Jottings By An Employer's Lawyer

Saturday, September 23, 2006

Three Things That Don't Mesh Well

A two week trial, a solo blog and an extended vacation --- although nothing wrong with any of these in isolation --- when they combine, at a minimum it means meager postings. And that has certainly been the case since late August when trial preparation got in high gear and now is about to go absolutely quiet as I head off for what feels like "well deserved" hols (as my favorite Brit would say).

Absent a cyber café coinciding with an inevitable urge to communicate -- about as likely as my Astros making the playoffs this year -- I will see you in mid-October.

Na shledanou -- auf Wiedersehen -- tot ziens -- cheerio

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Monday, September 18, 2006

MDV Update: Better, But More to Go

Earlier this summer I reported on two cases involving drivers which resulted in MDV's. Saturday, I updated the East coast verdict, where a Florida judge granted a new trial. Today, I update the 2nd case from the West coast -- which also has undergone judicial revision -- Calif. Judge Slashes $61 Million FedEx Verdict. Although better, not nearly the same sigh of relief that would have been heard, if like in Florida, the court had granted a new trial. Instead, the court still entered a judgment of more than $12 million.

Still, this is just round one, and before plaintiffs receive anything more than psychic income, there are multiple appellate levels to traverse.


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5th Circuit Holds Individual Government Employee Can Be Liable Under FMLA

An employee of the Texas Cosmetology Commission had a number of problems with her superiors following an incident where she was convicted of simple assault following an altercation with operators of a beauty school she was inspecting. (Texas doesn't get its reputation for taking "big hair" seriously for nothing.) After more problems she brought a suit against the new Executive Director of the agency arguing the ED should be individually liable under the FMLA as an "employer."

Although ultimately the 5th Circuit let the ED off the hook because the law was not firmly established when the claim was made in 2003, from this point forward, the law in the 5th Circuit is now clear:
We agree with the Wascura court that "t]he fact that Congress, in drafting the FMLA, chose to make the definition of "employer" materially identical to that in the FLSA means that decisions interpreting the FLSA offer the best guidance for construing the term "employer" as it is used in the FMLA. Wascura, 169 F.3d at 686. We have previously held that a sheriff is an employer for purposes of the FLSA. Lee v. Coahoma County, Miss., 937 F.2d 220, 226 (5th Cir. 1991), amended by 37 F.3d 1068 (5th Cir. 1993). Therefore our conclusion that plain language of the FMLA permits public employees to be held individually liable is consistent with our holding in Lee.
Modica v. Taylor (5th Cir. 9/13/06) [pdf].

In doing so, the 5th Circuit disagreed with some of its sister circuits, including ironically the 11th Circuit in Wascura, so I should say the law in the 5th Circuit is now clear until the Supreme Court says otherwise. For private sector employers the message should be equally clear. Just like under the FLSA, individual managers who take action with respect to FMLA matters may very well find themselves subject to individual liability.

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Saturday, September 16, 2006

MDV Update: Pulling the Plug on a $6 M Verdict

The huge sigh of relief coming from Broward County earlier this month didn't have anything to do with this year's so far relatively mild hurricane season, but from UPS after a judge granted its motion for a new trial in a workers compensation retaliation case. In late May, a jury awarded over $6 million following 3 hours of deliberations. See the story here. That result must have been influenced by "passion or prejudice" according to the judge. My initial report was here.

More often than plaintiffs would like, large jury verdicts are cut down or are reversed -- which doesn't change the lessons to be learned from how juries can react to situations that probably did not look all that bad viewed only from an employer's perspective.


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Tuesday, September 12, 2006

6th Circuit Limits ADA Claim in Weighty Decision

Denying a 405 pound dock worker's disability claim, the 6th Circuit holds that morbid obesity (“body weight more than 100% over the norm”), not caused by a physiological disorder, is not an impairment under the ADA. Since it is not an impairment, it can not be relied on to establish a "perceived as" claim. EEOC v. Watkins Motor Lines (6th Cir. 9/12/06) [pdf].

In a concurring opinion, Judge Julia Smith Gibbons finds the holding in part mandated by an errant comma when the EEOC adopted a prior regulation under the Rehabilitation Act:

The difference between the two regulations is slight but important. As noted above, § 1630.2 has a comma separating disorder and condition, whereas § 104.3 does not. This means that under the definition the agency intended to adopt, “physiological” modifies both “disorder” and “condition” rather than just “disorder.” In addition to this statement that the EEOC was adopting the definition of § 104.3, the actual definition given by the agency in the Federal Register does not contain the extraneous comma. See 56 Fed. Reg. at 35740-41. Finally, the definition of physical impairment for the Rehabilitation Act, 29 U.S.C. § 794, which is often interpreted coextensively with the ADA, likewise does not contain the extra comma. See 45 C.F.R. § 84.3(j) (2). Thus, the best reading of § 1630.2 is that the comma following “disorder” is scrivener’s error, meaning that the statute requires a “physiological disorder or condition” in order for a “physical impairment” to exist under the ADA.

Judge Gibbons also notes that it is possible that:

morbid obesity is a disorder that by its very nature has a physiological cause. This would preclude the need for a plaintiff to put forth evidence that his individual case was caused physiologically. No court or agency has ever adopted this position, however, and the EEOC has put forth no evidence, medical or otherwise, to support such a sweeping conclusion.

Bottom line, if you are attempting to make a disability claim based on morbid obesity -- it is critical it be tied to a physiological cause, at least in the 6th Circuit.


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Narrow Preemption for Aviation Drug Testing Says 2nd Circuit

Reviewing an issue that has split the 5th and 9th Circuits, the 2nd Circuit holds there is a narrow preemption of suits relating to drug testing in the aviation industry. In a dispute going back to a 1993 failed drug test, the court sends a suit brought by a terminated Delta flight attendant back to the lower court with many of his common law claims against the labs involved in the drug test intact.

According to the court, determining preemption is a two step process:

We think that the regulations call for a two-step analysis, then, for determining whether a state-law claim is preempted. First, state law is preempted if it "cover[s] the subject matter" of the federal rule. 14 C.F.R. Pt. 121, App. I § XI(A). When state law regulates conduct that is addressed by a specific provision of the FAA regulations, it is preempted. Second, state law is preempted if it "cover[s] the subject matter of . . . drug testing of aviation personnel performing safety-sensitive functions." Id. While some state laws may "cover the subject matter" of the drug testing of aviation personnel even if they regulate issues not specifically addressed by the FAA regulations, they are not preempted unless their relationship to such drug testing is so substantial as to interfere with the consistency and uniformity of the federal regulatory scheme.

Drake v. Laboratory Corp. of America (2nd Cir. 9/12/06) [pdf].

Although the labs being sued lost on their broad preemption arguments, they were not totally without success, as the court found:
  • If Drake is asserting that conduct addressed by the federal regulations is "wrongful" under state law although it does not violate the federal regulations, such claims are preempted; and
  • Drake's claim that the defendants-appellants acted negligently by "ignor[ing] industry standards and protocols for random drug testing" also appears to be preempted to the extent that it refers to "standards and protocols" other than those in the federal regulations.

Not as much as hoped for, but better than nothing.

If the testers had bribed personnel to fix the results of his test, how would pre-emption apply to his case?
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1st Circuit Notes Qualifiers on Burlington Northern v. White

Discussing the recent Supreme Court decision in Burlington Northern v. White, the 1st Circuit noted that it did not make a difference in the case before it, Carmona-Rivera v. Commonwealth of Puerto Rico (1st Cir. 9/12/06). The case involved a school teacher with a disability who complained not that her disability had not been accommodated (she did get her own private bathroom), but that it had taken too long. Her argument that the delay itself was retaliation fell on deaf ears, the court finding it nothing more the type of action "inherent in the workings of an educational bureaucracy."

The court also noted the qualifying factors in White:

The alleged retaliatory action must be material, producing a significant, not trivial, harm. Id. Trivial actions such as "petty slights, minor annoyances, and simple lack of good manners will not [normally] create such deterrence." Id. "Context matters," and "the standard is tied to the challenged retaliatory act, not the underlying conduct that forms the basis of the Title VII complaint." Id. at *11. While White slowly works its way into the consciousness of the courts, so far, nothing dramatic .... yet.


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Monday, September 11, 2006

Top 5 FLSA Mistakes

Thanks to Michael Harris at the EASI blog for his link to an article on the site, Top Five Employer Mistakes Under the FLSA. Given the complexity of the FLSA one might quibble with limiting the list to five, but there is no question these are problematic:

1. Believing salaried employees are automatically exempt from overtime;
2. Misclassifying assistant managers;
3. Automatic deductions for meal breaks;
4. Not paying for overtime that has not been approved in advance;
5. Allowing employees to “waive” their rights under the FLSA.

For those in states, unlike Texas, which have their own wage and hour laws which are different from the federal rules, it is very important to make sure you are in compliance with both. For example, California rules on assistant managers are different from the FLSA, which has caused a number of employers considerable pain.

The problem with allowing employees to waive their rights under the FLSA is that it is not a valid waiver unless in connection with litigation or supervised by the Department of Labor.

Michael was exactly right on another point -- this has become a hot button issue, particularly for plaintiffs' lawyers, which of course means employers as well.


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Tuesday, September 05, 2006

Did Burlington Northern Make the Difference?

At least at the circuit level there has still not been a lot of activity following the Supreme Court's decision earlier this summer in Burlington Northern v. White. The 2nd Circuit has now addressed Burlington Northern at some length in Kessler v. Westchester County of Social Services (8/23/06) [pdf], but it is not clear that it changed the outcome.

Kessler was an Assistant Commissioner of Social Services. Following his complaints of religious discrimination he was transferred from the White Plains to Yonkers. His law suit was dismissed on summary judgment with the district court finding that there was no adverse employment action since it was a lateral transfer in terms of pay.

The 2nd Circuit focused more on the change of duties.

Whereas he previously "ha[d] overall responsibility for policy formulation, resource allocation, planning and evaluation of programs and procedures, financial and personnel management", in Yonkers he no longer had any such responsibilities. Whereas he had been "[u]nder the general direction of the Commissioner of Social Services or Deputy Commissioner", he no longer reported to them but instead reported to a supervisor whose grade level was no higher than his. Whereas his job had been to "function[] as part of the top management of the Department", he was no longer given any managerial assignments and was not even allowed to attend meetings of lower-level managers. Whereas he had "[s]upervis[ed] . . . a large number of managerial, professional and clerical support staff", upon his transfer to Yonkers he in fact was allowed to supervise no one. He was required to undertake clerical tasks and to perform data entry alongside employees several grades below his.

Although quoting several of its prior decisions where transfers with loss of duties had been sufficient to constitute a materially adverse action, the Court not only discussed the Supreme Court's decision at some length, but gave a nod to it as making a difference -- noting the plaintiff challenged the district court's determination that he had not suffered an adverse employment action, writing: "In light of the Supreme Court's decision in Burlington Northern & Santa Fe Railway Co. v. White, 126 S. Ct. 2405 (2006) ("White"), rendered subsequent to the district court's decision in this case, we agree."

Applying the new test, the Court held:

A rational factfinder could permissibly infer that a reasonable employee in the position of DSS Assistant Commissioner could well be dissuaded from making a charge of discrimination if doing so would result in a transfer to an office in which, inter alia, he would not be allowed to perform the broad discretionary and managerial functions of that position, no one would report to him, and he would be forced to do work normally performed by clerical and lower-level personnel.
Notwithstanding the nod to Burlington Northern, it is not clear that it was outcome determinative in this case. But in the 5th Circuit, which had the now rejected "ultimate employment action" test, the Court has sent at least two summary judgment dismissals back to the lower courts for review under the new standard. Clearly at least in some locales it will make a difference.


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