Jottings By An Employer's Lawyer

Tuesday, April 24, 2007

NY Finance - Continues to be a MDV Hot Spot

For the second time in a week, a sex discrimination claim has apparently resonated with a New York federal court jury as reflected today's New York Post headline, Woman Takes $4M To The Bank In Bias Suit. When her supervisor retired, Beverly Zakre, 59 thought she would get the job, which she even filled on an interim basis. Unfortunately, when three males were interviewed and one selected she filed a sex discrimination charge, and was later terminated. Although the testimony mentioned in the short newspaper story focused on comments by bank management about females in the workplace, it is not clear whether she prevailed on the sex discrimination claim, retaliation or both.

According to the article, the Norddeutsche Landesbank attorney said the bank would appeal the jury's decision. "We think the jury verdict was ridiculous. We felt that the evidence [the judge] was allowing in was not evidence." Probably more likely to do well on appeal than on a motion for a new trial if the Judge is a New York Post reader.


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Thursday, April 19, 2007

Brokerage Woes in Employment Litigation Continue - $3.5 MDV

It may be that a MDV against a brokerage company is barely even news these days as the only reference to last Friday's verdict by a New York federal jury on Google News was a small story in the New York Post which in its entirey reads:

Suit award A federal jury awarded over $3.5 million in damages Friday to a former stockbroker who filed suit against UBS Finan cial Services Inc. for sex discrimination. Roberta Tse, a former financial adviser at one of UBS's flagship branches in Manhattan, sued UBS after she was put on a probationary plan in 2002 and fired eight months later.

A more complete story is at Employment Law 360 UBS Ordered To Pay $3.5M In Sex Bias Case ($). According to that article, the problems for Roberta Tse began when she lost her largest client. Shortly thereafter she was put on a performance improvement plan. She was subsequently fired for absenteeism, which the jury found was not discriminatory. However, it found placing her on the plan was.

One part of the case was the low number of female brokers, as well as evidence that she was treated differently from male brokers who had similar slumps in business. One thing that might catch many employers attention' was the contention that part of the problem was that UBS had no standards for when an employee should be put on a performance improvement plan, but left it to the discretion of the branch manager.

Of course employers who try to provide guidance tailored as it must to many different situations know that quite often they are challenged when such a plan has not been followed precisely. As with many employer challenges, it is hard to get it "just right."

I have been entirely remiss on my MDV reporting with many of them languishing in the draft stage. Since I soon will be talking on the topic at the UT Law School's 14th Labor and Employment Law Seminar on May 18-19, I will try to do some MDV summaries between now and then.


Do you know who represented the parties in that case? Thanks!
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Wednesday, April 18, 2007

Academic Proof for What You Already Knew

Emotions in the workplace are important. Professor Sigal Barsade of Wharton makes the point:

Everybody brings their emotions to work. You bring your brain to work. You bring your emotions to work. Feelings drive performance. They drive behavior and other feelings. Think of people as emotion conductors.

You can get the executive summary of her research at Managing Emotions in the Workplace: Do Positive and Negative Attitudes Drive Performance? — short answer — you bet.

The more academic version can be found at Why Does Affect Matter in Organizations?


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The No Asshole Rule - A (Mini) Review

Stanford Professor Robert Sutton is getting some attention with his latest book, "The No Asshole Rule." According to the introduction, the genesis for the book was an essay in the Harvard Business Review. It may have made a good essay.

But it is hardly worthy of book length treatment; and let's face it, the idea is not terribly unique. See for example, Jerks in the Workplace - Disturbing, But Sound Advice. And frankly, the book is little more than a series of anecdotes and references to "academic studies," not that you would conclude there were anything scholarly about it.

There are some good Steve Jobs' stories, a report on Scott Rudin, an apparently difficult producer who has gone through between 119 and 250 personal assistants (that's good for several mentions throughout the book), and an obligatory mention of "Chainsaw" Dunlap. For some reason, he doesn't mention Leona Helmsley, I guess thorough research just isn't what it used to be.

He does give us a mention of the other side — "lots of warm and caring individuals people who are also successful business leaders" like A.G. Lafley of Proctor & Gamble, John Chambers of Cisco, Richard Branson of Virgin and Ann Mulcahy of Xerox. Although some eyebrows might get raised over his inclusion of Oprah Winfrey in that group, instead of the former one.

Sutton also throws in some advice about dealing with assholes in the workplace, which is frankly pretty lame. He also adds some "checklists" which are not quite Parade magazine (the Sunday newspaper supplement) worthy.

I probably wouldn't have read the book at all but for the presentation I am giving at the SHRM National Convention, Bullying in the Workplace: The Newest Litigation Threat? Can't say that I got a lot of material for the presentation, but the fact that it is has been written and is doing well does hint that the whole issue is becoming a more important one.

One good thing in the book are several examples from, Gig, a collection of interviews about people's work lives that is fascinating reading. (It's a follow on to Studs Terkel's oral history, Working, also excellent.) I don't know that the conclusions Sutton draws from the stories in Gig make a lot of sense, but I heartily recommend the original source. I won't do the same for Sutton's effort.

Maybe a more interesting question is the fact that professors from two well respected institutions — Stanford and Princeton* — have chosen titles, and in Sutton's case adamantly so according to his introduction, that at least in some not too distant past, would not have passed muster out of a sense of propriety if nothing else.

But it's when I have thoughts like that — that I begin to think my age is showing.

*On Bullshit, by Harry G. Frankfurt


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Monday, April 16, 2007

Hypocrisy - and the Employee Free Choice Act

While I have previously written about one aspect of the so-called Employee Free Choice Act, see Deceptive Advertising - The Employee Free Choice Act, I was surprised amused by a letter by a number of Congressman written on August 29, 2001:
Junta Local de Conciliacion y Arbitraje del Estado de Puebla, Lic. Armando Poxqui Quintero, 7 Norte, Numero 1006 Altos, Colonia Centro, Puebla, Mexico C.P.


As members of Congress of the United States who are deeply concerned with international labor standards and the role of labor rights in international trade agreements, we are writing to encourage you to use the secret ballot in all union recognition elections.

We understand that the secret ballot is allowed for, but not required by, Mexican labor law. However, we feel that the secret ballot is absolutely necessary in order to ensure that workers are not intimidated into voting for a union they might not otherwise choose.

We respect Mexico as an important neighbor and trading partner, and we feel that the increased use of the secret ballot in union recognition elections will help bring real democracy to the Mexican workplace.

(Emphasis added)


The letter is signed by 14 Congressmen. Check here to see how the ones who remain in Congress voted on the EFCA, which passed the House on March 1, 2007. (To save you the trouble, those in blue voted in favor of the EFCA, those in black are no longer members of the House.)

George Miller (D. Cal)

Marcy Kaptur (D - Ohio)

Bernard Sanders (I - Vt) (now in the Senate), where he supports the Employee Free Choice Act,

And restoring the right of workers to join unions, which is the key to rebuilding a vibrant middle class? There's a clear way to do that. Next week, the Senate will take up the Employee Free Choice Act, which the House has already passed. By compelling employers to recognize unions if a majority of their workers sign affiliation cards, the legislation would bring a modicum of balance to workplace relations, and to the American economy as well.

William J. Coyne

Lane Evans

Bob Filner (D - Cal)

Martin Olav Sabo

Barney Frank (D - Mass)

Joe Baca (D - Cal)

Zoe Lofgren (D - Cal)

Dennis J. Kucinich (D - Ohio)

Calvin M. Dooley

Fortney Peter Stark (D -Cal)

Barbara Lee (D - Cal)

James P. McGovern (D - Wash)

Lloyd Doggett (D. Tex)

I thought it might be interesting to see if, or how they have responded to questions about this letter, but the only thing I could find was this Q&A on the website of the Committee on Education and Labor which Congressman Miller chairs:

MYTH: The Employee Free Choice Act's sponsors support secret ballot elections for workers in Mexico, but not in the United States.

FACT: Members of Congress wrote to Mexican authorities in 2001 arguing in favor of a secret ballot election in a case where workers were trying to replace a sham incumbent union with an independent union. The Employee Free Choice Act is consistent with this: it would require an NLRB election in cases where workers seek to replace one union with another union. Indeed, the original framers of the National Labor Relations Act intended elections for precisely those cases where multiple unions were competing – particularly where one was a sham company union and another was a real independent union.

One problem, that doesn't really address their letter, which recommended secret elections for all union recognition elections.

If anyone has any explanations I will be happy to listen to them, but until then, I will just put it down to hypocrisy — a word that never runs out of proper usage in Washington D.C.

A hat tip to Greg Guidry of the Onebane Law Firm for calling this letter to my attention and to he and his wife, Jane, for hosting a wonderful weekend in New Orleans for the Management Labor and Employment Law Roundtable members.


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Friday, April 13, 2007

I'm Not Sure Why It's News — But "Fear of Firing" Lays Out Some of the Concerns

Since the lawsuit they featured was one decided last July (see $11m Verdict in the Nutmeg State), I am not sure what prompted today's lengthy article on the problems employer's face when they terminate employees, but whatever the reason, Fear Of Firing, is a good summary.

Any one who works in this world won't be surprised by any of the information, including that often performance appraisals are not candid which causes problems; or that when there is documentation of performance problems it is often used as evidence of "building a case."

Of more interest are the comments — although as one would suspect of those reading Business Week articles, they are more pro-employer than most jury pools.

Update: If you didn't check out the two graphics to the main article you should. One is a graphic representation, The Untouchable Nation, which gives a visual explanation of why every(literally) terminated employee can have a federal case; the other is a graphic representation of how lawsuits end and what they cost: For Every 10,000 Lawsuits, Few Losses, but High Cost. There is also a Pink Slip Protocol which has helpful tips on firing, but of course, just like this blog, it "is not intended, nor should it be considered, legal advice."


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Tuesday, April 03, 2007

Guns vs. Business on the NYT Editorial Page — and the Texas Version

Not often that employment issues get space on the New York Times editorial page, but last week it weighed in on the battle between business and the gun lobby over employers' rights to ban guns from the workplace that is being fought in legislatures across the country.

I am not a hunter, nor a student of the 2nd amendment, but I do know a bit about workplaces, and let me tell you this is an important issue for employers and its crazy to think employers shouldn't have the right to ban handguns. The NYT agrees, Workers’ Safety and the Gun Lobby.

If safety is the issue, which of course it is, the NYT points to this:

There is no debate that doing so [allowing guns at the workplace] endangers workers. Workplaces that tolerate guns are five to seven times more likely to suffer homicides than job sites that ban firearms, according to a 2005 study in The American Journal of Public Health. The notion that self-defense mandates keeping guns in office drawers or out in parking-lot glove compartments is a dangerous fantasy.

The debate is happening just up the street from me as the Texas legislature is in session and has several bills before it. One bill, HB 220, has already passed out of committee. It would prohibit employers from banning guns in parking lots unless two conditions are met:
(1) the parking lot, garage, or other area is completely surrounded by a gate and is not open to the public; and (2) ingress to and egress from the parking lot, garage, or other area are monitored by security personnel.
These kinds of exceptions, which are not practicable, are cover for legislators who can use the "exception" to show that they were "reasonable." Garbage.

Even worse, SB 534 has already passed the Senate, and like its counterpart HB 992 (also passed out of committee), provides a cause of action for anyone discharged for having a gun on an employer's parking lot that has complied with a convoluted scheme involving the employee providing his supervisor a written statement that he has a gun, along with copies of the gun license and allowing the employer to provide an alternative place for storage. I can just see it now, instead of a hat check closet, employer's will now have a gun check closet.

I am not terribly optimistic that these bills won't make it through the legislature. If you are concerned, you better speak up soon.

Labels: ,

Wow, that’s pretty interesting. This statute could create a whole new dynamic in the workplace. If an employer fires a gun-toting employee, and that employee successfully sues for reinstatement, then that employer could be faced with an uncomfortable situation. Not only will the employee be coming back to work against the employer’s wishes (leaving a somewhat sour taste in the boss’s mouth). Now the employer can rest comfortably, knowing that this disgruntled employee has a dangerous weapon nearby!

I write this (mostly) in jest, but there are important issues that could plague an employer because of these bills. The NYT article mentions liability, and hand in hand with this consideration, insurance premiums could conceivably rise because of the possibility of gun-related injuries. Many small businesses already battle to keep premiums low for their employees. For example, one small KS company recently installed a gym on its premises and created a health awareness committee to lower employee premiums. I cannot imagine that their health insurance provider would dance for joy upon learning of a similar bill in KS. In addition, as you stated, the “convoluted scheme” required by the bill will just add another paperwork requirement for employers and make their job that much more confusing.

These bills do not leave a practicable way out for employers. While an employer could perhaps construct a gate around its parking lot without incurring undue expense, many businesses would be precluded from doing so for at least two reasons: 1) a city law probably disallows this in some areas, and 2) it would be aesthetically damaging and thereby decrease business. As for the second prong of the exception, most businesses simply cannot afford to hire security for this purpose. And these expenses would be imposed merely because employees choose not to leave their firearms at home when going to work…

Being a KS resident, I doubt that the TX legislature would care much about my opinion in the matter. However, concealed carry of firearms has just recently been passed in KS, so perhaps, in a couple of years, I will have my chance to write that letter.
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Monday, April 02, 2007

NLRB Not Required to Explain NO Bargaining Order

After 200+ years of appellate decisions, it is a rare day when you see the following:
As far as we can tell, this is a question of first impression for the Ninth Circuit and, indeed, for any federal circuit.
What was this case of first impression:
Whether the NLRB clearly abuses its discretion under the National Labor Relations Act when it gives a conclusory explanation for choosing not to adopt an ALJ’s recommended remedy of a Gissel order while adopting the ALJ’s recommended findings of fact, conclusions of law, and remaining remedies.
Maybe one reason that it took so long for this case was that it took a unique set of facts:
  • the ALJ recommends a Gissel bargaining order (basically a finding that the employer's campaign conduct has been so destructive of the laboratory conditions that it is impossible to have a fair election; thus that step must be skipped);
  • the Board has to not accept the recommendation of the Gissel order;
  • it must do so without giving a detailed explanation of why it was not accepting the order.

Those three factors thus allowed the union to make the following argument:

Because clearly articulated reasoning is required to issue a Gissel order, similarly, clearly articulated reasoning should be required if the ALJ recommends a Gissel order and the NLRB chooses not to issue one.
On first blush it makes some sense, but the Court saw it differently holding, "the fact that courts require greater reasoning when the Board decides to issue a Gissel order is inapposite to the Board’s decision instead to order the default remedy." United Steelworkers v. NLRB (9th Cir. 4/2/07) [pdf].

So an interesting case of first impression; however if the Employee Free Choice Act passes, it and much of the Gissel line of cases will become mere historical artifacts.


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Living and Losing at the American Dream - Jail Time and Immigration

A blog I haven't followed long, the New Jersey Employment Law Blog has a post about a West Coast sentencing of the owner and manager of Golden State Fence Co. following their plea bargain for knowingly hiring illegal aliens. See, Hiring Undocumented Workers: The Stakes Just Went Up for Business.

Quoting the sentencing judge:

Prosecution is long overdue in this area. Honestly, the government's efforts have been at the border, not with the employer. Obviously, the government has signaled a change with this case.

There's no question that pressure is rising in all parts of the country, and although it won't be just limited to them, I would wager that it is the small business that is most vulnerable.

It's ironic that Golden State Fence's website has this banner on the top: "Home of the American Dream" which I am pretty sure is what the illegal immigrants that were working for the company thought they were participating in. It's even more poignant when you read the company history:

Golden State Fence is a Family owned and operated business led by Founder Mel Kay, Jr., President and Chairman of the Board of Directors. Born and raised in Southern California during the Great Depression, Mr. Kay came from a family of 11 children. A classic American Dream story, Mr. Kay spent his childhood working to help support the family and left high school early at his father's orders to work full time. Shortly after this his father's untimely premature death left Mr. Kay as the primary supporter of the family. He started his first business in 1965 on the ground that Golden State Fence sits today. Over the last 40 years Mr. Kay has employed thousands of Southern California residents and today Golden State Fence employs over 700 individuals at 8 locations throughout Southern California. Golden State Fence is widely recognized as California's leader in the Fence industry and is one of the Inland Empires leading businesses. Mr. Kay has always taken great pride in building Golden State Fence based on the principles of Integrity, Honesty and Hard Work.
Now I don't know anything about about the facts and this story from NPR makes it clear it was not just a one time problem.

However, it only emphasizes to me that there has to be a better way to deal with immigration than penalizing those who want to work, and usually it is hot, dirty work at that, and those who want to give them that chance.


We run a fence industry discussion webpage over at and have posted several articles on the Mel Kay and Golden State Fence Company in regard to the fines and even house arrest of CEO Mel Kay. Mel came on the board to defend his company and his own reputation but failed to deny or acknowledge the final rebuttal by the Fence Wizard. You can access all of the articles by following this link:

Or skip to the final article here:

I enjoy your website - it is an excellent resource, I am adding a link to your site today. Thank you.
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Sunday, April 01, 2007

Security Industry (Finally) Catches A Break - U5's Absolutely Privileged

The securities industry has not always been a happy camper when it came to employment claims in the last few years, but Thursday was almost as good a day as bonus day on Wall Street. Well maybe, not quite that good, but there had to be smiles at least in the management offices in most brokerages knowing that New York's highest state court had responded, "Absolutely" to the following question:

Are statements made by an employer on an NASD employee termination notice ('Form U-5') subject to an absolute or a qualified privilege in a suit for defamation?

Rosenberg v. Metlife, Inc. (NY App 3/29/07) [pdf]. More importantly, the Court was responding to a certified question from the Second Circuit that it issued on June 28, 2006.

Since brokerages are required to complete a U-5 within 30 days of registered brokers termination, and forced to disclose circumstances which if not true could certainly be viewed as defamatory, the granting of an absolute as opposed to a qualified privilege is a major victory for the NASD.

Obviously, the 2nd Circuit had thought it was a close question, citing conflicting decisions on the issue among the lower appellate courts, and quoting a justice who had earlier voted for an absolute privilege who now felt that the issue had been wrongly decided, because:

The cloak of absolute privilege has generated substantial abuses by way of distorted and false filings for tactical, competitive business reasons, without any realistic recourse available to those injured.
and the 4-2 vote in New York's highest court would indicate that it was no slam dunk that it would turn out this way.

How many employees does it potentially impact? According to the opinion, 660,000 brokers are currently covered by the NASD.


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Why Talk to the Fisherman When You Can Hear From the Fish?

I have always thought that rather than listen to what a defense lawyer thinks are the reasons employees bring lawsuits against their former employers, you would be much better off hearing it from plaintiff's lawyers. Sort of a take off on the old saw, why would you listen to a fisherman about catching fish if you could hear the fish.

In any event Walter Crowson, a defense lawyer, gone, at least partially over to the dark side has these insights about why fired employees made their way to his office. The article was originally printed in the Texas Lawyer, Confessions of a Part-Time Plaintiffs Employment Lawyer.

His points (explained more fully in the article):

  • it's personal, really personal - meaning that in addition to losing a job, most employees are losing a huge part of their identity;

  • challenging their right to unemployment - may well be justified, and of course, you have to protect those rates; but it also may be the step that pushes the former employee to seek counsel. Really should make you think twice, particularly, if as is often the case, it is going to be an uphill fight to win.

  • Not telling them why - Very few states require it, Missouri perhaps, but only if they ask for a service letter; but not knowing is sometimes all it takes to keep them engaged with the past and not moving on. Just because you don't have to give a reason, doesn't always mean you shouldn't

  • Failure to understand communication involves hearing as well as telling.

Although I am much more like the fisherman — having done it for 30 years, what he says has the ring of truth to me.


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