here earlier this month. In Kautz v. Met-Pro Corporation (3rd Cir. 6/17/05) [pdf] he conducts a master class on the difficulties a plaintiff has to meet the "heavy burden" to establish pretext. First he recites the standard that controls in the 3rd Circuit:

In order to avoid summary judgment, Fuentes requires a plaintiff to put forward “such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer’s proffered legitimate reasons for its action that a reasonable factfinder could rationally find them unworthy of credence.”

Although the plaintiff had a multitude of arguments as to why the reasons the employer gave for his termination were a pretext for age discrimination, he succeeded in getting over the Fuentes barrier only on one. Unfortunately for him, in the 3rd Circuit a plaintiff is required to show "each reason" the employer gave was pretextual. (Actually if a plaintiff can disprove several of the proferred reasons that might be enough, but one out of several is not.)

In conducting the review, Judge Aldisert laid down some explicit "as a matter of law" holdings, and others that although not officially designated as such might have that same effect. Good things to know when arguning for summary judgment in the 3rd Circuit, or elsewhere. Among those holdings (emphasis added by me):

-- While an employer can't use a standard to evaluate its employees that has no relationship to the performance of an employee, but "absent this type of violation of the Fuentes standard, we will not second guess the method an employer uses to evaluate its employees."

-- "a naked assertion that a method of evaluation is new would not, by itself, support a finding that it is implausible, inconsistent, incoherent or contradictory. "

-- Evidence that the method of evaluation an employer used was not the best method does not amount to evidence that the method was so implausible, inconsistent, incoherent or contradictory that it must be a pretext for something else.

-- Questioning the timing of [complaints found in his personnel file as only occurring in the last 8 months of his employment] cannot suffice to establish pretext. Kautz must dispute the factual basis of each negative document in his file offered by Met-Pro as a basis for his termination.

-- The attempt to use past positive performance reviews to show that more recent criticism was pretextual fails as a matter of law. See Ezold, 983 F.2d at 528 (“Pretext is not established by virtue of the fact that an employee has received some favorable comments in some categories or has, in the past, received some good evaluations.”).

-- Kautz does not specifically assert that Cauble [a distributor] was lying about Kautz’s performance, though he does say that based on the foregoing “a jury could easily disregard all of Mr. Cauble’s testimony as not worthy of belief.” ... Kautz asks us to assume that Cauble’s testimony is false because he is an interested party without coming forth with specific evidence contradicting the testimony." Something the Court was not willing to do.

-- Kautz points also to the testimony of David Kirkwood, another distributor who was satisfied with his performance. Quite obviously, the fact that one distributor is pleased does not in any way create a question of fact about the opinion of a different distributor related to specific instances of deficient performance. To create a question of fact, Kautz must assert that there is no factual basis for Cauble’s specific complaints and then present some evidence supporting this claim.

-- In order to show pretext, Kautz claims no memory of Board’s criticism at the meeting or the bid itself. Lack of memory is not a denial of the truth of the memo and therefore does not show pretext; a specific denial of the truth or relevance of the employer’s proffered reason is required.

-- Kautz does not deny that [criticisms were made that he was not as well prepared as other RSM's at a meeting]. He also fails to assert that he was well prepared for this meeting. Rather, he claims that he was not able to be as well prepared as the other RSMs because he, unlike them, did not have a computer sitting in front of him. An explanation of the reason he was less prepared than he should have been for the meeting does not suffice as a showing of pretext.

Of course, it wasn't quite as clear cut as just reading Judge Aldisert's opinion might make you think. Judge Sloviter disagreed, since in her view the company's method of selecting Kautz for lay-off, rather than using the traditional method of ranking, gross sales had used a method designed to put him and other older employees at a disadvantage:

Notably, the three top earners of 2001 had the three worst percentages under the formula adopted. Met-Pro’s formula confers the worst scores to the best salespersons and the best scores to the less successful salespersons.

In Fasold, the majority opinion overturning summary judgment to which Judge Aldisert dissented so strongly, was written by you guessed it -- Judge Sloviter. And even though both clearly voiced their views in each case, it was the unspoken judge in the middle whose view ultimately decided who won, as Judge Ambro was the deciding vote in both cases.

Maybe the difference in their views was the appointing President? If so hard to find a common theme -- Judge Aldisert (President Johnson); Judge Sloviter (President Carter) and Judge Ambro (President Clinton).

Judge Ambro was not on the panel in Kautz, Judge Fisher was. That explains the divergent results.
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Wednesday, June 15, 2005

Ignorance Is Bliss - At Least in the Context of an Age Discrimination Claim

Fox TV purchased station WWOR in New York as part of a package deal, which left it with two stations in NYC as it already owned WNYW, better known as Fox 5. Before the merger was completed the management of Fox TV reviewed duplicate positions at the two stations and gave the current owner a list of employees that should be terminated prior to the completion of the merger. (For "tax reasons" according to a footnote in the opinion).
The general sales manager at WWOR was 61 year old Brenda Goodman, who had worked for WWOR for 16 years. Fox TV decided that the general sales manager function for both of its NYC stations would be handled by the current general sales manager at Fox 5, who was 43.

In order to obtain her almost $350,000 severance payment, Goodman signed a release. Unfortunately it did not contain a release of any claim under the ADEA and thus was not a valid waiver under the OWBPA. Thus with money in pocket, Goodman sued Fox TV for age discrimination.

The issue quickly resolved itself to whether Goodman could establish a prima facie case. The only element in contention was the 4th, [whether] the adverse employment action occurred under circumstances giving rise to an inference of discrimination, such as the fact that "the plaintiff was replaced by someone substantially younger.” The quoted language was particularly reassuring to Goodman since it would be uncontested that the person selected for the combined position was "substantially younger" (22 years) than Goodman and it came from the Supreme Court decision in O’Connor v. Consol. Coin Caterers Corp., 517 U.S. 308, 313 (1996).

But in the best tradition of lawyers looking to the substance behind language rather than just the words, the lawyers for Fox TV argued more than mere replacement by a younger person was required -- the decision maker had to have knowledge of the substantial age difference. Here, although not without a valiant effort, Goodman was never able to overcome the sworn denial by all the Fox TV executives involved in the decision that they made it without meeting her, reviewing her file or otherwise acquiring any information about her age.

Given that, the Court resolved the question it found the Supreme Court had not been required to address in O'Connor, holding:

[We] join our sister circuits in concluding that a defendant’s discriminatory intent cannot be inferred, even at the prima facie stage, from circumstances unknown to the defendant. Thus, in an ADEA case, where a plaintiff relies on a substantial age discrepancy between herself and her replacement, she must adduce some evidence indicating defendants’ knowledge as to that discrepancy to support the inference of discriminatory intent required by the fourth prima facie factor. In cases where such knowledge is undisputed, which we expect to be most ADEA cases, a court need not specifically address this point; rather it may be assumed in considering whether the circumstances presented indicate intentional discrimination. But, where a defendant asserts that the record fails to indicate the requisite awareness, a plaintiff must adduce some evidence, whether direct or indirect, indicating a defendant’s knowledge as to the relative ages of the persons compared.

Woodman v. WWOR-TV, Inc. (2nd Cir. 6/13/05) [pdf].

Although relatively simple and not ultimately surprising, the Court still took 41 pages to analyze the issue and carefully rebut the numerous ways that Goodman tried to not only argue that the O'Connor language should be read literally, but if it was not, to imply or impute knowledge of her age to the decision makers. Failing to do so, her suit failed.

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Just In Time For Father's Day - Get Your Children On the Payroll Early

It's a great family tradition for certain longshoremen in the Boston area according to Philip Wilson's post at Laboring Away at the Institute, Talk about "child labor". According to Wilson:

The NYT reports today that certain Boston Longshoremen have allegedly been putting their children on the union payroll beginning as early as age 2, to help secure their place on the seniority rolls (as well as let them start out at $30 an hour instead of $16).

Check out the whole post for the rest of the story.

If you are one of the lucky kids who has had a 16 to 20 year seniority jump on the rest of the field thanks to your dad's "foresight," I hope you pony up a nice father's day gift!

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Major Step Coming Today in AFL-CIO's Future

Although I don't track traditional labor activities as much as employment law, the internal debates inside organized labor, and the possible splintering of the AFL-CIO, are certainly important developments for employers to follow. It will take some time for the energy that is now being directed internally to be reflected outwards, but there is no doubt that at some point there will be a definite surge and employers should be prepared. The Labor Blog post today, Five Unions to Exit AFL-CIO?, has the view from one perspective inside the movement. It also notes that yesterday's action by the United Food & Commercial Workers authorizing its leadership to secede from the AFL-CIO if certain conditions were not met is even bigger news. All in all it will be an interesting summer. I will try to stay more closely attuned.

Update: A couple of more good posts from those blogging from the labor side of this issue, from Matthias Bolton at Unions-Firms-Markets, More on Today's Press Conference of Dissident Unions and from the Working Life, The New Federation Spreads Its Wings. In fact, check out Jonathan Tasini's blogging of the press conference which kicks offs in 20 minutes at the Working Life.

Further update: The newly formed organization formed by the 5 unions has their website up and running here, which includes the press release announcing the formation. The website also has the Change to Win coalition's constitution and bylaws.

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Tuesday, June 14, 2005

Disclosure of Discrimination Claim - A Plaintiff's Responsibility in Bankruptcy

While a Pennsylvania district court was dealing with issues involving the conduct of counsel, see the immediately prior post, the 5th Circuit was making clear that plaintiffs in employment law cases have certain responsibilities as well. Relying on judicial estoppel, a "principle intended to protect the judicial system, not the litigants," the Court affirms summary judgment dismissing a plaintiff's Title VII claim because she failed to list it as part of her bankruptcy assets in her Chapter 13 bankruptcy filing. Jethroe v. Omnova, Inc.. (5th Cir. 6/13/05) [pdf].

The Court found this a perfect example of when judicial estoppel is appropriate:

Judicial estoppel is particularly appropriate where, as here, a party fails to disclose an asset to a bankruptcy court, but then pursues a claim in a separate tribunal based on that undisclosed asset.
The position was not new ground for the Court, as it merely reaffirms a prior unpublished decision of the Court, Kamont v. West, 83 Fed. Appx. 1, 3 (5th Cir. 2003) (unpublished). bbb It does make clear that the "duty to disclose pending and unliquidated claims in a bankruptcy proceeding is an ongoing one."

To make matters worse for Ms. Jethroe, it does not appear she even got her bankruptcy relief, as the Court noted her case was "closed" for failure to comply with an agreed order.

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Beware of the Inside Mole - An Ethical Issue for the Plaintiff's Employment Lawyer

One of the issues of substantial sensitivity in the employment law area is which of an employer's past or present employees is fair game for a plaintiff's lawyer to talk to. Given that professional ethics are a matter of state law the legally correct answer may depend on the location of the lawyer, the witness or both. The importance of not only being aware, but sensitive to the significant nuances a lawyer's competing obligations is highlighted in last week's 38 page opinion disqualifying a plaintiff's lawyer for her communications (and use of those communications) with an "informational mole." EEOC and Beverly v. HORA, Inc. (E.D. Pa. 6/8/05) [pdf]. A hat tip to Shannon Duffy's story in the Legal Intelligencer for leading me to the opinion, as well as giving a good overview of the complex issues.

When Ms. Beverly, a probationary employee, was terminated for complaining of sexual harassment by a fellow hotel employee, her co-employee, the administrative assistant to the hotel manager and a part-owner of the hotel, became a source of information for Ms. Beverly's lawyer. In an email exchange that extended for a considerable period of time the source passed on information the Court concluded was proprietary and in some cases privileged. The Court found the exchange and the information gathering to have been instigated by Beverly's lawyer, and ultimately to go beyond the proper role of counsel. As a result, the plaintiff's lawyer who had intervened into a lawsuit originally filed by the EEOC, has been disqualified.

Although Judge Gene E.K. Pratter did note that many might consider the ethical issues with which the plaintiff's lawyer, Jana Barnett, was faced as "unsettled," he also articulated his view of the high standard by which lawyers' conduct should be judged:

A lawyer who exalts his or her responsibility as a client's agent to the point of ignoring the lawyer's responsibilities flowing from the lawyer's simultaneous, and equally important, role as officer of the court and as a professional whose conduct affects the quality of justice and public perception of the legal profession does not meet the letter or spirit of the rules of ethics or the expectations of the Court. Such a lawyer contributes to the causes for the scorn so many laypersons now seem to have for lawyers and the reportedly widespread distrust of our legal system. The standards of conduct applicable to and expected of lawyers require more than merely comporting oneself to escape discipline. Stated differently, the ethical rules ought not be read as an intellectually meager, uninspiring statement of minimum standards to be abused by those who would argue that lawyers need only meet those minimum standards.

Although some may see the issues here in black and white, like many things in the law it appears more gray to me. I hope the case will be the subject of discussion in those blogs which focus on the area of professional responsibility such as Ben Cowgill's Legal Ethics Blog (once he gets the issue associated with the Kentucky Bar's view of blogs which has caused a major storm in the blogosphere resolved), David A. Giacalone's f/k/a formerly known as ethicalEsq., and the group blog the Legal Ethics Forum. I, for one, will be watching.

Update: John Steele at the Legal Ethics Forum in his Quick Hits comes at it more from the black and white view, after pointing out the holding of the case, asking, "And who would disagree with that holding? It's one of those stories that prompts the eternal question, "what were they thinking?" It's not apparent from the link that he provides that he has read the actual court opinion or just the excellent summary by Shannon Duffy, but he may well have the same view after reading the whole opinion (which he may well have done.)

Of course, those of us who practice in the employment law area understand that it is incredibly difficult to get employees to testify against their employer. These employees end up being well prepped by their company’s attorneys before being deposed. They are fearful for their job or other retaliation. Prohibiting attorneys from speaking directly to the companies employees is unfounded. If the adverse lawyer fully advises that employee that they have no obligation to speak to them, that they have a right to seek independent counsel and that their company might also provide them counsel is adequate protection enough. Employees ought to be able to make their own intelligent decision about who they can and cannot speak to. Employees don’t belong to employers.
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Wednesday, June 08, 2005

"Perceived As Disabled" Entitled To Reasonable Accommodation - 10th Circuit Says

In Kelly v. Metallics, West (10th Cir. 6/7/05) the 10th Circuit wades into a problem that is dividing the circuits - is an employee who is not actually disabled (as defined under the ADA), but is "perceived as disabled", entitled to a reasonable accommodation? The question arose where Beverly Kelly could have accomplished all of the essential functions of her office job, if she had been allowed to use a portable oxygen device. Because with the oxygen device she could perform all of "life's major activities" she was not disabled under Sutton v. United Air Lines.

Her employer was less than enthusiastic, first telling her "no oxygen would be allowed on the premises," and later writing her a letter which included the following:
It appears that your health situation the past few months has not improved. You have lost considerable time and your words to me this morning is that you and your doctor have not found the answer and you would either report to work with an oxygen bottle or lose more time. Either condition does not make for a stable employee. Based on this information, management in a meeting this morning, voted to hire a new replacement for your job.
The challenge arose over the jury instructions, which the company argued allowed it to be found liable if it had failed to reasonably accommodate Kelly. The employee and the district court argued that was not the case, but the appellate court found the instructions did have the effect that the company alleged. Unfortunately for the company, that victory was short lived as the the Court went on to find that it was permissible. Adopting the words from a sister circuit, the Court held:
As the Third Circuit expressed it, the real danger is not that an employee will fail to educate an employer concerning her abilities, but that "[t]he employee whose limitations are perceived accurately gets to work, while [the employee regarded as disabled] is sent home unpaid." Williams v. Philadelphia Housing Auth. Police Dep't, 380 F.3d 751, 773-76 (3d Cir. 2004). That is to say, an employer who is unable or unwilling to shed his or her stereotypic assumptions based on a faulty or prejudiced perception of an employee's abilities must be prepared to accommodate the artificial limitations created by his or her own faulty perceptions.
Based on the Court's analysis of the various circuit courts which have addresssed whether there is an obligation to provide a reasonable accommodation for an individual only "perceived as disabled", the split is 3 for (1st, 3rd and 10th), and 3 against (5th, 6th and 9th). Sounds like a future Supreme Court issue to me, although as the Disability Law blog points out in its post that alerted me to yesterday's decision in Kelly, the Supreme Court has passed on this issue so far, as recently as this past term when it did not take the Williams case from the 3rd Circuit. Just from the opinion, this case doesn't sound like the most favorable fact pattern for those who would oppose such a duty.

The employer had another interesting legal argument on the companion retaliation claim, that in the ADA version of retalation there is no entitlement to compensatory damages. That is the view of the 7th Circuit, see my earlier post, Drafting Error? - 7th Cir. No Compensatory or Punitive Damages for ADA Retaliation Claim. Unfortunately in this case, that argument was not raised with the trial court abd thus was waived so we must wait another day to see if that argument will be accepted by other courts.


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Sunday, June 05, 2005

Even Under the Old Regs; Nuclear Plant Workers Are Exempt

Although much ink has been spent on the new white collar regulations under the FLSA, courts are still (and probably will be for awhile), making determinations under the old regs. Most recently, in Kennedy v. Commonwealth Edison Co. (7th Cir. 6/2/05) [pdf] the Court applied its typical common sense view and clear language in holding that several different groups of employees at ConEd's nuclear plants all were properly classified as exempt by virtue of the administrative exemption.

Among the plaintiffs' arguments that fell to the wayside on the question of whether they were paid on a salary basis - payment of additional wages based on hours is fine, an email that indicated they were subject to Snow Days and possible deductions, where the only thing that ever happened was loss of a leave day, not a salary deduction was not a problem, and a few deductions, all promptly rectified fell within the permitted window of correction.

The Court also took on the dreaded (for employers) administration/production dichotomy finding it not a problem, since the jobs in question either involved the actual planning of repairs (as opposed to actually doing them), directing others to do jobs, which the Court finds by definition to be "of substantial importance to the management ... of a business," or clearly administrative such as purchasing and regulatory compliance.

Finally, all of the jobs involved the use of "discretion and independent judgment." The Court strikes down the general argument that because a nuclear plant is so regulated and controlled, that almost no employee could exercise discretion and independent judgment, finding only that their energies "may be channeled" in a direction by the regulations, analogizing it to a tax lawyer constrained to work within the confines of the Internal Revenue Code. And the individual arguments with respect to their individual jobs fared no better.

In addition to making ConEd happy, the decision serves as a good model for the common sense application of regulations which in lesser hands (or minds) have often become hopelessly complex, and more grist for my argument that the change in the rules was not that a big a deal.


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The Motion for Summary Judgment - The Battle That Is Often the War

As anyone who toils on either side of the docket in employment law knows, summary judgment is the engine that most often drives the process. It is the fear of summary judgment that frequently makes an employee and his or her counsel take a settlement offer that might be less than hoped for; it is the denial of a summary judgment and the certainty of trial, that often makes an employer lose heart and up the settlement offer. While an argument can certainly be made that this dynamic is overplayed, particularly on the employer side, it is hard to overstate how big a role it plays. Thus any, even subtle, shift in the way courts view summary judgment in a particular case can seem monumental, although time usually dispels the idea that the earth has actually moved.

A case in point may be last week's debate among three judges of the 3rd Circuit over the way courts should apply the now years' old Supreme Court precedents of St. Mary's Honor Center (1993) and Reeves v. Sanderson Plumbing Products which might well cause at least some discussion whether summary judgment will now be more difficult in discrimination cases in that venue. Fasold v. Justice (3rd Cir. 6/1/05) [pdf].

Fasold, a detective in the Montgomery County DA's office claimed he had been terminated because of his age and in retaliation for filing an EEOC charge of discrimination. The whole dispute centered on the pretext prong of the McDonnell Douglas analysis. The trial court found that Fasold had insufficient grounds to go forward and granted summary judgment; two members of the appellate panel disagreed and reversed. Taking the four reasons the employer gave for firing Fasold, the majority marshalled Fasold's arguments why, believably, each of the four reasons could be false.

Perhaps Judge Aldisert, the dissenter, overstated the consequences of the majority opinion (as dissenters not infrequently do), but the highlighted words will not warm those on the management side of the docket:

Under the Majority’s view, without any affirmative or direct evidence of discrimination whatsoever, a plaintiff may get to trial by offering alternative, less damaging, explanations for his or her actions without in any way disputing the historical or narrative facts offered by the employer. This approach will result in an unfortunate waste of judicial resources by diminishing the ability of district courts to use the tool of summary judgment in these types of cases. The Supreme Court shares my concern and also does not wish to “insulate an entire category of employment discrimination cases from review under Rule 50 [and, I would argue, the same concern applies to Rule 56]” or “treat discrimination differently from other ultimate questions of fact."

The majority rejoins:

That is not only the majority’s view; it is also the view of the Supreme Court of the United States. In Reeves, the Court rejected the view of those circuits that had granted summary judgment for the employer on the ground that the terminated employee had failed to prove more than employer pretext (the “pretext plus” cases).

That even judges of an appellate court have such diverse views on the application of facts to those tests, now more than a decade old, is evidence of just how unclear the line can be.

Almost lost in the dispute over the pretext argument, the court also overturned the summary judgment on Fasold's retaliation claim. He filed his EEOC charge after his initial grievance had been lost, but before a review of that decision had been completed. It was probably not wise for the reviewing officer to mention in his affirmation of the grievance that the EEOC charge was "preposterous." Although the district court viewed it as merely an affirmation of a decision made before the charge was filed, which thus precluded any retaliatory motive, the panel also disagreed on that.

Now, the case goes back to trial. Or, based on the dynamic outlined above, maybe not.

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Wednesday, June 01, 2005

Post Those EEOC Posters

That's the message sent by the 1st Circuit in Mercado v. The Ritz-Carlton San Juan Hotel (1st Cir. 5/31/05) [pdf] as they revive, at least for a little while, discrimination claims of two employees whose EEOC claims were clearly not timely filed. The argument was that the hotel had not posted the EEOC posters advising them of their rights, so that the statute was "equitably tolled." The district court had dismissed that argument, holding equitable tolling required the employer to have "actively misled" the plaintiffs. According to the appellate court, that's too narrow a reading of their prior precedent which allows failure to post as an alternative way to establish equitable tolling.

Although the Court revived the claim, it remains barely beyond being on life support as the Court pointed out the number of ways that the hotel might still be entitled to prevail after more factual exploration. But it sure points out the importance of the little things.


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