Friday, December 28, 2007

What Claims Are Cognizable When Plaintiff Fails To Allege The Existence Of A Work-Sharing Agreement?

In Mayers v. Laborers' Health & Safety Fund of North America, 478 F.3d 364 (D.C. Cir. 2007), the Court of Appeals limited the plaintiff's claims to only those claims that occurred within 180 days prior to the filing of plaintiff's EEOC charge even though the District of Columbia is a deferral jurisdiction. The panel reasoned that the failure of the plaintiff to allege the existence of a work-sharing agreement between EEOC and the deferral agency, here the D.C. Office of Human Rights, should result in plaintiff not being permitted to seek relief with respect to claims that accrued between the 300th and 180th day prior to the filing of the EEOC administrative charge. The Court, in a brief per curiam opinion merely states the following: "Although EEOC regulations extend the deadline for filing to 300 days when it has a worksharing agreement with a state or local agency, . . . Mayers does not allege the existence of such an agreement nor does she dispute the applicability of the 180-day deadline to her case."

One must wonder why the panel chose to not take judicial notice of the fact that the District of Columbia is a deferral jurisdiction and that there is a work-sharing agreement between EEOC and the Office of Human Rights. My assumption is that the Court chose not to take judicial notice because plaintiff's counsel, as the Court noted, did not dispute the applicability of the 180-day deadline. I assume that this is a one time only decision. Obviously, best practice would be to henceforth allege the existence of a work-sharing agreement and to allege that the charge filed with EEOC was properly deferred to the deferral agency in accordance with the terms of the work-sharing agreement.

Now, having said that, one must take note of the disturbing opinion of the District of Columbia Court of Appeals in Griffin v. Acacia Life Ins. Co., 2007 D.C. App. LEXIS 266 (D.C., May 24, 2007) in which the Court of Appeals questioned whether the deferral had been properly effectuated.

Is A Constructive Discharge Claim A Continuing Violation And If So, Who Cares?

The panel in Mayers also, at the end of its brief opinion, suggests that it is an open issue for decision at a later date as to whether a constructive discharge case, after National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002), can be amenable to continuing violation analysis because, like a hostile work environment claim, a constructive discharge claim by its very nature involves repeated conduct. Morgan, 536 U.S. 115. While the question is intellectually interesting, one wonders why the Court saw it to be of any possible significance. After all, as Morgan teaches us, there must be one act within the limitations period that is a part of a chain of events culminating, in the case of a constructive termination, in the plaintiff-former employee's resignation which he/she alleges to be a constructive termination. Would not, in all events, the one act be the resignation, and therefore what possible difference could it make whether a court viewed the alleged constructive termination to be a Morgan-type continuing violation or merely a discreet act of discrimination.

SOX's Preliminary Order Of Reinstatement Is Dealt A Setback

The DOL's Administrative Review Board (ARB) in Windhauser v. Trane, ARB Case No. 05-127, 2007 DOL SOX LEXIS 82 (Oct. 31, 2007) held that the Administrative Law Judges did not have the power to sanction an employer that declines to obey the ALJ's order to reinstate the complainant in a SOX section 806 case. Instead, any enforcement remedies are reserved for the Federal District Court to impose.

Here the employer terminated Windhauser, who thereafter filed a complaint with DOL, alleging a violation of section 806 of SOX. After investigation, the agency issued its findings and a preliminary order of reinstatement. The employer then, among other things, requested a stay of the preliminary order of reinstatement, and the ALJ issued an order denying the employer's motion for a stay. Thereafter, the employer filed a petition for review with the ARB which was viewed as an interlocutory appeal. Thereafter, the parties settled and the ALJ requested briefing on the consequences of the employer's refusal to comply with the preliminary order of reinstatement. The ALJ then issued an order imposing monetary sanctions against the employer, which then petitioned the ARB to review the ALJ's imposition of monetary sanctions.

The ARB held that, absent statutory authority, the DOL had no power to impose monetary sanctions, indicating that the appropriate forum would be the Federal District Court.

Calculation Of Front Pay

In Hagman v. Washington Mutual Bank, Inc., Case No. 2005-SOX-0073, 2006 DOL SOX LEXIS 130 (Dec. 19, 2006), the ALJ had to decide what amount of front pay to award in a SOX section 806 case. The complainant's expert had testified that the complainant would never recover her career track and earnings potential in her lifetime. The expert alternatively calculated complainant's front pay as though she would recover her career track and earnings potential within ten years. The ALJ found the assumption that Ms. Hagman would never recover her career track and earnings potential as not credible, and instead found that the ten year assumption was reasonable and persuasive, resulting in a front pay award of $642,941. The ALJ relied heavily on the line of cases regarding front pay referenced in the District of Columbia Circuit's opinion in Peyton v. DiMario, The Public Printer of the U.S., 287 F.3d 1121 (D.C. Cir. 2002).

Is There A Private Right Of Action Under Section 304 Of SOX

Recently, Judge Woodlock of the District of Massachusetts in In re Ibasis Inc. Derivative Litigation, 2007 U.S. Dist. LEXIS 89989 (D. Mass., Dec. 4, 2007), a stock option grant date manipulation case, held as have apparently all courts that have addressed the issue, that section 304 of SOX does not provide a private right of action. Judge Woodlock adopted the analysis of this question articulated by Judge Dalzell in Neer v. Pelino, 389 F.Supp. 2d 648 (E.D. Pa. 2005) where the Court relied heavily on the fact that section 306 explicitly provides for a private right of action, suggesting, by implication that as section 304 is silent in that regard, that Congress did not intend to provide for a private right of action under section 304.

May The Public Policies Codified In SOX Be Used As The Basis For A State Common Law Wrongful Termination Claim?

In Willis v. Comcast of Oregon II, Inc., 2007 U.S. Dist. LEXIS 79927 (D. Ore., Oct. 25, 2007), Judge Aiken, focusing on the language of SOX which states that "nothing in [ the remedies] section shall be deemed to diminish the rights, privileges, or remedies of any employee under any Federal or State law . . . " 18 U.S.C. Section 1514A(d), held that SOX did not provide an adequate statutory remedy to preclude plaintiff's common law wrongful discharge claim. Even though SOX provides for "all relief necessary to make the employee whole" and even though Oregon law precludes a common law wrongful discharge claim where a statutory remedy exists, the plaintiff argued that SOX is not an adequate remedy because punitive damages are not allowed. The Court stated that "Congress may be said to have expressed an intent to provide for adequate remedies by detailing specific types of remedies in a comprehensive fashion." Nonetheless, the Court found that the Congress had explicitly not abrogated or superseded common law remedies , and therefore found that SOX does not provide an adequate statutory remedy to preclude plaintiff's common law wrongful discharge claim.

While I appreciate that the District of Oregon is in the Ninth Circuit, nonetheless, one must seriously question the reasoning of the District Judge. Applying this reasoning would permit those federal anti-discrimination and labor standards laws that state that they are not intended to displace or preclude even more comprehensive protections as potentially the basis for "sky's the limit" wrongful discharge litigation. In effect, decisions like the Willis decision, transform federal claims into state law claims, allowing plaintiffs to escape from federal court and to escape from federal limitations on damages. Decisions like this would seem to raise some questions regarding federalism.

Montgomery County Maryland Outlaws Employment Discrimination Against Individuals Based On Gender Identity, Including The Transgendered

Effective February 20, 2008, Montgomery County, Maryland's Human Rights Act has been amended to prohibit discrimination on the basis of gender identity which is defined in section 27-6 as follows: "Gender identity means an individual's actual or perceived gender, including a person's gender-related appearance, expression, image, identity, or behavior, whether or not those gender-related characteristics differ from the characteristics customarily associated with the person's assigned sex at birth." Montgomery County Bill 23-07, Non-Discrimination - Gender Identity Act, (available at http://www.montgomerycountymd.gov/content/council/pdf/bill/2007/23-07.pdf).

Drivers Of Light-Weight Vehicles - MCA Exemption To The FLSA

The Motor Carrier Act exempts from the FLSA certain employees transporting property by commercial motor vehicle. The exemption was amended in 2005 by provisions of the Safe, Accountable, Flexible, Efficient, Transportation Equity Act: A Legacy for Users (SAFETEA-LU), which provided in section 49 U.S.C. 31132 that a commercial motor vehicle is defined as a vehicle with a gross vehicle weight of at least 10,001 lbs. Thus, the courts have recognized that SAFETEA-LU narrowed the coverage of the MCA exemption to the FLSA and that after August 10, 2005 employees, driving vehicles weighing less than 10,000 pounds are no longer exempt from the FLSA. See, e.g., Kautsch v. Premier Communications, 502 F. Supp. 2d 1007, 2007 WL 1459694 (W.D. Mo., May 16, 2007), summary judgment denied in 2007 U.S. Dist. LEXIS 82856 (W.D. Mo., Nov. 7, 2007); O'Neal v. Kilbourne Medical Lab., 2007 U.S. Dist. LEXIS 22620 (E.D. Ky., Mar. 28, 2007); King v. Asset Appraisal Services, Inc., 2006 U.S. Dist. LEXIS 94937 (D. Neb., Oct. 23, 2006); Musarra v. Digital Dish, Inc., 454 F.Supp. 2d 692 (S.D. Ohio, 2006); Dell'Orfano v. Ikon Office Solutions, Inc., 2006 U.S. Dist. LEXIS 61563 (M.D. Ga., Aug. 29, 2006). See also, Field Assistance Bulletin, No. 2007-2, DOL, Wage and Hour (May 23, 2007), available at http://www.dol.gov/esa/whd/FieldBulletins/FieldAssistanceBulletin2007_2.pdf.

Thursday, December 27, 2007

SUPREME COURT UPDATE


ADEA Disparate Impact - Burden of Persuasion on RFOA


The Solicitor General filed an invite-brief with the Court on December 21, 2007 (available at http://www.scotusblog.com/wp/wp-content/uploads/2007/12/meachamcvsg.pdf) in Meacham v. Knolls Atomic Power Lab., No. 06-1505, 2007 U.S. LEXIS 10368 (U.S., Oct. 1, 2007); 461 F.3d 134 (2d Cir. 2006), recommending that the Court grant cert., limited to the issue of which party has the burden of persuasion in an ADEA disparate impact case to establish "reasonable factor other than age." The government's brief argues, in contrast to the Second Circuit's decision, that the burden should be upon the employer. The government's brief argues that the Court should not accept cert. on the second issue presented by the plaintiffs' petition which is whether an employer's practice of conferring broad, discretionary authority upon individual managers to decide which employees to lay off during a reduction in force constitutes a "reasonable factor other than age."

If the Court accepts cert. in Meacham, this will be its second visit to the Supreme Court. When the Court issued its decision in Smith v. City of Jackson, 544 U.S. 228 (2005), holding that disparate impact claims are cognizable under the ADEA, the Court granted the petition for cert. in Meacham I (381 F.3d 61) and remanded it for reconsideration in light of Smith. 554 U.S. 957 (2005).

On remand, the Second Circuit held that the employee had the burden of persuasion with respect to the "reasonableness" of the employer's proffered business justification under the ADEA disparate-impact framework. This holding was in agreement with the Tenth Circuit's opinion in Pippen v. Burlington Res. Oil & Gas Co., 440 F.3d 1186, 1200 (10th Cir. 2006). The Second Circuit also found that employment practices based on discretionary decisionmaking are generally immune from challenge under the ADEA, stating: "Any system that makes employment decisions in part on such subjective grounds as flexibility and criticality may result in outcomes that disproportionately impact older workers; but at least to the extent that the decisions are made by managers who are in day-to-day supervisory relationships with their employees, such a system advances business objectives that will usually be reasonable."

Judge Pooler dissented, holding that the RFOA creates an affirmative defense upon which the defendant bears the burden of persuasion.


Speech Or Debate Clause

The Justice Department has filed a petition for cert. in United States v. Rayburn House Office Building, No.07-816, a case arising out of the investigation and prosecution of Representative William J. Jefferson of "iced money" fame (available at http://www.scotusblog.com/wp/wp-content/uploads/2007/12/jeffersonpetition1.pdf). The petition raises the following question: "Whether the Speech or Debate Clause provides a non-disclosure privilege that bars Executive Branch Agents from executing a judicially issued warrant in a Member's office to search for non-legislative records of criminal activity." The District of Columbia Circuit, in its opinion in this matter, United States v. Rayburn House Office Building, 497 F.3d 654 (D.C. Cir. 2007), held that the Speech or Debate Clause includes an "absolute" "non-disclosure privilege." The government's petition argues that that holding is fundamentally incorrect, arguing that the Clause does not confer a confidentiality privilege, but rather its core protection exists for public acts, such as votes and floor statements, and applies without regard to whether a Member has attempted to preserve confidentiality.

Proximate Cause Jury Instructions

In a little noticed concurrence by Justice Ginsburg last term in Norfolk Southern Ry. v. Sorrell, 127 S. Ct. 799 (U.S. 2007), she, like so many other commentators have over the years, had a harsh assessment of the trial court's use of a "proximate cause" jury instruction. She said that the term "proximate cause" ought not be used in jury instructions as it is "confounding to jurists, it is even more bewildering to jurors". Norfolk Southern, 127 S.Ct. at 814.

Summary Judgment Constitutional

Recently, the Plaintiffs' Bar has been enamored with a law review written by Professor Suja Thomas of the University of Cincinnati in which the Professor argues that summary judgment proceedings are an unconstitutional deprivation of an individual's right to jury trial. Suja A. Thomas, Why Summary Judgment Is Unconstitutional, 93 Va. L. Rev. 139 (2007). In a little noticed footnote authored by Justice Ginsburg, writing for the six justice majority in Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S.Ct. 2499 (U.S. 2007), she had the following to say on the subject: "In numerous contexts, gatekeeping judicial determinations prevent submission of claims to a jury's judgment without violating the Seventh Amendment." Tellabs, 127 S.Ct. at 2512, n.8.

Upcoming Oral Arguments

On February 19th, the Court will hear argument in Gomez-Perez v. Potter, 06-1321, a federal sector ADEA case involving whether or not federal employees may pursue retaliation claims under that statute. Gomez-Perez v. Potter, 476 F.3d 54 (1st Cir. 2007) cert. granted, 2007 U.S. LEXIS 9085. The First Circuit held that the Postal Service and the Postmaster General had waived sovereign immunity with respect to ADEA suits, but further held that Section 15 of the ADEA, 29 U.S.C. §633a, does not provide a cause of action for retaliation by federal employers.


On February 20th, the Court will hear argument in CBOCS West v. Humphries, No. 06-1431, a section 1981 case which presents the issue whether claims of retaliation are cognizable under that statute. CBOCS West v. Humphries, 474 F.3d 387 (7th Cir. 2007) cert. granted, 2007 U.S. LEXIS 9079. The Seventh Circuit, 2-1 (Chief Judge Easterbrook dissenting), held that Section 1981 protects against retaliation and thus retaliation claims are cognizable under Section 1981. The panel held that its earlier decision in Hart v. Transit Management of Racine, Inc., 426 F.3d 863, 866 (7th Cir. 2005) is no longer good law in light of the Supreme Court’s decision in Jackson v. Birmingham Bd. of Educ., 544 U.S. 167 (2005).


On February 26th, the Court will hear arguments in Allison Engine Co. v. United States ex rel. Saunders, No. 07-214, a case that presents the so-called presentment issue in a False Claims Act case. In United States ex rel. Saunders v. Allison Engine Co., 471 F.3d 610 (6th Cir. 2007). the Sixth Circuit held that presentment of a false or fraudulent claim to the government is required under one subsection of the False Claims Act (31 U.S.C. SEC 3729(a)(1)), but it is not a prerequisite for liability under subsections (a)(2) and (a)(3) thereof. The D.C. Circuit has disagreed, reading the presentment requirement into the entire section. See United States ex rel. Totten v. Bombardier Corp., 380 F.3d 488 (D.C. Cir. 2004)(Roberts, J; now Roberts, C.J.).


On February 27th, the Court hears argument in Exxon Shipping Co. v. Baker, No. 07-219, a case involving claims for punitive damages arising out of the Exxon Valdez oil spill.

NLRB Ruling on Employee's Use of E-mail for Union Solicitation

On December 16, 2007, the NLRB issued a 3-2 decision in Guard Publishing Co. d/b/a Register Guard and Eugene Newspaper Guild, CWA Local 37194, 36-CA-8743-1, 36-CA-8849-1, 36-CA-8789-1, and 36-CA-8842-1 (available at http://www.nlrb.gov/shared_files/Board%20Decisions/351/v35170.htm). The three member majority held that an employer may prohibit employees from using its e-mail to solicit on behalf of a union so long as the employer enforces its non-job-related solicitations policy in a non-discriminatory manner. With respect to the employer's alleged discriminatory enforcement of the e-mail policy, the majority modified the NLRB's approach in discriminatory enforcement cases and announced a new, more limited, conception of "discrimination" relying upon two decisions of the Seventh Circuit, that is, Fleming Co. v. NLRB, 349 F.3d 968 (7th Cir. 2003), denying enf. to 336 NLRB 192 (2001) and Guardian Industries Cop. v. NLRB, 49 F.3d 317 (7th Cir. 1995), denying enf. to 313 NLRB 1275 (1994). The Board majority held that "unlawful discrimination consists of disparate treatment of activities or communications of a similar character because of their union or other Section 7-protected status."

FLSA Donning and Doffing Police Officers Uniforms and Equipment

The California Federal District Courts are battling over the question whether police officers are entitled to compensation under the FLSA for time spent donning and doffing their uniforms and equipment. Judge Breyer, in Martin v. City of Richmond, 2007 WL 2317590, 2007 U.S. Dist. LEXIS 61442 (N.D. Cal., Aug. 10, 2007), denied any compensation, holding that a "police officer's uniform, in and of itself, does not assist the officer in performing his duties". Judge Sabraw, in Abbey v. City of San Diego, 2007 WL 4146696 (S.D. Cal., Nov. 9, 2007), stated that "The relevant inquiry is not whether the uniform itself or the safety gear itself is indispensable to the job - they most certainly are - but rather, the relevant inquiry is whether the nature of the work requires the donning and doffing process to be done on the employer's premises." And, finally, Judge Patel, in Lemmon v. City of San Leandro, 2007 U.S. Dist. LEXIS 902 (N.D. Cal., Dec. 7, 2007), held that officers were entitled to compensation.

These police officer donning and doffing opinions are a continuation of the debate that filtered up to the Supreme Court two terms ago in IBP, Inc. v. Alvarez, 546 U.S. 21 (2005), 126 S. Ct. 514, 163 L. Ed. 2d 288, 2005 U.S. LEXIS 8373 (2005), aff’g, Alvarez v. IBP, Inc., 339 F.3d 894 (9th Cir. 2003), and aff’g in part, rev’g in part, remanding, Tum v. Barber Foods, Inc., d/b/a Barber Foods, 331 F.3d 1 (1st Cir. 2003).

Question Presented: Whether time spent walking between the location where protective clothing is donned and the actual work station, and time spent waiting at safety equipment distribution stations are compensable under Section 4(a) of the Portal-to-Portal Act of 1947 as an exception to Section 3 of the Fair Labor Standards Act of 1938.

In a series of Supreme Court decisions prior to 1947, the Court broadly defined the term “work” under the Fair Labor Standards Act (FLSA). In an effort to more clearly identify what is, and is not, compensable work under the FLSA, the Congress in 1947 passed the Portal-to-Portal Act. That Act exempts from FLSA coverage two categories of activities performed before or after an employee’s principal activities, unless such activities are integral and indispensable to those principal activities. The two exempted categories of activities are (1) time spent by an employee “walking, riding, traveling to and from the actual place of performance of the principal activity or activities” of the employee’s job; and (2) time spent by the employee on activities performed before or after the principal activities in a work day. Such activities are often called “preliminary” and “postliminary”. In addition, the Act provides that some activities that might otherwise be considered to be compensable work need not be compensated if the time spent on them is de minimis.

In 1956, the Supreme Court issued an opinion in Steiner v. Mitchell, 350 U.S. 247 (1956), in which it held that the specific acts of putting on and taking off mandatory protective clothing were integral and indispensable to the employee’s principal activities, and hence compensable. Id. at 256.

Against this backdrop these two cases arose, Alvarez v. IBP, Inc. and Tum v. Barber Foods, Inc., one a slaughterhouse and the other a poultry plant. In the Alvarez case, the meat processing plant, in addition to standard safety equipment like hardhats, hairnets, earplugs, and gloves, some of the employees wore special protective equipment, including chain-link metal aprons and plexiglass armguards. IBP required that the equipment be stored in company locker rooms, where the gear was typically donned. It paid employees from the first piece of meat handled to the last, as well as four minutes of clothes-changing time.

In the First Circuit case, Tum v. Barber Foods, the employees at a poultry processing plant were required to don and doff mandatory safety gear before and after their shifts. Barber Foods only paid employees by the hour from the time they punched in to the time they punched out, and the employees were not compensated for time spent walking to work stations after donning protective gear, nor were thy compensated for time spent walking from work stations to changing areas.

The Supreme Court had to determine in these two cases (1) whether walking time by employees both after donning and prior to doffing unique protective gear was compensable time and (2) whether time spent waiting to don and doff such gear was compensable time.

Relying upon the “continuous workday” regulations of the U.S. Department of Labor, the unanimous Court held that the workday for which a non-exempt employee must be compensated begins the moment an employee performs any task or activity that is “integral and indispensable” to a “principal activity” of that employee. Applying that reasoning to the specifics of these cases, the Court found that the time spent walking to and from the production area after donning integral and indispensable protective gear, the time spent waiting to doff such gear, and the time actually spent doffing such gear, all constituted compensable work under the FLSA. The Court stated: “[W]e hold that any activity that is ‘integral and indispensable’ to a ‘principal activity’ is itself a ‘principal activity’ under § 4(a) Portal-to-Portal Act. Moreover, during a continuous workday, any walking time that occurs after the beginning of the employee’s first principal activity and before the end of the employee’s last principal activity is excluded from the scope of that provision, and as a result is covered by the FLSA.”

The Court ruled that time spent waiting to don gear, even if that gear is unique, integral, and indispensable, does not count as a compensable time under the FLSA unless the employer required its employees to report at a particular time and because of that requirement, the employees had to wait to don their gear.

District of Columbia Non-Union School Employees To Be At-Will

Legislation has been introduced in the City Council at the request of Mayor Fenty entitled the "Public Education Personnel Reform Amendment Act of 2007" (available at http://www.dcwatch.com/council17/17-450.htm). The legislation, in its simplest terms would convert all appointments to positions within the District of Columbia public schools to at-will appointments with the sole exceptions of those employees "appointed to occupy or currently occupying a position included in a recognized collective bargaining unit and those who were appointed before January 1, 1980 . . . " The proposed legislation encompasses, among others, individuals employed at the D.C. public school Central Office, and specifically provides that any such employee "who is terminated as a result of this section shall be separated without competition, assignment rights, or retreat rights." Such employees shall be given at least 15 days notice of proposed separation, shall not be entitled to any internal or administrative review, but shall be entitled to severance pay so long as the separation is for non-disciplinary reasons. The severance pay would be computed in accordance with the provisions of D.C. Code Section 1-624.09 which is referenced in the bill only as "section 2409". These are the reductions-in-force severance pay provisions found under Title I, Government Organization.

Do State Trade Secrets Acts Preempt Common Law Claims?

The recent opinion of Judge Golden in Cenveo Corp. v. Slater, 2007 U.S. Dist. LEXIS 9966 (E.D. Pa., Feb.13, 2007), underscored an ongoing debate in the federal and state courts as to whether a state trade secrets act preempts common law claims. Judge Golden in Cenveo Corp., a case involving the Pennsylvania Trade Secrets Act (PTSA), reviewed the authorities and the arguments, and concluded that it would be inappropriate to grant a motion to dismiss on the issue, and that he would reconsider the issue on a fully developed summary judgment record. Judge Golden declined to join those courts that have held that the state legislatures, in enacting trade secrets legislation, intended to remove liability for any theft of non-trade secrets. Thus, if the proof establishes in a given case that the information that has been allegedly misappropriated constitutes a trade secret, then, it would appear, most courts would hold that common law claims like conversion, would be preempted. In contrast, if the facts established the theft of non-trade secrets, then the statutory claim under the state trade secrets act would not preempt a claim of conversion based upon the taking of information that, though not a trade secret, was nonetheless of value to the plaintiff. Judge Golden's opinion collects the authorities on this interesting issue.

Anonymous Bloggers

Before the Christmas break, we blogged about a recent Texas case involving whether or not the Court would compel the ISP to unmask an anonymous blogger. The Arizona Court of Appeals in Mobilisa Inc. v. John Doe 1, 2007 Ariz. App. LEXIS 225 (Ariz. Ct. App., Nov. 27, 2007), expanded the reasoning of the Delaware Supreme Court's decision in Doe v. Cahill, 884 A.2d 451 (Del. 2005), can set forth sufficient facts to survive a motion for summary judgment. The Arizona Court of Appeals decided to expand the Cahill two factor test to add a third factor, that is, a balancing of the relative interests of the parties. When the Court of Appeals considered this third factor, it found that the anonymous blogger's First Amendment rights should be protected by declining to issue an order to the ISP identifying the blogger. See also Konrad S. Lee, Hiding From The Boss Online: The Anti-Employer Blogger's Legal Quest For Anonymity, 23 Santa Clara Computer & High Tech. L. J. 135 (Nov. 2006).

Wage & Hour Collective and Class Actions

Because the FLSA only authorizes opt-in collective actions, and not Rule 23-type opt-out class actions, plaintiffs' lawyers in wage and hour litigation have adopted the tactic of filing an opt-in FLSA action and a companion Rule 23 class action for alleged state wage and hour violations. The federal courts, thus, have been called upon to determine whether they can certify both a federal FLSA collective action and also certify under Rule 23 state wage and hour claims, sometimes even state wage and hour claims based upon the laws of several states. Recently, the District of Columbia Circuit in Lindsay v. Gov't Employees Ins. Co., 448 F.3d 416 (D.C. Cir. 2006) reversed the trial court's denial of class certification of the state law claims, stating that it "did not view the difference between the opt-in procedure provided by section 216(b) for FLSA claims and the opt-out procedure for state law claims [under New York state law] provided by Rule 23 as fitting the 'exceptional circumstances/other compelling reasons' language" that would allow it to decline jurisdiction under the supplemental jurisdiction statute. See also Lehman v. Legg Mason, Inc., 2007 WL 2768519, 2007 U.S. Dist. LEXIS 69648 (M.D. Pa., Sept. 20, 2007)(court found that, in enacting the FLSA, Congress did not intend to limit the substantive remedies available under state law or their procedural mechanisms under which such remedies may be pursued); Iglesias-Mendoza v. LaBelle Farm. Inc., 239 F.R.D. 363 (S.D. N.Y. 2007)(same); Morton v. Valley Farm Transport, Inc., 2007 WL 1113999, 2007 U.S. Dist. LEXIS 31755 (N.D. Cal., Apr. 13, 2007)(same); Romero v. Producers Dairy Foods, Inc., 235 F.R.D. 474 (E.D. Cal. 2006)(same) and contra Evans v. Lowe's Home Centers, Inc., 2006 WL 1371073, 2006 U.S. Dist. LEXIS 32104 (M.D. Pa., May 18, 2006)(court refused to exercise supplemental jurisdiction over the state law claims and to certify a Rule 23 class).

Spoliation of Evidence - Sanctions

In Communications Center, Inc. v. Hewitt, 2005 U.S. Dist. LEXIS 10891 (E.D. Cal., Apr. 5, 2005), the Magistrate Judge recommended entry of default judgment on plaintiff's claims relating to misappropriation of trade secrets in a breach of fiduciary duty after the defendant ran a software scrubbing program called "Evidence Eliminator" despite a court order to produce mirror images of the hard drives. Recently, Judge Stohr in Ameriwood Industries, Inc. v. Lieberman, 2007 U.S. Dist. LEXIS 74886 (E.D. Mo., July 3, 2007), arrived at essentially the same result when the spoliating party used the software program called "Window Washer". Judge Stohr stated: "While the name sounds less reprehensible than the 'Evidence Eliminator' software used in Communications Center, the purpose is the same . . . [D]efendant's knew information on their computers was discoverable and they destroyed it. The discovery process cannot and will not function when a party exhibits such blatant disregard for basic tenets of the system."

Friday, December 21, 2007

Blogger Anonymity

Any number of courts in recent times have opined on the question whether ISPs should be compelled to disclose the identity of anonymous bloggers. Quite recently, the Court of Appeals for the Sixth Appellate District of Texas has waded into these waters in In re: Does, 06-07-00123-cv (6th App. Dist. Tex., Dec. 12, 2007). The Texas Court found itself in agreement with the 2005 opinion of the Delaware Supreme Court in Doe v. Cahill, 884 A.2d 451 (Del. 2005), which described the test as: "[B]efore a defamation plaintiff can obtain the identity of an anonymous defendant through the compulsory discovery process, he must support his defamation claim with facts sufficient to defeat a summary judgment motion." 884 A.2d at 460. See also Best W. International v. Doe, 2006 WL 2091695 (D. Ariz., July 25, 2006).

The Texas Court also addressed the argument of the hospital that had sued that the Court was empowered to issue such an order under the Cable Communications Policy Act of 1984 (CCPA), 47 U.S.C. Section 551. The Texas Court held that the CCPA provides a sanctuary for cable operators who disclose personal information to private parties pursuant to a court order, but does not provide, by this federal statute, a procedural vehicle for obtaining such a court order. Instead, the plaintiff must use some procedural device, like the Texas rules of discovery, not the CCPA.

Much has been written about anonymous blogging, and I will continue to write about it with some frequency. See Glenn Harlan Reynolds, Libel In The Blogosphere: Some Preliminary Thoughts, 84 Wash. U. L. Rev. 1157 (2006); Daniel J. Solove, A Tale Of Two Bloggers: Free Speech And Privacy In The Blogosphere, 84 Wash. U. L. Rev. 1195 (2006).

Arizona Immigration Law

It would appear that unless the Circuit Court intervenes, the Legal Arizona Worker's Act, A.R.S. Sections 23-211 through 23-214, which was enacted July 2, 2007, will become effective January 1, 2008. Judge Wake of the District of Arizona in the Arizona Contractors Assoc., Inc. litigation has declined to enjoin the enforcement of the state law, a state law which permits the Arizona State Courts to suspend or revoke the business licenses of employers who intentionally or knowingly employ an unauthorized alien. The initial lawsuit, having been filed against the Governor, and not the District Attorneys who would enforce the law, was thrown out by Judge Wake for failure to name the proper defendants. Inexplicably, the plaintiffs delayed doing so, and when they finally sued the proper parties and sought emergency relief, Judge Wake found that the emergency circumstances were of their making, and declined to grant preliminary relief. So, Arizona, as of the New Year, could be enforcing against employers one of the strictest state immigration laws.

Must Retaliation, At Least In A Constitutional Context, Be In The Form Of A Discreet Act Or Can It Be Death By A Thousand Cuts?

Last Term, the Supreme Court in Wilkie v. Robbins, 127 S.Ct. 2588 (2007), seemingly rejected the "thousand cuts" theory. Now, Laurence Tribe, Carl M. Loeb university professor at Harvard, has penned an article for the CATO Supreme Court review entitled: "Death By A Thousand Cuts: Constitutional Wrongs Without Remedies After Wilkie v. Robbins" http://www.cato.org/pubs/scr/2007/tribe.pdf. I will discuss the opinion and Professor Tribe's analysis after the holidays.

Warning: Use of the Wayback Machine Can Result In Expensive Litigation

On July 20, 2007, Judge Kelly of the Eastern District of Pennsylvania issued his decision in the much discussed wayback machine litigation, see Healthcare Advocates, Inc. v. Harding, Early, Follmer & Frailey, 2007 U.S. Dist. LEXIS 52544(E.D. Pa., July 20, 2007). The wayback machine, in its simplest terms, allows one to locate screen shots of websites that have subsequently been revised or deleted. The wayback machine reviews archived images, and makes them available to the searcher unless the website owner has blocked access to the archived web pages. The lawyers at the Harding firm had web research done on Plaintiff's historic websites. Unbeknownst to Harding, Plaintiff had followed the procedures to block access, but the blocking mechanism, over which the Harding firm had no control, malfunctioned and allowed them access to archived images of the Plaintiff's website. Plaintiff sued alleging that this violated the Digital Millenium Copyright Act, the Computer Fraud and Abuse Act as well as being a copyright infringement. After some 39 pages of analysis, Judge Kelly granted the Harding firm's motion for summary judgment. Anyone who intends to use the wayback machine for web research needs to carefully parse Judge Kelly's opinion to hopefully avoid the assertion by the website owner of potential claims.

Obstacle Preemption

In Anderson v. Sara Lee Corp., 2007 U.S. App. LEXIS 26723 (4th Cir., Nov. 19, 2007), the Court held in a FLSA case that state claims for breach of contract, negligence and fraud should have been dismissed as preempted by the FLSA. Judge King, writing for the panel, held that, because the FLSA's enforcement scheme is an exclusive one, the state contract, negligence and fraud claims were precluded under a theory of obstacle preemption. In contrast, the Eleventh Circuit in Avery v. City of Talladega, 24 F.3d 1337, 1348 (11th Cir. 1994), allowed a claim for breach of contract which was coterminous with the FLSA claim. Presumably, Paukstis v. Kenwood Golf & Country Club, Inc., 241 F.Supp. 2d 551, 559-60 (D. Md. 2003), which held that a state negligence claim did "not necessarily conflict with the purpose of the FLSA's remedial scheme, at least where a plaintiff seeks identical damages under both federal and state law", is no longer good law in the Fourth Circuit in light of the Sara Lee decision.

Sanctions Issue Submitted To Supreme Court

In Scott v. Metropolitan Health Corp., 2007 U.S. App. LEXIS 8103 (6th Cir., Apr. 3, 2007), petition for cert. filed (07-360), the Sixth Circuit affirmed a $1.6 million sanction against plaintiff , pursuant to its "inherent powers", finding that Ms. Scott had acted with subjective bad faith. Recently, the National Employment Lawyers Association and the National Whistleblower Center filed an amicus brief in support of Ms. Scott's petition for cert. The principal issue presented is whether imposing sanctions without holding a hearing constitutes a violation of the Due Process Clause.

Thursday, December 20, 2007

Actual Knowledge vs. General Corporate Knowledge - Which Should Be Required In Retaliation Cases?

Some days ago, we discussed the recent opinion of the D.C. Court of Appeals in McFarland v. [need cite], wherein the Court required that the decisionmaker in a retaliation case have actual knowledge of the employee's protected activity, and rejected an argument that it should, in essence, impute knowledge to the corporation in general. Judge Squatrito of the Federal District Court for the District of Connecticut in Tucker v. Journal Register East, 2007 U.S. Dist. LEXIS 82368 (D. Conn., Nov. 7, 2007) held that while a prima facie case of retaliation requires that the plaintiff show that his/her employer was aware of his/her protected activity, the Court went on to hold that the plaintiff merely needed to show nothing more than "general corporate knowledge that the plaintiff has engaged in a protected activity", relying on Gordon v. New York City Board of Education, 232 F.3d 111, 116 (2d Cir. 2000).

False Claims Act - The "Presentment Requirement"

The other day, the petitioners in Allison Engine Co., Inc. v. United States ex rel. Sanders, No. 07-214, cert. granted Oct. 29, 2007, 128 S.Ct. 491, filed their initial merits brief authored by Ted Olson of Gibson, Dunn and Crutcher. This case presents the question whether the Plaintiff in a False Claims Act case under section 3729(a)(2) or (3) is required to prove that a false claim was submitted to the federal government, or whether it is sufficient to establish that the claim was paid using federal monies. This is the so-called Totten issue, referring to United States ex rel. Totten v. Bombardier Corp., 380 F.3d 488 (D.C. Cir. 2004) where the now Chief Justice held that the FCA requires presentment to the federal government directly of a false claim.

Upon return from the holiday, we will discuss and dissect the issues presented by this case at greater length.

Federal Legislative Update

OPEN Government Act of 2007 (S.2488)

The Congress has passed and sent to the President for signature, amendments to the Freedom of Information Act (FOIA). Among other changes, section 4 relaxes the requirements for an award of attorneys' fees in FOIA litigation. The section 4 amendment provides that a FOIA complainant has substantially prevailed in a legal proceeding to compel disclosure if such complainant obtained relief through either: (1) a judicial order or an enforceable written agreement or consent decree; or (2) a voluntary or unilateral change in position by the agency if the complainant's claim is not insubstantial. In addition, where the complainant has substantially prevailed, section 4 prohibits the use of the Treasury's Claims and Judgment Fund to pay attorneys' fees, and requires that such fees be paid only from funds annually appropriated for authorized purposes for the federal agency against which a claim or judgment has been rendered.

Is It Protected Activity For An Employee To Cooperate With Her Employer's Internal Investigation Of Sex Harassment?

Yesterday, the Solicitor General filed a so-called invitation brief with the Supreme Court in Crawford v. Metropolitan Government of Nashville and Davidson County, Tennessee, No. 06-1595. The text of the Solicitor's brief can be found on the SCOTUSblog. The issue before the Court is whether section 704(a) of Title VII, its anti-retaliation provision, protects an employee from retaliation because the employee cooperated with her employer's internal investigation of a sexual harassment complaint. The Solicitor urges the Court to grant the writ of certiorari and to reverse the Sixth Circuit's decision in this case, holding in an unpublished decision that the employee's cooperation was neither protected under section 704(a)'s opposition or participation clauses. The Sixth Circuit reasoned that the employee's actions in cooperating, that is, "relating unfavorable information" during the investigation, did not qualify as "overt opposition", and accordingly was not protected conduct. With regard to the participation prong of section 704(a), the Court reasoned that participation in a corporate internal investigation is only protected activity when that corporate investigation occurs pursuant to a pending EEOC charge, and as none had been filed at the time of the investigation in this case, employee's participation was unprotected.

When we return from the holiday, we will further discuss and dissect the Solicitor's brief. Quite obviously, the Court having invited the Solicitor to share its views with the Court, and the Solicitor now having urged the Court to take this case, there is a high likelihood that the Court will indeed take cert.

Wednesday, December 19, 2007

Federal Employee Protection of Disclosures Act

On Monday of this week, the Senate by unanimous consent approved S.274, the Federal Employee Protection of Disclosures Act ("FEPDA"). The House of Representatives had passed similar legislation, H.R. 985, back in March of this year. The text of the Senate bill can be found at http://www.govtrack.us/congress/billtext.xpd?bill=s110-274. The FEPDA would, among other things:

- Afford federal employee whistleblowers jury trials with the potential for compensatory damages awards;

- Permit federal whistleblower appeals to go to the Circuit Courts, ending the Federal Circuit's monopoly on such appeals;

- Revise the statute to provide that reports made as a part of an employee's job duties can be considered whistleblowing, thus avoiding the holding of the Supreme Court in Garcetti v. Ceballos;

- Permit the denial of a security clearance to be viewed as an adverse employment action;

- Provide whistleblower protections to employees of federal contractors, the TSA, and other agencies whose employees were previously not protected.

Tuesday, December 18, 2007

E-Discovery

So, you are headed to a Federal Civil Rule 26(f) "meet and confer" conference regarding e-discovery. How do you prepare and what should be discussed? Craig Ball has an excellent piece in Law Technology News entitled "Ball In Your Court: Ask The Right Questions", which can be found at http://www.lawtechnews.com/r5/survey.asp (subscription only). Craig has 50 questions to consider asking.


Off-label False Claims Act Cases

In the last few days, I have made several mentions of off-label FCA cases. There is an interesting off-label Rule 9(b) decision from Judge Kennelly in U.S. Ex Rel. Kennedy v. Aventis Pharmaceuticals, Inc., 2007 WL 2681701 (N.D. Ill., Sept. 13, 2007) and a subsequent denial of a motion for reconsideration found at 2007 WL 3145010 (N.D. Ill., Oct. 23, 2007). In essence, the Judge ruled that an off-label pharmaceutical case survives Rule 9(b) scrutiny even though the complaint did not detail an individual claim that was actually submitted to the government. And, in denying Aventis' motion for reconsideration, the Judge also declined a request for an immediate interlocutory appeal, distinguishing U.S. Ex Rel. Clausen v. Laboratory Corp. of America, Inc., 290 F.3d 1301 (11th Cir. 2002) and U.S. Ex Rel. Russell v. Epic Health Care Management Group, 193 F.3d 304 (5th Cir. 1999).

Disparate Impact

The other day, we wrote about the Supreme Court's request of the Solicitor General for briefing on the testing issues in N.Y. City Board of Education v. Gulino. See http://robertfitzpatrick.blogspot.com/2007/12/board-of-education-of-new-york-city.html. The EEOC has issued a fact sheet on testing which can be found at http://www.eeoc.gov/policy/docs/factemployment_procedures.html, indicating EEOC's continuing interest in challenging tests that have a disparate impact on the basis of race.

While I am not yet prepared to fully dissect the opinion, there is potentially a very important decision from the Sixth Circuit regarding disparate impact and the stringency of the business-necessity defense. The Sixth Circuit's case arises not in an employment context, but in a Fair Housing Act case. Nonetheless, its analysis, and the debate among the judges may well carry over into continuing debates regarding disparate impact and the business-necessity doctrine in employment cases. See Graoch v. Louisville-Jefferson County Metro Human Relations Commission, 2007 U.S. App. LEXIS 26883 (6th Cir., Nov. 21, 2007).

Section 8 Voucher Program

The Graoch case involved the Section 8 voucher program, which is a voluntary program through which the federal government provides rent subsidies to eligible low-income families who rent from participating landlords. While at a later date, I will discuss Graoch's analysis of the business-necessity defense, Graoch is interesting also because it is the second case this month involving the Section 8 program. In Graoch, a landlord, in essence, has been prohibited from withdrawing from a so-called voluntary federal program. In a case before the Maryland Court of Appeals, the landlord was required to participate in the Section 8 program on the ground that a refusal to participate would constitute "source of income" discrimination under the Montgomery County, Maryland anti-discrimination law, MCC, Ch. 27, §§ 27-1 through 27-63. See Montgomery County v. Glenmont Hills Assoc., 2007 Md. LEXIS 719 (Md. 2007).

Ad Damnum Clause

Last week, we summarized the holding in Hoang v. Hewitt Avenue Associates, LLC (see http://robertfitzpatrick.blogspot.com/2007/12/there-is-lots-going-on-at-end-of-week.html). As promised, a few thoughts regarding the implications of this decision. At first blush, one sympathizes with the litigant whose judgment of $1.89 million is reduced to a mere $100,000 because the ad damnum clause in the original complaint sought damages "in excess of $100,000." But, sympathy begins to erode when one sees that the victorious plaintiff never once sought to amend the ad damnum clause to advise the defendant that the plaintiff sought not a mere $100,000, but far, far more. The simple best practice tip to be taken away from this Maryland case is that one should timely amend the ad damnum clause. The Court of Appeals seems to indicate that timely amendments that do not blindside the defense ought to be routinely granted.

Layoffs and ERISA Section 510 Claims

Recently, the Supreme Court denied cert. in Eichom v. AT&T Corp., 484 F.3d 644 (3d 2007). See also the prior opinion in Eichom I of the Third Circuit at 248 F.3d 131 (3d 2001).

As pointed out by guest blogger Colleen Medill in the Workplace Prof blog, "Eichom is symbolic of a new genre of Section 510 claims where the claim of interference is not made by a lone individual who allegedly was targeted for retaliation, but rather stems from a corporation restructuring where employee benefits (most notably, their costs) are a factor in how the reorganization is structured." So, with the possibility of recession looming on the horizon, and the inevitable increase in layoffs, plaintiff and defense lawyers both need to be mindful, as always, of age discrimination claims under both federal and state law, WARN Act claims, challenges to releases under OWBPA, and now this new genre of claim - - a Section 510 ERISA claim.

Mind-reading To Prove Racial Bias

The American Psychological Association (I note using federal grant money from the National Institute of Mental Health) has issued a report entitled "Functional Magnetic Resonance Imaging: A New Research Tool" in which it states at the outset: "A brain scanning technology called functional magnetic resonance imaging (fMRI) isn't quite a mind-reader, but it comes close." The article goes on to opine that the results of fMRI may be able to demonstrate racial prejudice. The report states that: "Even though all of the participants [in research performed by a psychologist] said they weren't prejudiced, their brains told a different story."

Having decades ago fought the good fight over the use of the so-called lie detector in the workplace, one is saddened to see an organization like the APA suggesting that a brain scan might reveal prejudice. With this report in hand, let me count the days before a plaintiff's attorney argues to the court that the alleged discriminating official should have a fMRI administered in a racial prejudice case. Such nonsense can only make those who pine for the good ol' days of the STASI and the gulag happy. Many, in the wake of the pendulum swinging too far to prohibit conduct as sex harassment, have joked about the "sex police". Now, will the race robocops attach scans to our brains to ferret out those who need to be sent to reeducation camps. Garbage like this from the APA belongs one place only - - the trash can. And, NIMH, or at least the taxpayers, should be aghast that our scarce resources are being wasted on garbage like this.

Attention Deficit Disorder

Attention Deficit Disorder, many times called Attention Deficit Hyperactivity Disorder, has been the subject of much litigation under the ADA, both in the employment and educational contexts. Recently, Judge Oliver of the Northern District of Ohio in Braud v. Cuyahoga Valley Career Center, 2007 U.S. U.S. Dist. LEXIS 72123 (N.D. Ohio, Sept. 27, 2007), held that ADHD is not a disability within the meaning of the Americans with Disabilities Act, finding that ADHD did not substantially limit him in any major life activity. In doing so, Judge Oliver opined that the courts "have viewed with skepticism the claims of plaintiffs that have been diagnosed with ADHD who claim to be disabled." See the opinions of Judge Lamberth in Steere v. The George Washington University, et al., 2005 U.S. Dist. LEXIS 4313 (D.D.C., Mar. 22, 2005) and Steere v. The George Washington University School of Medicine and Health Sciences, 2006 U.S. Dist. LEXIS 46671 (D.D.C., July 12, 2006).

Retaliation - Protected Activity

For employers, it is often times difficult to draw the line between what constitutes "protected activity" and what is simply unacceptable bellyaching that can be the basis for termination. Recently, the Sixth Circuit addressed this recurring issue in Fox v. Eagle Distributing Co., 2007 U.S. App. LEXIS 28887 (6th Cir., Dec. 14, 2007). The employee in Fox had filed a charge of discrimination with EEOC, which is clearly protected activity. Thereafter, he repeatedly told co-workers and customers that his employer was out to get him and that he was going to sue the company for millions. In his complaints to customers, he never claimed that his employer was discriminating against him. When the company was informed of what he had been saying to customers, he was fired for a "poor attitude". Not surprisingly, Fox contended that his termination was retaliatory. The Sixth Circuit held that he had not engaged in protected activity because he had not complained to customers that he was a victim of discrimination by his employer.

Clearly, Eagle Distributing Co. is the courageous exception to the rule. Ask yourself - - if you were asked to advise the employer in these circumstances where an EEOC charge has already been filed, and the employee is complaining to customers, would you recommend that your client terminate, and run the risk of the inevitable retaliation claim. Tip of the hat to Eagle Distributing Co.

Monday, December 17, 2007

When Is A Lawsuit By An Employer Considered Retaliation?

In Greer-Burger v. Temesi, 2007 Ohio 6442, 2007 Ohio LEXIS 3049 (Ohio, Dec. 12, 2007), the Ohio Supreme Court in its Greer-Burger decision, rejected the lower court's holding that the mere act of filing a lawsuit by an employer is per se retaliatory. Instead, the Ohio Supreme Court's majority held that the employer must be afforded an opportunity to show that there is an objective basis for the lawsuit. The Supreme Court's litmus test for establishing an objective basis, is that the employer must demonstrate that its case can survive a motion for summary judgment. In other words, the employer must establish that there are genuine issues of material fact, such that summary judgment could not be granted, in order to establish that its lawsuit is not actionable retaliation. The dissent would hold that the filing raises retaliation as a prima facie issue to be rebutted, and that the employer's rebuttal must show that the employee's previous discrimination claim was totally without merit, i.e., frivolous.

One must question whether either the majority or the dissent is correct. Some would argue that if the employer has a claim against the employee, it should be allowed to pursue it unless it is frivolous and, of course, the employer's motivation for filing is retaliatory. I had thought that BE&K Construction Co. v. NLRB, 536 U.S. 516 (2002) had suggested that even if the employer filed the action out of spite and anger because of the employee's protected activity, the right of access to the courts was so paramount that such an employer could proceed so long as the lawsuit was not frivolous. If this were to be the test, then even though the employer's case might not survive summary judgment, it could be a far cry from frivolous. It would seem that the Ohio Supreme Court debated these difficult questions with blinkers on that narrowed the scope of legitimate debate on the question.

False Claims Act - Public Disclosure - Off-Label Drug Prescriptions

Last week, I referenced the increasing incidents of False Claims Act (FCA) cases based on off-label drug marketing. The First Circuit in U.S. ex rel. Rost v. Pfizer, Inc., 2007 U.S. App. LEXIS 26486 (1st Cir., Nov. 15, 2007) was such a case, and raised head-on the question whether the defendant-company's self-disclosure only to the government, without further disclosure, is a "public disclosure" within the meaning of the FCA, specifically section 3730(e)(4)(A). The First Circuit, Judge Lynch writing, held: "The mere fact that the disclosures are contained in government files someplace, or even that the government is conducting an investigation behind the scenes, does not itself constitute public disclosure."

Friday, December 14, 2007

There is lots going on at the end of the week, and I will try to touch on some of the major developments.

Supreme Court Update

Yesterday, a petition for cert. was filed in Murphy v. IRS, 493 F.3d 170 (D.C. Cir. 2007)(rehearing denied en banc, 2007 U.S. App. LEXIS 22173 (D.C. Cir., Sept. 14, 2007)). This is the tax case that attracted so much attention this year. Initially, the D.C. Circuit held that it was unconstitutional to tax compensatory damages for non-physical injuries, holding that it was not taxable income. This extraordinary decision was challenged on petition for rehearing, and the panel that originally issued the decision did a complete flip, and held that such damages are taxable. Ms. Murphy is represented by David K. Colapinto, General Counsel of the National Whistleblower Center. You can go to their website and click on the petition filed yesterday with the Court. See http://www.whistleblowers.org/.

Maryland Wage Payment & Collection Act

Yesterday, the Maryland Court of Appeals has granted the petition for cert. in Hoffeld v. Shepherd Electric, 2007 Md. App. LEXIS 127 (Md. Ct. Spec. App., Sept. 24, 2007)(case No. 106, Sept. Term 2007 in Maryland Court of Appeals). The Court will now review the decision of the Maryland Court of Special Appeals which rejected the claim of a salesman who contended that he had been denied commissions in violation of the Maryland Wage Payment and Collection Law. The salesman argued that he was due commissions on sales that he had made before his termination. The court distinguished the fact situation in Hoffeld from that in Medex v. McCabe, 811 A.2d 297 (Md. 2002). The court found that in McCabe the employee had done all the work necessary to earn the commission, and had been denied the commission solely because he was not employed on the scheduled payment date. In distinguishing that case, the court stated: “Unlike Medex, commissions in this case were not linked to the arbitrary factor of employment, but to a reasonable job requirement.” In the instant case, while the salesman had made the sale prior to his departure, the salesman also was responsible for handling change orders and resolving problems for clients before and after orders shipped. Under the company’s unwritten policy, commissions were not considered to have been “earned” until the shipment/invoice date. The company explained that its policy was based on the fact that sometimes orders were modified before shipment, and clients were permitted to cancel orders before shipment.


Ad Damnum Clauses In Maryland

Last Friday, December 7, 2007, the Maryland Court of Special Appeals in Hoang v. Hewitt Avenue Associates, LLC, 2007 Md. App. LEXIS 152 (Md. Ct. Spec. App., Dec. 7, 2007)
(CSA #1048, Sept. Term 2005), held that a damage award of $1.89 million must be reduced to $100,000 because Plaintiff's ad damnum clause stated that he sought damages "in excess of" $100,000. Rule 2-305 states that "a demand for a money judgment shall include the amount sought." The Court held that the ad damnum clause in this case did not satisfy the plain language of the rule.

We will discuss the implications of this case at length next week.

D.C. Federal Court Orders Defendant To Restore Backup Tapes

In Disability Rights Council of Greater Washington v. Washington Metro. Area Transit Auth., 242 F.R.D. 139, 2007 U.S. Dist. LEXIS 39605, 2007 WL 1585452 (D.D.C. June 1, 2007), an ADA case, Magistrate Judge Facciola granted Plaintiff's motion, and ordered the Defendant to restore and search backup tapes for discoverable information. The Defendant's email system was programmed to automatically delete all emails after 60 days. Subsequently to the filing of the lawsuit, the Defendant's failed to take steps to prevent the deletions. In response to Plaintiff's motion, WMATA argued that for it to do so would impose an undue burden and expense.

Magistrate Judge Facciola, in rejecting that argument, stated: "It reminds me too much of Leo Kostens' definition of chutzpah: 'that quality enshrined in a man who, having killed his mother and his father, throws himself on the mercy of the court because he is an orphan.'" (footnote omitted). The Court granted Plaintiff's motion and held that while the amendments to the Rules "initially relieve a party from producing electronically stored information that is not reasonably accessible because of undue burden and cost, I am anything but certain that I should permit a party who has failed to preserve accessible information without cause to then complain about the inaccessibility of the only electronically stored information that remains."

Chemical Sensitivity and The Americans With Disabilities Act

McBride v. City of Detroit, 2007 U.S. Dist. LEXIS 87391 (E.D. Mich., Nov. 28, 2007). In this case, Judge Zatkoff denied Defendant's motion to dismiss an ADA case where the Plaintiff claimed that she suffered from chemical sensitivity to perfume, body lotion, aftershave, cologne, deodorant and hairspray, among others. She claimed that exposure caused headaches, nausea, chest tightness, cough and rhinitis (to wit, a runny nose). She alleged that chemical sensitivity is a physiological disorder and is thus a physical impairment. She alleged that the chemical sensitivity substantially limited her major life activities of breathing, engaging in social activities and reproduction. She requested, as a reasonable accommodation, that the Defendant, City of Detroit, implement and enforce a " no scent policy", prohibiting the wearing of scents or perfumes in the workplace.

One can only imagine what the offices at City Hall in Detroit would smell like if Plaintiff were to win this case and force this accommodation upon the City.

Query: Does this case make any sense?

In contrast, District Judge Motz, back in 2000 in Comber v. Prologue, Inc., 2000 U.S. Dist. LEXIS 16331 (D.Md., Sept. 28, 2000), held that Plaintiff's evidence in an ADA case of her "multiple chemical sensitivity syndrome" was inadmissible, because it did not meet the Daubert standard for the admissibility of scientific evidence, relying upon holdings of the Fourth, Seventh and Tenth Circuits that evidence of MCSS was inadmissible. Apparently, the City of Detroit, did not call these authorities to the attention of Judge Zatkoff.

Federal Legislative Update

Trade and Globalization Assistance Act (H.R. 3920)

The House of Representatives on October 31, 2007 passed H.R. 3920 by a vote of 264-157. The text of the bill can be found at http://www.govtrack.us/congress/bill.xpd?bill=h110-3920. The proposed legislation amends the WARN Act to require 90 days of notice to employees, instead of the current 60 days, of impending job layoffs due to plant closings and mass layoffs as a result of globalization. The bill also provides to impacted employees more time to receive continuation of their health care coverage under COBRA.

Thursday, December 13, 2007

Supreme Court Update

The Supreme Court denied cert. the other day in Bonilla v. Baker Concrete Construction, Inc., 487 F.3d 1340 (11th Cir. 2007), cert. denied, 2007 U.S. LEXIS 13052 (U.S., Dec. 10, 2007). Bonilla is a FLSA case, involving whether construction workers were entitled to compensation for travel time on the defendant-employer's buses between the Atlanta airport security checkpoint and the actual construction site. The workers sought, under the FLSA, overtime for such travel both before and after their work at the construction site. Judge Kravitch, writing for the panel (Judge Black concurred in the result), found that the travel time was not compensable and that it was encompassed by the statutory exception of Section 254(a) of the FLSA. The court accorded Skidmore deference to DOL interpretive statements on the subject, and the court found that the circuits agreed with its interpretation, including the Fourth Circuit in Ralph v. Tidewater Construction Corp., 361 F.2d 806 (4th Cir. 1966), a case in which it held that time that employees spent traveling on an employer's boat to a construction site was not compensable. The Supreme Court's IBP decision was distinguishable because the time that the employees spent going through mandatory security screening was not "integral and indispensable" to a principal activity.

Newport News, VA. v. Sciolino, 480 F.3d 642 (4th Cir. 2007), cert. denied, 2007 U.S. LEXIS 13055 (U.S., Dec. 10, 2007). The Court denied cert. in a case involving a municipal police officer who sued under Section 1983, contending that he was entitled to a name-clearing hearing because the city had placed false information in his personnel file which could damage his good name. The opinions of the majority and the dissent in this case appeared to have acceptance of cert. written all over it. Judge Motz, writing for herself and Judge Gregory, forged a "likely to be disseminated" test as the linchpin for determining whether the public employee was entitled to a name-clearing hearing. Judge Wilkinson wrote an eloquent dissent. Interestingly, civility between chambers in Richmond seemed to collapse over this case. In a court known for its gentility, comments by Judge Motz regarding Judge Wilkinson sounded more like a debate between Rudy Giuliani and Ed Koch rather than the dialogue expected in the Fourth Circuit. In any event, the Supreme Court chose not to accept this case, and, for now, Judge Motz' approach to public sector "defamation" cases is the law of the Fourth Circuit.

14 Penn Plaza LLC v. Pyett, 498 F.3d 88 (2d. Cir. 2007), cert. filed, No. 07-581. A petition for cert. was filed, presenting the question whether an arbitration clause in a collective bargaining agreement can waive union members' right to a judicial forum for their statutory discrimination claims. The case presents, head on, whether Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974), remains good law.

John Carlo Inc. v. Chao, 234 Fed. Appx. 902 (11th Cir. 2007), cert. filed, No. 07-606. The cert. petition filed in this case presents in an OSHA case the "cat's paw" issue that the court had accepted cert. on last term in BCI Coca-Cola [cite], only to have it settle before oral argument. In the John Carlo case, the Commission adopted the decision of an ALJ that imputed to the employer the actual knowledge of willfulness of a project superintendent and a foreman to the employer.

Sher v. Dep't of Veteran's Affairs, 488 F.3d 489 (1st Cir. 2007), cert. filed, No. 07-595. This petition caught my eye because Samuel Estreicher is on the cert. petition. Here a federal government employee who was disciplined for failure to cooperate when he did not answer questions during an interview regarding an allegation that he had accepted free drug samples from a pharmaceutical company, a refusal to answer even though he had been granted use immunity. The petition contends that an employee may not be disciplined for a good faith invocation of his Fifth Amendment privilege against self-incrimination.

Federal Legislative Update

Arbitration Fairness Act (S.1782)

The Senate Judiciary Committee's Civil and Constitutional Rights subcommittee held a hearing on S.1782 on Wednesday, December 12. The text of the bill can be found at www.govtrack.us/congress/bill.xpd?bill=s110-1782.

Revision to Mandatory Airline Pilot Retirement (H.R. 4343)

The House of Representatives on Tuesday, December 11, passed an amendment increasing the mandatory retirement age to 65. The text of the Fair Treatment for Experienced Pilots Act can be found at www.govtrack.us/congress/bill.xpd?bill=h110-4343.

English-Only (H.R. 3093)

The appropriation bill contains, in Section 527, for the FBI, NASA, and DOJ contains an English-only provision. The text of the bill can be found at www.govtrack.us/congress/bill.xpd?bill=h110-3093. The bill provides that funds made available by the Act may not be used by, or on behalf of, the EEOC in an action against an entity based on their requirement that an employee only speak English at work.

False Claims Act Update

Increasingly, there has been substantial FCA litigation involving off-label marketing of drugs. To access an interesting thirty-minute speech by a defense lawyer on the subject, Paul E. Kalb of Sidley Austin, go to http://icvclients.com/ehcca/pharma_2007/2_1230/.

Form I-9

Be certain to remind your clients and your firm administrators that effective December 26, employers must begin to use the revised form I-9. For more information on the new I-9, see www.jacksonlewis.com/legalupdates/pdf/11-23-07_CIS_Update_New_I-9_Form_Become_Effective_12-26-07.pdf; www.jacksonlewis.com/legalupdates/pdf/New_Employer_I-9_Handbook_M-274_11-07.pdf; www.jacksonlewis.com/legalupdates/pdf/NewI-9Form11-07.pdf; www.jacksonlewis.com/legalupdates/pdf/New_Revised_I-9_Form_Instructions_11-9-07.pdf .

Domestic Abuse Leave

Increasingly, state legislatures are enacting leave laws that permit employees who have been victims of domestic abuse or who need to care for someone in their household who has been a victim of domestic abuse to take leave for said purpose. Recently, Florida enacted such a statute which applies to employers of fifty or more employees, and took effect last July. The statute is available at www.leg.state.flo.us/welcome/index.cfm?CFID=35772789&CFTOKEN=49535546. The Florida statute requires that employees be granted three days leave to care for anyone in their household who is a victim of domestic abuse, including the employee, a child, a relative or a friend. The statute does not mandate that the leave be paid leave. And, the statute prohibits the discrimination or retaliation against an employee for exercising their rights under the new statute. See also Deborah Widiss, "Domestic Violence and the Workplace," Workplace Prof Blog, Nov. 11, 2007, available at http://lawprofessors.typepad.com/laborprof_blog/2007/11/domestic-violen.html.

Intersectional Discrimination

Intersectional claims have been brought on behalf of African-American females typically. See Jeffries v. Harris County, 615 F.2d 1025, 1032-33 (2d Cir. 1980) (The Court of Appeals said “discrimination against black females can exist even in the absence of discrimination against black men or white women.”); Smith v. AVSC, 148 F. Supp. 2d 302 (S.D.N.Y. 2001) (Sex discrimination plus additional characteristic); Lam v. Univ. of Haw., 40 F.3d 1551, 1562 (9th Cir. 1994) (Court stated: “the attempt to bisect a person’s identity at the intersection of race and gender often distorts or ignores the particular nature of their experiences.”). A recent article entitled “The Most Endangered Title VII Plaintiff?: African American Males and the Intersectionality Claims” at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=984552, provides and overview of the development of the intersectional claim. See also, Virginia W. Wei, “Asian Women and Employment Discrimination: Using Intersectionality Theory to Address Title VII Claims Based on Combined Factors of Race, Gender and National Origin,” 37 B.C. L. Rev. 771 (1996); Sabina Crocette, “Considering Hybrid Sex and Age Discrimination Claims by Women,” 28 Golden Gate U. L. Rev. 115 (1998).

Wednesday, December 12, 2007

Board of Education of The New York City School District of The City of New York v. Gulino, No. 07-270



On Monday, December 3, 2007, the Supreme Court invited the Solicitor General to file a brief in this case expressing the views of the United States. If the Court takes this case, it could have a dramatic effect on the ability of public school systems to administer competency tests to incumbent and aspiring teachers. The case is filled with ironies.



First, the Second Circuit, Judge Wesley writing for the panel, reversed the Southern District of New York's holding that the test at issue was job-related and that accordingly the Plaintiff class of African-American and Latino teachers challenge to the test on disparate impact grounds failed. The District Judge who issued that decision was none other than the now deceased, revered icon of the Civil Rights Movement, the Honorable Constance Baker Motley. A reading of the Second Circuit's reversal of Judge Motley underscores that the Court well understood that it was finding, with some temerity, that an African-American female Federal District Judge who for decades had been on the front lines of the Civil Rights jurisprudential revolution, had erred. Repeatedly, in his opinion, Judge Wesley genuflects to the legacy of Judge Motley. Nonetheless, the Second Circuit reverses her.



The second irony is that, among other lawyers representing the Plaintiff class, was a law firm that normally aligns itself in employment cases with management, DLA Piper Rudnick Gray Cary US LLP.



The decision of Judge Motley is reported at 2003 U.S. Dist. LEXIS 27325 (S.D.N.Y., Sept. 4, 2003). The decision of the Second Circuit reversing is found at 460 F.3d 361 (2d Cir. 2006) and the New York City Board of Education's petition for cert was filed on August 27, 2007 (2007 WL 2456185). And the Court's Order inviting the Solicitor to file a brief can be found at 2007 U.S. LEXIS 12762 (U.S., Dec. 3, 2007).



In its simplest terms, the case involves the imposition by the New York State Education Department upon the New York City Board of Education (BOE) of a requirement that all teachers and all aspiring teachers pass a test called the Liberal Arts and Sciences Test (LAST). The test is referred to as a New York State teacher certification examination. The class of African-American and Latino teachers and aspiring teachers sued both the BOE and the New York State Education Department (SED). They argued before Judge Motley that the SED could be considered to be an employer within the meaning of Title VII, arguing that the so-called interference theory, first enunciated by the D.C. Circuit in 1973 in Sibley Memorial Hospital v. Wilson, 488 F.2d 1338 (D.C. Cir. 1973). The Defendants argued that, for the purposes of this case, neither should be considered to be an employer within the meaning of Title VII.



The SED argued that the Second Circuit had never adopted, and should not adopt, the Sibley interference theory. This theory reads Title VII to cover entities that interfere with a direct employment relationship. The District Court found that the State's involvement was sufficient to bring the SED within the scope of the interference test. The Second Circuit reversed that finding, and ironically dismissed the party directly responsible for the creation of the LAST. The Second Circuit adopted the dissent of Judge Gould of the Ninth Circuit in Association of Mexican-American Educators v. California, 231 F.3d 572 (9th Cir. 2000)(en banc)("AMAE"). In AMAE, the en banc majority had endorsed the D.C. Circuit's Sibley test. Judge Gould, in dissent in AMAE, rejected the Sibley test as contrary to a natural reading of Title VII. So, the Second Circuit, now turned its attention to the BOE, and Judge Motley's decision finding that while the BOE was an employer within the meaning of Title VII, the LAST, although it had disparate impact, was lawful because, according to Judge Motley, the Supreme Court in Watson v. Forth Worth Bank & Trust, 487 U.S. 977 (U.S. 1988), had lowered the bar for employers in disparate impact cases. Judge Motley specifically found that Watson resulted in the Second Circuit's more onerous test in disparate impact cases first enunciated in Guardians Association of New York City Police Department v. Civil Service Commission of City of New York, 630 F.2d 79 (2d Cir. 1980) as no longer being good law. The Second Circuit disagreed with Judge Motley, finding that Watson did not undermine Guardians.


Judge Motley, in approving the Essay Section of the LAST noted: "It should go without saying that New York City Teachers should be able to communicate effectively in both spoken and written English. Teachers who are unable to write a coherent essay without a host of spelling and grammar errors may pass on that deficiency to their students, both in commenting upon and grading the work they turn in. Defendants' decision to exclude those who are not in command of written English is in keeping with the legitimate educational goal of teaching students to write and speak with fluency." While the Second Circuit thought Judge Motley's observation to me eminently reasonable, it found the EEOC's Uniform Guidelines on Employee Selection Procedures (29 C.F.R. Sections 1607.1 - 1607.18(2006)) perhaps to be the most important source of guidance, calling them "the primary yardstick by which we measure defendants' attempt to validate the LAST." And so, after a convoluted, esoteric discussion of "content" and "construct" validity, the panel found the LAST did not survive scrutiny under the EEOC's Guidelines and Guardians.

None of this complex Title VII jurisprudence is presented to the Supreme Court for further elaboration. The debate as to whether cases like Sibley and AMAE are correct continues, and will have to be resolved at a later date. And, the debate regarding the Supreme Court's holding in Watson, the 1991 Civil Rights Act disparate impact provisions, what level of deference, if any, to accord to EEOC's Uniform Guidelines on Employee Selection Procedures and the continuing vitality of Guardians will remain unresolved.



The issue before the Court is whether, for the purposes of this case, the BOE should be considered for all purposes to be acting as an employer. The BOE argues that it is obliged to comply with State licensing requirements, and its obeisance to the State-mandated licensing activity does not give rise to a cause of action under Title VII. The BOE relies upon a string of appellate decisions finding, in various contexts, including teachers, that Title VII does not apply to State certification examinations. See Fields v. Hallsville Independent School District, 906 F.2d 1017 (5th Cir. 1990) (Title VII does not apply to State certification exam administered to Texas teachers); George v. New Jersey Bd. Of Veterinary Medical Examiners, 794 F.2d 113 (3d Cir. 1986) (Title VII does not apply to New Jersey veterinary license); Haddock v. Bd. Of Dental Examiners of California, 777 F.2d 462, 464 (9th Cir. 1985) (Title VII “is not intended to apply to the kind of licensing activity in which the Board [of Dental Examiners] engages”; “history [of bill deleting from Title VII exemption for state government employers] is barren of any reference to state licensing agencies or the many persons licensed by them”); Woodard v. Virginia Bd. Of Bar Examiners, 598 F.2d 1345 (4th Cir. 1979) (Title VII does not apply to bar examination); Tyler v. Vickery, 517 E2d 1089 (5th Cir. 1975) (Title VII does not apply to the Georgia bar examination); see also Camacho v. Puerto Rico Ports Authority, 369 F.3d 570, 578 (1st Cir. 2004) (“under … Title VII,…state licensing and regulatory agencies generally are not regarded as employers vis-รก-vis those whom they license and regulate”). Challenges to state licensing tests arise solely under 42 U.S.C. § 1983 and the Fourteenth Amendment. See, e.g., Haddock, supra, 777 F.2d 462 (9th Cir. 1985).



One can only imagine the debate going on within the federal establishment regarding what position the Solicitor General should take. We can be certain that EEOC is arguing for the point of view enunciated by the Second Circuit. Presumably, later historians will discover what position the Civil Rights Division of DOJ takes, much less the back and forth between the agencies over this question. Should the Court take the case, and find that this is a licensing, and not an employment case, and that therefore Title VII does not apply, then presumably Plaintiff's only remedy would be a Section 1983 claim, which does not permit disparate impact analysis, and can only be based on a showing of discriminatory intent. Potentially, the end result of such a Supreme Court holding would be far more latitude on the part of public schools to test incumbent and aspiring teachers for competence in liberal arts and sciences.

Tuesday, December 11, 2007

McFarland v. The George Washington University, 2007 D.C. App. LEXIS 660 (D.C. Nov. 8, 2007).

This decision, written by Judge Fisher, is ladened with issues worthy of discussion. I will try to touch on the ones that appear most interesting.

The Burden of Proof in So-Called "Reverse Discrimination" Cases

For decades, the courts have grappled with the burden of proof in so-called "reverse discrimination" cases. The Federal Courts in the District of Columbia, long ago, adopted a heightened standard for such cases, requiring the Plaintiff to show "additional background circumstances that support the suspicion that the Defendant is that unusual employer who discriminates against the majority." Mastro v. Potomac Electric Power Co., 447 F.3d 843, 851 (D.C. Cir. 2006)(quoting Harding v. Gray, 9 F.3d 150, 153 (D.C. Cir. 1993). See also Parker v. Baltimore & Ohio R.R. Co., 652 F.2d 1012, 1017 (D.C. Cir. 1981).

The D.C. Court of Appeals has never had occasion to adopt that standard or to reject it. And, in McFarland, the Court leaves for another day whether it will adopt the Circuit's heightened standard. McFarland, an African-American male, claimed gender discrimination, and argued that the Parker/Harding/Mastro heightened standard ought not apply to him in a gender case because he is an African-American.

The McFarland court noted that the Federal District Court for the District of Columbia had applied the heightened standard in cases where an African-American male alleged gender discrimination. In doing so, the McFarland court stated that it was "skeptical" that the heightened standard was intended to apply in a case like McFarland's.

So, we will have to wait for another day as to whether so-called "majority" plaintiffs have a heightened standard of proof in discrimination cases or whether the District of Columbia is prepared to establish a level playing field. The McFarland court, in noting the rationale for the heightened standard when Caucasian bring so-called "reverse discrimination" cases, seems to suggest that in such a case it too would apply the heightened standard rather than a level playing field.

"Intersectional" or "Combination" Discrimination Claims

Over the years, a number of courts have recognized a "distinct protected subgroup", many times African-American females, and have allowed such "intersectional" or "combination" claims to proceed. Many of the cases are collected in McFarland. In McFarland, the Plaintiff, an African-American male, argued that this was not just gender discrimination, this was discrimination against an African-American man. Apparently suggesting that he was a member of a "distinct protected subgroup". As this argument, which would stretch the "intersectional" theory to its outer limits, had first been raised in McFarland's reply brief, the panel declined to reach the issue, noting that it had found no federal case "where the court has squarely held that black men are a distinct subgroup for purposes of applying the anti-discrimination principles of Title VII."

Knowledge of Protected Activity

Faced with the fact that there was no evidence that the individuals in the McFarland case who made the adverse personnel decisions at issue in the case, knew that McFarland had engaged in protected activity, McFarland argued that the Court should impute such knowledge to the institution as a whole. In other words, because others within the corporation knew of his protected activity, the corporation as an entity should be held to have such knowledge for the purposes of a retaliation claim, the so-called "imputed knowledge theory". The Court rejected McFarland's argument, finding that there must be proof that the decisionmakers who took the adverse action knew about his protected activity.

Protected Activity

The McFarland case also presented a question whether a particular letter authored by McFarland constituted protected activity. The Court found that, while the letter raised questions, for example, as to why he was not interviewed for a position, the letter did not allege discrimination or retaliation of any kind. The Court found: "Even if Mr. McFarland's letter is read as signalling a general dissatisfaction with the fact that he was passed over for promotion, it does not clearly complain about unlawful discrimination. Indeed, it is far from clear that the letter is complaining about anything at all." (footnotes omitted).

Monday, December 10, 2007

Blog #2

Huber v. Wal-Mart Stores


Friday, we reported that the Supreme Court has agreed to hear this case. Interestingly, Justice Breyer, who holds Wal-Mart stock, has recused himself, lessening the possibility that the Court will rule in favor of the Plaintiff's point of view in the case.



Seawright v. American General Financial Services, Inc., 2007 U.S. App. LEXIS 26328 (6th Cir., Nov. 13, 2007).



In Friday's post regarding this case, I neglected to include the best part, that is, the dissent's reliance on Homer Simpson. As you may recall, this is the arbitration case where the employee did not in any way signal that she truly accepted the arbitration regime being unilaterally imposed by her employer. Judge Boyce F. Martin, Jr., dissenting, says in a footnote that the majority's finding a binding contract without a signal that the Plaintiff - Employee understands that a contract is being made, is analogous to the following colloquy between Homer Simpson and God: "Here's the deal: you freeze everything as it is, and I won't ask for anything more. If that is OK, please give me absolutely no sign. [ no response] OK, deal. In gratitude, I present you this offering of cookies and milk. If you want me to eat them for you, please give me no sign. [ no response] Thy will be done." The Simpsons: And Maggie Makes Three (FOX television broadcast, Jan. 22, 1995).



False Claims Act - Public Disclosure - United States Ex Rel. Rost v. Pfizer, Inc., 2007 U.S. App. LEXIS 26486 (1st Cir., Nov. 15, 2007).



The False Claims Act requires that the Relator be the "original source" and is barred from proceeding if there has been a "public disclosure". In United States Ex Rel. Rost, it was argued by the Defendant - Corporation that its self-disclosure to the federal government constituted a "public disclosure" under 31 U.S.C. Section 3730(e)(4)(A) barring the action. The District Court, Judge Joseph L. Tauro, rejected that argument (446 F.Supp. 2d 6 (D. Mass. 2006)), and the First Circuit, Judge Lynch writing for the unanimous panel, affirmed, holding that Pfizer's confidential disclosures to the HHS and DOJ were not "public disclosures" that would trigger the False Claims Act's jurisdictional bar. In doing so, the Court said: "In our view, a 'public disclosure' requires that there be some act of disclosure to the public outside of the government. The mere fact that the disclosures are contained in government files someplace, or even that the government is conducting an investigation behind the scenes, does not itself constitute public disclosure." Later, the Court says, "If providing information to the government were enough to trigger the bar, the phrase 'public disclosure' would be superfluous." The Court noted that the Ninth, Tenth and Eleventh Circuits agree; whereas the Seventh Circuit in United States Ex Rel. Mathews v. Bank of Farmington, 166 F.3d 853, 861 (7th Cir. 1999), reached a contrary result.

Confidentiality of Personnel Files


In a 7-0 opinion, the Supreme Court of Missouri in State Ex Rel. Delmar Gardens North Operating, LLC v. Gaertner, 2007 Mo. LEXIS 167 (Mo., Dec. 4, 2007), the lower court ordered the employer, a skilled nursing facility, to produce the entire personnel file of a non-party employee. The employer challenged the trial court's order, seeking a writ of prohibition directing that the trial court quash its order.


The order had issued after a certified nurse's aide had reported observing the son of one of the facility's residence in the room of another resident who was on a feeding tube, the aide observing the son's hand under the bedsheet of the resident. After receiving the report, the facility sought and obtained a TRO prohibiting the son from entering the premises. In proceedings to determine whether the injunction should be made permanent, the son sought the production of the "whistleblowing" aide's entire personnel file.


A unanimous Missouri Supreme Court held that the employer had standing to object to production of its employee's personnel file on the grounds, among others, that its disclosure could subject it to liability under Missouri law. The Court recognized a right of privacy in the personnel files that was described as "fundamental" and held that to permit "discovery of a witness' entire personnel file solely for a collateral matter such as impeachment would eviscerate the right of privacy that employees enjoy as to those records." Finding that the trial court's order was overly broad, the Court found the order a clear abuse of discretion.

When counsel for the requesting party, at oral argument, attempted to refine the request to what might arguably be relevant, the Court stated: "That is not what he requested, however, nor what Respondent ordered Delmar Gardens to produce. 'The discovery process was not designed to be a scorched earth battlefield upon which the rights of the litigants and the efficiency of the justice system should be sacrificed to mindless, overzealous representation of plaintiffs and defendants.' (Citation omitted)."



RICO Suits Against Unions For Corporate Campaigns

Fairly recently, several employers have counter-attacked against Unions, using the federal RICO (Racketeer Influenced and Corrupt Organizations Act) statute. In one such lawsuit, Wackenhut sued the Service Employees International Union in Federal District Court in New York, alleging that the Union and its associates have infiltrated and disrupted public and other corporate events; distributed false and disparaging newsletters to Wackenhut customers; interfered with the company's contract-bidding process; solicited plaintiffs to file suits and charges against Wackenhut, and staged "street theater" events to disparage the company in public. The Wackenhut complaint can be viewed at http://www.kmblabor.com/media/Wackenhut-Complaint.pdf. See also the Smithfield Foods lawsuit against the United Food and Commercial Workers Union, filed in U.S. District Court in Richmond, Virginia. (Complaint can be viewed here: http://www.smithfieldfoods.com/Investor/Pdf/RICO_101707.pdf).

Trade Secrets

The South Carolina Supreme Court in The Atwood Agency v. Black, 374 S.C. 68, 646 S.E.2d 882 (S.C. 2007), held that a customer list that is available through other proper means, is not protected as a trade secret. The Plaintiff, a vacation rental business, argued that its homeowners list and its renters list had been misappropriated by a former property manager, and were being used to solicit business to another rental agency, arguably in violation of the South Carolina Trade Secrets Act. Two Justices concurred, indicating that they could not agree that the list of renters did not qualify as a trade secret. The majority reasoned that the renters list was not a trade secret because some of the renters had contacted the former property manager and because some renters provided personal contact information in guestbooks or directly to homeowners. The concurring Justices contended that this evidence did not undercut the trade secret contention because the renters list, taken as a whole, in their judgment, qualified as a trade secret. The fact that some renters chose to contact the property manager and because some renters left contact information did not make the entire renters list "readily ascertainable."