Lawffice Space - Employment Law Blog

PA Judge Orders Expert Review of Facebook Page - COTW #144

noreply@blogger.com (Philip Miles) — Fri, 24 May 2013 12:35:00 +0000

Pennsylvania has had a number of Facebook discovery cases in the past couple of years. However, a recent decision out of Lancaster County took a slightly different approach.

The discovery dispute arose over Facebook photos (and video) allegedly showing a personal injury plaintiff frolicking in the snow. Per the order:

1. Within seven (7) days of the date of this order, the parties are to agree upon a neutral forensic computer expert to conduct an examination of the relevant material on Plaintiffs' computer.

2. The expert is to be given Plaintiffs' user name and password information in order to access the private portion of Plaintiffs' Facebook social networking account and to download the contents of the Facebook account to the hard drive. The expert is to copy the hard drive and isolate the data for the period January 27, 2010, through February 13, 2010.

3. For the period January 27, 2010, through February 13, 2010, the expert is to identify all photographs of snow and references to snow in any emails and any photographs of Plaintiff, Grace Perrone, engaged in any physical activity.

4. Copies of the files identified in item 3 are to be provided to counsel.

5. This discovery is to be completed within sixty (60) days of the date of this order.

6. The cost of this process including the expert's fees, is to be borne by Defendants.

In short, the Pennsylvania judge ordered third-party expert review of the contents of the Facebook page. I like the balance of allowing the opposing party to probe for relevant information, while not giving them unfettered access to the Facebook profile.

I'm a little concerned, however, about the cost. Although I guess it serves as a deterrent to avoid Facebook fishing expeditions as the discovery-seeking party (at least in this case) bears that expense.

HT to fellow Pennsylvania attorney, Dan Cummins of Tort Talk fame - Novel Facebook Discovery Order Out of Lancaster County.

Lawffice Links - New EEOC Publications Galore!

noreply@blogger.com (Philip Miles) — Thu, 23 May 2013 12:34:00 +0000

Wow, I can hardly keep up with all of these new EEOC publications. Here are the links:

Cancer: Q&A on Cancer in the Workplace and the ADA
Diabetes: Q&A on Diabetes in the Workplace and the ADA
Epilepsy: Q&A on Epilepsy in the Workplace and the ADA
Inetellectual Disabilities: Q&A on Intellectual Disabilities in the Workplace and the ADA
GINA: What You Should Know: Q&A About Genetic Information Nondiscrimination Act (GINA) and Employment
The Mental Health Provider's Role in a Client's Request for a Reasonable Accommodation at Work

In case you didn't have any plans for the three-day Memorial Day weekend . . . .

SCOTUS Grants Cert. in Sarbanes-Oxley Retaliation Case

noreply@blogger.com (Philip Miles) — Tue, 21 May 2013 20:06:00 +0000

On Monday, the Supreme Court granted certiorari (order here) in Lawson v. FMR, LLC (SCOTUSblog case page here). Per the Petition for Certiorari, the Question Presented is:

Section 806 of the Sarbanes-Oxley Act, 18 U.S.C. § 1514A, forbids a publicly traded company, a mutual fund, or “any ... contractor [or] subcontractor ... of such company [to] ... discriminate against an employee in the terms and conditions of employment because of ” certain protected activity. (Emphasis added). The First Circuit held that under section 1514A such contractors and subcontractors, if privately-held, may retaliate against their own employees, and are prohibited only from retaliating against employees of the public companies with which they work.

The question presented is:

Is an employee of a privately-held contractor or subcontractor of a public company protected from retaliation by section 1514A?

The Sarbanes-Oxley Act generally protects "whistleblowers who disclose fraud or certain other unlawful activity to company management, to federal agencies, or to Congress." (from the Petition, citing 18 U.S.C. § 1514A).

Miles on Sexual Orientation Discrimination

noreply@blogger.com (Philip Miles) — Tue, 21 May 2013 09:20:00 +0000

My latest article is available for your consumption in the Reading Eagle Business Weekly. Check out: For employers, discrimination based on sexual orientation is a legal minefield. The takeaway: Federal and Pennsylvania employment discrimination laws don't expressly prohibit sexual orientation discrimination - but there are still plenty of legal risks in that area.

Caperton v. Massey . . . Still Going

noreply@blogger.com (Philip Miles) — Mon, 20 May 2013 12:10:00 +0000

Last week, I mentioned that I was reading The Price of Justice - the true story of Caperton v. Massey. I finished it this weekend, and was shocked by the ending.

The setup is that Hugh Caperton and his smaller coal company sued coal giant Don Blankenship and Massey Energy for allegedly driving the former out of business (by tortiously interfering with contracts and committing misrepresentation). Caperton won a $50 million jury verdict, but the West Virginia Supreme court threw it out.

However, Blankenship spent millions of dollars on campaign ads, while the case was pending before the WV Supreme Court, to get a Massey-friendly judge elected. From the later U.S. Supreme Court opinion:

Blankenship’s $3 million in contributions were more than the total amount spent by all other Benjamin supporters and three times the amount spent by Benjamin’s own committee. Caperton contends that Blankenship spent $1 million more than the total amount spent by the campaign committees of both candidates combined.

Amazingly, the judge (Benjamin) refused to recuse himself and was the deciding vote in the case. So, Caperton appealed to the U.S. Supreme Court arguing that his due process rights had been violated.

The Supreme Court held that due process required recusal. Happy ending for Caperton, right? Actually, the case went back to the West Virginia Supreme Court, which once again threw Caperton's case out (holding that the action had to be filed in Virginia, effectively killing it forever in West Virginia). So, Caperton filed suit in Virginia.

Now, for the truly shocking part. Caperton got his jury verdict in 2002. The Virginia Supreme Court held that Caperton could proceed with his lawsuit in Virginia . . . last month! I couldn't believe it when I reached the end of the book and the case still hadn't been resolved!

Sidenote: The book covers several other lawsuits vs. Massey, from contaminating drinking water to questionable safety practices killing miners.

Image: Book cover used in commentary on book.

Third Circuit Holds Obama Recess Appointment Unconstitutional - COTW #143

noreply@blogger.com (Philip Miles) — Fri, 17 May 2013 12:17:00 +0000

In Noel Canning v. NLRB the D.C. Circuit held that President Obama's "recess" appointments to the NLRB were unconstitutional. For a rundown of the implications of this holding, see here. I warned you that the Third Circuit was also looking at this issue also. Well guess what?

Yesterday, the Third Circuit dropped the hammer. In New Vista Nursing v. NLRB, the Third Circuit became the second federal appellate court to hold that the Constitution's recess appointments clause allows only intersession (not intrasession) recess appointments. Therefore, President Obama's NLRB "recess" appointments were unconstitutional - and the NLRB doesn't have enough members to officially operate (see New Process Steel).

If you want to read the 102-page opinion (and 55-page dissent), knock yourself out. Volokh Conspiracy's John Elwood has a nice post on the decision, including:

The majority thought context was more helpful, particularly “the Recess Appointment Clause’s specification that recess-appointed officers’ terms ‘shall expire at the End of [the Senate’s] next session.’” It reasoned, “[t]he expiration of these officers’ terms at the end of the next session implies that their appointments were made during a period between sessions,” id. at 75, and “if recess includes intrasession breaks, then we would expect the recess-appointment term to last only until the end of that session.” The majority then addressed historical practice, Id. at 87-95, reaching essentially the same conclusion as the D.C. Circuit: the absence of Founding-era intrasession recess appointments suggests the power does not extend that far.

Employers and employees could already choose to appeal NLRB decisions to the D.C. Circuit (or their "home circuit"). For parties in the Third Circuit, both routes now lead to the same place: the NLRB is powerless.

This decision also places even more pressure on the Supreme Court to take Noel Canning and decide the scope of the president's recess appointments power. I suspect a major SCOTUS ruling next year . . . .

Angelina Jolie and Employment Law

noreply@blogger.com (Philip Miles) — Wed, 15 May 2013 12:42:00 +0000

By now, you've probably already heard about the biggest news in the world for the past day or so . . . Angelina Jolie's double masectomy. Why an apparently uneventful preventive surgery on an actress is the number one story in the world is a riddle I have yet to solve. I have, however, nailed down an employment law tie-in!

You can't spell Angelina without GINA (if you rearrange some letters)! The key here is the reason Ms. Jolie had the operation:

[T]he truth is I carry a "faulty" gene, BRCA1, which sharply increases my risk of developing breast cancer and ovarian cancer. My doctors estimated that I had an 87 percent risk of breast cancer and a 50 percent risk of ovarian cancer, although the risk is different in the case of each woman. Only a fraction of breast cancers result from an inherited gene mutation. Those with a defect in BRCA1 have a 65 percent risk of getting it, on average.

Ms. Jolie may not realize it yet, but she just became the poster-child for GINA, the Genetic Information Nondiscrimination Act!

This is a great example of the reason Congress passed GINA. Genetic testing has gotten to a point where we can predict, with farely high probability, the chances of contracting certain major diseases. That is why GINA generally prohibits employers from conducting genetic testing, requesting genetic information, and discriminating on the basis of genetic information.

An unscrupulous employer may misuse such information to only hire people who are "low risk" in terms of insurance costs and availability for work. GINA outlaws that.

In a related story, the EEOC just settled its first GINA lawsuit.

Image: Public domain clip art from wpclipart.com.

What am I Reading? - Shelfari

noreply@blogger.com (Philip Miles) — Tue, 14 May 2013 12:29:00 +0000

Once upon a time, I had my Amazon Reading List on my LinkedIn Account. Sadly, LinkedIn "upgraded" and completely killed off the Reading List. And yes, I was VERY bitter . . . especially because my Reading List completely vanished (after I spent years tracking all of my reading).

Great news! Amazon acquired Shelfari, and included an option to import old LinkedIn Reading Lists. So, the answer to the title of this post is that you can check my Shelfari "shelf" at any time to see what I've read, and what I'm reading.

I'm currently reading The Price of Justice. A book that tracks Caperton v. Massey Coal from trial through SCOTUS (opinion here). Some marketing company sent it to me out of the blue. I had absolutely no interest . . . but I took it home and left it on my dining room table, assuming it would just be clutter. One evening I picked it up, and I was immediately hooked. I absolutely love it (aside from the free copy, I received no compensation . . . I just genuinely enjoyed it).

Feel free to browse my shelf. I try to mix ideological perspectives. I read Justice Scalia's book on Constitutional interpretation, and then Justice Breyer's opposing/alternate take. I also read a lot of economics ranging from Hayek (Austrian school) to Friedman (Chicago) to Marx (communist) to Thaler and Sunstein (the latter, a former Obama advisor). I find that competing perspectives provide a fuller picture.

Record-Breaking EEOC Verdict - COTW #142

noreply@blogger.com (Philip Miles) — Fri, 10 May 2013 12:21:00 +0000

Last week, the EEOC issued a press release: Jury Awards $240 Million for Long-Term Abuse of Workers with Intellectual Disabilities. Apparently, that's the biggest verdict in the agency's history.

I wish I could tell you there were some great "lessons learned" from this case, but let's look at what led to that huge dollar figure:

Specifically, the EEOC presented evidence that for years and years the owners and staffers of Henry's Turkey subjected the workers to abusive verbal and physical harassment; restricted their freedom of movement; and imposed other harsh terms and conditions of employment such as requiring them to live in deplorable and sub-standard living conditions, and failing to provide adequate medical care when needed.

Verbal abuses included frequently referring to the workers as "retarded," "dumb ass" and "stupid." Class members reported acts of physical abuse including hitting, kicking, at least one case of handcuffing, and forcing the disabled workers to carry heavy weights as punishment. The Henry's Turkey supervisors, also the workers' purported caretakers, were often dismissive of complaints of injuries or pain.

I mean, seriously, what's the lesson here? Do you really need to be told not to kick employees with intellectual disabilities and call them "retarded"?

I guess the lesson is that if you're the deplorable type of person who engages in such behavior (or their employer), know that there are repercussions for your actions.

DC Circuit Strikes Down NLRB Poster Requirement

noreply@blogger.com (Philip Miles) — Wed, 08 May 2013 12:30:00 +0000

The D.C. Circuit Court of Appeals took another shot at President Obama's NLRB yesterday in Nat'l Ass'n of Mfrs. v. NLRB (opinion here). The Court vacated the NLRB's poster requirement, primarily under s 8(c) of the NLRA.

Section 8(c) did most of the heavy lifting. It provides:

The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this Act, if such expression contains no threat of reprisal or force or promise of benefit.

29 U.S.C. s 158(c). The Court essentially applied a First Amendment free speech style of analysis to the issue.

Ultimately, the Court concludes that the 8(c) right to express views without incurring an unfair labor practice charge includes a right to keep silent (framed another way, a right against compelled speech). As the NLRB's poster requirement treated failure to post as an unfair labor practice, or evidence of union animus in an unfair labor practice charge, the rule violated s 8(c).

The NLRB did have another method of enforcing the rule, which was to toll the statute of limitations. The Court held that the NLRB lacked authority to modify the statute of limitations, so that portion of the rule was vacated as well.

Could it get any worse for the NLRB's poster requirement? Well, yeah, actually it can. Although the Court's controlling (and unanimous) opinion did not reach the issue, a majority of the judges issued a concurring opinion. In it, the judges found that the NLRB would have lacked the authority to promulgate the poster requirement rule even if it had not violated s 8(c).

This may be the end of the NLRB's poster rule. They can press it in other circuits, but employers have the option to appeal NLRB rulings to their home circuit OR the D.C. Circuit. Guess where they'll be heading? The NLRB could appeal to SCOTUS . . . but this doesn't strike me as a SCOTUS-worthy case (maybe if there's a split on the issue with another circuit).

BONUS QUESTION: Since two judges, a majority of the D.C. Circuit panel, held that the NLRB lacked the authority to promulgate the rule . . . is that binding precedent in the D.C. Circuit?

Image: NLRB logo used in commentary on the NLRB. Not Official Use.

PA Supreme Court Upholds Employee Third-Party Injury Waiver

noreply@blogger.com (Philip Miles) — Tue, 07 May 2013 12:05:00 +0000

The Supreme Court of Pennsylvania (SCOPA?) recently issued its opinion in Bowman v. Sunoco, Inc. (copy here). As a condition of employment, the plaintiff-security guard signed a worker's compensation disclaimer that included a waiver of claims for injuries against the security company's customers.

Well, wouldn't you just know it . . . she slipped and fell on snow and ice while guarding a customer's refinery. She filed a worker's comp claim and received benefits. Then, she sued the customer. In discovery, the customer found the waiver and filed for judgment on the pleadings, which was granted.

On appeal, the Supreme Court affirmed. The employee had bargained away her right to bring a claim against the third-party, her employer's customer, for injuries covered by worker's compensation. Finally, if you're like me, you'll want to see the actual disclaimer:

I understand that state Workers’ Compensation statutes cover workrelated injuries that may be sustained by me. If I am injured on the job, I understand that I am required to notify my manager immediately. The manager will inform me of my state’s Workers’ Compensation law as it pertains to seeking medical treatment. This is to assure that reasonable medical treatment for an injury will be paid for by Allied Workers’ Compensation insurance.

As a result, and in consideration of Allied Security offering me employment, I hereby waive and forever release any and all rights I may have to:

-make a claim, or

-commence a lawsuit, or

-recover damages or losses

from or against any customer (and the employees of any customer) of Allied Security to which I may be assigned, arising from or related to injuries which are covered under the Workers’ Compensation statutes.

Image: Pennsylvania State Capitol Building, taken by me.

3d. Circuit: Shareholder Not "Employee" Under Title VII - COTW #141

noreply@blogger.com (Philip Miles) — Fri, 03 May 2013 12:32:00 +0000

Earlier this week, the Third Circuit issued its opinion in Mariotti v. Mariotti Building Products, Inc., holding that a shareholder was not an "employee" under Title VII.

The plaintiff was a shareholder-director in the family business. One day, he had a "spiritual awakening" that was not well received by his family members and fellow shareholders. They began to harass him about his newfound spiritualism (the opinion doesn't really go into what religious beliefs he discovered). The breaking point was Plaintiff's eulogy at Babe Mariotti's funeral that included references to the new religion (Babe was the founder of the business).

So, the shareholders fired their own family member and he filed a discrimination lawsuit. Can a shareholder file a Title VII claim?

In Clackamas Gastroenterology Associates, P.C. v. Wells, 538 U.S. 440 (2003), the Supreme Court adopted the EEOC's six-part test for determining who is an "employee":

1. Whether the organization can hire or fire the individual or set the rules and regulations of the individual‟s work

2.Whether and, if so, to what extent the organization supervises the individual‟s work

3. Whether the individual reports to someone higher in the organization

4. Whether and, if so, to what extent the individual is able to influence the organization

5. Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts

6. Whether the individual shares in the profits, losses, and liabilities of the organization.

The Third Circuit applied that test here, with a focus on the element of control to conclude that Plaintiff was not an "employee" and the District Court properly dismissed his case.

This case was not just a repeat of the Supreme Court case, and the Third Circuit addressed some of the differences. For example, this was a Title VII case and Clackamas was an ADA case, and this case dealt with a non-professional corporation. Also, this case dealt with whether Plaintiff was an employee for purposes of filing a lawsuit and not whether an individual was an employee for purposes of meeting the employee-threshold to determine whether the employer was covered. Ultimately, none of these differences changed the outcome.

This opinion is likely no surprise to those of you who remember Kirleis v. Dickie, McCamey, and Chilcote (Third Circuit holding that a law firm shareholder was not an employee). However, Mariotti is a precedential opinion and Kirleis was not.

NLRB Issues Facebook Firing Decision

noreply@blogger.com (Philip Miles) — Thu, 02 May 2013 12:30:00 +0000

The NLRB recently issued a decision and order in a Facebook firing case: Design Technology Group, LLC d/b/a Betty Page Clothing and Vanessa Morris (download .pdf).

Let's cut straight to the posts:

Holli Thomas needs a new job. I’m physically and mentally sickened.

Vanessa Morris It’s pretty obvious that my manager is as immature as a person can be and she proved that this evening even more so. I’m am [sic] unbelievably stressed out and I can’t believe NO ONE is doing anything about it! The way she treats us in [sic] NOT okay but no one cares because everytime we try to solve conflicts NOTHING GETS DONE!!

Holli Thomas bettie page would roll over in her grave.
Vanessa Morris She already is girl!
Holli Thomas 800 miles away yet she’s still continues our lives miserable. Phenomenal!
Vanessa Morris And no one’s doing anything about it! Big surprise!
Brittany [Johnson] “bettie page would roll over in her grave.” I’ve been thinking the same thing for quite some time.
Vanessa Morris hey dudes it’s totally cool, tomorrow I’m bringing a California Worker’s Rights book to work. My mom works for a law firm that specializes in labor law and BOY will you be surprised by all the crap that’s going on that’s in violation 8) see you tomorrow!

Then, the employer fired them.

We know from previous advice memos and decisions that the NLRB is on a social media kick. Generally, protected concerted activity includes multiple employees interacting on social media to address terms and conditions of employment.

That's pretty clearly what happened here, right? Also, the employees had approached management earlier to address concerns about safety and the store closing later than the other stores in that neighborhood. It's tough to lay down bright line rules . . . but if the employees are discussing "Worker's Rights" books and lawyers and "labor law" . . . it's probably going to be protected activity.

How does the NLRB see it?

Thomas and Morris were engaged in protected concerted activity when they presented the concerns of the employees about working late in an unsafe neighborhood to their supervisor and to the Respondent’s owner, and . . . their Facebook postings were a continuation of that effort. But we also find that the Facebook postings would have constituted protected concerted activity in and of themselves.

I suspect social media will create a ton of tough cases regarding protected concerted activity . . . realistically, I don't think this was one of them.

Lawffice Links - Noel Canning Hits SCOTUS

noreply@blogger.com (Philip Miles) — Tue, 30 Apr 2013 12:28:00 +0000

Were President Obama's NLRB recess appointments constitutional? We're one step closer to an answer from SCOTUS! Let's taste some Lawffice Links on the subject:

The D.C. Circuit Court of Appeals issued this opinion holding that the recess appointments were unconstitutional.
Now, the NLRB has taken its case to the Supreme Court by filing this petition for writ of certiorari.
This report indicates that the employer, Noel Canning, will "encourage the court to take the case."
If you're really interested in the president's recess appointments power, check out the Volokh Conspiracy's Recess Appointments Reading List.
Meanwhile, the NLRB has work to do, so President Obama has nominated enough members to fill the roster. Even if they're confirmed, the Noel Canning case could still call into question all of the cases decided by the disputed recess appointees prior to confirmation.

I think SCOTUS will take this one, but you never know.

SCOTUS Hears "Mixed Motive" Retaliation Case - COTW #140

noreply@blogger.com (Philip Miles) — Fri, 26 Apr 2013 12:29:00 +0000

On Wednesday, in the last oral arguments of the season, the Supreme Court heard Univ. of Texas Sw. Med. Ctr. v. Nassar (transcript here). The issue is whether Gross or Price Waterhouse applies to Title VII retaliation claims.

If you're not familiar with those cases, generally Price Waterhouse allows a "mixed motive" discrimination claim where a plaintiff shows that discrimination was a "motivating factor" in an adverse employment action. The "mixed motive" theory was expressly adopted by Congress in 1991 with amendments to Title VII. Then, in Gross v. FBL, the Supreme Court said (paraphrasing), "hey, nobody amended the ADEA (age discrimination) to include mixed motive . . . so I guess it doesn't exist under the ADEA and plaintiffs must therefore establish "but for" causation (a higher standard)."

The defendants argument here is pretty straightforward:

Under Gross, [Plaintiff] must prove that retaliation was the but-for cause of the challenged employment action unless Congress has specifically relieved him of that burden by authorizing a mixed motive claim. In -- in the 1991 amendments, however, Congress authorized mixed motive treatment only for Title VII claims that challenge -- that challenge discrimination based on membership in a protected class.

I think the conservative bloc is on board with this, and will view this as a simple case that was all-but-decided when they issued their opinion in Gross.

The liberal bloc clearly appeared skeptical. Justice Kagan repeatedly expressed concerns about "divorcing" the discrimination standard from the retaliation standard within the same statute. This seems like a pretty weak argument - why is it a problem to apply different standards to different sections of a statute using different language?

The stronger arguments (in my opinion) of the liberal bloc are that the Supreme Court has previously held that retaliation is a form of discrimination. So when Congress amended the statute to include mixed motive discrimination, they thought they were including retaliation. Also, the language of the mixed motive subsection refers to "unlawful employment practice" and the section on retaliation calls retaliation an "other unlawful employment practice."

That said, does this sound like it is meant to encompass the "other unlawful employment practice" of retaliation:

[A]n unlawful employment practice is established when the complaining party demonstrates that race, color, religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice.

See Sec. 2000e-2(m). Couldn't Congress have just thrown in "retaliation under sec. 2000e-3" if they wanted to make sure retaliation was covered? I think it's a close call. And (just my best guess here), the man who will make that call is Justice Kennedy.

My prediction: Kennedy sticks with his Gross v. FBL pals in the conservative bloc. 5-4 that Title VII requires "but for" causation.

NLRB Eases Up on Confidential Workplace Investigations . . . Sort Of

noreply@blogger.com (Philip Miles) — Thu, 25 Apr 2013 12:11:00 +0000

A few months ago, I blogged about the NLRB's opposition to confidentiality provisions in workplace investigation policies. Now, the NLRB has issued a new advice memorandum briefly addressing the issue.

The key takeaway here is that:

[T]he Employer cannot maintain a blanket rule regarding the confidentiality of employee investigations, but must demonstrate its need for confidentiality on a case-by-case basis.

One nice thing about this memo is that it actually provides an example of what would be a lawful policy (in the NLRB's eyes). First, they ok'd the portion of the employer's policy providing that:

[Employer] has a compelling interest in protecting the integrity of its investigations. In every investigation, [Employer] has a strong desire to protect witnesses from harassment, intimidation and retaliation, to keep evidence from being destroyed, to ensure that testimony is not fabricated, and to prevent a cover-up.

The advice memo scrubs the remainder of the employer's policy because it included a blanket confidentiality provision under threat of termination. Instead, the memo says to try something like this:

[Employer] may decide in some circumstances that in order to achieve these objectives, we must maintain the investigation and our role in it in strict confidence. If [Employer] reasonably imposes such a requirement and we do not maintain such confidentiality, we may be subject to disciplinary action up to and including immediate termination.

So, employers, there's your roadmap. Just one more thing . . . in my post linked above, I noted that the EEOC is also taking aim at confidential investigations. Does the NLRB's advice memo pass EEOC muster? I tell ya, nothin's ever easy.

See also: Jon Hyman's NLRB Offers Further Guidance on Confidential Workplace Investigations; and WinWinHr's Internal Investigations: NLRB Suggests Confidentiality Language.

Image: NLRB seal used in commentary on NLRB. Not official use.

Fired for What!? - News Anchor's Tough Start

noreply@blogger.com (Philip Miles) — Wed, 24 Apr 2013 12:38:00 +0000

Today's Fired for What!? is a little different in that I have secured an exclusive interview with the fire-ee, A.J. Clemente (actually, it's all fake using his publicly available tweets - in case that wasn't obvious).

So A.J., I understand that you think you're ready to anchor the news. What do the News Director and GM think?

Alright News Director and GM checking out my tape that we shot yesterday. Seeing if i amready for anchoring.....Awkward Turtle.......
— A.J. Clemente (@ClementeAJ) April 21, 2013

Sounds great! I can't wait to see you on the air. Let's see how it goes (warning: includes profanity) . . .

(Click here to view video online if embedded video does not display). Wow . . . A.J., I'm actually not sure if that could possibly have gone any worse. What do you think?

That couldn't have gone any worse!
— A.J. Clemente (@ClementeAJ) April 21, 2013

Yeah, that's what I just said. Did I hear you call someone "gay"?

I just want to say that I did not say the word gay, I was trying to pronounce the London Marathon winners name Tsegaye Kebede.
— A.J. Clemente (@ClementeAJ) April 22, 2013

Well, I guess that's one good thing, right? Do you think this will impact your career at KFYRTV?

Unfortunately KFYRTV has decided to let me go. Thank you to them and everyone in ND for the opportunity and everyone for the support.
— A.J. Clemente (@ClementeAJ) April 22, 2013

Ouch. I guess it will probably be awhile before you get back on television, huh?

MT Off to my home state, #NYC. Meeting up family and friends from #DE.Next time you see me, it will be on @todayshow. Thank God for each day
— A.J. Clemente (@ClementeAJ) April 23, 2013

The Today Show!? Well, I guess all's well that ends well. Thanks for your time A.J., and good luck.

HT: My mom via email.

Do FLSA Settlements Require Court Approval?

noreply@blogger.com (Philip Miles) — Tue, 23 Apr 2013 12:42:00 +0000

Does the Fair Labor Standards Act require judicial (or Department of Labor) approval of private settlements? When you think about it, private settlements could work to effectively contract around the FLSA provisions, rendering them almost worthless.

For example, take minimum wage. An employer could just pay an employee $2.00/hour and then settle their claims each week for an extra dollar an hour. This is just contracting to blatantly violate the FLSA by paying an employee less than half the minimum wage, right?

But enough of my hypothesizing, what do the courts have to say? Judge Conner of the Middle District of Pennsylvania (my home district) issued a memorandum opinion covering this issue in Deitz v. Budget Innovations and Roofing, Inc. (available here). Judge Conner noted some precedent from other courts, and provided a rundown of Third Circuit law, before reaching his own conclusion:

The Third Circuit has not addressed whether FLSA lawsuits claiming unpaid wages may be settled privately without court approval. Several cases from the District of New Jersey and the Eastern District of Pennsylvania have . . . assumed that judicial approval is necessary . . . . The Third Circuit has, in dicta, indicated that bona fide disputes over the facts leading to liability may be settled without court approval. See Coventry v. U.S. Steel Corp., 856 F.2d 514, 521 n.8 (3d Cir. 1988)(observing that a employee cannot generally waive his rights under FLSA, but that he may be able to release a factually disputed claim); Watkins v. Hudson Coal Co., 151 F.2d 311, 314 (3d Cir. 1945) (noting that a private agreement over the amount of wages owed by an employer “may, under proper circumstances, be upheld.”)) . . . . The undersigned concurs with the majority of courts . . . for the premise that bona fide disputes of FLSA claims may only be settled or compromised through payments made under the supervision of the Secretary of the Department of Labor or by judicial approval of a proposed settlement in a FLSA lawsuit.

Read the opinion for more citations and discussion of additional case law on this topic.

This remains a gray area, but if you're settling an FLSA claim you should check for precedent in your jurisdiction requiring approval.

HT: Janine Gismondi. I found the opinion linked from Pennsylvania Requires Court Approval for Enforcement of Wage/Hour Settlements Under FLSA.

Image: Middle District of Pennsylvania courthouse in Harrisburg, PA. Image from the Court's website, public domain as work of federal government.

SCOTUS, ERISA, and Equitable Rules - COTW #139

noreply@blogger.com (Philip Miles) — Fri, 19 Apr 2013 12:34:00 +0000

Earlier this week, the Supreme Court released its opinion in U.S. Airways v. McCutchen. Before we get to the holding, it's important to understand the background:

- Employee is involved in a bad car accident
- Employee has ERISA health plan that pays for $65,000 in damages
- Employee files lawsuit and settles it for $100,000
- Employee's lawyer takes a 40% contingent fee of $40,000
- Plan has a reimbursement clause and demands that the employee, who just settled for $100,000, use $65,000 of that to reimburse the plan*

The problem? The employee will be at -$5,000 ($100,000 settlement; minus $40,000 attorney's fees; minus $65,000 reimbusement) despite having a health plan that supposedly covers his damages and getting a favorable settlement of $100,000. This seems unfair.

The issue? Can courts use "equitable principles" to override the contracts reimbursement clause? For example, the employee argues unjust enrichment - that the plan received the benefit of the employee paying $40,000 to the attorney without incurring any costs. Can the Court make the plan share in the attorney's fees?

The holding? It's unanimous! The entire court agrees that equitable principles can not override the express terms of the plan, which is a binding contract construed under ERISA. Even though it may be unfair, the Court can not just override the plan's terms.

Well, another case is in the books . . . wait . . . what? There's more!? Justice Kagan (plus the rest of the liberal bloc and Kennedy, J.) goes on to address another issue. She notes that "[t]he plan is silent on the allocation of attorney’s fees" (that sound you hear is plan-writers everywhere screaming "the plan doesn't say anything about attorney's fees because it doesn't pay for any attorney's fees!!!"). The Court deems this a "gap" in the contract.

Per the majority, the Court can fill in gaps in the plan. So, Justice Kagan fills in the "gap" with the common fund doctrine ("a litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney’s fee from the fund as a whole."). So, the employee wins after all - despite unanimously losing on the issue actually before the Court.

Justice Scalia (joined by the conservative bloc) penned a short two-page dissent calling out Justice Kagan for answering a question that wasn't asked:

[W]e granted certiorari on a question that presumed the contract’s terms were unambiguous—namely, “where the plan’s terms give it an absolute right to full reimbursement.” Pet. for Cert. i . . . . In their brief in opposition to the petition they conceded that, under the contract, “a beneficiary is required to reimburse the Plan for any amounts it has paid out of any monies the beneficiary recovers from a third-party, without any contribution to attorney’s fees and expenses.” Brief in Opposition 5 (emphasis added). All the parties, as well as the Solicitor General, have treated that concession as valid . . . . The Court thus has no business deploying against petitioner an argument that was neither preserved . . . nor fairly included within the question presented.

Thus, Scalia and the dissenters would have stopped after deciding that equitable principles can not override the terms of the plan, and not searched for gaps to fill with the Court-preferred common fund clause.

That sound you hear now? Plan-writers furiosuly drafting clauses expressly addressing attorney's fees in their reimbursement clauses.

* To keep it simple to follow, I changed some of the numbers and left out some details (for example, some recovery came from another motorist and some from an insurer).

Fired for What!? - Trayvon Target Practice?

noreply@blogger.com (Philip Miles) — Thu, 18 Apr 2013 12:14:00 +0000

A single Fired for What? to start the day. A police officer was fired for bringing Trayvon Martin-looking targets to a firing range. The targets were faceless black silhouettes of someone wearing a hoodie and holding a beverage and a pack of skittles. In his defense, the police officer posted a video on YouTube claiming he was using the targets as "no-shoot training aids."

As someone who played a lot of shooting range video games growing up - I find this possible. The games would have targets pop up of angry guys in camo holding machine guns and you were supposed to shoot them . . . but be careful because some of the targets would be people holding flowers (or something like that) and you would lose points for shooting them. Whether that's what the officer was really using the targets for . . . I have no idea.

SCOTUS Decides FLSA Pick-Off Case

noreply@blogger.com (Philip Miles) — Tue, 16 Apr 2013 14:42:00 +0000

Moments ago, the Supreme Court issued its opinion in Genesis Healthcare Corp. v. Symczyk. You may recall my previous coverage of this case as the "FLSA Pick-Off Case."

In short, an employee filed a FLSA wage and hour claim intended to be a collective action. The defendant made a Rule 68 offer of judgment that would have given the plaintiff everything she could possibly have obtained through the lawsuit, effectively mooting her claim (more on that later) before any more employees joined the collective action. The district court dismissed the case because it was moot as to the only plaintiff.

The Third Circuit reversed, but the Supreme Court sided with the district court. The effect is that employers can "pick-off" the lead plaintiff in a collective action and avoid the collective action entirely.

Not so fast though! The majority assumed without deciding that the Rule 68 offer did in fact moot the lead plaintiff's claim. The liberal bloc dissented with Justice Kagan calling the majority's assumption "bogus" and resulting in the majority opinion having "no real-world meaning or application" (ouch). Justice Kagan argues that the offer in this case was never accepted and therefore the plaintiff's case was never mooted (i.e. the plaintiff was never effectively picked off).

So, if you ever have a pick-off case, be prepared to argue over whether a Rule 68 offer of judgment for full relief does in fact moot the individual's claim.

SCOTUS Grants Cert. in ERISA Statute of Limitations Case

noreply@blogger.com (Philip Miles) — Mon, 15 Apr 2013 18:14:00 +0000

Earlier today, the Supreme Court granted certiorari in Heimeshoff v. Hartford Life Insurance. Per the Court's Order, SCOTUS will only hear question one. Per the Court's Questions Presented, question one is:

When should a statute of limitations accrue for judicial review of an ERISA disability adverse benefit determination?

The case is on appeal from the Second Circuit, 496 F. App'x 129, which enforced a contractual agreement to shorten the statute of limitations to three years for a claim brought under ERISA where the normal state contract statute of limitations was six years. The contract further provided that the limitations period began to run when the employee's proof of loss was due, not upon the final denial of request for benefits.

As you can see, the Court has a few different directions it could go in here. SCOTUSblog hasn't posted a copy of the Petition for Writ of Certiorari yet (and I haven't located it anywhere else), so I'm not sure what angle the parties are pressing yet. It will also be interesting to see what impact (if any) the Court's decision will have on contractual agreements to alter limitations periods in other contexts.

Segregated Law Firm? - COTW #138

noreply@blogger.com (Philip Miles) — Fri, 12 Apr 2013 11:33:00 +0000

The ABA Journal reports a Dallas lawyer filed a lawsuit alleging her law firm had a policy that prohibited male attorneys from being alone with female attorneys. As another article explains, the law firm's website indicates that they have 33 male attorneys and only five female attorneys. Obviously, the effect of the rule is that women have a much smaller "circle" to interact with than men.

Apparently, the complaint acknowledges that the firm no longer has this rule, but claims there remain lingering effects. The law firm issued a statement denying any allegations of discrimination. I'd be interested in knowing why such a rule was implemented in the first place (assuming there was such a rule).

HT: Heather Bussing via Twitter.

Adams County Added to Pennsylvania Courthouses Photo Album

noreply@blogger.com (Philip Miles) — Thu, 11 Apr 2013 10:34:00 +0000

This past weekend I attended the Pennsylvania Bar Association Civil Litigation Section Retreat in Gettysburg, PA. We stayed at the historic Gettysburg Hotel, which happens to be just a block or two away from the Adams County Courthouse, so I grabbed some pictures for the Pennsylvania Courthouses Photo Album.

The courthouse includes a classic-looking section attached to a more modern (and plain) section. A plaque with the Ten Commandments hangs to the right of the entrance. Enjoy!

Guest Post: Rutgers, Whistleblowers, and Extortion

noreply@blogger.com (Philip Miles) — Wed, 10 Apr 2013 12:51:00 +0000

By Stephanie Sautter
Ms. Sautter is a 2L at Catholic University and Lead Articles Editor of the Catholic University Law Review

Just about everyone has seen the video of recently fired Rutgers University basketball coach Mike Rice abusing his players, both physically and verbally. The video, which ESPN aired last week, showed clips of Rice throwing basketballs at his players, kicking them, and shoving them. Less than 24 hours after it aired, Rice had been fired. Eric Murdock, the former Director of Player Development, compiled the video footage. Murdock gained public sympathy when he said that he tried to take steps to end the abuse, but was fired for doing so on July 2, under the false pretense that his contract was not being renewed.

The Whistleblowing Claim

Given the allegations, it was not too surprising when Murdock filed a wrongful termination suit in state court on April 5 (complaint can be seen here). He names several defendants, including Rutgers University, the current and former presidents of the university, Mike Rice, and former Athletic Director Timothy Penetti.

Murdock is alleging that his employment with Rutgers was terminated in direct response to his complaints about Rice’s offensive behavior. Essentially, he is saying that the employment decision was a result of illegal retaliation. Murdock is suing under New Jersey’s Conscientious Employee Protection Act, which created a cause of action for retaliatory discharge. Terminating an employee in response to the filing of an internal complaint is actionable retaliatory discharge under the Act. Therefore, Murdock’s complaints about Rice are protected, and Rutgers may be held liable if its actions were taken in response to the complaints. The issue may come down to whether Murdock can establish that he filed a complaint before the decision about his contract was made. He says this is the case, but has not yet provided evidence (failing to provide evidence seems to be a consistent problem for Murdock – Rutgers says he also made allegations about NCAA violations, including paying players, but did not provide any supporting evidence).

Rutgers has stated that Murdock’s contract was simply not renewed, which Murdock claims is not true. Rather, Murdock claims that his contract was actually renewed (although there is no evidence of this) and Rutgers’ contract renewal explanation is merely pretext. So far, Rutgers has not offered much justification for their decision other than a dispute Murdock had with Rice regarding missing 35 minutes of basketball camp – but that reason seems pretty flimsy. Odds are, Rutgers has compiled a laundry list of Murdock’s misconduct that they will say influenced their employment decision, but the court may determine that it was actually retaliation.

Extortion Investigation

Soon after filing his suit, however, information surfaced that was far less sympathetic to Murdock: he may have tried to extort Rutgers out of almost one million dollars. This week, the media obtained a 2-page letter, dated December 27, 2012, from Murdock’s attorney, Barry A. Kozyra to Rutgers University’s attorney, John K. Bennett (entire letter can be seen here). The letter requested a $950,000 “settlement” of Murdock’s (not yet filed) wrongful termination claim. Murdock’s salary with Rutgers was $70,000 - less than a 1/10 of the “settlement offer.” I’m admittedly not well versed in the art of extortion, but I’m guessing “don’t send a signed and dated extortion letter” is pretty high on the list of things not to do if you want to get away with it. Unfortunately for Murdock, though, his “settlement offer” was signed and dated, which might explain why F.B.I. Special Agent James Tareco visited the Rutgers campus. Murdock’s lawyer called the extortion claim “nonsense,” and said that the letter was a standard request to settle before filing suit.

What’s more, Murdock compiled the 30-minute video by painstakingly editing hundreds of hours of video footage, which he obtained pursuant to New Jersey’s freedom of information statute. Obviously this video is horrible no matter what, but the way in which Murdock went about creating it, along with his leaking it to ESPN rather than just filing his wrongful termination suit, does make it look a bit like extortion.

The Impact of an Extortion Attempt on his Whistleblowing Claim

Although settlement offers are not usually admissible in trial, evidence of an FBI investigation may be. An extortion attempt does not necessarily change the legality of Rutgers’ employment decision, but may still be helpful to Rutgers in determining damages or a settlement amount. If Murdock was taking steps in preparation of an extortion attempt while he was still employed, Rutgers could use evidence of the misconduct to severely limit the relief available to Murdock. The “after-acquired evidence” doctrine allows relief to be limited to back-pay based on evidence obtained after the retaliatory action, if the evidence would have been a legitimate basis for terminating the employee had the employer known about it at the time.

This means that Rutgers could benefit by obtaining evidence that Murdock was taping practices or discussions with or of Rutgers officials that he then used to extort Rutgers. Murdock certainly would have been fired for any known preparation of an attempt to extort Rutgers.

Note from Phil Miles: First, I'd like to thank Ms. Sautter for contributing this post. I would like to offer a few counterpoints in defense of Mr. Murdock. It is not unusual for an ex-employee to make a settlement demand prior to filing suit and as someone who does a lot of defense work, ridiculously high settlement demands are likewise not that unusual. The media "leak" does cause a little concern though. I also wanted to note that he has only filed a complaint so the lack of evidence at this stage is not a problem - although it may be down the road. I'd love to get some feedback on the line between settlement demands and extortion - so drop a comment!

Image: Rutgers logo used in commentary on matter of public interest. Not official use.