Jottings By An Employer's Lawyer

Tuesday, October 31, 2006

6th Cir. - Check Your Pension Plan

Particularly if it has a component that provides extra time for employees who become disabled before the regular retirement age, and denies those disability payments to those who work beyond regular retirement age. That's the lesson in today's en banc holding in EEOC v. Jefferson County Sheriff's Department (6th Cir. 10/31/06).

Although at first I thought this might be an application of a disparate impact analysis, instead the finding was based on disparate treatment. Finding the plan facially discriminatory, the majority found the EEOC had made a prima facie case without any other showing of intent and reversed summary judgment for the employer and its plan.

The dissent makes a sensible argument, at least to me, that the plan really provided only an insurance component to ensure that an employee who was disabled and thus prevented from working a full 20 years, would be entitled to what he would have been able to obtain absent the disability. A benefit that will now be lost under the majority's ruling.

Although the argument makes sense to me, it didn't carry the day, so if you have a pension plan that sounds at all like this, and employee's located within the confines of the 6th Circuit, a call to your friendly pension lawyer for a checkup is in order.


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Hospital Staffing - Grievance by Grievance

Is the upshot of the 1st Circuit's decision in Massachusetts Nurses Association v. North Adams Regional Hospital (1st Cir. 10/26/06). Having obtained a collective bargaining agreement that contained a provision dealing with staffing, the Union filed grievances that it had been violated on 9 shifts on one floor. Although the violations occurred in 2002, the decision of the arbitrator was not handed down until February, 2005. Finding the hospital in violation, he ordered that hospital cease and desist from future violations of the standard as well as pay additional wages to the nurses who actually worked the shifts, as well as paying the union what an extra nurse on the shifts in question would have earned.

In the spring of 2005, nurses reported additional violations, although only one occurred on the same floor as the previous grievances. Bypassing the grievance procedure, the Union filed a § 301 action in federal court seeking to apply the prior award to the new violations. Unfortunately, it ran into 1st Circuit precedent based on the traditional reluctance of courts to interfere with grievance proceedings. Finding the union could not meet the high standard --"no colorable basis for denying the applicability of the existing award to a dispute at hand" --the Court held the passage of time alone would be enough to give a colorable basis that the award should not be applied.

This has to be one of the more arcane points of labor law, which severely limits the group which will be interested. But what is of much more general significance is the term of the CBA, that the hospital is contractually obligated to -- "only keep and admit the number of patients that registered nurses can safely care for" and to "take measures such as adding nurses [and] stopping admissions . . . to ensure that this occurs." In a world where the future of healthcare is on everyone's mind, the fact that a union has gained that power is significant.

No doubt there will be different viewpoints as to the merits of such power -- but the fact that it is potentially significant, seems hard to argue with.


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Wednesday, October 25, 2006

6th Cir. Hands EEOC a Setback in Release War

One area of recent contention has been fights over employer's releases -- do they comply with the OWBPA, or worse, are they themselves retaliatory. That's the tact the EEOC took with respect to a severance agreement utilized by an employer that not only asked for a release of claims but also barred the employee from filing any administrative claims, including an EEOC charge. If a charge was filed after signing the release, the employer was entitled to the return of the severance payment.

The trial court granted summary judgment to the EEOC which argued the release was retaliatory on its face, calling it a “preemptive strike against future protected activity.” Disagreeing, the 6th Circuit in a 2-1 decision found while the bar on filing the charge was not enforcible, it was not on its face retaliatory. Probably realizing the complexity of the issues (not to mention the real world impact), the Court emphasized, the narrowness of its ruling:

SunDance’s mere offer of the SeparationAgreement does not amount to retaliation under ADA, ADEA, EPA, or Title VII, either as a facialviolation of those statutes’ antiretaliation provisions or under the conventional burden-shiftinganalysis. SunDance has not tried to enforce the Separation Agreement, and the question of theenforceability of the Agreement or any of its provisions is not before us.

EEOC v. Sundance Rehabilitation Corp. (6th Cir. 10/24/06) [pdf].

The dissent thought that the majority opinion was drawing too fine a line:

The majority in effect says that an employee who believes he or she has an EEOC enforceable claim or at a minimum is willing to testify in an EEOC enforcement action should sign the agreement, take the money and then go forward with the EEOC. If SunDance sues for a return of the severance pay, then the defense of retaliation should be raised and may carry the day. Any act by an employer which interferes with or chills a protected right is, I believe, contrary to public policy and in violation of the anti-retaliation provisions of the several statutes involved.

Most releases, at least in the 5th Circuit which has long held such requests are void as against public policy, make it clear that they do not bar filing a charge of discrimination with the EEOC. Today's opinion does nothing to change the wisdom of that approach.

Given the subject matter and the EEOC's position, I doubt this is the last word on this issue and maybe not even on this case.

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$15.5 MDV in the Big Apple

Hip hop, welcome to the painful world of employment law. That's no doubt how the founders of Source magazine, the self-described magazine of "hip hop music, culture and politics," must be feeling after finding themselves on the wrong end of a Manhattan jury verdict after being sued by their former editor-in-chief. Kim Osorio, the first woman to hold that position, alleged she was terminated in retaliation for filing a complaint of gender discrimination and then refusing to withdraw it.

The Daily News story during the trial summed it up this way:

They call it the Bible of hip hop, but The Source was a modern-day Sodom and Gomorrah behind the scenes, with executives watching porn movies and workspaces festooned with raunchy photos of topless women, a lawsuit claims.

The defense take was of course different -- using a variation of the "she knew what she was getting into" defense, it argued Osorio knew better than most that the hip-hop world was rife with raunchy language, profane lyrics and scantily clad women. According to its attorney:"
"That is the world that the plaintiff chose. She had many choices and she chose to work in hip hop. ... The Source is not Martha Stewart Living."

Nine days of testimony and four hours of deliberation later, the headline tells the story which view the jury bought -- Kim Osorio Wins $15.5 Million Judgement Against The Source.

Osorio summed it up:"Whether it's hip-hop, rock-n-roll, or the post office, there's still laws a company needs to abide by.'"


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Tuesday, October 24, 2006

A Border Problem of Different Sorts for Employers

An article with the phrase "employers have a new worry" naturally catches my eye,which is why I picked up the the TP! wire service link to today's NYT story, At U.S. Borders, Laptops Have No Right to Privacy.

The concern - all that confidential information contained on your employees' laptop as they cross borders may well be subject to search and review based merely on the desire of immigration officials -- no reasonable cause for a search required.

At least one group, Association of Corporate Travel Executives, is taking it up with the government to at least get some understanding of what the policies are. How big an issue, well purely anecdotal, but:

One member who responded to our survey said she has been waiting for a year to get her laptop and its contents back,” said Susan Gurley, the group’s executive director. “She said it was randomly seized. And since she hasn’t been arrested, I assume she was just a regular business traveler, not a criminal."


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Monday, October 23, 2006

The Real Cost of Litigation

Lord Hoffman, one of the judges on Great Britain's highest court is quoted in the article Making Civil Justice Sane by Philip K. Howard, on the true cost of litigation:

The problem was that judges had come to view litigation merely as a way of resolving private disputes and no longer appreciated that the proliferation of lawsuits affects the behavior of everyone in society. If judges don’t act as gatekeepers, drawing the boundaries of claims on behalf of broader society, then the mere possibility of a lawsuit will end up “diverting resources from activities where they are most needed and . . . restricting the liberty of individuals to enjoy their lives in their own way.

Anyway who has been involved daily in litigation will have a hard time disputing those words.

Which does not mean that all consequences of litigation are bad; no one could (at least seriously)argue that the workplace of 2006 is not better than the workplace of 1963, and that the Civil Rights Act of 1964 has played a large part in that difference, and much of what it has accomplished would not have happened but for litigation. But still, what Lord Hoffman says rings very true ... and finding the key to keeping the litigation benefits for society from outbalancing the costs to society is or should be the holy grail of the justice system.

A step, would be the recognition of those who sit on the benches of the wider impact when the focus is primarily (or even solely) on moving their docket.

A hat tip to JD Hull at What About Clients? for the link to the article.

A good follow-up question is what you do when lawsuits have in fact changed behavior. If the workplace today is better, is it in danger of regression if those behavior-changing laws weren't in place, or if they were watered-down by increasing the threshold required by "gatekeepers"?

I don't know the answer to this, but I do know that not many people are asking this. I put the blame for that on the fact that in the US there are scant few in politics who would want to address this problem. Both sides have knee-jerk views on this.
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Friday, October 20, 2006

Major Change in Texas Non-compete Law

In a long awaited decision, the Texas Supreme Court today drastically alters the landscape for the enforcement of covenants not to compete. In Sheshunoff Management Services, Inc. v. Kenneth Johnson and Strunk & Associates, (Tx. 10/20/06) [pdf] , the Court modifies its earlier holding in Light v. Centel Cellular, to now permit a unilateral contract to support a covenant not to compete. This means employers who promise to provide confidential information in return for a covenant not to compete can enforce the agreement so long as they provide the confidential information to the employee before he departs.

Judge Don Willett in his opening paragraph lays out the change:

In this case we revisit the Court’s 1994 decision in Light v. Centel Cellular Co. and again consider the enforceability of covenants not to compete in the context of at-will employment. The question today is whether an at-will employee who signs a non-compete covenant is bound by that greement if, at the time the agreement is made, the employer has no corresponding enforceable obligation. Under Light, the answer to that question was always “no.” Today we modify our holding in Light and hold that an at-will employee’s non-compete covenant becomes enforceable when the employer performs the promises it made in exchange for the covenant. In so holding, we disagree with language in Light stating that the Covenants Not to Compete Act requires the agreement containing the covenant to be enforceable the instant the agreement is made.

There will be tons of ink written about the decision (including more by me), but cutting to the chase -- the central question about non-compete covenants in Texas law is no longer whether it is enforceable, but whether it is reasonable.

Hiring employers and departing employees are now in a whole new ballgame.


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Wednesday, October 18, 2006

A Top 10 List You Don't Want to Miss

Or violate either for that matter. Check out Professor Paul Secunda's post on the Top 10 Violated OSHA Standards at the Workplace Prof Blog. Number 1 with almost 8,000 violations last year was § 1926.451 -- which you of course immediately recognized as the general requirements for scaffolding.


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Tuesday, October 17, 2006

FRD Not Just Federal Rules Decisions Anymore

For those of us who remember when legal research involved a trip to the library not to the keyboard, when we see FRD our first thought is of Westlaw's specialized reporter interpreting the Federal Rules of Civil Procedure. But in today's world, FRD may more often stand for a new variant of discrimination law, family responsibility discrimination.

Before you panic, Congress hasn't passed a new statute, instead FRD is the terminology being promoted by the Center for Worklife Law at Hastings College of the Law. You know they are serious about it as they even have a hotline:

Employees: Think You've Been Treated Unfairly Because of FRD? Call our Hotline at 1-800-981-9495.
In case you aren't sure what might be involved here's their invitation to call the hotline:

Have you been subjected to employment discrimination just because you are a parent or caregiver? Family caregiver discrimination is discrimination on the job based solely on your status as a parent or caregiver. Mothers, fathers, and other caregivers have been passed over for promotion, denied leave, or forced out of their jobs -- sometimes with express statements from employers that their parental status was the reason.

Have you been told you may lose your job if you take time off to take your child to the doctor? Were you not considered for a promotion because your boss assumed you wouldn't want to travel with small children or elderly parents at home? Did you return from maternity leave to find you had been reassigned to a lesser position? If you answered "yes" to any of these questions, you may be the subject of family caregiver employment discrimination.

Here are some examples of real situations in which parents have successfully sued their employers:

  • A mother was terminated from her job "because she was no longer dependable since she had delivered a child."
  • A male Maryland State Trooper was denied leave to care for his newborn and told by his supervisor that his wife would have to be "in a coma or dead" for a man to qualify for leave as the primary caregiver.
  • An employer told a mother that he didn't think mothers should work, saying "I don't see how you can do either job well," and that "women are not good planners, especially women with kids."
  • An employer stated that he preferred to hire unmarried, childless women because they would give 150% to the job.

The above cases are obvious examples of outspoken discrimination. But there are less obvious forms of discrimination that are just as serious. In addition to being terminated or passed over for promotion, parents and caregivers might find they get less desirable job assignments, are forced to work difficult schedules, are denied training opportunities, or receive unjustifiably negative performance reviews. Some job applicants do not even get their foot in the door because of discriminatory hiring practices.

What can you do? Talk with one of the attorneys at WorkLife Law about your situation. If the attorney thinks you might have a case or might need legal advice, you will be given the name of an attorney near you who can meet with you to discuss your situation further. There is no charge to talk with a WorkLife Law attorney, but attorneys to whom you are referred will charge you their standard rates.

I have been seeing references to FRD and the Hastings program for the last few months, but it was an email from the SP3Group that brought it to my attention today, Family-Duty Discrimination Lawsuits Up.


Thanks for mentioning FRD -- it is a growing problem for employers, and one they can take steps to prevent. I'm writing to highlight what I hope is evident from our website -- we work with employers as well as employees. I am a management-side employment attorney as well as being deputy director of WorkLife Law, and I regularly advise employers on how to recognize and reduce their potential liability (which can be substantial -- one man won $11.65 million in an FRD lawsuit, and there are more than 70 verdicts over $100,000). We have information for employers on our website, and will soon have some trainings available for HR professionals and managers/supervisors of employees.

-- Cynthia Calvert, Deputy Director, WorkLife Law
yes, thanks for mentioning FRD. I was recently fired from my employment after 32 years after disclosing to my new manager that my husband had been diagnosed with Alzheimers Disease and required 24/7 care.
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Thursday, October 12, 2006

Whistleblower Still Whistling in the Dark

Back from an extended holiday, nice to note that some things haven't changed, including the inability of the first whistleblower ordered reinstated under Sarbanes Oxley -- David Welch -- to get reinstated. Instead he has lost round two before federal district judge Glen Conrad of the Western District of Virginia. has the story, Judge Won't Enforce Whistle-blower Ruling.

A concise overview:
Welch's case seems to be caught in a perpetual game of legal ping pong. In 2004, two years after he was fired, Cardinal appealed a "recommended decision and order" by DoL Administrative Law Judge Stephen Purcell to reinstate Welch as CFO and award him back pay. The bank's appeal was denied in June by DoL's administrative review board.
Judge Conrad's opinion is that he does not have authority to force Cardinal Bankshares to reinstate Welch because there is no "final administrative order." Although his refusal to act is based on the limited jurisdiction of a federal court, he does note the problems that could be caused if a district court were allowed to intervene: “immediate enforcement at each level could cause a rapid sequence of reinstatement and discharge, and a generally ridiculous state of affairs.”

Judge Conrad agrees his ruling does not result in the speedy resolution intended by Congress, but he lays the fault at the DOL's door. He also notes Welch is not totally without remedy in this situation as he could file suit in district court, but with the unfortunate result that the review would be de novo. Technically true, but given Welch is currently seeking to uphold a favorable decision -- starting afresh is really only a Hobson's choice.

If Judge Conrad is correct, that means one of the early enforcement mechanisms of Sarbanes Oxley is of little significance. This is clearly not the last word, certainly not on Welch's case, or even on how the statute will ultimately be interpreted, but federal courts seem to guard their jurisdiction zealously, so it is by no means certain that Judge Conrad's view will not carry the day.

For a more detailed overview of Welch's frustrating journey see this earlier post, Latest Step in First SOX Reinstatement Case.


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