Jottings By An Employer's Lawyer

Tuesday, October 30, 2007

Not Quite Halloween, But Still A Scary (MDV) Story

California is obviously not the only place where large verdicts in employment law cases occur, but it certainly has its share. The latest -- an MDV returned yesterday by a San Francisco federal jury following a three week trial over the claims of a PhD level petroleum engineer, Chevron ordered to pay $5.5 million in wrongful firing case.

The underlying claim appeared to be national origin discrimination as Kiran Pande, the plaintiff, was born in India. That angle was certainly played up in the headline from an Indian website, The Economic Times, Fired NRI engineer gets $5.5 mn over racist remarks, but even as that article points out, the claim that appeared to carry the day was her retaliation claim.

Although punitive damages were certainly a large part of the verdict ($2.5 million) the past and future economic damages were over $3 million. Although the articles don't say what Kiran Pande was making before she did not take an offered transfer to Houston, my guess is that it was pretty high. Which is another good reminder that certainly plaintiff's lawyers do not forget -- the higher the former income of the plaintiff, the more valuable the case.


Great observation about the plaintiff's income level. That is always a factor in employment cases and should be looked at from the outset.
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Wednesday, October 24, 2007

Speechless by Bruce Barry - A Mini-review

Two relatively recent posts, one by Chris McKinney at HR Lawyer's Blog, Limits of Free Speech in the Workplace and Freedom of Speech in the Workplace: Think Again by Michael Moore at the Pennsylvania Employment Law Blog, reminded me how I had been meaning to mention an interesting book by Vanderbilt Professor Bruce Barry, Speechless: The Erosion of Free Expression in the American Workplace.

If Professor Barry has a law degree he has gone to great pains to hide it on his professional c.v. on his website, but nevertheless his book has one of the best explanations of state action as a pre-requisite for constitutional protection that I have seen. I only wish he had written it sooner, so I could have used it as a reference when I was testifying before a Texas House Committee several years ago and was taken to task for making the comment that in the private sector employees didn't have first amendment rights. In fact the Chair of the Committee asked where I went to law school with a sarcastic tone that indicated he didn't think much of my legal education. (Hopefully I didn't cost UT Law School anything in the way of appropriations that biennium.)

Professor Barry has a viewpoint, he is after all an academic and President of the board of directors of the American Civil Liberties Union of Tennessee, but I found his book quite balanced in its approach to the issue of free speech in the workplace. It is the type of thoughtful writing about a serious issue that one wishes many more current writers would aspire to emulate.

In addition to providing good insight into the current state of the law, he makes the argument that it would be good for society, including employers, if they could get over their basically reflexive anti-free speech reactions, while acknowledging there is little current legal basis to require them to do so, and conceding that freedom increases conflict which runs against employer's "enduring goals of employee compliance, conformity, complacency and efficiency." Perhaps a little too cynical view of modern employers.

If you wanted to quibble, and there certainly is no reason to, one might question the use of "erosion" in the sub-title, as it perhaps implies that at one time free speech rights in the workplace were more than they are now. I don't think that's right, nor does Professor Barry really attempt to make that point. A couple more examples of small flaws from my viewpoint --he buys into organized labor's argument that the NLRB's recent decisions on who are supervisors is some watershed moment, and in his critique of employment at will probably overstates the impact of Montana's statutory alteration of that standard. And there are other similar points where arguments could be raised.

But if you are at all interested in the workplace, and I assume you are or you wouldn't be reading this post, then this is a serious book that too deserves a place in your library.

Private sector employees have 1st amendment rights, but only against the government making their employer discipline them, not against the voluntary decisions of their private employer to discipline them.

In Korb v. Lehman, the Fourth Circuit recognized that although a private employer can fire an employee for his speech, a government official can't pressure the employer to do so.

In Truax v. Raich (1916), an equal protection cases, the Supreme Court observed that the fact that employment is at the will of the parties does not mean it is at the will of the government, which can be sued under the Constitution for pressuring a private employer to fire one of its employees.

Hans Bader
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5th Circuit's Newest Judge - Leslie Southwick Confirmed

In an act of good sense, the Senate today confirmed Leslie Southwick from Mississippi to the 5th Circuit Court of Appeals. This was nearly caught up in partisan politics, but somehow survived.

Having served as a Teaching Quizmaster at UT Law School with Leslie more than 30 years ago, I am fairly confident that the individual portrayed by those trying to defeat the nomination is not who will be sworn in and serve admirably for however long he ends up sitting on the bench. Here is the NYT story, Southwick Wins Confirmation.

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Thursday, October 18, 2007

Interesting Thought About Electronic Discovery and Arbitration

Stephen Rosenberg, who has a tremendous site, Boston Insurance and ERISA Litigation Blog, has an interesting post on the relationship between the developing law of electronic discovery and how it might actually make arbitration a better forum. Electronic Discovery and the Calculus of Arbitration. It's an interesting argument.

More notable because as a general rule, Rosenberg thinks that arbitration is not as cost effective as it could be and may not be worth the bother, particularly for complex cases. His thesis: if the federal courts don't reign in the cost and expense of e-discovery, getting arbitrators to carve out more narrow (less costly) rules might make it more appealing.

There's no question e-discovery is the "in-thing" now. One aspect that may not be getting enough attention is its scalability — should the same rules apply in a $100 million suit and a $10 million one and a $150,000 one?

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MDV for the Still Employed

Most employment law cases are brought by workers who were terminated, but occasionally a current worker brings a claim that makes its way to trial. And, amazingly enough, sometimes juries are convinced that an employer, who is still good enough to work for, has acted badly enough that the employee should be compensated with a large award. That was the case in Alameda County where a jury found for Oliver Hill on his race and retaliation claims. BART worker awarded $1.27 million for on-the-job racial harassment.

Oliver, a mechanic still works for BART, although he did transfer from the Richmond facility, where the actions occurred to Concord.

Although the SF Chronicle story doesn't make it perfectly clear, it seems as though one of the acts that he alleged was harmful was a 21 month paid psychiatric leave following a complaint by a supervisor that Hill had made threats against him and the employee who Oliver claims harassed him.

If you have been thinking million dollar verdicts don't seem to be happening quite as often based on my postings of the last six months, I am afraid you are wrong. They are there, I just haven't been as faithful a reporter. Many of them are collected as potential posts, so perhaps I will do some catch-ups in summary fashion one of these days.

For me reports of MDV's are helpful reminders of what can happen in a court room. Not that it should scare employers away from trying cases that should be tried, but it does help with a sense of urgency — there are no 100% sure winners.


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Wednesday, October 17, 2007

American Employment Law More Liberal Than Europe

At least in one small area — mandatory retirement. Unlike the ADEA which has no upper limit and bars mandatory retirement, the European Union's top court has held that country laws establishing a retirement age could be "justified to promote social policies like improving employment. Here is the Judgment of the Court from the International Court of Justice.

For more background on the dispute that was brought by Felix Palacios de la Villa after he was forced to retire from Spanish retailer Cortefiel SA when he turned 65, see the International Herald Tribune article, Court ruling upholds mandatory retirement in Europe.

One caveat of the ruling — it is necessary to also provide adequate provisions for retirees.

This ruling must be particularly painful to those remaining partners at Sidley, Austin who have recently agreed to not only give up their mandatory retirement requirement, but also kick in $27.5 million to some former partners. See the EEOC press release here.


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Tuesday, October 16, 2007

Why Employment Lawyers Worry About Defamation

Sometime ago I saw a study that 1/3 of all defamation claims arise out of the workplace. If an employer needs chilling evidence of why that is a concern, a careful reading of last week's decision in Galarneau v. Merrill Lynch (1st Cir. 10/12/07) should provide it.

I first reported on the trial court decision as one of two million dollar verdicts in March 2005, Sticks and Stones May Break Your Bones. Although the 1st Circuit did knock out the $2.1 million dollar punitive damage award, it left intact an $850,000 judgment for compensatory damages.

The defamation occurred on the U-5 form that Merrill Lynch was required to complete when it terminated Ms. Galarneau. Among the statements contained in the form were these:
Ms. Galarneau was terminated after the firm concluded that she had (I) engaged in inappropriate bond trading in one client's account and (II) utilized time and price discretion in the accounts of three clients.
When Galarneau's expert opined that the bond trading was appropriate it was left for the jury to determine the truth of the statement.

When it agreed with Galarneau, Merrill Lynch had only its defense that the conditional privilege was not barred because of malice. Unfortunately, the Court found the same evidence that supported falsity, also supported malice: "Evidence that Merrill Lynch approved the trading as it was taking place and defended the trading after it came under attack supports the jury's conclusion that the firm either knew the statement was false, or recklessly disregarded its falsity."

Merrill Lynch's protestations that it took those actions without knowing the true facts, while completely understandable to anyone who knows how things work in the real world, were merely a jury argument that Merrill Lynch lost.

One of Merrill Lynch's most intriguing defenses, that the Court should have applied a heightened standard of defamation based on the 1st amendment because the issue involved a matter of public concern, was left on the cutting room floor. Not because the argument might not have been successful, but because it was raised for the first time in the appellate court.

Merrill Lynch also argued that the trial court's exclusion of correspondence between "Galarneau's counsel and counsel for Merrill Lynch regarding the opportunity to review and comment upon the language Merrill Lynch proposed to use in Galarneau's Form U-5," was erroneously excluded. But showing how hard it is to reverse a judgment on the basis of an evidentiary ruling, the 1st Circuit held it was not an abuse of discretion.

Those two rulings might be enough to get Merrill Lynch an en banc hearing, which would be appropriate, but it may be that it has to settle for the 2/3 reduction in its overall liability.

For employers and their counsel, Galarneau it is a clear warning of the continuing dangers of defamation in the workplace.

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Understanding Employment Law - A Book Review

Professor Ross Runkel has a very favorable mini-review of Understanding Employment Law written by the three editors of the Workplace Prof Blog, Rick Bales, Jeff Hirsch and Paul Secunda.

According to Ross:

If I were still teaching employment law, I would strongly recommend this book to my students. And I recommend it to any lawyer who wants to get a reliable overview of the legal tangle we call employment law.

I haven't read it yet, but based on the collective expertise of the authors and the reviewer, I will be adding it to my bookshelf. If you want to do so as well, you can find it here.

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Monday, October 15, 2007

Why You Have to Be Careful When Reading Blogs - Retaliation Claims Not Really in Danger in the Supreme Court

When you have a blog entitled Jottings By an Employer's Lawyer, it is pretty clear that you write with a viewpoint. Nevertheless, I try hard to make sure that what I write is accurate, and separate what is opinion from what actually is. No doubt that in the more than 1500 posts since this blog began five years ago, I have not achieved that goal 100%.

Diversity, Inc. also has a viewpoint, and I am sure most of their posting are accurate, but a recent one, No More Discrimination Lawsuits? Supreme Court May Make It Easier to Retaliate, seems to be unnecessarily off the mark.

The basis for the article is the Supreme Court's granting of certiorari in CBOCS West, Inc. v. Humphries (06-1431) and it links to Ross Runkel's page with his description and links to the key documents.

Here's what the article says about the possible effects of the Supreme Court decision:

Should the Supreme Court side with CBOCS West, it would become easier for companies to retaliate against workers who file discrimination lawsuits. This would discourage many from disclosing illegal discriminatory practices.

While perhaps technically true, when combined with the following statements:

Federal law includes "retaliation against an individual for filing a charge of discrimination, participating in an investigation, or opposing discriminatory practices," according to the U.S. Equal Employment Opportunity Commission (EEOC).

In 2004, the EEOC received 22,740 charges of retaliation discrimination and recouped more than $90 million in monetary benefits.

it vastly overstates the potential significance of the case and I think unfairly castigates the Supreme Court.

A decision in CBOCS would have no impact on retaliation cases under Title VII of the Civil Rights Act of 1964, which are the the types of charges mentioned in the two quoted paragraphs and by far the vast number of retaliation claims brought in discrimination cases.

If the Court finds no retaliation is available under § 1981, it would only impact retaliation cases brought under that statute which is limited to racial claims, and basically parallels Title VII race claims with three key exceptions -- there are no statutory damage caps, a much longer statute of limitations and no administrative prerequisites.

Still the implication that retaliation law in discrimination cases is at grave risk, is a real stretch.

The case is an interesting one however as the Supreme Court will have to deal with the Title IX decision of two years ago authored by Justice O'Connor, where four of the justices felt the majority clearly exceeded the scope of the Congressional mandate to create a retaliation cause of action out of whole cloth. See my discussion at Whistleblowing in the Supreme Court, A Good Day .

I do agree with the writer of the article that it is quite likely that the outcome will be different here given the switch from O'Connor to Alito, but I don't think it is really fair to imply it is because of a hostility to retaliation claims by the present Supreme Court. Especially given that it was the Roberts court, including Justice Alito who wrote the other case which is referenced* in the article as broadening the protection provided by the retaliation provision of Title VII.

Blogs are helpful, but all of them, including this one, should be read carefully to make sure that any particular post is not one that may have missed the mark.

*The article says, "Last June, the Supreme Court enhanced protections for employees on the basis of retaliation under Title XII (sic) of the Civil Rights Act of 1964 ..." I believe that is referring to the Burlington Northern Railway v. White decision of June, 2006. See my post about that decision here.


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Sunday, October 14, 2007

Family Responsibility Discrimination Doesn't Advance in California

Because of Governor Schwarzenegger's veto of SB 836 which would have added "familial status" as a protected category under California's discrimination laws.

According to the Governor, the bill would not

"only result in endless litigation to try and define what discrimination on the basis of “familial status” means, it will also unnecessarily restrict employers’ ability to make personnel decisions."

Notwithstanding this temporary setback, I don't think anyone should write off family responsibility discrimination as an issue that employers should continue to be concerned about.

Hat tip to one of the better sources for information on current developments in California employment law, Storm's California Employment Law which has the Governor's veto message here.


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Tuesday, October 09, 2007

Now That You Can't - DNA Testing - A Reason For Doing It

Discrimination on the basis of genetic testing has been kicking around both in Texas where it has passed, see here and in Congress in the form of Genetic Information Nondiscrimination Act of 2007 which has passed the House and is pending in the Senate. Although aware of the legislation, I hadn't followed it all that closely, in large part because I didn't understand exactly what employers would want to be doing that would run afoul of the ban.

But the good folks over at Workers Comp Insider have fortunately at least begun my education with their post, Brave new world: genetic testing and workers compensation. It will be interesting to see how the technology develops.

But clearly the laws, including the Texas version which prohibits discrimination for the refusal to take a test, will be an impediment.

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Monday, October 08, 2007

What is a VEBA?

Besides apparently being the key to the GM/UAW settlement, a VEBA (voluntary employee beneficiary association) is a different mechanism for handling benefits that works well for employers with unions.

See Jonathan Tasini's explanation in Post UAW-GM Deal.


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Have You Tipped Your Salad Maker Lately?

Last Friday I did the second session of the Essential Employment Law course that I do for the University of Texas School of Law CLE division every fall. On the section on the basics of the FLSA I mention how some of the more arcane areas of wage and hour law can cause serious problems for employers.

For example while a restaurant can pay its waitstaff $2.13 an hour, with the balance that gets them to the minimum wage (and often a lot more) coming from a tip pool, the pool has to comply with all the technical requirements set out by the department of labor.

One of those provisions that has led to litigation has been whether those participating in the pools are regularly tipped employees? One case I mention turns on whether a salad maker was a regularly tipped employee. (True confession -- I never have tipped a salad maker.)

If I had been more current on my reading I could have also mentioned the following story from the Austin Business Journals, Area restaurants served with lawsuits, to show these issues are not just an academic exercise.

I will make sure that I do that for the November 7th session to be held here in Austin, which you can still catch if you are interested. See here for registration.


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Wednesday, October 03, 2007

Employers and Domestic Violence

Two years ago, commenting on an article in a British publication, I suggested that domestic violence and its carryover into the workplace was something employers should have on their radar screen if they didn't already.

I can't say that I have seen a groundswell of attention since then, but this article, Employers'play a role in preventing domestic violence, in the Birmingham Business Journal certainly does nothing to make me think the issue is going to go away.

If for no other reason, the $725 million per year in lost productivity cited in the article from a CDC study might get someone's attention. Probably not as much attention, at least right now as the $146 million spent on first and business class airline tickets by U.S. government officials, see CBS's story Flying High -- On Your Dime, but ultimately it may be a lot bigger story.

domestic voilence issue is over hyped , and exaggerated . i believe a normal human being wont get get voilent only except in personal defence. and most of us are normal
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Tuesday, October 02, 2007

Isn't It Time for Basketball Yet?

That's probably what Isiah Thomas was thinking last night as he pondered the impact of the jury's note to the judge in the sexual harassment case brought against him and his employer the NY Knicks.

Unlike the jury which was sent home for the night, Thomas was free to read the papers which were more than happy to help him understand what the note meant: With Defeat Looming, What's Next for Isiah Thomas, Knicks?

According to the ABC news story, the note indicated that there was one question that left the jury divided:

The members of the jury remained divided 6-1 on Question No. 4, which deals with whether Thomas will be held personally liable for punitive damages. And since the verdict form instructed the jury to skip Question No. 4 unless it had found in favor of the plaintiff, it was apparent the New York Knicks were headed for a defeat.
Although this probably isn't the most significant point for Thomas and his counsel, the reporting indicates the difficulty that the press has in covering trials. I know something about employment law jury trials and I am confused about what exactly is left, because according to the various stories it could be:
  • that the jury is divided on individual liability for Thomas and once that is divided, the jury will move to the "penalty phase" (not exactly a precise legal term) with the jury deciding punitive damages and the judge deciding compensatory damages;

  • according to the Bloomberg story, the jury is divided on whether to award punitive damages and they can't be answering that question unless they have already decided to hold Thomas and his employer liable;

  • Newsday seems to side with Bloomberg saying the issue left is "whether they should slap Thomas with punitive damages,"

  • and the Detroit Free Press just leaves it open holding that the note makes clear "they have reached decisions against the defense on some of the nine claims," which appears to confuse claims with jury issues.

The good news (for us, not Thomas and the Knicks) is that it should all be a lot clearer later today as the jury returns to deliberation this morning. Of course it is not unheard of to have such notes spark serious settlement discussions.

Even Knicks basketball, bad as it is, has to be better than this for Thomas and company.

Update: Now it offficially makes it into the million dollar club: Jury awards $11.6 million in Knicks harassment case.


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