David H. McCarthy

2023-01-24T14:44:00.000-08:00

PSYCHIATRIST WHO PUBLICLY DIAGNOSED
PRESIDENT TRUMP FOULS OUT AT YALE

Yale finally cut ties with the psychiatrist who publicly diagnosed President Donald Trump as psychotic though she had never met him.

It did not renew the contract of an unpaid volunteer and untenured “assistant professor.” Bandy X. Lee, M.D., 52, has resisted the decision with fury. Yale brought this on itself. It tacitly condoned the misconduct for years and only changed course in 2020 in response to the complaints of another of the doctor’s victims, Alan Dershowitz, emeritus professor of Harvard Law School.

At that time, a three-year contract was set to expire on June 30, 2020. The school authorities took up the question whether Dr. Lee was so plainly indispensable that putting up with all the “noise” around her was a small price to pay to keep for faculty, students, and staff the gift of herself.

Notice was served in May of 2022 that the contract would not be renewed. The notice was preceded by a meeting between the doctor and four colleagues who unanimously decided against renewal.

The notice was followed by “multiple informal attempts to be heard” (her words) and then by an appeal to the chairman of the department of psychiatry, who said no; an appeal to the provost, who said no; and an appeal to the president of the university, who said no.

That was followed by a lawsuit claiming that the doctor had a guaranteed right to renewal of the contract. U.S. District Judge Sarah A. L. Merriam disagreed and dismissed the case on motion of the defendant-university.

Dr. Lee changed lawyers. The new lawyers made an untimely, baseless, and unavailing attempt to get Judge Merriam to reconsider her ruling. An appeal is pending at this writing. See Bandy X. Lee M.D., MDiv. v. Yale University, No. 21 cv 389 on the docket of the U.S. District Court for the District of Connecticut and No. 22-2634 on the docket of the U.S. Court of Appeals for the Second Circuit.

The attacks upon President Trump date to May of 2017, i.e., before the start of the contract that expired in June 2020. The memorandum opinion and order Judge Merriam issued on August 30, 2022 suggests that Dr. Lee would have enjoyed an uneventful renewal of the contract but for the complaints of Professor Dershowitz.

She violated the Goldwater Rule of the American Psychiatric Association. A psychiatrist may not diagnose an individual she has not examined, to say nothing of the ban on public disclosures about an individual without the consent of that individual. Dr. Lee concluded that the Goldwater Rule did not apply to President Trump.

01-24-23
Copyright © 2023 David H. McCarthy III

2022-10-27T14:03:00.001-07:00

THE CYNICAL LUNCH-AT-HOOTERS CASE IS OVER.

PLAINTIFF LOST
____________________

That dubious case cobbled up around a business lunch at Hooters that never happened is over. The plaintiff lost. Justice was done.

The facts as found by the trial judge in late 2021 differed dramatically from the facts in online news accounts when the lawsuit was filed in early 2017.

The media played up the Hooters angle. They all told essentially the same story the same way under the same suggestive headline: A business lunch at Hooters had excited complaints on the part of the plaintiff-executive, a retaliatory firing, and a lawsuit. They seemed to be acting in concert, doing no independent reporting, but only publishing a press release from the plaintiff’s attorney. Had there actually been a lunch at Hooters? No. But only one source reported on that, the Houston Chronicle, the hometown paper so to speak for the defendant, a German biotechnology company that had it American headquarters in Houston, Texas (Molecular Health Inc.).

It did not add up. A job that was too good to be true had been gained and lost in 80 days. A middle-age stay-at-home-mom from small-town Minnesota was being paid $15,000.00 per month to work from home. That had been arranged by a regional vice president who became her immediate supervisor. Eighty days later she was “fired” by her “employer” for objecting to a business lunch at Hooters that had been proposed by a new national vice president who had had no say in her “hiring.” There had been no lunch at Hooters, and no reporting about that except by the newspaper in Houston. The so-called “million-dollar case” could have been filed in Minnesota, and on the face of it, the plaintiff had every reason to file there, yet the lawsuit was filed in the state courts of Texas.

This fueled suspicions that there was a back story. Indeed, there was a back story. It surfaced with a minimum of time and effort. It encouraged skepticism on the part of this writer as to the merits of the lawsuit and the motivations for its filing. There was no follow-up reporting by the online news sources. But this blog continued to monitor the “Hooters case” as it moved through the trial and appeals courts of Texas and on to the federal trial court in Houston.

The plaintiff waived her demand for a jury trial. The case was tried on her fifth amended petition, i.e., the sixth version of her complaints against her so-called employer. Only four witnesses testified: the plaintiff (Marcia Hocevar) and the regional vice president of sales (Bruce Mrachek), the director of human resources, and the national vice president of sales (Tom Strilko). The defendant presented no witnesses, relying on its exhibits and on evidence elicited on cross examination during the plaintiff’s case.

Last June the findings, conclusions, and judgment were handed down. The defendant won handily. Plaintiff was not an employee but an independent contractor. The relationship between plaintiff and defendant was initially for December of 2015 only and lasted only 80 days all told. The decisions not to renew the independent contractor relationship and not to hire plaintiff were not wrongful. No one was hired in her place. By December of 2016 the defendant had ceased its sales operations in the United States.

There was no lunch at Hooters, nor any invitation or proposal of a lunch at Hooters. The plaintiff and the national vice-president of sales had lunch at a non-descript restaurant in Minneapolis. They were the only witnesses to the event. The plaintiff immediately notified the regional v.p. that she had been sexually harassed and had concluded that full-time employment would not be offered to her. The regional v.p. immediately reported the complaints to the director of the human resources department. (Just that easily, plaintiff gained for herself the “halo” of retaliation.). For his part, the national vice president (Strilko) recommended that full-time employment be offered to plaintiff.

The decisions as to plaintiff were made by executives senior to Strilko, and they were made after the joint insubordination of plaintiff and her immediate superior, the regional V.P. of sales (Mrachek). The members of the sales team were directed to input sales data into an intra-company sales tracking program. Plaintiff refused. Mrachek notified Strilko that plaintiff would not comply until she received an offer of full-time employment, and that Mrachek supported her in that decision. Defendant’s relationships with Mracheck and with plaintiff were terminated for this insubordination.

This writer had long since concluded that plaintiff showed up for the lunch empty-handed, i.e., she had generated no leads, made no sales, etc. The findings of the trial judge confirmed that conclusion: Plaintiff completed no sales and produced no revenue (though she collected as much as $45,000.00 per her agreement during the 80 days). One new thing was learned from the findings and conclusions of the trial judge: The regional vice president (Mrachek) was biased because he had sought and lost the position that Strilko had gained, and his (Mrachek’s) testimony about his communication with the director of HR was not credible.

See, Hocevar v. Molecular Health Inc., No. 20 cv 664 on the docket of the U.S. District Court for the Southern District of Texas Houston Division

10-27-22
Copyright by David H. McCarthy III

DECISION NEARS IN LUNCH AT HOOTERS CASE

2021-12-12T09:20:00.000-08:00

____________________

A decision is at hand in the business-lunch-at-Hooters case, the cynical and misreported lawsuit for retaliation filed in Texas in 2017 by a hard-up and litigious “stay-at-home mom” from Minnesota who amazingly “scored” a sinecure that paid her $15,000.00 a month to work from home, only to lose it two months later because she would not show her work to her so-called employer. There was a trial late last October.

This case was the topic of a blog post in May of 2017 because of the titillating “news” coverage gained for it by a publicist and because it exemplifies the disquieting truth that explains the explosive growth in retaliation claims.

There was no lunch at Hooters

Salacious news coverage greeted the case at the time of its filing (c. February 2017). That was no accident. The fingerprints of a public relations professional are all over it. Numerous online “news” sources offered the same “lede” paragraph under the same headline: Woman executive fired for objecting to business lunch at Hooters. Only the Houston Chronicle, the defendant’s hometown “newspaper,” reported that there was no lunch at Hooters. Otherwise, they all told the same story the same way. It was as if they had all received the same press release and posted it verbatim. That excited suspicion, and a search for a backstory.

There is indeed a backstory on the Internet, and it cuts against the narrative. So do subsequent events, though information about them does not appear in follow-up “news” stories. This writer is unaware of any follow-up “news” stories. As fast as the story appeared, it disappeared. However, because the case was removed from Texas state court to federal court, the papers filed in it became accessible with a PACER account. There is a lot less to the case than “a business lunch at Hooters,” and also a lot more to it than that.

The plaintiff was an expert, not a victim

The individual who initiated the Hooters case is not a naif but a professional plaintiff, wise in the ways of litigation in general and of litigation about sexual harassment and retaliation in particular. She has been married for years to a career prosecutor who was elected County Attorney in 2014. She once initiated a nasty, drawn-out litigation over sexual harassment and retaliation that culminated in federal appellate decisions in 2000 that rejected her claims of sexual harassment but saved her claim for retaliation; and by inference, a settlement followed.

By 2013 she was out of sales work and listing her employment as campaign manager for her husband. Despite all his years on a public payroll, the couple lost a house to foreclosure in October of 2015. At that time and for some months prior thereto she had been after one Bruce Mrachek for a job. He was a regional vice-president of sales for Molecular Health Inc. (MHI), a German company that had its U.S. headquarters in Houston. Apparently he was instrumental in her landing a one-month consulting agreement that paid her $15,000.00 per month and permitted her to work from home and report directly to him (Mrachek). The new national vice-president of sales (Tom Strilko) found them both on his team when he came aboard in mid-December, though he had not picked either one of them.

The high-priced stranger
comes empty-handed to the one and only meeting with the new boss

Plaintiff and Strilko met only once. In mid-January of 2016 they had lunch at a mall in Minneapolis that did not have a Hooters outlet, and there was no proposal for lunch at Hooters. There were no witnesses to the event, only a national V.P. who had been on the job for two weeks and a 52-year-old stranger he found on his sales team, a mother of two school-age children who was working from home in small-town Minnesota, who was eating into his budget for salaries at the rate of $15,000.00 per month, and who showed for lunch empty-handed: At no time before, during, or after that lunch did the plaintiff produce a dollar of profit for MHI, or even a dollar of revenue, or close a sale, or even tee-up a sale for someone else to close. She lasted only 80 days at MHI and was paid some $45,000.00 or more. Did MHI get anything for its $45,000.00-plus other than recriminations and the burden, expense, and uncertainty of a litigation that is now deep into its fourth year? Not that we can see.

The Hooters case serves as a glaring example of the disturbing truth that explains the explosive growth of claims for workplace retaliation. Once upon a time claims of discrimination based on race and on sex far outnumbered claims of retaliation. That is no longer true. For years retaliation has been the absolute and undisputed number one form of workplace discrimination claim. “The FY 2020 data show that retaliation remained the most frequently cited claim in charges filed with the agency—accounting for a staggering 55.8 percent of all charges filed.” U.S. Equal Employment Opportunity Commission (EEOC), Press Release, 02-26-2021. “The FY 2019 data show that retaliation continued to be the most frequently filed charge filed with the agency, followed by disability, race and sex.” EEOC, Press Release 01-24-2020. (The number of retaliation charges submitted to EEOC was 37,632 in fiscal 2020 and 39,110 in 2019 (or 53.8 percent of all charges filed).

The plaintiff does not need to prove that she was sexually harassed,
only that she complained to management that she was sexually harassed

What changed? An unsettling truth about retaliation became common knowledge. The underlying “offense” need not be true or provable or rise to the level of actionable discrimination in order to profit from a claim of retaliation. The prima facie case for retaliation is a simple, one-two-three proposition: (1) the plaintiff exercised his civil rights; (2) the plaintiff was subjected to an adverse employment action; and (3) there is a causal connection between elements (1) and (2). The mischief lies in element (1).

This is what the Hooters case presented as and for element (1): After the lunch, plaintiff told her supervisor she doubted that she would be offered full-time employment, and that the national V.P. had “sexually harassed” her by repeatedly expressing his preference for Hooters over Applebee’s because the servers at Hooters were not old men but pretty girls, and by wondering whether she could effectively perform sales work from home while raising school-age children.

May this be understood. What went on at the lunch is irrelevant to the retaliation claim. The case for “status” discrimination (race, sex, disability) is negligible in this case as in many others. Even if the conduct complained of is true and provable and rises of the level of actionable gender-based discrimination, it is trivial. There is no indication that hospitalization or psychotherapy or medication was required. On the contrary, there are suggestions that plaintiff, a hardened veteran of retaliation litigation, went to lunch ready to pounce if full-time employment was not offered to her. She is in it for retaliation, not discrimination. There is no money in the discrimination case. Her case for retaliation does not require proof that she was actually a “victim” of sexual discrimination, only proof that she complained to a supervisor that she was a “victim” of sexual discrimination (then experienced an adverse employment action because she complained).

The disquieting truth about retaliation was full well known to the plaintiff in the Hooters case at the time when she went to lunch and for a long time prior thereto. Her prior lawsuit drove the lesson home if nothing else did. Federal courts at the trial and appellate levels rejected her case for “status” discrimination (sex) but her case for retaliation was rescued on appeal and, by inference, it fetched a nice settlement. There is one case on the books that awarded a huge judgment for retaliation to a plaintiff who openly admitted he had maliciously concocted the underlying story about sex discrimination. You can see and feel the judge holding his nose as he writes that the malicious falsehoods might support a claim for defamation but they have no effect on the claim for retaliation.

MHI managed the situation well. The director of HR investigated at once and attempted to interview plaintiff, who refused to be interviewed. The national V.P. recommended to a decision-maker overseas an offer of full-time employment to the plaintiff. The sales team was directed to input its data into a sales tracking program. Plaintiff refused. Her immediate supervisor, the regional V.P. of sales, backed her on her refusal and notified the national sales V.P. that the information would be withheld until plaintiff received an offer of full-time employment. So MHI fired them both for insubordination. (To be precise, plaintiff was not fired. Her independent contractor agreement was not renewed and she was not hired.)

Did she actually have any sales data of consequence to provide? This writer is skeptical about that. She had not worked in sales for years prior to her 80-day stint with MHI and would not work in sales for a long time thereafter. Whether she was paid $15,000.00 per month because someone was returning a favor, or because she had performed well for other organizations in the past, or because someone had sized her up as a can’t-miss prospect going forward, whatever the case may be, the only party who got anything worth having out of the relationship was the plaintiff.

A plaintiff who could have played a “home game” choses to play an “away game”

The lawsuit could have been filed in Minnesota (and at least one attorney who had handled the prior lawsuit was still practicing). Instead, the lawsuit was filed in Texas state court by a Texas lawyer. When the plaintiff amended her petition to add counts under a federal statute, Title VII of the Civil Rights Act of 1964, the defendant removed the case to federal court. Shortly before trial, plaintiff waived her right to a trial by jury. The case went to trial on her fifth amended petition, i.e., the sixth version over all of her complaints about the defendant. Only the defendant filed a motion for summary judgment, not the plaintiff, and it looks like the motion was “taken with the case.” Trial lasted three days. Four witnesses appeared for plaintiff, the plaintiff, her spouse, and the two vice presidents. Defendant presented no witnesses, relying on its exhibits and on cross examination of the witnesses in plaintiff’s case. After trial an order for mediation was formally requested by plaintiff and opposed by defendant. (The object of mediation is an outcome agreed-to be the parties, as distinct from an outcome imposed by a court or an arbitrator. It makes sense only when all parties desire a negotiated resolution and believe it can be achieved with the aid of an intermediary.) The prediction here is that judgment will be entered for the defendant, and that the plaintiff will be ordered to pay the court costs. (Court costs are not to be confused with attorney fees, but could amount to many thousands of dollars in this case all the same.)

This writer allows for the possibility that the case was filed in far-away Texas because the financially-straitened plaintiff concluded that the less her friends and neighbors in small-town Minnesota saw and heard about a second lawsuit for employment discrimination brought by the wife of the county prosecutor the better.

The summing up

My take on this case: A professional retaliation plaintiff who was up against it financially gained a sinecure she could not keep. She was 52 years of age, she had two school-age children, and had not worked in sales for years. Yet somehow she landed a sales consulting contract that paid her $15,000.00 per month and permitted her to work from home. No sooner did this plum assignment materialize than a threat to it appeared in the form of a new national sales V.P. He had not picked her for his team; he would want to know, of course, what the company was getting for its money, and the answer was: not much. She sensed an end to “fat city.” She was a tough, cagey veteran of hotly-contested employment litigation that had paid off for her in the past. So she dealt herself the retaliation card. Just as soon as she concluded that full-time employment would not be offered to her, she claimed to her supervisor that she had been sexually harassed at a business lunch by references to a Hooters restaurant. The allegation is all it took to acquire the “halo” of retaliation, and she knew it. She positioned herself to issue this ultimatum: Offer me full-time employment or buy a lawsuit for retaliation. What’s your pleasure?

See, Marci Hocevar v. Molecular Health Inc., No. 20 cv 664 on the docket of the U.S. District Court for the Southern District of Texas, initially filed under that name as trial cause no. 17-02-02044-cv in the 284th District Court for Montgomery County, Texas.

12-09-21
Copyright by David H. McCarthy III

FROM FAKE NEWS THAT A “BUSINESS LUNCH AT HOOTERS” SPAWNED A SEXUAL HARASSMENT CASE TO PROOF THAT RETALIATION IS NUMBER ONE

2017-05-11T09:21:00.000-07:00

Lurid headlines that a business lunch at Hooters spawned a “million-dollar” case for sexual harassment moved me to (i) find out whether a prediction about retaliatory discharge had proved true and (ii) investigate a lawsuit that seemed fishy.

Retaliation Has Passed Race

To Become the Most Common Kind of Workplace Discrimination Case

Complaints of retaliation now outnumber claims based on race or sex or any of the other forms of “status” discrimination in the workplace (e.g., age, disability, national origin). I predicted this in “The Employee Retaliation Plaintiff and Title VII: The 800-pound Gorilla Plays the Victim,” DCBA Brief, Vol. 21 p. 18 (November 2008).

While claims of race and sex discrimination today number only marginally more than they did 20 years ago, retaliation claims have doubled under Title VII and more than doubled under all statutes combined. The data bears this out. Consider this excerpt from the “charge statistics” of the U.S. Equal Opportunity Commission (“EEOC”) for FY 1997 through FY 2016 (For the full chart, go to https://www.eeoc.gov/eeoc/statistics/enforcement/charges.cfm).

Total charges	FY 1997 80,680	FY 2016 91,503
Race	29,199/ 36.2%	32,309/ 35.3%
Sex	24,728/ 30.7 %	26,934/ 29.4%
Retaliation – all statutes	18,198/ 22.6%	42,018/45.9%
Retaliation – Title VII	16,394/ 20.3%	33,082/ 36.2%

Easier to Prove and It Pays Better

Why has retaliation shot to the top? In short: It pays better and is easier to prove. It pays better because a retaliation case so often involves termination, with all the money remedies attendant thereto (back pay and front pay, pre-judgment interest, and damages even for nebulous injury like “inconvenience”). It is easier to prove. There is no need to deal with such daunting proofs problems as the he said, she said proof problems that arise in sex discrimination cases, or with identifying similarly-situated “comparators” who were treated more favorably.

The prima facie case has only three elements: (i) plaintiff exercised his/ her civil rights (e.g., complained about the conduct of a co-worker); (ii) plaintiff was thereafter subjected to an “adverse employment action” (e.g., termination); and (iii) a causal connection exists between elements (i) and (ii). A rebuttable presumption of causation arises when elements (i) and (ii) occur close in time.

The “Dirty Little Secret”

Element (i) is the key. People have caught on to its dirty little secret, a counterintuitive subtlety that is one remove from legalized fraud. The conduct complained of need not be true or provable or rise to the level of a viable case of discrimination in the workplace. The plaintiff need prove only that he or she made allegations about an “unlawful employment practice.”

In the Hooters case, the conduct complained of was confined to a few harmless remarks by a vice-president. During a telephone conversation, he said he wanted lunch at Hooters because he enjoyed being waited on by attractive females, and a day or two later he questioned whether having young children would impair plaintiff’s ability to do the job. A sex discrimination case based on those statements, even assuming they were made, is apt to be dismissed, but so what? That will do no harm to her retaliation case, which is far more valuable to her and will require only proof that she submitted an in-house complaint that was peppered with the buzz words of discrimination.

Although some cases pay lip service to the notion that the retaliation plaintiff must have a reasonable basis to conclude that an “unlawful employment practice” has, in fact, occurred, in reality the making of the complaint is all that counts. One federal case upheld a big-money judgment for a retaliation plaintiff who openly admitted that his underlying complaint of sex discrimination was false and malicious (The court said the remedy against him was a suit for defamation, not depriving him of his retaliation case.)

The in-house complaint is all it takes to prove element (i) in the Hooters case. Element (ii) is a “gimme.” By all accounts, the plaintiff was fired. She has a leg up on element (iii) as well: Because only one month separated the in-house complaint from the firing, the case for retaliation will probably enjoy the rebuttable presumption that elements (i) and (ii) are connected. More about this case below.

FAKE NEWS ALERT: THERE WAS NO LUNCH AT HOOTERS.

A RETALIATION CASE WAS DRESSED UP LIKE A GENDER DISCRIMINATION CASE BECAUSE SEX SELLS

Can You Believe This? Wife of a Courtroom Lawyer from Small-Town Minnesota Files a “Million-Dollar Case” for Sex Discrimination in Far-away Texas after Losing a House to Foreclosure and a Lavish Stay-at-Home Job that Lasted Just Two Months

Recently a case for sex discrimination and retaliation that is built around a business lunch at Hooters and seeks $1 million in back pay, plus damages, was filed in Texas by a 53-year-old mother of two school-age children in small-town Minnesota who is married to the county prosecutor and lost a home to foreclosure just weeks before she started a stay-at-home job that paid $100,000.00 per year, minimum, who lasted in the job only two months, and who has been unemployed ever since. Or so it has been alleged and reported.

The PR Blitz Played Up the Hooters Angle, but There Was No Meeting at Hooters

The Hooters angle was played up by one and all, by the complaint and by the headlines and lead paragraphs of the online accounts of the lawsuit. (The Hooters restaurant chain is known for its suggestive name and scantily-clad waitresses.) All the stories were nearly the same in what they said and the order in which they said it. This fueled suspicion that they were all working off a press kit put out by a publicist for the plaintiff’s attorney which emphasized the point about Hooters – a gross inaccuracy, as it turns out.

Marci Hocevar’s complaint against a Houston-based biomedical company, Molecular Health, alleges that she had worked “remotely” as an executive account director for six weeks when a new vice-president of sales called for a lunch meeting to evaluate her performance and to determine whether she would continue in her job. Although the V.P is alleged to have proposed a Hooters in the Mall of America in Minneapolis, and most stories state or suggest that the event took place there, the Houston Chronicle reported that the lunch took place at a “more traditional” restaurant after the plaintiff objected to Hooters.

One Hundred Grand, Minimum.

For a Stay-at-Home Gig that Lasted Eight Weeks?

The Chronicle offered another detail that others did not, an assertion by the attorney for plaintiff that she was “earning a six-figure salary.” (To me, that means at least $100,000.00 per year, no matter what. Not a complicated mix of salary, commission, and draw that might pay in six figures if goals and quotas are reached, but $100,000.00, rock bottom minimum. Really? For working from home, for six weeks, in small-town Minnesota? Wow. Hard to believe. The defense lawyer was quoted as saying that the case has no merit; but, then, he would say that, wouldn’t he?)

The stories went on to report, again apparently paraphrasing the complaint or a press release, that the vice president made “sexually discriminatory” remarks, and specifically, that he questioned whether having young children might interfere with plaintiff’s ability to do the job. After this meeting, the plaintiff complained to her immediate supervisor, who forwarded her complaint to the human resources department. A month later both of them were fired, the plaintiff and her immediate supervisor. That was in January-February of 2016. She has been unemployed ever since, or so it has been alleged. (There are indications online that the plaintiff is employed in pharmaceutical sales).

Digging for the Back Story

This case seemed fishy from the start. When it transpired that nothing had taken place at a Hooters outlet despite all the emphasis placed upon Hooters, I decided to look at this case more deeply, and I brought to my investigation a solid understanding that a trivial event or a stray remark can be parlayed by an employee with a little moxie and a little know-how into an incipient retaliation case: Cobble up a report. Sprinkle it with some jargon of workplace discrimination. Send it to the human resources department.

Plaintiff’s Background: Spouse of a Courtroom Lawyer; Lost a House to Foreclosure

The plaintiff lives with her husband and their two school-age children in a small town in southeast Minnesota. The husband has spent his career in the office of the local prosecutor, and has been the incumbent county attorney since January of 2015.

Despite the good and steady pay and perks which all those years on a government payroll imply, the couple experienced financial straits so lasting and severe that a protracted foreclosure case culminated in the loss of their house in October of 2015.

That was only weeks before the plaintiff started her job with the defendant, a sales job that entailed working “remotely.” (To me, “remotely” means working from home.) She had held that job only six weeks when the performance evaluation meeting was set up. Its stated aim was to determine whether she would stay in the job.

The evaluation was performed by her ultimate boss, a vice president of sales who was himself so new to the company that, apparently, he had had no say in the hiring of this unknown newcomer he found on his team who was working “remotely” out in Minnesota and eating up at least $100,000.00 of his budget for salaries.

That vice president is still with the defendant. The immediate superior of the plaintiff who allegedly was fired at the same time she was has found substitute employment. There is a conflict between “news” reports that the plaintiff has been unemployed since getting fired and other online indicators wherein she holds herself out to be employed in the sale of pharmaceuticals.

What was her employment in the weeks and months before she went to work for the defendant? I could not find any information about that, and I allow for the possibility that this signifies there was no prior employment to speak of. I also allow for the possibility that one can live and work in a tiny town in Minnesota and still command a starting salary of $100,000.00 a year (maybe more), but I suspect that that is an outlier and not the norm.

The temptation to construe this case as an example of rank opportunism or calculated upward failure is overwhelmingly seductive. I believe that this plaintiff knew or suspected that the performance evaluation would more closely resemble an exit interview, and the event itself dispelled any doubt of it. I believe that she was remarkably well-versed in the relevant employment law and not at all shy about prosecuting a lawsuit for $1 million, if only because she had lived so long with a courtroom lawyer. I allow for the possibility that the two of them practiced, drilled, and rehearsed before the lunch meeting or after it or both (After all, the suggestion that lunch take place at Hooters was a potential heads up in that it preceded the actual meeting by a day or two.) My bet is that this plaintiff stayed home with her children and collected unemployment payments for as long as the law allowed, and was content to do so. As for choosing venue in Texas when Minnesota was also proper venue, one wonders whether the less her neighbors in that small town know about her lawsuit, the better.

The “Ah Ha Moment”: She Has Sued Before

After the foregoing was written, I kept investigating because the case struck me as trumped up. The effort paid off. I learned that the plaintiff in the Hooters case has a background steeped in prosecuting claims that she is a victim of sexual harassment and retaliation. See Hocevar v. Purdue Frederick Company, 223 F.3d 721 (8th Cir. 2000). That case played out over seven years, from putative discrimination that began in 1994 or 1995 to a sex discrimination and retaliation case in the federal trial court in Minnesota that she lost badly, to an appeal to the federal appeals court in St, Louis that salvaged the retaliation case, to a remand to the trial court and an unexplained dismissal by agreement in 2001, which suggests a settlement. (In fairness, the conduct complained of in that case was amply proved and obnoxious; it lasted a long time and was inflicted by, among others, a male supervisor who had been promoted over her although her performance was measurably superior to his when they were peers,)

I will be watching for developments in this case. The defendant has one thing to work with, a 2013 decision of the U.S. Supreme Court which requires proof of but-for causation, i.e., that the plaintiff would not have been fired but for her complaint that she had been subjected to gender discrimination.

05-11-17

Copyright David H. McCarthy III (2017)

To Get Rid of the Electoral College Is to Let San Francisco Elect POTUS

2016-11-23T07:39:00.000-08:00

A Coup in the “College.” To some the three most depressing words in the English language are Hillary Rodham Clinton. Others are hoping against hope for a coup in the Electoral College that will make her President. One bitterly disappointed die hard, Senator Barbara Boxer (D-CA), introduced a bill to abolish the Electoral College.

If the popular vote determined the Presidency, candidates would stay in California, Texas, and New York; in Florida, Illinois, and Pennsylvania; and in Ohio, Georgia, North Carolina, and Michigan. Their combined population (174,000,000) far exceeds the population of the other 40 states put together, and accounts for more than half the population of the country: 321,418,820. President-elect Donald J. Trump recognized this, tweeting on November 15th that if the popular vote decided the Presidency, he would have spent more time in California, New York and Florida and, he added, he would have won by an even greater margin. (But for California, Trump would have won the popular vote, and won it big. More on that below.)

Please Meet the Electoral College. Our President is not elected by direct vote of the citizens, and never has been. The Electoral College was established in 1790 by Article II of the Constitution of the United States. Although the ballot identifies the candidates by name and political party, the vote is actually for a pre-determined slate of Electors who are pledged to support the candidate of their party.

Electors are appointed in each state in the manner provided for by the state legislature. The political parties establish their slates of Electors at a convention or at a meeting of a central committee. Electors tend to be deeply-committed party loyalists and they pledge to vote for their party’s presidential candidate. The number of Electors in any given state equals the size of its Congressional delegation. Illinois has 20 members in Congress (two senators and 18 representative) and 20 Electors. In all, there are 538 Electors, including three for the District of Columbia.

Because Mrs. Clinton won the popular vote in Illinois, the Electors pledged to her will meet in the Capitol in Springfield on December 19th for a vote that presumably will be unanimous. The results will be tallied, certified and sent to Washington D.C. to be counted by the Senate. (In case of a tie vote in the Electoral College, the President would be elected by the House of Representatives.)

It Takes a Coup. It would take a coup in the Electoral College to make Hillary Clinton President of the United States, and a coup is possible, though only in theory. That theory presupposes that each Elector is a “free agent,” which is true only in the loosest sense of that term. But to pull ii off, job one would be to hang on to the 232 electoral votes Mrs. Clinton won on Election Day. Then it would be necessary to induce 37 of the 306 electoral votes won by Mr. Trump to turn coat and vote for Mrs. Clinton.

The Coup Won’t Happen. Here’s Why. Laws in 29 states and the District of Columbia bind Electors to vote for the candidate who wins the popular vote in their state. An indispensable premise of those who cling to the fairy tale that Mrs. Clinton could pull out a win in the Electoral College is that Electors bound to Trump would vote for Clinton instead because the legal penalties for disobedience are trivial (e.g., small fines), and so they would risk little by defying the law and voting for Mrs. C.

However, a far greater force is at work upon all Electors than the risk of a fine or penalty for violating a statute, namely, peer pressure. Picture this: At the upcoming meeting of the slate of Illinois Electors for Mrs. Clinton, a so-called faithless elector casts a vote for Donald Trump. The life expectancy of that poor soul, from the time she got found out to the time she almost made it out the door, would be about six seconds. And in any case, the reaction of her fellows would likely evoke the old Hollywood threat: “You’ll never work in this town again.”

If ever a coup in the Electoral College were to happen, the year 2000 would have been the year for it: the year of Bush and Gore, when Mr. Gore asked the courts to settle the matter of who would be President and the courts obliged him. On that occasion, Mr. Bush lost the popular vote and had only a slim lead in electoral votes: 271 to 266. (If you’re counting, that comes to 537 electoral votes. What about number 538? A “faithless elector” from the District of Columbia abstained in protest of the lack of voting representation in Congress. The District has one representative in the House but she has no vote.)

Another obstacle to a coup in the Electoral College of 2016 is the sheer force of history. There have been only 157 “faithless electors” in the history of the Republic and only 17 in the last 119 years.

More About Abolition. As for efforts to abolish the Electoral College, the quixotic bill introduced by the soon-to-retire Senator Boxer is set up to do it the old fashioned way: by amending the Constitution. That requires (i) a vote of two-thirds of the House of Representatives; (ii) a vote of two-thirds of the Senate; and (iii) a vote of three-fourths of the States. (U.S. CONST. Art. V). Senator Boxer does not have the votes for her bill in the current Congress, and she will be retiring from the Senate in a few weeks.

Other efforts are afoot as well, notably the National Popular Vote Interstate Compact (“NPVIC”). It proposes to do away with the Electoral College without amending the Constitution on the theory that the very article which created the Electoral College in the first place contains the seeds of its demise, to wit: “Each State shall appoint (Electors), in such Manner as the Legislature thereof may direct.” (U.S. CONST. Art. II) (parenthetical added). Proponents of this so-called compact locate in the quoted part of Article II a way to get rid of the Electoral College without undergoing the arduous process of amending the Constitution.

Only eight states have signed on for this compact so far, and it should come as no surprise that all eight are deep “blue” states with sizeable populations: California, New York, Illinois, New Jersey, Washington, Oregon, Pennsylvania, and Virginia. (True, Pennsylvania voted “red” in 2016, but it has historically voted “blue,” and it is too soon to tell whether 2016 is a one-off.)

San Francisco Picks Our Presidents Forevermore. What Could Go Wrong? The impetus to scrap the Electoral College for a straight popular vote comes from “blue” states with big populations – the biggest and bluest of which is California, of course (population: 39 million). The current year (2016) makes the point. Mr. Trump won the electoral vote by a landslide: 306 to 232. He also won the popular vote in 30 states. But Mrs. Clinton won the popular vote countrywide (63.6 million to 61.9 million), and she won it only because of California. More to the point, her margin of victory countrywide practically matched her margin of victory in and near San Francisco (1.7 million votes, give or take). (But for California, Trump would have won the popular vote countrywide by more than 1.6 million votes, and won in the Electoral College by 306 to 177).

Were we to switch to straight popular voting, then from that time till God knows when the President of the United States -- of all 321.5 million of us in all 50 of the “united” states -- would be selected by a relative handful in and near San Francisco. If you think that’s a good thing, you’ll want to work for the abolition of the Electoral College. Better hurry, though. There has been talk out of California since Election Day of its seceding from the Union.

11-23-16

The FBI Spoke Because the AG Punted

2016-11-04T17:15:00.003-07:00

It’s all about Attorney General Loretta E. Lynch and her do-nothing response to news of her secret meeting with Bill Clinton on the tarmac in Phoenix last June.

FBI Comments a Second Time. On October 28th, FBI Director James Comey sent a letter notifying Congress that investigation had resumed into Hillary Clinton’s use of a private email server while she was Secretary of State because new information on that subject had surfaced in a different investigation of another subject (the alleged “sexting” to a minor by one Anthony David Weiner, a/k/a Carlos Danger, former Congressman from New York and estranged spouse of Huma Abedin, long-time aide to Mrs. Clinton). In a twinkling the letter was leaked to the media, became known around the world, and excited a furor.

The Evil of Telling the Voters the Truth before Election Day. It has been said that Napoleon was not disturbed that Moscow was burning but was disturbed that the development had caught him by surprise. What disturbed the Clinton campaign, apparently, was not that the investigation continues but that all Americans were informed of it in time to do something about it on election day, e.g., not vote for Hillary Clinton when they otherwise might.

The candidate herself complained on the grounds that the letter had been sent only to Republicans. That was false and untrue, and readily refuted by the face of the letter itself: It was sent to Democrats as well as Republicans. Eventually the campaign acknowledged the error.

(See the letter at www.nytime.com/interactive/2016/10/28/us/politics/fbi-letter.html)

Most of the complaints characterized the conduct of Mr. Comey as a mistake or “inappropriate” or illegal, largely on the theory that (a) it might influence the election and (b) Mr. Comey intended for it to influence the election. These critics, who had been effusive in their praise of Mr. Comey in July, included U.S. Rep. Nancy Pelosi (D-CA), Speaker of the House of Representatives during the first two years of the Obama administration; U.S. Rep. Elijah Cummings (D-MD), ranking member of oversight committee and the special Benghazi committee; and U.S. Senator Harry Reid (D-NV) who, of course, needs no further introduction.

The Secret Meeting Comes to Light by Chance. It is this observer’s conclusion that the Comey letter and the ensuing uproar was made possible, and probably inevitable, by Ms. Lynch’s clandestine meeting with Mr. Clinton on her private airplane in Phoenix; by the serendipitous discovery and reporting of it; and above all, by Ms. Lynch’s “quietist” response to the dreadful publicity.

The meeting may well have passed without notice had not a local television anchorman (Chris Sign of ABC15) been tipped off about it the next day and questioned Ms. Lynch while she was still in town.

This is the story: On Monday evening, June 27th, Mr. Clinton was due to depart from Sky Harbor International Airport in Phoenix after completing some fund-raising activity and Ms. Lynch was due to arrive for business related to “community policing” (which to some is code for management of municipal police forces by the Department of Justice (“DOJ”)). Mr. Clinton learned of Ms. Lynch’s imminent arrival, delayed his own departure, and boarded her private plane for a lengthy meeting attended only by Ms. Lynch, who owes her 1999 appointment as U.S. Attorney for the Eastern District of New York to Mr. Clinton; by Mr. Clinton, spouse of the subject of a criminal investigation by the FBI, which answers to DOJ; and by the husband of Ms. Lynch. (I have been unable to confirm one report that the meeting took place on a third plane that neither Ms. Lynch nor Mr. Clinton were travelling on. Nor have I been able to ascertain why the husband of Ms. Lynch was traveling with her on a business trip at the start of a work week.) Although the length of the meeting has been variously reported at between 25 and 40 minutes, Ms. Lynch characterized it as “primarily social” and said the only subjects discussed were grandchildren and Mr. Clinton’s golf game. She denied that there was any conversation about the FBI investigation of Mrs. Clinton’s email practices.

AG Does Nothing More than Say She’ll Punt to the FBI. Ms. Lynch acknowledged that the situation looked bad. She said that to mitigate the appearance of impropriety she would distance herself from the investigation by accepting the recommendation of the FBI. She might have opted for an independent counsel or special prosecutor, with the total loss of control which that entails. But no. Nor did she recuse herself. And I have just learned that her decision to accept the recommendation of the FBI had been made some months before her secret meeting with Mr. Clinton in Phoenix – or so she said after she got found out. In other words, her effort to remove the taint on the secret meeting consisted of nothing more than telling a television newsman that she had long since decided that she would accept whatever the FBI recommended. (The abdication of her duties to exercise independent professional judgment and prosecutorial discretion is beyond the scope of this piece.)

The FBI Interviews Mrs. Clinton. A few days later, on Saturday, July 2d, Mrs. Clinton met for an interview with representative of the FBI and the DOJ. She was accompanied by five lawyers: David Kendall and two others from Williams & Connolly; Heather Samuelson, one of two aides charged with the task of separating Mrs. Clinton’s business emails from her personal emails; and Cheryl Mills, the other aide charged with separating the business and personal emails, chief of staff to HRC when she was at State, and chairman of the Clinton Foundation). No oath was administered. No tape recording was made. No stenographer attended. And the meeting was “voluntary,” in that the witness appeared without a subpoena (no grand jury was sitting, and so no authority to go to for a subpoena.)

A Nice Job for Ms. Lynch? Two days later, June 4th, according to “sources close to the campaign,” if Mrs. Clinton won, she might ask Ms. Lynch to stay on as Attorney General.

FBI Comments a First Time. On July 5th FBI Director Comey told the world the FBI had recommended that no charges be brought against Mrs. Clinton, and that no reasonable prosecutor would prosecute her even though (a) she had been “extremely careless” in the handling of classified information, (b) 18 U.S.C. 793(f) criminalizes “gross negligence” in the handling of such information, (c) it is practically impossible to see a dime’s worth of difference between “extremely careless” and “gross negligence,” and (d) Mr. Comey went on to indicate that there would be a different recommendation if the subject were not named Hillary Clinton and nominee of the largest political party in the land for the office of President of the United States. (Even as Mr. Comey was speaking, President Obama and Mrs. Clinton were on their way in Air Force One to a rally for her in North Carolina. Some see that as evidence that the outcome was already known to the President, not to say “fixed,” because it is difficult to imagine that the President would be leaving town with HRC to campaign for her while his FBI Director was back in Washington announcing that she was about to be charged with felonies.)

To Cover for the AG, Speak Fully and Honestly, and Be Loved by All: Good Luck with That. My only point here and now is that the public comments of Mr. Comey on two recent occasions about the FBI investigation into what others call the Clinton “email scandal” were made possible and predictable and even inevitable by the acts and omissions of Attorney General Loretta E. Lynch in Phoenix: She met in secret with Mr. Clinton. She got found out. She said the conversation was nothing but small talk, though it lasted up to 40 minutes. Her effort to mitigate the appearance of impropriety – to take the stink off it, if you please -- was confined to telling the press that she had long since decided to accept the recommendation of the FBI. Nothing more, nothing less, and nothing else.

As a rule the FBI does not comment on investigations. This case is different, and made so by an Attorney General who had thoroughly compromised herself and then did nothing to right the wrong. She did not opt for an independent counsel or recuse herself. She did not even decide to accept the recommendation of the FBI – an abdication of the fundamental duties of her office. All she did was state publicly that her decision to punt to the FBI had been made months before her clandestine meeting on the tarmac.

Director Comey spoke on July 5th, where he otherwise almost certainly would not have spoken at all, in order to cover for the Attorney General. (Team Clinton welcomed this development, describing it in terms of Mrs. Clinton’s being “cleared” and “exonerated” and found “innocent.” But that, too, is a subject for another day).

The intended beneficiary of the public statements on July 5th by the Director of the FBI was not Hillary Clinton, although she surely did benefit from those statements, but the tainted Attorney General of the United States, Loretta E. Lynch, who publicly dumped her responsibilities on the FBI in general and on its director in particular. However, once Mr. Comey undertook and assumed to speak at all, he had to speak carefully, completely, and honestly. So when new information of consequence came to his attention, as was the case in late October, he was obliged to set the record straight (never mind that he had also indicated to the Congress, on oath, that he would do so).

11-04-16

2016-11-04T15:13:00.002-07:00

2016-02-18T19:45:00.002-08:00

A Clash of Personalities in the Workplace

Is Not a “Hostile Environment” Case

Hostile environment harassment is the most often misunderstood concept of employment law, from what we can tell.

It is widely (and wrongly) supposed that any disagreeable or unpleasant person, circumstance, situation, or event at work constitutes hostile environment harassment and equips the complaining party with rights to sue the employer and co-workers. The latest example that has been brought to our attention involves an anonymous note left at the work station of an employee. "I'm sick to death of all your talk about (presidential candidate) Donald Trump," the note said in word or in substance. "If you do it any more, I'll go to H.R. and have you fired." The “missing link” in that case, as in so many others, is illegality.

Hostile environment harassment, which appears to have originated with a University of Michigan law professor (Catharine MacKinnon), gained acceptance to the mainstream when the U.S. Supreme Court recognized it in Meritor Savings Bank v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986). A bank fired a branch manager for absenteeism. She responded by filing a lawsuit under Title VII of the Civil Rights Act of 1964. It alleged that she had been the victim of sexual discrimination in the form of demands for sexual favors by her supervisor. The trial court found for the bank on the grounds that the plaintiff had been promoted time and again strictly on her own merit and had suffered no economic harm on account of the sexual activity if, indeed, it had occurred at all.

The Court of Appeals reversed on the grounds that the trial judge had an unduly narrow view of sexual harassment. The Supreme Court affirmed the Court of Appeals on the point about hostile environment on this basis: Title VII prohibits discrimination “against any individual with respect to his compensation, terms, conditions or privileges of employment, because of such individual’s race, color, religion, sex or national origin.” 42 U.S.C. sec. 2000e-2(a) (1). Unwelcome sexual advances that create an offensive or hostile working environment violate Title VII without regard to whether anything is gained or lost economically. To be actionable, however, the sexual harassment must be sufficiently severe or pervasive to alter the conditions of employment and create an abusive environment.

The conduct complained of in the Meritor Savings case went beyond the merely annoying, unwelcome, or offensive. It constituted a violation of Title VII, at least in theory, and a violation in fact if the plaintiff could prove what she pleaded. Likewise, conduct that violates laws against workplace discrimination on account of age, disability, and so on could, and often does, create a “hostile environment.” But true cases of actionable “hostile environment” are rare compared to all the cases that are labelled “hostile environment” but which would be more accurately described as personality clashes. The aforementioned case of the outspoken fan of candidate Trump and the anonymous author of the snotty note is a recent example of the latter. (For more on this subject, see the blog post of 04-26-14, titled Hostile Environment.)

02-17-16

Sue the State: It's Where the Money Is

2015-06-09T18:09:00.000-07:00

"Illinois is not broke. Illinois is flush."

-letter to the editor, Chicago Sun Times, June 4, 2015

A local municipality with a job opening for an individual who spoke fluent Spanish refused to hire an applicant who spoke fluent Spanish because she was not Hispanic.

That certainly sounds like workplace discrimination that would be actionable under Title VII of the Civil Rights Act of 1964, 42 U.S.C. sec. 2000e et seq. (“Title VII”), and perhaps under that part of the Civil Rights Act of 1871 that is known as the “Ku Klux Klan Act,” 42 U.S.C. sec. 1983 (“Section 1983”).

It is an unlawful employment practice under Title VII for an “employer” to fail or refuse to hire an individual “because of” his/her national origin. (42 U.S.C. sec. 2000e-2(a)). And a municipal corporation is a proper defendant in a Title VII case because “employer” is defined in terms of “person,” and the definition of “person” includes governments, government agencies, and political subdivisions. (42 U.S.C. secs. 2000e(a) and 2000e(b)).

A Title VII plaintiff must contend with two disadvantages, though they are more like molehills than like mountains. First, the general statute of limitations is short, i.e., 180 days from the unlawful employment practice, and 300 days in those states that have a counterpart to the federal Equal Employment Opportunity Commission (“EEOC”). Illinois has such a counterpart, the Illinois Human Rights Commission). There are some exceptions to the 180-day/ 300-day rule, but they are not relevant to the situation under examination here. Additionally, a Title VII plaintiff cannot go straight to the courthouse with the case but must first file charges with the EEOC or with a state counterpart (e.g., the Illinois Human Rights Commission) and obtain a right-to-sue letter. But as a rule all you have to do to get a right-to-sue letter is ask for it.

The case under examination here might also be actionable under section 1983, which imposes liability on those who, acting color of state law, deprive another of rights “secured” by the Constitution and laws of the United States. The case at hand entails an actual or arguable deprivation of the rights of a job applicant under a federal statute (Title VII) by one or more representatives of a local governmental unit, although there is a large body of case law to the effect that Title VII preempts section 1983 unless the conduct complained of rises to the level of a Constitutional violation. The typical “section 1983” plaintiff is someone who has had a disagreeable experience in the criminal justice system. But the statute applies in other contexts, too, including employment. (A section 1983 case is pending at this writing against the trustees of the University of Illinois on the grounds that their refusal to rubber stamp a conditional offer of employment extended by a college administrator violated the civil rights of an opinionated teacher from another university whose postings on social media have been characterized by some as anti-Semitic.)

A section 1983 case has obstacles all its own, and they can be daunting. Take the situation under examination here. The only viable defendant in the case could very well be a low-level clerk who communicated the rejection and added the point about the job being available only to a person of Hispanic background. There is no vicarious liability under section 1983 and the case law construing it. In concrete terms, the city would not be liable for the conduct of the low-level employee merely because of the employer-employee relationship between them. The city would be a viable defendant only if the violation of Title VII were the result of a policy, practice, or custom which top-level policymakers established or tolerated with indifference. Another obstacle of consequence to a 1983 case is the widespread availability of various immunity defenses.

But the statute of limitations in a section 1983 case is longer than the statute of limitations in a Title VII case. It matches the statute of limitations for a personal injury case, which is two years in Illinois. A section 1983 plaintiff can take the case straight to the courthouse without first routing it through an administrative agency. And there are some limitations on damages recoverable under Title VII that are inapplicable to a section 1983 case (e.g., 42 U.S.C. sec. 1981a).

The television and the newspapers are awash every day with stories about cities and states being on the brink of financial ruin for one reason or another (crushing pension obligations, crumbling roads and bridges, crippling rates of interest, and all the rest of it). But have you also noticed that they always have plenty of money (hundreds of thousands of dollars and even millions) to resolve civil rights lawsuits brought against them, especially under federal statutes of the kind examined above, which have one-way fee-shifting statutes that favor the plaintiffs. It calls to mind the now-famous exchange with bank robber Willie Sutton. Question: Willie, why do you rob banks? Answer: Because that’s where the money is.

If your rights have been violated, or you think they have, by the city or the state, don’t wait, get after them now. That’s where the money is, and it’s not theirs, so they don’t mind spending it.

Fiduciary Duties and the Presumption of Fraud

2015-06-08T15:33:00.000-07:00

A stranger called recently in the mistaken belief that this office had prepared a power of attorney for property that named her estranged brother as the attorney-in-fact for her ill and aged mother. Evidently her brother had used a power of attorney to transfer large sums (hundreds of thousands of dollars) from accounts owned by his mother to accounts owned by him, although the wants and needs of the mother did not warrant these transactions.

He had not answered a letter from a lawyer demanding an accounting. The question was whether litigation against the brother would be worthwhile. And it was practically impossible to tell without actually engaging in some litigation. But the obstacles were manageable. One, although the brother had left Illinois, the “long-arm statute” would permit Illinois courts to exercise jurisdiction over him at least as to the transactions that took place while he lived in Illinois. Two, the amount at stake was certainly sufficient to justify some pursuit of him in the courts if he did not provide a satisfactory explanation, for the risk that he was judgment proof was all but nil: He was frugal and had no one to care for but himself. Above all, the transactions were presumptively fraudulent, and the onus would be on him to show otherwise.

Fraud is not, as a rule, presumed. But there is an exception when a fiduciary profits from a transaction with the beneficiary of his/her trust. In this case the son was a fiduciary of the mother, not because of the mother-son relationship, but because of the power of attorney. As such, he owed her the utmost honesty, loyalty, and due care; and he was answerable to her for the slightest breach of those duties. It is well-settled that when a fiduciary benefits from a transaction with the beneficiary of the trust relationship, the law will presume that the transaction was fraudulent. The presumption is rebuttable, but the fiduciary must show -- by evidence that is clear and convincing -- that the transaction was wholly fair and equitable to the beneficiary and in no way the product of undue influence or overreaching.

The courts look for the following “significant” factors: first, a showing that -- before the transaction -- the fiduciary made a full and frank disclosure of all relevant information; second, that the fiduciary furnished adequate consideration for the transaction; and, third, that the principal had the benefit of competent and independent advice. By those standards it would be practically impossible for the fiduciary in this case to rebut the presumption. (And let this be noted: Rebutting the presumption of fraud does not ipso facto establish that the transaction was free of fraud. The presumption is a legally acceptable substitute for evidence, and so if there is evidence of fraud, it might be sufficient to support a conclusion that the transactions were fraudulent even if the presumption of fraud were overcome.)

See Franciscan Sisters Health Care Corp. v. Dean, 95 Ill.2d 452, 69 Ill. Dec. 960, 448 N.E.2d 872 (1983); Rizzo v. Rizzo, 3 Ill.2d 291, 120 N.E.2d 546 (1954); In re Estate of Miller, 334 Ill.App.3d 692, 268 Ill.

Absenteeism and Tardiness Will Still Get You Fired

2015-03-17T15:16:00.000-07:00

Absenteeism and tardiness are a common reason why employees get fired, or so our recent observations suggest.

A.W.O.L. After an On-the-job-injury, and Retaliatory Discharge. An employee was fired for being A.W.O.L. (absent without leave) while recovering from an on-the-job injury. He was receiving workers' compensation benefits that included an allowance for total temporary disability. But he was too new to the job to qualify for leave under the Family and Medical Leave Act ("FMLA"); he had used up all his other leave; and he was, by his own admission, absent without leave. Is a viable case for retaliatory discharge lurking in all that? No.

The cause of action for retaliatory discharge for filing a workers' compensation claim was established years ago by the Illinois Supreme Court (Kelsay v. Motorola Inc., 74 Ill.2d 172 (1979)), and now it appears in the text of the workers' compensation statute itself. (820 ILCS 305/4(h)). In short, it is unlawful for an employer to discharge an employee "because" he/she asserted his/her rights under the workers' compensation statute.

But an employer is not obligated to retain an at-will employee who is medically unable to return to his assigned position, or to re-assign the employee to another position, and an employee may be fired for excessive absenteeism even if it is caused by a compensable injury. (Hartlein v. Illinois Power Company, 151 Ill.2d 142 (1992); Siekierka v. United Steel Deck Inc., 373 Ill.App.3d 214 (2007)). It is conceivable that an employer might cite attendance problems as a pretext to mask a firing that was actually motivated by animus against an employee who filed for workers' compensation benefits, but the point here is this: The work-at-will rule permits either party to the employment relationship to end to it at any time for any reason or for no reason. If you don't show up for work and you've run out leave time, the fact that you’re off nursing an on-the-job injury does not suspend the work-at-will rule and preclude the employer from firing you.

Potpourri: Hostile Environment, FMLA, and a Straddle. In another case of absenteeism, an employee hit upon a straddle strategy that was doomed by its inconsistencies. She had worked uneventfully for a year at an in-house cold-calling operation. Then she told some co-workers she had an anxiety disorder (though they did not need to know that to do their jobs). Some subsequent comments offended her because she concluded that they were about her and unfavorable. But she did not notify her employer of her condition or of the situation, much less request an accommodation. Two weeks later she took what she characterized as FMLA leave on the strength of a note from the human resources department. A month later she applied for unemployment compensation. An objection on the part of the employer was sustained.

This individual described herself as disabled within the meaning of the Americans with Disabilities Act ("ADA") and a victim of "hostile environment" harassment. It is easier to accept the first of those conclusions than the second, though even the first is no "gimme": A proper plaintiff in an ADA case must be a "qualified person with a disability," i.e., capable of performing the essential functions of the job with or without an accommodation. In the case at hand, a reasonable accommodation may have been as simple as warning the co-workers to knock off the teasing or else, yet there appears to be a fair question whether the would-be plaintiff could handle the basics of the job in the absence of that accommodation.

In any event, the law recognizes hostile environment discrimination in the context of the ADA. But as in any other hostile environment case, the abuse must be so severe and pervasive that it alters the terms, conditions, and privileges of employment. (Ekstrand v. School District of Somerset, 583 F.3d 972, 977-78 (7th Cir. 2009)). It is difficult to conclude that the conduct complained of in this case rose to that level. It was limited to two weeks of occasional oral remarks of peers, not of supervisors, and the would-be plaintiff did not notify management of her condition or of the remarks of the co-workers, still less request an accommodation. She knew there was an H.R. department and how to communicate with it, for she had obtained from H.R. a note pertinent to FMLA.

As for the "straddle," the story here blended details that were incompatible with one another and fatal to all theories floated: An employee who was supposedly on approved FMLA leave and had a note to prove it applied for unemployment benefits and made no reference to the note when the employer challenged the application. The story does not add up. According to Occam's razor, the simplest explanation for something is usually the correct explanation. This is more likely what happened: Once she had been on the job for a year, she requested and received from H.R. written confirmation that she was now eligible for FMLA. But no specific leave was requested. She stopped showing up for work. The days turned into weeks. She put in for unemployment benefits and was turned down because she had voluntarily terminated the employment relationship by failing to report for work -- in a word: resigned. (See "voluntary leaving" at 820 ILCS 405/601). It had not occurred to her that her application for unemployment benefits would meet with objection, still less with an objection that was sustained. In an attempt to salvage something from her decision to stop showing up for work, she floated the untenable hostile environment theory.

Pregnancy: The Ticket to Special Treatment? In the third case, a pregnant employee was fired for being absent without leave. She had come in late for work or not at all on several occasions, and on some of those occasions she had been in a doctor's office dealing with back and leg pain associated with her pregnancy. To complicate matters, her job required heavy lifting and her doctor had imposed a lifting restriction upon her.

This case is strikingly similar to one that was argued before the Supreme Court of the United States last December. (Peggy Young v. UPS, Docket No. 12-1226). Peggy Young was (and still is) a part-time driver for UPS. She worked fewer than 19 hours a week, when she worked at all, and she was absent -- with leave -- for 13 of the 18 months between July of 2005 and December of 2006. On three occasions Ms. Young requested a leave of absence to undergo in vitro fertilization procedures. On each of those occasions, her request for leave was approved by the occupational health manager (Carolyn Martin). She miscarried the first time and was on leave between July and October of 2005. The second procedure failed, too, and she was on leave in February and March of 2006. Her third period of leave started in July of 2006. She became pregnant and immediately requested an extension of her leave. That request for leave was also approved (and from all indications the group health insurance Ms. Young enjoyed because of her employment with UPS paid all or most of the expenses of the in vitro procedures, which cost between $10,000.00 and $15,000.00 apiece).

UPS permitted its pregnant employees to work as long they liked until they became physically unable to perform. And many employees worked late into their pregnancies. Not so with Ms. Young. In September of 2006 she announced that she was ready to return to work, but that was not really true. She approached a supervisor with a doctor's note that imposed a lifting restriction upon her. The supervisor funneled Ms. Young back to the occupational health manager, who informed her that she could not return to work with the lifting restriction because lifting was an essential part of the job, and her inability to lift was not due to an on-the-job injury.

Ms. Young's response was complicated: First, she denied that her job entailed heavy lifting even though (i) her job description called for lifting up to 70 pounds, (ii) she had requested "light duty," and (iii) she asserted that co-workers would do her heavy lifting for her. Next, Ms. Young prevailed upon a midwife who did not as a rule issue notes to issue a note imposing the same lifting restriction that had been imposed by the doctor a few weeks earlier, even though the file of the midwife contained a note -- shown to no one -- that said Ms. Young had been released without any restrictions. She took the midwife's note to her supervisor, who again funneled her back to the occupational health manager. Later still, Ms. Young approached a building manager about returning to work, and again she was funneled back to the occupational health manager.

Between the established company policy and the pertinent parts of the union contract, light duty was available only to employees with an ADA disability or an on-the-job injury. Ms. Young, and any number of employees who were not pregnant did not qualify for light duty. (Another sort of alternative employment, so-called “inside jobs,” was available only to drivers who had lost their driving privileges, and more to the point, it was not light duty.)

Even though Ms. Young had burned through all of her FMLA leave, UPS permitted her to stay on approved (but unpaid) leave through the end of 2006. She had the baby in the spring of 2007. Two months later she returned to work -- at UPS. And then she promptly filed suit against UPS for workplace discrimination, alleging in particular that by refusing to assign her to light duty, UPS had violated the ADA and the Pregnancy Discrimination Act (“PDA”), an extension of Title VII of the Civil Rights Act of 1964 which prohibits workplace discrimination on the basis of pregnancy.

The ADA claim contended that she was entitled to an accommodation in the form of light duty even though she was not disabled within the meaning of the ADA, nor disabled in her own estimation, nor regarded as disabled by her employer. Pregnancy has not hitherto been considered a disability as a rule. (The notion of pregnancy as pathology originated with the pro-abortion movement. See, for example, Doe v. Bolton, 410 U.S. 179 (1973), the health-of-the-mother companion case to Roe v. Wade.) The PDA claim of Ms. Young contended that the failure to offer her light duty also constituted workplace discrimination on the basis of pregnancy.

The federal trial judge granted a motion of UPS for summary judgment, which is to say that that case was a slam dunk for the employer in the trial court: Not one important fact was in dispute and there was no doubt at all that UPS was entitled to judgment. Then the case went to the appeals court in Richmond, Virginia, and it was subject to the de novo standard of review, that is, there was absolutely no presumption that the trial judge got it right. Three more judges, starting at scratch, looked at the same evidence that the trial judge looked at, and reached the same conclusion. Another slam dunk for UPS. Four different judges in two separate layers of the federal court system concurred that Peggy Young did not have a leg to stand on. (And there are hints in the court opinions of suspicion that Ms. Young was attempting to game the system (e.g., the conflicting notes of the midwife, the untenable denials that the job required heavy lifting, appearing to avoid the occupational health manager and approaching other supervisors and managers (as if on the hunt for contradictions and inconsistencies that could be leveraged into a lawsuit)). Meanwhile, Ms. Young was the darling d’jour of the pundit class, which was all but unanimous in its carping and complaining about UPS.

The prediction here is that the Supreme Court will dwell upon the PDA dimension of the case, and the question will be whether the PDA prohibits discrimination or actually elevates pregnant employees into a favored class who are entitled to demand and receive privileges, advantages, and special treatment precisely because they are pregnant. Meanwhile, pregnancy became a disability that employers of any size must accommodate as of January 1, 2015 under pain of liability for violating the Illinois Human Rights Act (775 ILCS 5/1-101 et seq.), owing to enactment of an amendment (House Bill 0008) last August. And you read that correctly: The duty to provide an accommodation applies to every employer in the state of Illinois no matter how small. The “ma and pa” store is no exception.

Non-Competition Covenants: It Does Not Matter Who Ends The Relationship

2015-03-12T18:20:00.000-07:00

A recently-fired employee was heard to say that the good news of his situation was that his covenant not to compete was unenforceable because he had not resigned but had been fired. He is mistaken about that. The enforceability of a covenant not to compete does not depend on whether the employment relationship is ended by the employer (i.e., a firing) or by the employee (i.e., a voluntary resignation).

All contracts require consideration to be enforceable. Covenants not to compete are no exception. Promises of employment can be lawful consideration, and a mere offer of employment might suffice for a covenant that is made at the start of an employment relationship (though there is now some doubt about that in Illinois law). But it takes more than a mere offer of continued employment to support a non-competition covenant that is made after the start of the employment relationship. In that case, employment must continue “for a substantial period of time.” As a practical matter, two years of continued employment is deemed the minimum to qualify as a “substantial period of time.” Otherwise there is a risk of illusory consideration: The work-at-will rule would permit an employer to fire an employee immediately after locking the employee into a covenant not to compete. The two-year rule applies whether the employment relationship is terminated by the employer or by the employee. The chap who declared his covenant unenforceable because the employer fired him is mistaken, unless, of course, there is something peculiar to his agreement that so provides (e.g., a clause to the effect that the covenant would be unenforceable if the employee were fired without cause).

Doubt about the adequacy of consideration can be removed by supplying consideration in a form other than employment itself, for example, money, an extra sum of money specifically earmarked as consideration for a covenant not to compete. The question whether a covenant not to compete is or is not supported by consideration is not the only question relevant to enforceability but only the first question. Or to put it another way, consideration is a necessary but not sufficient for enforceability. The absence of consideration is fatal but its presence is not sufficient of itself to render the covenant enforceable. It must also be reasonable in its terms and reasonably necessary to protect legitimate business interests of the employer lest it be a mere restraint on trade.

Ernie Banks and the Caregiver: Who Gets the Estate?

2015-02-28T06:02:00.000-08:00

If you're pulling for the family of Ernie Banks in their dispute with his long-time caretaker over his estate, know this: The widow will fare well no matter what, and the children have some tools to work with (though the best one is too new to be available to them).

The facts: Mr. Cub died on January 23, 2015 in Chicago at the age of 83. A wife and three children survived him. The wife secured appointment as the administrator of the estate (which implies that he died without a will). Then the caretaker filed a will made in October of 2014 that named her the executor and gave all the property to a trust that she controls. A will of that kind is fairly common and is known as a "pour-over will": The probate estate pours over into a trust. Details of the trust have not been reported, which is one of the virtues of having a trust - privacy: Trusts do not go through probate as wills do.

The wife will do all right in this contest no matter what. A spouse cannot be disinherited. At minimum, the wife can exercise her right to renounce the will and thereby receive one-third of the property (the share would be one-half if there were no descendants). (See 2-8 of the Probate Act of 1975 (755 ILCS 5/2-8)). (Of course, that right can be waived pursuant to a pre-nuptial agreement.)

The children have no right of renunciation. Their recourse is to contest the will on the basis of some defect in the making, signing, or witnessing of it. For instance, these facts invite a challenge on the "composite theories" of undue influence and incompetence: The will was made only three months before Ernie Banks died, and he had dementia, according to the death certificate. He put great trust and confidence in the caretaker, who has ended up with total control of the property (if not ownership of it). The will was prepared by a suburban attorney who apparently had no prior relationship with the ballplayer but only with the caretaker.

However, Ernie Banks had every right to give his property away as he pleased, and it is not illegal to be 83 years old. The law presumes that he was competent when he made that will, and the burden is upon challengers to the will to rebut that presumption.

Which gets to the aforementioned point about a "tool" that is too new to be available to the children of Ernie Banks. Today certain transfers of property to caregivers are presumptively void. Public Act 98-1093, which added Article 4a to the Probate Act, applies to wills, trusts, and the like made or changed after January 1, 2015. Any transfer of more than $20,000.00 of money or other property to a caregiver is presumed to be void if (i) it is challenged, (ii) provision for it appears in a "transfer instrument" intended to take effect after the death of the transferor (e.g., a will or a trust), and (iii) the caregiver is unrelated to the transferor.

The caregiver can attempt to rebut the presumption by (i) showing, by a preponderance of evidence, that the share is no greater than what the caregiver would have been entitled to under an instrument in effect before the caregiver became a caregiver; or (ii) showing, by clear and convincing evidence, that the transfer was not the product of fraud, duress, or undue influence. A caregiver who tries and fails to overcome the will be chargeable with the costs and attorney's fees of the proceeding.

This new law could be improved by expanding it to caregivers who are family members. Family members, after all, account for much of the mischief in this area. An opportunistic family member was the mastermind in a contested probate matter that was recently resolved to the satisfaction of some 30 clients of this office. First he submitted for himself a $17,000.00 claim against a probate estate for caregiver services to a sibling who lived in a nursing home with round-the-clock professional care. That claim, which was allowed in full before we entered the case, was a trifle compared to his other activity. He orchestrated an eleventh hour change to a trust that increased the share earmarked for his children from a mere nine percent of the value of the trust to 75 percent. We built a case for undue influence and incompetence that induced the opposition to propose a settlement conference with the judge. The ensuing settlement agreement restored nearly $900,000.00 to the side of the family that we represented, and reversed the split from 75/25 in favor of the opposition to 63/37 in favor of our clients.

Abuse of Intermittent Leave Under FMLA: Fact or Fiction?

2015-02-02T17:47:00.003-08:00

Introduction.　 What excited the question was an unsolicited email touting a webinar about "curbing intermittent FMLA leave abuse." Is the abuse real or imagined? It is nearly an epidemic, according to a national human resources organization, and largely a myth, according to the U.S. Department of Labor.

The Background. The Family and Medical Leave Act, which has been in effect since 1993, is one of the so-called federal "entitlement" programs. Eligible employees of businesses with at least 50 employees have an "entitlement" to 12 weeks of unpaid leave each year because of the birth or adoption of a child or the serious health condition of the employee or members of his/her immediate family. (29 U.S.C. 2601　et seq.). To become eligible an employee must work for the employer for a minimum of 12 months (though those need not be 12 consecutive months) and must work 1,250 hours in the 12 months immediately prior to the start of leave.

The statute mandates, among other things, that an employee may take leave intermittently to deal with a "serious health condition" of the employee or of his/her spouse, child, or parent. (29 U.S.C. 2612). Some who actually have to "implement" the FMLA report that intermittent leave is abused. In fact, nearly 40 percent of human resource professionals who work for businesses subject to FMLA believed they had approved requests for intermittent leave that were not legitimate, according to a survey report published in 2007 by the Society for Human Resource Management ("SHRM").

The Abuse. The abuse manifests itself in the form of hard-to-disprove conditions (e.g., asthma, arthritis, migraines, back problems) that have a knack of flaring up just before and after weekends, holidays, and regularly-scheduled days off, on sunny days in the summer, on the first day of deer-hunting season, and just as the pertinent employee is about to be disciplined for excessive tardiness or absenteeism.

(Among the problems: It is a constant "challenge" to line up adequate staffing in the face of unscheduled absences taken with little or no notice; as also to keep track of the leave time that is often take in dribs and drabs - an hour here, 15 minutes there; and then there are the morale problems of co-workers who are called upon to pick up the slack, sometimes at the last minute, sometimes on short notice, and sometimes having to re-arrange their own vacation plans to cover for the co-worker who has taken intermittent leave.)

The Myth. But be of good cheer. The notion that intermittent leave under FMLA is abused is largely a myth. The U.S. Department of Labor said so in a report prepared by a Massachusetts consultant and titled Family and Medical Leave in 2012. "Very few covered worksites report suspicion of FMLA misuse (2.5%)." (p. 156). "Confirmed misuse at covered worksites appears to be even rarer: only 1.6% of worksites report any misuse." (p. 156).

Did human nature undergo a dramatic change in the five years elapsed between 2007 and 2012? The report of the Department of Labor in 2012 appears to be in conflict not only with the 2007 report of the Society for Human Resource Management but also with another report of DOL itself, a 2007 report about the response to a request for information about FMLA (a so-called RFI) that the Department of Labor had issued in December of 2006 -- Family and Medical Leave Act Regulations: A Report on the Department of Labor's Request for Information; Proposed Rule. (72 Fed. Reg. 35550 (2007)). The 2007 report of DOL cited to and quoted from a response submitted by the Society for Human Resource Management, and the RFI was the inspiration for the survey report of SHRM in 2007.

Examples Abound. Twenty of the 88 pages of the 2007 report of DOL were devoted to the subject of unscheduled intermittent leave. "With respect to employer comments, no other FMLA issue even comes close." (72 Fed.Reg, 35553). "[I]ssues involving unscheduled intermittent leave remain at the forefront of the debate regarding FMLA and its regulations." (72 Fed.Reg. 35581). The 2007 report is awash in stories about the administrative nightmares presented by intermittent leave, the abuses, and the morale problems among the workers who are dislocated, put upon, and called in to take up the slack. Here are some examples.

Item:　"Many employees will request FMLA as soon as they are placed in the discipline system for attendance." (72 Fed.Reg. 35577).

Item:　"Intermittent leave has created a hiding place for Employees who have absence issues." (72 Fed.Reg. 35578).

Item:　"FMLA usage plummets on December 25, Christmas Day each year when triple overtime is paid. . . FMLA usage is near its peak the day before Christmas and jumps the day after, but somehow nearly all those employees who have been out on FMLA feel better on Christmas Day and are able to come to work." (72 Fed.Reg. 35578, quoting a submittal of Southwest Airlines).

Item:　"Here is an example of what occurs on a REGULAR basis. An employee requests a vacation at the last minute as she received an unexpected invitation for a week at the beach. The manager denies the request, citing the numerous others who were granted vacation for the week in question. The manager simply cannot afford to allow one more person to take that week off as it would incur overtime for others to cover for this one. This employee chooses to head to the beach anyway and calls the manager, citing only those magic words, 'FMLA.'" (72 Fed.Reg 35579). (The term "regular" appears in all capital letters in the original.)

And yet, according to the 2012 report of DOL, the problem is trivial,　de minimis, virtually non-existent.

The Bureaucracy. Has human nature changed between 2007, when DOL and SHRM issued their reports, and 2012 when DOL issued another report about the Family and Medical Leave Act? There is a simpler explanation for the apparent inconsistency -- a bias against employers on the part of the Department of Labor. 　The first and second laws of bureaucracy are self-preservation and empire building. The existence of FMLA gives the Department of Labor just that much more to do.　

Then there is this term in the 2007 report -- the "regulated community." (72 Fed. Reg. 35565 and 35609).　(Where do people learn to talk like that? Is there something about living or working near the Potomac River that disposes otherwise normal human beings to coin such terms?)　　 Other indicators of bias (if not outright hostility) appear in the 2007 report. For one thing, the term abuse is regularly set off in quotation marks - "abuse." Second, employee comments about the wonders and benefits of intermittent leave are presented without editorial comment, whereas employer comments about misuse and "abuse" are routinely dismissed as "perceptions" and matters of "perceived abuse."

Like it or not, intermittent leave under FMLA is here to stay, and the misuse and abuse will never be eliminated for good. After all, the employee is "entitled" to it (i.e., "entitled" to take intermittent leave, not "entitled" to abuse intermittent leave).　

Employer Steps. There are some things the employer can do to diminish the risk. Here are some of the steps that can be taken. There are others as well.

One is to stay small.
Another is to insist upon having a complete and accurate certification of serious health condition is permitted by the statute. The relevant certification forms (WH380-E and WH380-F) are available on line, and the virtue of using those forms is that it would be difficult to build a case of interference-with-leave around use of a form developed by the Department of Labor. The trick is to insist that the information be complete and precise, and not settle for less.
The next step is to keep track of the leave time. This can be simplified by making the "leave year" the same as the calendar year. (The risk of "stacking" - ending one calendar year with 12 weeks of FMLA leave and starting the next year with 12 weeks of FMLA leave - figures to be a small one for many reasons, not least because it takes 1,250 hours of work in the 12 months immediately prior to leave time to qualify for leave in the first place, and someone who "maxes out" on his "FMLA "entitlement" in one year might come up short on his 1,250 hours for the next year.)
Yet another means of controlling misuse of intermittent leave is to require the employee to use up all paid leave before taking unpaid leave. The statute allows paid leave and unpaid leave to run concurrently. The practice of requiring that paid leave be exhausted before unpaid leave can be taken controls the risk of an employee's taking the 12 weeks of unpaid leave required by FMLA and then extending the leave time by tacking on paid leave.

CONCLUSION

This phenomenon recalls the old saying that one bad apple spoils the whole bunch. The number of employees who actually abuse intermittent leave -- say, use a bogus certificate to qualify for leave and use the leave time to party or moonlight -- is probably relatively small. But they have a negative effect that is out of proportion to their numbers because even cases of honest requests for intermittent leave cause headaches for the managers who have to administer the request and for the co-workers who have to fill in for the one who is absent.

Can I Make My Opponent Pay My Legal Fees?

2014-11-07T15:21:00.003-08:00

Another question that is asked all the time is: Can I make my opponent pay my legal fees?

In general, the answer is no. We follow the so-called American Rule in this country. Each party is responsible for his/her own costs and fees. There are exceptions when contracts or statutes that are pertinent to the controversy provide for shifting of costs and fees. Apartment leases, as an example, typically recite that if the landlord must pursue the tenant for the rent, the tenant will also be chargeable for the attendant costs and fees. Many of the statutes which govern discrimination in the workplace also make allowance for fee-shifting.

There are some who assume that because a fee-shifting agreement or statute is available, their own attorney will have no recourse against them but only against their opponent. It does not work that way, however, unless the attorney agrees to look solely to the opposition for compensation.

Prudent counsel will make it clear early on that the obligation to compensate the attorney is on the client, not on the client's opponent; that the attorney will look to the client for that compensation; and that the client may, in turn, invoke the fee-shifting to pursue reimbursement from the opposition.

Do I Need a Lawyer?

2014-11-06T16:56:00.000-08:00

One of the questions we are frequently asked is: Do I need a lawyer? An individual is free to represent himself or herself as to any legal matter, whether it is a business transaction, initiating a lawsuit, defending a lawsuit, or what have you.

Business organizations are not nearly as free on that score. As a rule they must, by law, be represented by attorneys. Some exceptions apply in certain small claims cases. Smalls claims court in Illinois is limited to cases that seek money only, and not more than $10,000.00.

Having said that, there are any number of situations in which it makes sense for an individual to be represented by an attorney even though the law does not require it. One sort of situation in which this would be true is the situation which entails an attorney representing the opponent, so that it makes sense to engage legal counsel in order to "level the playing field" and avoid a mis-match. An arrangement of that sort makes more and more sense as the stakes of the case increase.

We were recently informed about a case that arose out of a home remodeling project that went awry. The homeowners had spent lavishly on a purely elective improvement to their house but they saw no value in engaging an attorney to help them at the contract formation phase of the transaction. The problem surfaced when the project was nearly complete. The amount at stake, only a few thousand dollars, was far too small to justify a legal fee. But the contractor had an attorney. The attorney had submitted what was, in fact, a modification of the construction contract, five dense, single-space pages that called for further construction work on the part of the contractor. The homeowner airily misdescribed this document as a mutual release, as if to say that anyone with a license to practice law could tell in two minutes whether the document was sufficient for the task.

The upshot: There was not enough money involved to warrant paying an attorney but there was too much work in prospect on the part of the attorney to justify giving a "freebie" to a stranger who had tens of thousands of dollars available to improve the house but no budget at all for legal work.

Probate II: A Tool to Avoid Probate Becomes Even More User Friendly

2014-09-26T14:00:00.000-07:00

by David McCarthy

One of the many probate-avoidance devices available in Illinois has just been amended to make it easier for homeowners to transfer ownership of the home without going through probate.

The Illinois Residential Real Property Transfer on Death Instrument Act (755 ILCS 27/1 et seq.) permits residential real estate to be conveyed outside probate by the use of a document that blends the features of a deed and the features of a will and is known as a transfer-on-death-instrument ("TODI").

The amendment, which became effective on August 1, 2014, made a transfer simpler and easier in at least two ways. It eliminated an inference that the beneficiary must accept the transfer during the owner's life time in order for the transfer to take effect. It also altered the nature of the so-called notice of death affidavit. The recording of that document is now required in order for the beneficiary to confirm his or her title to the property where before it was required to perfect title. Failure to record the document is still risky and could be fatal. If it is not recorded within 30 days of the death of the owner, the personal representative of the estate of the owner may take possession of the property, assert control over it, and gain rights to reimbursement and to lien the property; and if the document is not recorded within two years of the death of the owner, the TODI will become void and ineffective.

The amendment also imparted some protection to the so-called BFP -- bona fide purchaser for value: Persons, groups, and organizations who acquire an ownership or mortgage interest in the property for value and without notice before the recording of a lis pendens for an action to set aside or challenge a TODI, take free of the contest.

The amendment also removed the authority of agents acting under a durable power of attorney from creating or revoking a TODI.

The TODI is a handy item in the probate-avoidance tool box, alongside living trusts, the use of joint tenancies, and the small-estate affidavit. Picture this: A married couple raised their family in a house they owned as tenants by the entireties. One of them dies. That would terminate the tenancy, and the house would become part of the probate estate of the survivor unless it is put in a trust or sold. The survivor wants to stay in the house and does not have a trust. And but for the house, the probate estate would be modest enough to qualify for treatment under the small estate affidavit provisions of the Probate Act. That is not a far-fetched hypothetical. And the TODI is an almost perfect solution to the problem.

"Contested Probate" and Its Cure

2014-09-26T13:53:00.001-07:00

Probate is the court procedure for administering the estate of a deceased person. (The term is also used in reference to administration of the estates of persons who are minors or disabled or both.)

It has a bad name in some quarters. That is owing, so near as we can tell, to the endless court proceeding in Bleak House by Charles Dickens, to a book from the 1960s, How to Avoid Probate by Norman Dacey, and to the public filing in California of an inventory of the property and assets of a celebrity (Natalie Wood? Bing Crosby?).

The reality of probate in Illinois is that it can be annoying and expensive, or largely painless, depending on the extent to which it is a "contested probate." The potential for contest exists at almost every step in the process.

There is room for contest even at step number one, determining who will serve as the representative. In theory, this risk is greater in an intestate estate (when there is no will) than in a testate estate (when there is a will), because a will will name an executor, and usually a number of back-ups, whereas, when there is no will, those entitled to serve as representative and those entitled to nominate a representative are not named but only described generically by the Probate Act of 1975. (755 ILCS 5/1-1 et seq.)

However, the presence of a will does not of itself eliminate the risk of contest over who will be in charge of administering an estate. Will contests are so common that the Probate Act devotes a whole section to the subject (Article VIII, titled "Will Contests"). A "will contest" can materialize over the question whether a will that has been admitted to probate is invalid for one reason or another (e.g., incompetence, undue influence, fraud), or when two or more wills surface and a competition ensues to determine which is the true "last will."

Potential for contest exists in the next step of the process, too, collecting the property of the estate and paying the claims. Any doubt of that is dispelled by the existence of sections of the Probate Act that spell out the ways and means of locating and identifying property and assets of the estate; resolving disputes over ownership of that property; submitting and responding to claims against the estate; and resolving disputes as to whether a claim should be allowed or disallowed in whole or in part. (See Probate Act of 1975 at Article XVI, titled "Recovery of Property and Discovery of Information," and at Article XVIII, titled "Claims Against Estates").

The representative of an estate must, by law, render an accounting from time to time of the receipts and disbursements. This duty to account exists without regard to whether there is or is not a will and without regard to whether there is an "independent administration" or a "supervised administration." There is room for contest as to the accuracy of the accounting and the legitimacy of the disbursements. Representatives and their attorneys are entitled to compensation (See Probate Act at Article XXVII). That, too, holds the potential for contest.

Oliver Wendell Holmes Jr. wrote that the life of the law is not logic but experience. The existence of legislation implies a problem. The Probate Act is peppered with provisions that anticipate contest and strive to remove the risk of it, reduce the risk of it, and resolve it in a sensible, orderly way.

Readers of a certain age may remember that scene in the movie Zorba the Greek, where the villagers ransack the house of Dame Hortense right after her death. Probate in Illinois is a bit more orderly, and steps can be taken to simplify and smooth the process.

Here is our "top three" list. One, avoid probate altogether (or at least limit the scope of it) by setting up an inter vivos trust (also known as a "living trust") and taking care to see that all pertinent property is placed in the trust (including especially property that is acquired after the trust has been established). Two, make a will in order to deal with the eventuality that some property will end up as "probate property" despite diligent efforts to put it in the trust. If probate is inevitable, and it often is, a will can make it a simpler, more agreeable experience. Three, make a "pour-over will," that is, a will which names the trust as the beneficiary of the "residuary clause" (the part of a will that disposes of all property not the subject of specific gifts).

We have helped others with "contested probate." We can help you. Call 630-219-3068.

Overtime Exemptions and Salary

2014-09-26T13:51:00.000-07:00

A salaried position is not ipso facto exempt from the time-and-a-half overtime pay rule imposed by section 207 of the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et. seq. at 207).

The list of exemptions from the overtime rule appears in section 213. At the top of the list are those employed "in a bona fide executive, administrative or professional capacity." (29 U.S.C. 213(a)(1)).

Although such positions often are salaried, the decisive considerations are whether the job entails hiring, firing, and supervising others (executive); or exercising judgment and discretion as to "matters of significance" (administrative); or advanced knowledge of science or learning gained through a prolonged course of specialized instruction (professional). (29 C.F.R. 541.100, 541.200, 541.300).

Fee Shifting: Charging the Adversary for One's Own Legal Fees

2014-09-26T13:49:00.000-07:00

by David McCarthy

The most frequently asked question of all is whether one's legal expenses (and attorney's fees in particular) can be charged to an opponent. In general, the answer is no, each party bears its own litigation fees and costs. This is called the American Rule.

There are exceptions when fee-shifting is called for by a relevant contract (e.g., an apartment lease) or a statute (e.g., the Illinois Wage Payment and Collection Act). (Typically, the client will pay its own attorney and then, if the client is also the "prevailing party," invoke the contract or the statute in support of an application for an order obligating the opponent for the fees.)

When preparing or vetting contracts for clients, we put a lot of energy and attention on fee-shifting clauses. And we get push back from the other side all the time. A lot of advantage and disadvantage rides on the existence and content of a fee-shifting clause in a contract.

As for statutes that permit or require fee shifting, they are as a rule available only to plaintiffs as applied even though many of them are neutral on their face (employing the term "prevailing party"). Make no mistake: They are game changers that alter the balance of power in favor of plaintiffs. We know it, and we have leveraged them to the great advantage of our clients.

The rough equivalent for defendants is a motion for sanctions for frivolous pleadings on the part of a plaintiff. They are rarer than cases with fee-shifting potential because the conduct necessary to support an award of sanctions must be beyond the pale. (We have made three motions for sanctions, defended one, and have not lost yet.)

Hostile Work Environment

2014-04-26T05:44:00.000-07:00

by David McCarthy

Another interesting misconception about hostile environment and retaliation came to our attention recently.

An individual we will name John Doe had been employed for a relatively short time, about six months, but long enough to know that he and the owner of the business did not get along. What brought it to a head was a disagreement over a "prioritizing" of tasks.

Mr. Doe was filling an order for a customer who was due to arrive later in the day. The owner asked him to put that work down and turn his attention to a different task -- a task that was perfectly legal. Mr. Doe did not do what the owner asked him to do. He opposed the owner and asserted that the task he was working on should receive priority.

The owner threatened to strike Mr. Doe if his opposition continued, and Mr. Doe was suspended from work. He then contemplated the filing of criminal charges, and supposed that doing so would position him to be a viable retaliation plaintiff if he got fired.

In our judgment, the State had a pretty good case against the owner on a misdemeanor charge, but that was not going to make Mr. Doe a viable retaliation plaintiff. Every antagonistic relationship between employees and superiors, and there are a lot of them, does not provide the ingredients for a "hostile environment" case.

To get to that place, the "hostility" has to relate to a form of discrimination that is prohibited in the workplace, e.g., lewd jokes, racist remarks, mocking older workers.

Something more than a mere clash of personalities is required, though a clash of personalities can certainly be distracting and stressful and unpleasant. Mr. Doe did not fall into any of the classes who are protected by workplace discrimination laws, and the friction between him and the owner, though plenty hostile, did not rise to the level of a "hostile environment" case.

And in our judgment, the filing of a complaint with the police did not qualify as a predicate act that would set Mr. Doe up to be a viable retaliation plaintiff were he to lose his job over the dispute with the owner because it did not constitute the opposing of an unlawful employment practice. (Ironically, if Mr. Doe were to lose his job and apply for unemployment benefits, an objection by the employer on the grounds of insubordination would have a fair chance of being sustained.)

Family Medical Leave Act and Job Security

2014-04-26T05:32:00.002-07:00

by David McCarthy

It is easy to suppose that an employee on leave under the Family and Medical Leave Act ("FMLA") enjoys a special "halo" of job security and protection that co-workers who are on the job do not. After all, businesses subject to FMLA must allow eligible workers up to 12 weeks of unpaid leave each year plus reinstatement to their old position. That invites an inference that an employee on leave has privileges and protections that an employee at work does not.

But it is not so. The work-at-will rule continues to apply to the employment relationship and does not yield to leave-taking.

Suppose the employee on leave had worked the night shift, and the employer puts an end to the night shift. Does that mean that only those who were actually working the night shift are out of a job while the one who was on leave is not?

Answer: no.

If the position would have been eliminated while the employee was on active duty, so to speak, the fact that the employee is on leave does not preclude elimination of the position or obligate the employer to hold the position open for the employee.

FMLA is codified at 29 U.S.C. 2601 et. seq. It generally applies to businesses with 50 employees or more. An eligible employee is one who has worked for the employer for at least 12 months (though that need not be 12 months in a row) and who has worked at least 1,250 hours in the 12 months immediately prior to the start of leave. That employee is entitled to reinstatement to his/her old position or to a position that is similar in terms of pay, benefits, etc.)

FAQs - Probate and Estate Administration

2014-01-11T10:16:00.001-08:00

What if you die after a divorce without changing your will?

Answer: A section of the Probate Act steps in and nullifies those parts of the will which make gifts to the former spouse. (755 ILCS 5/4-7(b)).

Illinois statutes also nullify powers of attorney and those terms of revocable trusts which pertain to a former spouse. (755 ILCS 45/2-6(b) and 760 ILCS 35/0.01 et seq.). However, that is not the case with respect to the beneficial interest in a policy of life insurance.

The law does not step in and revoke a designation of a former spouse as a beneficiary. The surest way to change the beneficiary is to complete and submit a formal change of beneficiary. A second-best way would be to include a waiver in the marital settlement agreement. The trick to that, of course, is to make sure the waiver is highly specific lest it will be deemed too vague to be enforceable. A third way is to take some positive step which manifests an intention to change the beneficiary, an uncertain proposition if that "positive step" is something short of formally changing the beneficiary.

What if a child is born after a will has been made, or even after the parent has died?

Answer: In general, that child will be entitled to the same share of the estate that the child would have received had the parent died intestate (that is, without a will). There are exceptions when a will exists and speaks to this point. An after-born child will be entitled to what the will calls for, or disinherited, depending on whether the will makes gifts to after-borns or disinherits them. The statutes will control when the will is silent on the point or there is no will. (755 ILCS 5/2-3 and 755 ILCS 5/4-10).

Information Technology: Cybercrime

2014-01-11T10:10:00.000-08:00

A loved one with an entrepreneurial spirit figures to soon be procuring product for his new venture from vendors in China. His situation is far from unique.

This has raised a host of issues relevant to cybercrime (and, for that matter, the subject of online contracting):

•How does one establish that the vendor is who he claims to be?
•Will the transactional documents will remain as drawn, and unaltered?
•Will the goods will be delivered?
A lot of good advice about such concerns, among others, is available at the website of the Internet Crime Complaint Center ("IC3"), a partnership between the Federal Bureau of Investigation and the National White Collar Crime Center that was established in 2000 "to address the ever-increasing incidence of online fraud." (2012 Internet Crime Report, Internet Crime Complaint Center p. 5).

Is cybercrime a big deal?

Here is the data from the most recent year available (2012):

Total complaints received: 289,874

Complaints reporting loss: 114,908

Total loss: $525,441,110.00

Median dollar loss for those reporting a loss: $600.00

Average dollar loss overall: $1,813.00

Average dollar loss for those reporting loss: $4,573.00

Where does Illinois fit in?

It ranks seventh in number of complaints by state (8,297 complaints) and fifth in losses ($14,316,107.72). (California, Florida, and Texas rank 1-2-3 in both those categories.)

Every once in a while, the FBI catches a bad guy. But the principal contribution of IC3 is that it imparts information and education to consumers. In terms of information, it regularly publishes online scam alerts that are available at the above identified web site address.

The Wage Act

2014-01-11T10:04:00.003-08:00

The sales representative had this dilemma: He had an offer of new employment that would soon expire. But to collect commissions on sales made in the current year he had to remain with his current employer until April 1st of the next year.

The question was whether he had any tools available, other than his own powers of persuasion, to obtain the commission immediately.

Answer: Probably.

The Illinois Wage Payment and Collection Act ("Wage Act" or "Act"), 820 ILCS 115/1 et seq., classifies earned commission as final compensation for purposes of paying "separated" employees. The commission in this case was, in fact, earned. The sales had been closed. The goods had been received and paid for.

Section 5 of the Act states that the employer "shall pay" the final compensation of a separated employee at the time of separation if possible but in no case later than the next pay day. And there is no except-for language in case the agreement of the parties calls for payment on some other basis. Moreover, an agreement in Illinois incorporates and includes the law of Illinois in effect at the time when the agreement was made unless the agreement clearly excludes such incorporation. The agreement under examination here did not contain that exclusion. Hence, there was a conflict between the agreement that required presence on the payroll until April 1st of the year to come and the Act, and the agreement had to yield to the Act.

That would seem to put the employee in a solid position to accept the new offer of employment and demand his commissions. So why is the answer to the question posed above just "probably"? Because the Act applies only to "Illinois employers." It was far from clear whether there was an "Illinois employer" in this case.

The company was organized under the laws of a state other than Illinois. It had its principal place of business in a state other than Illinois. Its presence in Illinois was largely confined to the presence of its sales representative, an Illinois resident who conducted business from a location in Illinois. Most of the decisional law that bears upon this question is something less than "controlling legal authority." For it comes from the federal trial courts in Chicago and it analyzes the "Illinois employer" question on a case-by-case basis.

We recently made an inroad of sorts on this point before the Illinois Appellate Court. It began with a six-figure money judgment against an out-of-state business executive who was found personally liable for the severance pay of a former employee on the grounds that he had knowingly permitted the true employer to violate the Act by withholding the pay. (Under section 13 of the Act company officers who knowingly permit an employer to violate the Wage Act are deemed to be the employer and are personally liable for the pay.)

There was no question that the true employer in the case was an "Illinois employer": It was a limited liability company organized under Illinois law and it had its only business office in Illinois. The executive contended that he could not be personally liable unless he, too, was as an "Illinois employer," and he could not be an "Illinois employer" because he lived and worked outside Illinois and had virtually no physical contact with Illinois.

The Illinois Appellate Court rejected that contention and affirmed the judgment on the grounds, among others, that his duties as an officer of an Illinois company were sufficient to confer personal jurisdiction over him under our "long-arm" statute and bring him to trial on the question whether he knowingly permitted the true employer to violate the Wage Act.

The upshot is: In order for the Wage Act to apply at all, the true employer (or the employer-in-fact) must be an "Illinois employer," but only the employer-in-fact need be an "Illinois employer."

David H. McCarthy

DECISION NEARS IN LUNCH AT HOOTERS CASE

The high-priced strangercomes empty-handed to the one and only meeting with the new boss

The plaintiff does not need to prove that she was sexually harassed,only that she complained to management that she was sexually harassed

FROM FAKE NEWS THAT A “BUSINESS LUNCH AT HOOTERS” SPAWNED A SEXUAL HARASSMENT CASE TO PROOF THAT RETALIATION IS NUMBER ONE

To Get Rid of the Electoral College Is to Let San Francisco Elect POTUS

The FBI Spoke Because the AG Punted

Sue the State: It's Where the Money Is

Fiduciary Duties and the Presumption of Fraud

Absenteeism and Tardiness Will Still Get You Fired

Non-Competition Covenants: It Does Not Matter Who Ends The Relationship

Ernie Banks and the Caregiver: Who Gets the Estate?

Abuse of Intermittent Leave Under FMLA: Fact or Fiction?

Can I Make My Opponent Pay My Legal Fees?

Do I Need a Lawyer?

Probate II: A Tool to Avoid Probate Becomes Even More User Friendly

"Contested Probate" and Its Cure

Overtime Exemptions and Salary

Fee Shifting: Charging the Adversary for One's Own Legal Fees

Hostile Work Environment

Family Medical Leave Act and Job Security

FAQs - Probate and Estate Administration

Information Technology: Cybercrime

The Wage Act

The high-priced stranger
comes empty-handed to the one and only meeting with the new boss

The plaintiff does not need to prove that she was sexually harassed,
only that she complained to management that she was sexually harassed