Wednesday, January 30, 2008

Company Blogging Policy


"When I was a small boy in Kansas, a friend of mine and I went fishing. . . . I told him I wanted to be a real Major League baseball player, a genuine professional like Honus Wagner. My friend said that he'd like to be President of the United States. Neither of us got our wish."

by Dwight David Eisenhower, 34th President of the United States

False Claims Act Public Disclosure

In United States ex rel. UNITE HERE v. Cintas Corp., 2007 WL 4557788 (N.D.Cal., Dec. 21, 2007), the district court (Hon. Phyllis J. Hamilton) stated in dicta that an internet posting on a government website was equivalent to "news media".

Anonymous Blogging

I just finished a teleseminar on blogging issues in the workplace, and in getting prepared, came across an article that I thought, in fairness, I should share with those of you who wish to anonymously blog and make it as difficult as possible for anyone to determine your identity. Ethan Zuckerman has an article entitled A Technical Guide to Anonymous Blogging dated April 13, 2005 which can be found at

Company Blogging Policy

Let me share with you a checklist, not necessarily exhaustive, of what ought to be included in an employer's electronic usage policies.

  1. The policy should prohibit disclosure of trade secrets, trademark, copyright or other confidential, proprietary non-public information.

  2. It should prohibit the use of the company's name, logo, or slogans.

  3. Blogging on the clock/on company time should be prohibited.

  4. Blogging, using company equipment and company electronic systems, should be prohibited.

  5. Any electronic communication, using company equipment or company electronic systems, may not include disparaging, threatening, harassing, or other inappropriate content whether it be about the company, its employees or others.

  6. Any non-business electronic communication should clearly indicate that the content of the communication contains the opinions and views of the writer, and not the company.

  7. The policy should clearly indicate that violation thereof may subject the employee to immediate disciplinary action, including termination.

  8. The policy should clearly indicate that the equipment and electronic systems are the property of the company, that there is no right of privacy whatsoever with respect to electronic communications on company equipment or using company systems, and that the company may at any time for any reason monitor electronic communications.

  9. The policy should warn employees that they may be held legally responsible for the content of such communications, including a blog, if it violates the law, for example, trade secret laws, the copyright laws, and privacy concerns.

In working with an employer-client to develop such a policy, one should craft the policy with the employer's particular industry in mind. For example, financial institutions have customer information that needs to be carefully protected, including Social Security numbers and account numbers.

When Might an Employer Be Responsible for Comments Posted by Employees

In Blakey v. Continental Airlines, Inc., 751 A.2d 538 (June 1, 2000), the airline provided pilots with a software package which allowed them to communicate with each other through posts, similar to blogs. When a number of male pilots posted inappropriate comments, a female pilot filed suit, claiming harassment and discrimination. The airline contended that, as it did not sponsor the site, it was not libel for the comments. The court declined to adopt the airline's sponsorship test, and instead held that if the airline benefited from the site, it could be vicariously liable for the comments.

That Famous/Infamous Tribune Company Employee Handbook

The blogosphere has been chattering about the eleven page new handbook issued by the Tribune Company. An excellent summary of the handbook can be found on the Connecticut Employment Law Blog. The Ohio Employer's Law Blog of January 22, quotes the harassment policy, and notes that the policy mistakenly limits the definition of sexual harassment to quid pro quo. Apparently, the Tribune chose not to have its lawyers review the policy.

Whistleblower Protections for Employees of Defense Contractors

On January 28, 2008, the President signed into law the National Defense Authorization Act for Fiscal Year 2008, which includes provisions protecting employees of defense contractors who allegedly blow the whistle on contractor fraud. The full text of Section 846 of the Act and the text of 10 U.S.C. Section 2409 are at the end of today's blog.

Section 846

(a) Increased Protection From Reprisal- Subsection (a) of section 2409 of title 10, United States Code, is amended--
(1) by striking `disclosing to a Member of Congress' and inserting `disclosing to a Member of Congress, a representative of a committee of Congress, an Inspector General, the Government Accountability Office, a Department of Defense employee responsible for contract oversight or management,'; and
(2) by striking `information relating to a substantial violation of law related to a contract (including the competition for or negotiation of a contract)' and inserting `information that the employee reasonably believes is evidence of gross mismanagement of a Department of Defense contract or grant, a gross waste of Department of Defense funds, a substantial and specific danger to public health or safety, or a violation of law related to a Department of Defense contract (including the competition for or negotiation of a contract) or grant'.
(b) Clarification of Inspector General Determination- Subsection (b) of such section is amended--
(1) by inserting `(1)' after `Investigation of Complaints- ';
(2) by striking `an agency' and inserting `the Department of Defense, or the Inspector General of the National Aeronautics and Space Administration in the case of a complaint regarding the National Aeronautics and Space Administration'; and
(3) by adding at the end the following new paragraph:
`(2)(A) Except as provided under subparagraph (B), the Inspector General shall make a determination that a complaint is frivolous or submit a report under paragraph (1) within 180 days after receiving the complaint.
`(B) If the Inspector General is unable to complete an investigation in time to submit a report within the 180-day period specified in subparagraph (A) and the person submitting the complaint agrees to an extension of time, the Inspector General shall submit a report under paragraph (1) within such additional period of time as shall be agreed upon between the Inspector General and the person submitting the complaint.'.
(c) Acceleration of Schedule for Denying Relief or Providing Remedy- Subsection (c) of such section is amended--
(1) in paragraph (1), by striking `If the head of the agency determines that a contractor has subjected a person to a reprisal prohibited by subsection (a), the head of the agency may' and inserting after `(1)' the following: `Not later than 30 days after receiving an Inspector General report pursuant to subsection (b), the head of the agency concerned shall determine whether there is sufficient basis to conclude that the contractor concerned has subjected the complainant to a reprisal prohibited by subsection (a) and shall either issue an order denying relief or shall';
(2) by redesignating paragraphs (2) and (3) as paragraphs (4) and (5), respectively; and
(3) by inserting after paragraph (1) the following new paragraphs:
`(2) If the head of an executive agency issues an order denying relief under paragraph (1) or has not issued an order within 210 days after the submission of a complaint under subsection (b), or in the case of an extension of time under paragraph (b)(2)(B), not later than 30 days after the expiration of the extension of time, and there is no showing that such delay is due to the bad faith of the complainant, the complainant shall be deemed to have exhausted all administrative remedies with respect to the complaint, and the complainant may bring a de novo action at law or equity against the contractor to seek compensatory damages and other relief available under this section in the appropriate district court of the United States, which shall have jurisdiction over such an action without regard to the amount in controversy. Such an action shall, at the request of either party to the action, be tried by the court with a jury.
`(3) An Inspector General determination and an agency head order denying relief under paragraph (2) shall be admissible in evidence in any de novo action at law or equity brought pursuant to this subsection.'.
(d) Definitions- Subsection (e) of such section is amended--
(1) in paragraph (4), by inserting `or a grant' after `a contract'; and
(2) by inserting before the period at the end the following: `and any Inspector General that receives funding from, or has oversight over contracts awarded for or on behalf of, the Secretary of Defense'.

10 USC § 2409

Sec. 2409. Contractor employees: protection from reprisal for
disclosure of certain information
(a) Prohibition of Reprisals.--An employee of a contractor may not
be discharged, demoted, or otherwise discriminated against as a reprisal
for disclosing to a Member of Congress or an authorized official of an
agency or the Department of Justice information relating to a
substantial violation of law related to a contract (including the
competition for or negotiation of a contract).
(b) Investigation of Complaints.--A person who believes that the
person has been subjected to a reprisal prohibited by subsection (a) may
submit a complaint to the Inspector General of an agency. Unless the
Inspector General determines that the complaint is frivolous, the
Inspector General shall investigate the complaint and, upon completion
of such investigation, submit a report of the findings of the
investigation to the person, the contractor concerned, and the head of
the agency.
(c) Remedy and Enforcement Authority.--(1) If the head of the agency
determines that a contractor has subjected a person to a reprisal
prohibited by subsection (a), the head of the agency may take one or
more of the following actions:
(A) Order the contractor to take affirmative action to abate the
(B) Order the contractor to reinstate the person to the position
that the person held before the reprisal, together with the
compensation (including back pay), employment benefits, and other
terms and conditions of employment that would apply to the person in
that position if the reprisal had not been taken.
(C) Order the contractor to pay the complainant an amount equal
to the aggregate amount of all costs and expenses (including
attorneys' fees and expert witnesses' fees) that were reasonably
incurred by the complainant for, or in connection with, bringing the
complaint regarding the reprisal, as determined by the head of the
(2) Whenever a person fails to comply with an order issued under
paragraph (1), the head of the agency shall file an action for
enforcement of such order in the United States district court for a
district in which the reprisal was found to have occurred. In any action
brought under this paragraph, the court may grant appropriate relief,
including injunctive relief and compensatory and exemplary damages.
(3) Any person adversely affected or aggrieved by an order issued
under paragraph (1) may obtain review of the order's conformance with
this subsection, and any regulations issued to carry out this section,
in the United States court of appeals for a circuit in which the
reprisal is alleged in the order to have occurred. No petition seeking
such review may be filed more than 60 days after issuance of the order
by the head of the agency. Review shall conform to chapter 7 of title 5.
(d) Construction.--Nothing in this section may be construed to
authorize the discharge of, demotion of, or discrimination against an
employee for a disclosure other than a disclosure protected by
subsection (a) or to modify or derogate from a right or remedy otherwise
available to the employee.
(e) Definitions.--In this section:
(1) The term ``agency'' means an agency named in section 2303 of
this title.
(2) The term ``head of an agency'' has the meaning provided by
section 2302(1) of this title.
(3) The term ``contract'' means a contract awarded by the head
of an agency.
(4) The term ``contractor'' means a person awarded a contract
with an agency.
(5) The term ``Inspector General'' means an Inspector General
appointed under the Inspector General Act of 1978.

(Added Pub. L. 99-500, Sec. 101(c) [title X, Sec. 942(a)(1)], Oct. 18,
1986, 100 Stat. 1783-82, 1783-162, and Pub. L. 99-591, Sec. 101(c)
[title X, Sec. 942(a)(1)], Oct. 30, 1986, 100 Stat. 3341-82, 3341-162;
Pub. L. 99-661, div. A, title IX, formerly title IV, Sec. 942(a)(1),
Nov. 14, 1986, 100 Stat. 3942, renumbered title IX, Pub. L. 100-26,
Sec. 3(5), Apr. 21, 1987, 101 Stat. 273; amended Pub. L. 102-25, title
VII, Sec. 701(k)(1), Apr. 6, 1991, 105 Stat. 116; Pub. L. 102-484, div.
A, title X, Sec. 1052(30)(A), Oct. 23, 1992, 106 Stat. 2500; Pub. L.
103-355, title VI, Sec. 6005(a), Oct. 13, 1994, 108 Stat. 3364; Pub. L.
104-106, div. D, title XLIII, Sec. 4321(a)(10), Feb. 10, 1996, 110 Stat.

Tuesday, January 29, 2008

Smoking and the ADA

Corporate Social Responsibility

There is a recent article on Nike and how it has addressed labor issues at its suppliers. See R. Locke, T. Kochan, M. Romis & F. Qin, Beyond Corporate Codes of Conduct: Work Organization and Labour Standards at Nike's Suppliers, Vol. 146, International Labour Review (2007). Available at:

When Are Law Firm Partners Deemed Employees Under Federal Anti-Discrimination Laws

In Kirleis v. Dickie, McCarney & Chilcote, 2007 WL 2142397, 2007 U.S. Dist. LEXIS 75996 (W.D.Pa. July 24, 2007) the district court held that "defendant has 63 shareholders but . . . control is in fact concentrated on the small number of members of the Executive Committee." Based on that finding and the Supreme Court decision in Clackamas Gastroenterology Assocs., P.C. v. Wells, 538 U.S. 440 (U.S. 2003), the court found that the plaintiff, a female lawyer and shareholder in the law firm, was an employee covered by Title VII of the Civil Rights Act of 1964 as well as the Pennsylvania Human Relations Act.

Smoking and the ADA

The Federal District Court in Alexandria, Virginia has a fascinating case scheduled for hearing on February 8. The case involves a lawsuit filed under the ADA by James Bogden against several restaurants in which he argues that because he has coronary artery disease and secondhand smoke can increase his risk of another heart attack, the restaurants, by permitting smoking, are discriminating against him on the basis of an alleged disability. See Bogden v. Harry's Tap Room of Arlington, Civil action No. 01178-LO-TRJ (E.D.Va). See also: Lainie Rutkow, John S. Vernick, Stephen P. Teret, Banning Second-Hand Smoke in Indoor Public Places Under the Americans With Disabilities Act: A Legal and Public Health Imperative, 40 CTLR 409, (December 2007).

Executive Compensation

Maybe Angelo R. Mozilo, CEO of Countrywide Financial Corp., heard the thundering hooves of judges like Judge James Rosenbaum when he decided to forego approximately $37.5 million in severance pay, fees and perks that he was scheduled to receive upon his retirement. Mr. Mozilo announced that in addition to cash severance payments, he has decided to forego $400,000 per year that he would have been paid under an agreement to consult the company in his retirement and also agreed to forego perks such as the use of a private airplane. Now, before anyone gets teary eyed about Mr. Mozilo's "losses", it is estimated that his payout, after foregoing the above, will exceed $110 million.

The Judge Rosenbaum decision to which I allude is his order of December 26, 2007 in In re UnitedHealth Group Incorporated Shareholder Derivative Litigation, 2007 U.S. Dist. LEXIS 94616 (D. Minn. 2007), in which he stated the following with respect to some $600 million after tax payments being made to the company's former CEO, Bill McGuire: Words such as "huge," "fantastic," "astounding," "staggering," or "astronomical," do not describe $1 billion. Such a sum can only be thought of as 'transcendant," or in terms of the gross national product of smaller members of the United Nations. Judge Rosenbaum froze McGuire's stock options valued at some $600 million after taxes, even though McGuire had earlier agreed to surrender $420 million in options and other benefits.


"I find baseball fascinating. It strikes me as a native American ballet - a totally different dance form. Nearly every move in baseball - the windup, the pitch, the motion of the infielders - is different from other games. Next to a triple play, baseball's double play is the most exciting and graceful thing in sports." - Alistair Cooke

Monday, January 28, 2008

Metadata: Some practical advice


"I ain't ever had job. I just always played baseball." - Leroy Robert "Satchel" Paige

Hangman's Noose

As I mentioned on Friday, it seems like hardly a day goes by without some idiot insulting African-Americans with a display of a hangman's noose. The latest incident involves a "stupid little prank" that occurred at the construction site for the new baseball park in Washington, DC. See
- and -

DOL to Propose FMLA Regulatory Changes

Late last week, DOL officials reported that they have forwarded to OPM proposed new regulations that eventually will be published for public comment. Apparently, the proposals address, among other issues, the notice that employees generally would be required to provide to employers requesting a leave before actually taking the leave. Current regulations allow employees to take off for two days before even requesting FMLA leave. In addition, apparently the proposed regulations would permit employers to require health care providers to recertify annually that an employee has a serious health condition. Current regulations provide that healthcare providers can submit a multiyear certification of a serious health condition. As of the weekend, no one yet had an actual copy of the proposed regulations. Once we have them, we will comment further.

New Leave Law in Defense Authorization Act

The Defense Authorization Act provides that family members would be allowed to take up to six months of unpaid leave to care for wounded military personnel. The Act also would allow for employees to take up to twelve weeks of unpaid leave "for any qualifying exigency" related to a family member's call-up to active duty or deployment. See

The Power of One

In the last few weeks, there has been a hue and cry about the power of words alone to inspire change. Over the past few days, I have been reading a wonderful book published in 1941 by A.J. Cronin entitled The Keys of the Kingdom. Apparently within four months of the original publication, the book sold more copies than the publisher, a major publishing house, had sold since its foundation shortly after the turn of the century. I got interested in the author, and started to do a little research. One of his books, The Citadel, resulted in the establishment in the United Kingdom of the National Health Service. Wikipedia reports that "the popularity of his novels played a substantial role in the Labour Party's landslide 1945 victory." Having said that, I cannot recommend more highly the book that I am reading, The Keys of the Kingdom. Great read.

Corporate Social Responsibility

In the January / February 2008 issue Foreign Affairs, Klaus Schwab has an interesting article on CSR entitled "Global Corporate Citizenship: Working with Governments and Civil Society." Mr. Schwab is the Executive Chair of the World Economic Forum which just met Davos, Switzerland. See


I thought that I would share with our readers, a very thorough analysis of the metadata problem that a colleague recently sent to me.

Starting with the facts in your email, it appears that you are interested in understanding the obligations of the producer and also the recipient of a document containing metadata that is exchanged during the negotiations (including grant requests and proposals) of a business transaction. With this in mind, my initial observation of your use of the term "metadata" is that you are concerned primarily with the feature in Microsoft's Word that is commonly known as "track changes," but should also include the data within the "properties" tab and "comments" of a document.

Reflecting first upon the recipients' obligations with respect to receiving a document that contains metadata available for review, currently I am not aware of any law that prohibits review of the metadata by the recipient. I am aware of a few state bars and an initial position paper from the ABA (that was later revised) that would suggest it is unethical for an attorney to review and/or "mine" for such metadata, in a business document, but the majority of the state bar associations would suggest that no ethical violation has occurred in such cases.

Since it is too difficult for a recipient to determine whether the "track changes" metadata was intentionally available for review, my opinion is that the recipient does not have either a legal or ethical obligation to refrain from reviewing the metadata available in these documents, nor does he or she have the responsibility of informing the producer of the availability of such data. I would add, however, that it has been a courtesy practice of mine to inform the producer in obvious cases that such metadata exists in their files.

From a producer's perspective, while from a practical and strategic perspective it may be devastating, I do not know of any law (other than the foregoing bar association opinions) that directly prohibits a producer from distributing documents with metadata. There may be, however, some ethical rules that may apply here, such as Rule 1.6 concerning the confidentiality of client information in those cases where the metadata contains client information. This rule along with the varying levels of knowledge among attorneys regarding metadata, and of the tools used to prevent the "leakage" of metadata, suggest that the vehicle that will be used in the near future is malpractice to establish a minimum standards on what steps should be taken by attorneys to mitigate the likelihood of distributing a document with metadata, which frankly is how these issues should be analyzed. I am certain that this standard will evolve in a manner similar to the standard used by attorneys in adopting the use of the internet, which was once feared for possibly disclosing confidential client information during the transmission of data and has now become commonly used by nearly all attorneys in their practice.

However, having said that, on a practical side, the easiest way to clean any of these files is to run them through one of the third party cleaners to remove any unwanted metadata and to "accept all" changes if track changes is not intended to be included, as well as checking the document for comments. These "scrubbers" are software programs that may be initiated either manually by a user or automatically by a system and it removes known metadata, such as the author, hyperlinks, track change information, comments etc. Most organizations will typically use these scrubbers to remove metadata that can be found in the "properties" tab of a document (and rely on the decision of the attorneys with respect to other forms of metadata such as comments and track changes), before transmitting a document to the other side.

While I do not endorse any scrubber product over any other, you may find that some work better than others in your environment, and they have different features that you may or may not find helpful. It is important to note, that while stripping down a document to the bare text will leave a document free of metadata, it will, in the most extensive examples of scrubbing, leave only raw text and thus, lose most, if not all of its formatting. Since we all need to have documents formatted in a coherent human readable form, there will always be a small amount of metadata that could be retrieved by someone, but the changes to a document that you refer to can be stripped out by the use of one of these scrubbers, and this combination of "accepting" all changes and using the software scrubber (to eliminate metadata stored in the properties field and, if selected, comments) can leave your formatting of the document untouched.

While the process you refer to of converting a document into a pdf file will remove most forms of metadata (except for track changes that have been left visible), the pdf produced by your method will create its own metadata viewable in the properties menu of the file. So in a situation that is highly sensitive, I might use this process and then run the pdf file through one of the scrubbers to eliminate the file property information. I agree that this process (as it does with discovery in litigation) results in a less efficient process when making revisions between parties during negotiations, and often frustrates business participants who want to make changes to the documents.

In the context of redaction, do not use any of the more advanced features of Adobe Acrobat like the redaction feature, because the redaction can be stripped out and then everything you redacted becomes visible. If trying to redact a document, I would use the NSA document and follow the directions on it for the best and wisest approach.

I hope I have clarified the issues for you, and while your colleagues had some valid suggestions, the answer to the metadata question is that it depends on the situation, the content of the metadata and what the desired result is to know which solution or combination of solutions is the best.

One note that might be of interest to you, is that the newest version of Microsoft Word (Word 2007) has included features that help to deal with the ever growing concern over metadata by including a stripping function that gets rid of the most common metadata attached to documents.

Friday, January 25, 2008

American "Can Do"

The Man Who Thinks He Can
by Walter D. Wintle

If you think you are beaten, you are.
If you think you dare not, you don't.
If you'd like to win, but think you can't,
It's almost a cinch that you won't.

If you think you'll lose, you're lost,
For out in the world we find
Success begins with a fellow's will.
It's all in the state of mind.

If you think you're outclassed, you are,
You've got to think high to rise.
You've got to be sure of yourself before
You can ever win a prize.

Life's battles don't always go
To the stronger or faster man,
But soon or late, the man who wins,
Is the man who thinks he can.

- Walter D. Wintle

Rick Majerus and Sayed Parwiz Kambakhsh

Two stories from different parts of the globe seem to have, in a sense, some striking similarities. Rick Majerus, basketball coach at St. Louis University, a Catholic institution, stated at a Hillary Clinton rally that he, a Catholic himself, is pro-choice. The St. Louis archbishop, Raymond Burke, has demanded that he be disciplined by the University and denied Holy Communion. See

Thousands and thousands of miles away in Afghanistan, a court sentenced Sayed Parwiz Kambakhsh, a 23-year-old journalism student, to death for blasphemy for distributing an article from the Internet that was considered to be an insult to the Prophet Mohammad. See

I leave it to you to judge whether there is or is not a striking similarity in terms of fundamentalism. 'Nough said before I lose the few readers that we have.

Hangmen's Nooses

It seems like hardly a day goes by without some idiot insulting African Americans with the display of a hangman's noose. Now, the EEOC announced a $465,000 settlement with a North Carolina furniture company, Henredon Furniture Industries, in a case arising, in part, out of the display of a hangmen's noose. See

In California, You Can Have Your Ganga, but Not Your Job

A divided California Supreme Court yesterday in Ross v. Ragingwire Telecommunications, Inc. 2008 Cal. LEXIS 784 (3d Dist. Ct. App., #C043392, 9/7/05) upheld the employer's termination of an employee who tested positive for ganga and who argued that to do so was disability discrimination because, pursuant to California's Compassionate Use Act of 1996, a doctor had recommended ganga for medical purposes.

Privacy and the Company Computer

Recently, in Scott v. Beth Israel Medical Center, 2007 WL 3053351, 2007 N.Y. App. Div. LEXIS 7561 (NY Sup. Oct. 17, 2007), the hospital and a doctor who had been formerly employed there, locked horns over emails on the hospital's computer system between the doctor and his attorney. The hospital argued that the privilege status of those communications had been waived by the doctor by virtue of the fact that he had used the hospital's email system to communicate with his lawyer. The court, utilizing the test articulated by the Bankruptcy Court of the Southern District of New York in In re: Asia Global Crossing, Ltd. 322 B.R. 247, 2005 Bankr. LEXIS 415 (Bankr. S.D.N.Y. 2005), concluded that no privilege attached to the doctor's emails with his attorney as the court determined that the doctor had actual or constructive notice of the hospital's policy which stated that its communications systems were its property and were to be used "for business purposes only," and that employees "have no personal privacy right in any material created, received, saved or sent" using those systems. See also Long v. Marubeni America Corp., 2006 WL 2998671, 2006 U.S. Dist. LEXIS 76594 (S.D.N.Y. Oct. 19, 2006) (court held that employees had waived privilege even though employees, in communicating with their counsel, used personal, password-accessed email accounts).

Leave Home Without It

Recently, in In re: Boucher, 2007 WL 4246473, 2007 U.S. Dist. LEXIS 87951 (D. Vt. Nov. 29, 2007), Magistrate Judge Niedermeier quashed a subpoena which would have required a Mr. Boucher to provide the password to encrypted files on his laptop, holding that to do so would violate his Fifth Amendment right against self-incrimination. This case is on appeal to the First Circuit.

In United States v. Arnold, 454 F. Supp. 2d. 999 (C.D. California, 2006), Judge Pregerson also refused to authorize a search of a laptop. Judge Pregerson's decision was argued on appeal before the Ninth Circuit last October, and some are predicting a reversal based on the oral argument. United States v. Arnold, No. 06-50581 (9th Cir. 2007).

The Fourth Circuit in 2005 in United States v. Ickes, 393 F.3d 501, 504 (4th Cir. 2005) upheld a conviction in circumstances somewhat similar to the above cases.

Corporate Social Responsibility

For those advising clients regarding CSR policies, read the Maquila Solidarity Network report on Corporate Social Responsibility available at

Thursday, January 24, 2008

AT&T Corp. v. Hulteen, 07-543; 498 F.3d 1001 (9th Cir. 2006)

On January 22, 2008 the Court invited the Solicitor General to submit a brief in this case as to whether or not the Court should take cert. The issue in this case is whether Title VII permits an employer, when setting retirement benefits, to discriminate between those employees who took pregnancy disability leave before the Pregnancy Discrimination Act came into effect and other employees who took any other kind of temporary disability leave during that same period.

Centerior Energy v. Mikulski, 07- ; 501 F.3d 555 (6th Cir. 2007)

A petition for cert was filed this past Friday in this case which involves interesting questions regarding federal jurisdiction predicated on a state law claim that turns on a disputed issue of federal law. The Federal Circuit in Immunocept, LLC v. Fulbright & Jaworski, LLP, 504 F.3d 1281 (Fed. Cir. 2007) held that arising under jurisdiction extends to any case in which the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims. In Immunocept the plaintiff brought a state law malpractice claim based on alleged errors in the prosecution of a patent. The case required resolution of a dispute over the scope of a patent claim. The Federal Circuit held that the case arose under federal law because federal law was a necessary element of the state law claim, and the federal law question thus was substantial. The court also noted that litigants will benefit from federal judges who are used to handling these complicated rules.

Allison Engine Co., Inc. v. United States ex rel. Sanders, 07-214; 2007 U.S. LEXIS 11916 (2007).

In the past few days, a raft of briefs have been filed in this case which is a False Claims Act case presenting the so-called Totten presentment issue. See, U.S. ex rel. Totten v. Bombardier Corp., 363 U.S. App. D.C. 180, 380 F.3d 488, 496 (D.C. Cir. 2004). (Roberts, J.). Ted Olsen filed on behalf of petitioners: ( cite).
The United States filed an amicus brief supporting respondents (; Senator Grassley filed an amicus brief ( and Taxpayers Against Fraud filed an amicus brief ( This case is scheduled for oral argument on February 26, 2008.

Class Action Employment Litigation

Seyfarth Shaw LLP has issued its "Annual Workplace Class Action Litigation Report: 2008 Edition," which analyzes some 508 class action rulings on a circuit-by-circuit and state-by-state basis. The 468-page report is available free from the firm at

Virginia Worker's Compensation Act Does Not Trump "Horseplay" Personal Injury Claim

On January 11, 2008, the Virginia Supreme Court issued its decision in Hilton v. Martin, 2008 Va. LEXIS 18 (Va. Sup. Ct. January 11, 2008) which was a personal injury action resulting from the death of Ms. Rhoton as a result of an assault by a fellow employee "in the course of" their mutual employment with Highlands Ambulance Service, Inc. As one of the company's ambulances was returning, after lunch, to the company office, defendant Martin took a cardiac defibrillator, and accidentally struck Ms. Rhoton, shocking her, leading to a seizure. Ms. Rhoton never regained consciousness and died of the electrocution and cardiac arrest caused by the charged defibrillator. The Virginia Supreme Court found that the assault was personal to the employee and not directed against her as an employee or because of her employment, and that therefore her resulting death did not arise out of her employment, and thus the worker's compensation exclusivity doctrine did not preclude the claim. The court rejected the so-called "positional risk" test, and adhered to the "actual risk" test, under which the injury comes within the Worker's Compensation Act only if there is a causal connection between the employee's injury and the conditions under which the employer causes the work to be done.

Major SOX Opinion on Scope of Protected Conduct

With permission, set forth below is a summary of the Fifth Circuit's decision from Tuesday of this week in Allen v. Administrative Review Board, 2008 U.S. App. LEXIS 1236 (5th Cir. 2008) prepared by Jason Zuckerman, a plaintiff's attorney:

On January 22, 2008, the Fifth Circuit issued an opinion providing significant guidance about the parameters of protected conduct under Section 806 of the Sarbanes-Oxley Act. See Allen v. Administrative Review Board, (5th Cir. Jan. 22, 2008). Affirming the ARB’s decision that the plaintiff did not engage in protected conduct, the Fifth Circuit established the following standards for assessing whether a SOX whistleblower engaged in protected conduct:

  • “Reasonable Belief’ Standard Protects a Mistaken Belief That an Employer Violated an SEC Rule. Consistent with the plain meaning of Section 806, which requires a plaintiff to demonstrate only a “reasonable belief” that there was a violation of one of six enumerated categories of protected conduct (not an actual violation), the Allen Court held: “Importantly, an employee’s reasonable but mistaken belief that an employer engaged in conduct that constitutes a violation of one of the six enumerated categories is protected.” This is significant because it counters a popular defense contention that a SOX whistleblower must demonstrate that shareholders have been harmed by the SEC violation or other misconduct about which the whistleblower complained.

  • “Objective Reasonableness” is Not Solely a Question of Law. In Welch v. Cardinal Bankshares Corp., 2003-SOX-15 (ARB May 31, 2007), the ARB erroneously held that objective reasonableness is a question of law. That decision is pernicious because it encourages ALJs who lack knowledge of securities law to determine prior to trial whether a SOX whistleblower engaged in protected conduct. The Allen Court, however, has held that while the objective reasonableness of an employee’s belief can be decided as a matter of law in some cases, “the objective reasonableness of an employee’s belief cannot be decided as a matter of law if there is a genuine issue of material fact . . . . [and if] reasonable minds could disagree on this issue,” the objective reasonableness of an employee’s belief should not be decided as a matter of law.”

  • SOX Protects a Disclosure About a Reasonably Perceived Violation of “Any Rule or Regulation of the SEC”. Although the plain language of Section 806 protects an employee who provides information to a person with supervisory authority over the employee related to a violation of “any rule or regulation of the SEC,” many employers continue to argue that protected conduct is limited to disclosures about shareholder fraud. The Fifth Circuit has rejected that tortured construction of SOX, holding that a disclosure about a violation of any SEC rule is protected.

Although Section 806 of SOX has been narrowed by some courts, it continues to afford robust protection to whistleblowers and does not require proof of an actual violation of an SEC rule. The lesson of Allen is that SOX whistleblowers need to plead protected conduct in detail and be prepared to establish a strong link between their disclosure and a reasonably perceived violation of an SEC rule, which in some cases will require expert witness testimony.

For a defense perspective on the Allen decision see:

Intentional Infliction of Emotional Distress

The District of Columbia Circuit on Tuesday, January 22, issued a significant intentional infliction of emotional distress (IIED) decision in Kassem v. Washington Hospital Center (2008 U.S. App. LEXIS 1174 (D.C. Cir. January 22, 2008). The complaint alleged that defendant made false statements about the plaintiff to the Nuclear Regulatory Commission with the intent of inducing the NRC to initiate disciplinary action against him. After the NRC completed an investigation and hearing, it dismissed charges against plaintiff who had worked as a nuclear medical technologist at the defendant hospital. Plaintiff sued, alleging, among other claims, an IIED claim which the trial court dismissed on the ground that his allegations were based on "purely occupational concerns with purely occupational consequences,"which the district court found did not satisfy the elements of the tort of IIED under DC law.

Judge Garland, writing for the panel, reversed, relying on Carter v. Hahn, 821 A.2d 890, 895 (D.C. 2003) where the D.C. Court of Appeals held that reporting false information to the police can constitute outrageous conduct for the purpose of stating an IIED claim. Defendant hospital argued that Kerrigan v. Britches of Georgetown, Inc., 705 A.2d 624 (D.C. 1997) precluded the IIED claim. In Kerrigan the plaintiff had alleged that his employer "targeted him for a sex harassment investigation, manufactured evidence against him in order to establish a false claim of sexual harassment, leaked information form the investigation to other employees, and unjustifiably demoted him to the position of store manager in order to promote a woman to his position." 705 A.2d at 628. The Court of Appeals found that those allegations did not rise to the level outrageous conduct sufficient to state an IIED claim. Judge Garland distinguished on the grounds that that case did not involve a false report to government authorities, but rather concerned exclusively actions that took place within the workplace. In Kassem in contract, defendant hospital, after it fired plaintiff, intentionally filed a false charge against him with this NRC -- a charge that could have prevented him from working as a nuclear technologist and could have subjected him to criminal penalties.

Anonymous Blogger

Tip of the hat to the Electronic Frontier Foundation (EFF) which successfully moved to quash a subpoena in the superior Court for Monmouth County, New Jersey in a case where the plaintiff Township had issued a subpoena to Google demanding the identity of an anonymous critic who blogged as "datruthsquad", along with datruthsquad's contact information, blog drafts, emails, and any and all information related to the blog. On December 21, 2007 Superior Court Judge Terance Flynn granted EFF's motion to quash. See:,%20501%20F.3d%20555%20(6th%20Cir.%202007)

GLBT Discrimination

For employers who are considering putting in place a corporate non-discrimination policy, banning discrimination against gays, lesbians, bisexuals and the transgendered, see Dupont's policy a copy of which can be found at:

Hi-Ho, Hi-Ho, Its Off to Work We Go!

With apologies to Walt Disney, we report that some 41 District of Columbia employees have been fired or suspended after visiting pornographic websites, using their office computers on office time. Of the fired employees' estimated 200 workdays per year, the city's investigation that allegedly they had visited pornographic websites 100 times per day. One wonders what the numbers would have been like were it not for coffee and lunch breaks. The investigation by the Office of the Chief Technology Officer revealed 20,000 hits from pornographic websites on the 9 fired employees' computers in 2007 alone.

I heard someone once say that one of the few perks for underpaid federal judges was "having" to review alleged pornographic material in order to make judgments as to whether or not it crossed the line. So, I guess some administrative judge at the Office of Employee Appeals of the District of Columbia will be singing: "O Joy, O Rapture unforeseen" when the examiner is "required" to review this material.

And, it brings back memories of representing a soon-to-be hall of fame pitcher in arbitration, and billing at my hourly rate research in Baseball Today and Baseball America. I now imagine the lucky lawyer who gets to view all this stuff and bill at the same time.

For the Washington Post story see:

Comical Statistics

The January 28th issue of Newsweek has a brief blurb about the number of African-American cartoonists. There are more than 200 syndicated comic strips in U.S. newspapers, and some 15 feature regular African-American characters drawn by African-American cartoonists. On February 10th, a little more than one-half of the 15 will engage in a protest against alleged discrimination against African-American cartoonists. The protesters will each draw a version of the same comic strip in order to underscore their point that allegedly readers and editors view all of their work alike. One interesting allegation is that there is a pattern in the news media that whenever an African-American strip is eliminated, it is then replaced by another African-American strip, the allegation being that there is a limit to the number of such strips.

Wednesday, January 23, 2008

Have I fallen down the rabbit hole?

As I recall, some years back, a segment of the political spectrum was accusing banks/mortgage lenders of not extending credit in low income neighborhoods, predominantly African-American and Latino neighborhoods. The banks were accused of so-called "redlining" where they drew red lines around certain low income neighborhoods, and wrote very little business in those neighborhoods. Because many of these neighborhoods were predominantly African-American and Latino, there was a so-called "disparate impact" on the basis of race and ethinicity.

So, the then powers that be cajoled the banks to loosen their lending standards, and the sub-prime business took off like a rocketship. The big boys, Fannie Mae and Freddie Mac, created programs to support this subprime business.

Then, the house of cards began to collapse. And we now have the subprime mortgage fiasco which has resulted in the big boys declaring billions in losses, and now the even bigger boys, the Arabs and the Chinese, buying up substantial stakes in the big American financial institutions at low prices. And, some say we haven't even begun to see the bad news in terms of losses because of the subprime mortgage fiasco, much less the coming predicted disaster in credit default swaps, where the losses could make the subprime fiasco look like a walk in the park.

All of the above, I intellectually understand and am quite concerned that there is no "stimulus package" that is going to forestall more and more bad news here at home, and ripple effects in overseas markets. But, along comes a story that takes my breath away. The mayor and city council of Baltimore have filed suit in federal district court against Wells Fargo Bank alleging "reverse red lining." The theory of this new lawsuit (Mayor and City Council of Baltimore v. Wells Fargo Bank, N.A., Civil No. LO8cv 062(D. Md)) is that Wells Fargo violated the Fair Housing laws by targeting minority neighborhoods and placing borrowers there into loans that they could not afford, leading to racially disproportionate foreclosures. In a forty page complaint the City, arguing that it has standing to sue, articulates this theory. A similar suit was recently filed in Cleveland, predicated on a nuisance theory.

We will continue to follow developments in both the Cleveland and the Baltimore cases.

For more information, see:

Dina ElBoghdady, "Baltimore Sues Subprime Lender Over Race", The Washington Post, January 9, 2008, Financial Section, Pg. D04.

Al Lewis, "Cleveland Suit Smells Like a Pig", The Denver Post, January 15, 2008, Business Section, Pg. C-01.

Thomas J. Sheeran, "Cleveland Sues Banks Over Foreclosures", available at

Christopher Maag, "Cleveland Sues 21 Lenders Over Subprime Mortgages", available at

Tuesday, January 22, 2008

James v. Metro Government of Nashville

Someone asked if I would set out the citations that reflect the circuit split on this issue - the issue being whether the judge or the jury decides whether the facts support a claim that the retaliatory act could have deterred protected conduct. In our post of Friday, we provided the Fourth, Sixth and D.C. Circuit authorities on this issue.

The Fifth Circuit has held that judges, not juries determine whether the fact-bound Burlington Northern standard has been met. See DeHart v. Baker Hughes Oilfield Operations, Inc., 214 Fed. Appx. 437 (5th Cir. 2007). The Eleventh Circuit so held in Collins v. Board of Trustees of University of Alabama, 211 Fed. Appx. 848 (11th Cir. 2006). The Eighth Circuit goes with courts, not juries. See Higgins v. Gonzales, 2007 WL 817505 at *8-*9 (8th Cir., March 20, 2007). The Seventh Circuit in at least six cases since Burlington Northern has held that judges are to decide the question. See Roney v. Illinois Dept. of Transportation, 474 F.3d 455, 459 (7th Cir. 2007); Phelan v. Cook County, 463 F.3d 773, 781 n.3 (7th Cir. 2006); Szymanski v. County of Cook, 468 F.3d 1027, 1031 (7th Cir. 2006); Thomas v. Potter, 2002 Fed. Appx. 118 (7th Cir. 2006); Novak v. Nicholson, 2007 WL 1259054 at *5 (7th Cir., Apr. 12, 2007); Schmidt v. Canadian National Railway Corp., 2007 WL 755171 at *4 (7th Cir., Mar. 13, 2007).

In addition to the D.C. Circuit, three other circuits have held that juries, not judges, determine the question. The Third Circuit has so decided in at least three cases. See Hare v. Potter, 2007 WL 841031 at *11 (3d Cir., Mar. 21, 2007); Ridley v. Costco Wholesale Corp., 217 Fed. Appx. 130, 1325 (3d Cir. 2007); Moore v. City of Philadelphia, 461 F.3d 331, 347 (3d Cir. 2006). The Second Circuit has aligned itself in favor of juries. See Kessler v. Westchester County Department of Social Services, 461 F.3d 199, 209-10 (2d Cir. 2006); Wrobel v. County of Erie, 211 Fed. Appx. 71, 73 (2d Cir. 2007); Zelnik v. Fashion Institute of Technology, 464 F.3d 217, 227 (2d Cir. 2006). And, the Tenth Circuit has joined the Second, Third and District of Columbia Circuits in holding that the application of the Burlington Northern standard to the circumstances of a case is a matter for a jury. See Williams v. W.D. Sports, 2007 WL 2254940 at *10 (10th Cir., Aug. 7, 2007).

False Claims Act

On January 22, 2008, the U.S. Supreme Court denied cert in U.S. ex rel. Bly-Magee v. Premo, Case No. 05-55556 (9th Cir. Dec. 13, 2006). The Ninth Circuit's opinion is at 470 F.3d 914. In Bly-Magee, the Ninth Circuit ruled that non-federal reports, audits, and investigations qualify as a source of public disclosure under 31 U.S.C. section 3730(e)(4)(A). This represents yet one more split in the circuits, for the Third Circuit limits this provision to federal reports, audits, investigations. See U. S. ex rel. Dunleavy v. County of Delaware, 123 F.3d 734, 745 (3d Cir. 1997). The Eighth Circuit, on the other hand, agrees with this Ninth Circuit decision. See Hays v. Hoffman, 325 F.3d 982, 988 (8th Cir. 2003).

FLSA Settlements

If you settle an FLSA claim and have it supervised by the US Department of Labor, pursuant to 29 U.S.C. Section 216(c), the settling employee may end up signing off on a government form entitled WH-58 "Receipt for payment for lost or denied wages, employment benefits, or other compensation." In a recent opinion, the Ninth Circuit teaches us that the language contained in that form can either extinguish a claim or merely extinguish some portion of a claim.

In Dent v. Cox Communications Las Vegas, Inc., 502 F.3d 1141 (9th Cir. 2007), Mr. Dent signed a WH-58 which acknowledged receipt of payment of unpaid wages for the period beginning with the workweek ending May 4, 2002 through the workweek ending October 11, 2003. Thereafter Dent claimed unpaid wages for a time period prior to May 4, 2002. The district court dismissed his claim, accepting the employer's argument that the unpaid overtime wage claim had been settled in full. The Ninth Circuit reversed, finding that his claim was released only with regard to the time period specified in the WH-58.

Two New New Jersey Employment Statutes

New Jersey has amended its Law Against Discrimination and expanded it to require that employers reasonably accommodate sincerely held religious beliefs unless to do so would impose an undue burden. The statute now defines "undue hardship" as an accommodation requiring unreasonable expense or difficulty, unreasonable interference with the safe or efficient operation of the workplace or a violation of a bona fide seniority system or a violation of any provision of a bona fide collective bargaining agreement. Further, the statute states that, in determining whether an accommodation constitutes an undue hardship, the factors considered shall include:

  • The identifiable cost of the accommodation, including the costs of loss of productivity and of retaining or hiring employees or transferring employees from one facility to another, in relation to the size and operating cost of the employer.

  • The number of individuals who will need the particular accommodation for a sincerely held religious observance or practice.

  • For an employer with multiple facilities, the degree to which the geographic separateness or administrative or fiscal relationship of the facilities will make the accommodation more difficult or expensive.

The other statute concerns employment protections for employees on military leave in time of war or emergency.

Insurance Coverages for Federal Employees

There was an interesting article in one of the newspapers in the last few days about insurance coverages provided to federal employees who might be sued, and presumably not otherwise protected by immunity doctrines. Wright & Company, a Virginia-based insurance company, writes coverages. The article indicated that it provides $200,000 for legal fees incurred in an administrative proceeding, an additional $100,000 in fees for criminal investigations, and up to $1,000,000 for damages incurred in civil litigation. See:

Corporate Social Responsibility

The January 19, 2008 issue of The Economist has a special report on corporate social responsibility. Reprints of the report are available. See A list of sources can be found at and an audio interview with the author can be found at

For those who are interested, there is an ABA corporate social responsibility committee. If you should be interested in joining, please let me know and I will forward your name to the committee chair.

Hangman's Nooses

In the past week we have observed first Kelly Tilghman making an utter fool of herself on the Golf Channel when she said that the way to defeat Tiger Woods was to take him out and lynch him. That merited only a two week suspension. Then to add fuel to the fire, Golfweek distributes this past week's issue with a cover image of a noose for an article about Ms. Tilghman's idiocy. That thankfully merited the discharge of Dave Seanor, the editor.

Some of the obvious questions raised by these two incidents, other than being dumbfounded that supposedly intelligent people still just don't get it, would be the following:

  • How come it took two days to apologize? You would have thought that within seconds after Ms. Tilghman uttered her stupidity, that she or someone associated with the channel, would have realized that what she said was over the top, and an apology should have issued within moments after she said what she said. Makes you wonder whom, in addition to Ms. Tilghman, at the Golf Channel simply doesn't get it.

  • Makes you also wonder what the hiring practices are at the Golf Channel. I would assume that if there were African-Americans on the production team, that one of them would have spoken up immediately and demanded that she apologize on the air. I sure would like to see the Golf Channel's hiring statistics.

  • That takes me to Golfweek magazine, the cover page, I am told, was vetted by a committee. So, it isn't just Mr. Seanor who doesn't get it, there are many others at the magazine who are simply clueless or worse than that, closet racists who took pleasure in insulting millions of our citizens. So, one wonders why Mr. Seanor is the only person who was disciplined. Yes, "the buck stops here", and the boss takes the fall, but the others ought not to go scot free.

  • Finally, the incident, like the Golf Channel incident, has to raise questions about the hiring practices at Golfweek. Again, I sure would like to see some data.
The EEOC recently obtained a $2.5 million settlement on behalf of an African-American electrician who claimed he was harassed daily, including the display of nooses, at Lockheed-Martin. This was the largest settlement filed by EEOC on behalf of an individual. See:

Since Fiscal Year 2001, the EEOC has filed more than 30 lawsuits that involve the displaying of hangman’s nooses on the job. It recently settled for $290,000 such a claim against Helmerich & Payne International Drilling in Jackson, Mississippi, for $390,000 against Pemco Aeroplex in Birmingham Alabama, for $600,000 against AK Steel in Butler, Pennsylvania, and for more than $1,000,000 against Commercial Coating Service of Conroe, Texas. Tresa Baldas, EEOC Targets Workplace ‘Noose” Cases, National Law Journal, November 5, 2007. Available at: See Stephanie Armour, “Racial Bias Suits Climb in Workplaces,” Asbury Park Press, Oct. 29, 2007, available at

For additional coverage of the Golf week debacle see:

For some startling discussion of the use of nooses as a form of racial discrimination in the workplace see:

Sunrise Senior Living Sued by Former CFO

The former CFO of Sunrise Senior Living filed suit back in September in Fairfax County Circuit Court in Virginia, claiming that he was fired in retaliation for uncovering improper accounting practices. Sounds like a snooze, but, trust me it has gotten real interesting. In recent court filings, Sunrise disclosed that it had discovered "more than 25,000 unique pornographic images" on a company-owned computer used by the former CFO. That disclosure raises interesting issues regarding the former CFO's attempt to delete material from laptops provided to him by Sunrise. Sunrise alleges that the former CFO returned one of two laptops after deleting all active electronic files, and that only after a forensic examination did it find the evidence of pornography on parts of the hard drive that had not been wiped clean. The former CFO's attorney has asked the court to strike all references to the pornography, arguing that Sunrise's instructions regarding retention of materials related to accounting activities under investigation and did not require the retention of the "adult materials". We hope to obtain more information about this interesting case and report further in the future.


General Sherman supposedly once said: "If I owned Texas and Hell, I would rent Texas and live in Hell." Quite obviously, Roger Clemens is betting that the good citizens of Harris County, Texas will prove the good general wrong. In what, in retrospect, may well be viewed as a serious blunder, Brian McNamee's lawyers threatened to sue Clemens if he went on 60 Minutes. Presumably, that lawsuit would have been filed in a more favorable venue than Harris County, Texas. But Rusty Hardin beat McNamee's lawyers to the punch, and filed a fourteen page complaint for defamation in Harris County before McNamee could file elsewhere. The complaint can be found at

I am beginning to get that itch that starts about this time every year - the itch to go south for spring training. Many players that I would love to go observe. Will Elijah Dukes get through spring training before he gets arrested yet again? How will D Train (Dontrelle Willis) do in the American League? And who is this latest deportee from Japan, Yosuke Kukudome, who will play right field for the Cubbies?


Put this under the category of crass commercialism. I co-chair a two day CLE conference sponsored by ALI-ABA on damage issues in employment cases which will be held February 7-8 at Georgetown Law School in Washington, D.C. If you are interested in registering, just contact ALI-ABA at 1-800-CLE-NEWS.

Friday, January 18, 2008

Dr. King's Birthday

We are closed Monday and will not be blogging Monday as we celebrate Dr. King's birthday.

My favorite quotation from Dr. King is: "The arc of the moral universe is long, but it bends toward justice." The quote was actually first uttered by Theodore Parker, an American Transcendentalist, referring then to the abolitionist movement.

Last October the world lost one its great voices, who was clearly inspired, in part, by Dr. King. I refer to the South African reggae singer Lucky Dube. One of my favorite lyrics of his are from his song "Different Colours / One People." One refrain goes as follows:

They were created in the image of God
And who are you to separate them
Bible says, he made man in his image
But it didn't say black or white
Look at me you see BLACK
I look at you I see WHITE
Now is the time to kick that away
And join me in my song

The Psychology of Race in America

I am not a big fan of Bill Moyers, but his interview last Friday evening, January 11th, with Shelby Steele regarding the racial psycho-dynamics of the Obama campaign was spot on. The transcript is available at

Supreme Court Update

Today's conference

The Court granted cert. in MetLife v. Glenn, 06-923; 461 F.3d, 660 (3rd Cir. 2006).

The Solicitor General had filed an invitation-brief (available at in support of the petition for cert. in this case, which presents the recurring ERISA issue as to the standard of review that the trial court's should utilize in ERISA benefit cases when the plan administrator is the employer, and thus evaluates whether or not to pay claims out of its own pocket. The first question that the Solicitor recommended the Court grant cert. on is whether or not that constitutes a conflict of interest that must be considered in determining the standard of judicial review. The Solicitor also recommended to the Court that it order the parties to brief how the Courts should weigh such conflicts of interest in reviewing discretionary benefit determinations made by such a "dual-role administrator."

The courts have struggled with the delineation of a meaningful standard ever since Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989). As a commentator noted in the fall 2007 issue (vol. 37, no. 1) of The Brief, the publication of the Tort Trial & Insurance Practice Section of the ABA, "This sliding scale approach is hopelessly imprecise . . . " See Teresa S. Renaker, "State Regulation of Discretionary Clauses In Insured ERISA Plans," The Brief, Fall 2007, page 51. Ms. Renaker's fascinating article called my attention to developments occurring at the state regulatory and state legislative levels regarding discretionary clauses, like the one at issue in MetLife. The National Association of Insurance Commissioners and several states have moved to disallow discretionary clauses in certain insurance policies. On December 5, 2004, NAIC voted unanimously to adopt model legislation banning the use of discretionary clauses in disability insurance policies. This model legislation amended the NAIC's Model Act 42 of 2002, which banned discretionary clauses in health insurance policies, expanding it to reach disability policies as well. The article points out that the Federal District Courts are now grappling with the effect in those states that have by regulation banned discretionary clauses, on the standard of review in ERISA cases like MetLife. Some courts have found discretionary clauses invalid, and have applied de novo review. Other courts have continued to apply discretionary review. And, some courts have held that the states do not have the authority to regulate in the area of discretionary clauses.So, if you represent a client in a benefit determination case, in addition to keeping your eye on MetLife, you need to determine what, if any, action the applicable state insurance commissioner has taken in light of NAIC's model legislation.

The Court also granted cert. in Meacham v. Knolls Atomic Power Lab., 06-1505; 461 F.3d 134 (2d Cir. 2006).

The Solicitor General had filed an invite-brief with the Court on December 21, 2007 (available at in Meacham v. Knolls Atomic Power Lab., No., 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 critically 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.

The Court also granted cert. in Crawford v. Metro. Gov't of Nashville & Davidson County, 06-1595; 211 Fed. Appx. 373, 2006 U.S. App. LEXIS 28280 (6th Cir. 2006) (petition for cert. available at

The 6th Circuit held that the anti-retaliation provisions of Title VII were not violated by the employer’s allegedly retaliatory discharge of plaintiff who had cooperated in the employer’s internal investigation of a co-worker’s sexual harassment allegations against a supervisor, where there was no pending charge with the EEOC.

AT&T Corp. v. Hulteen, 07-543; 498 F.3d 1001 (9th Cir. 2006)

The Court had this case on for decision at conference today whether to grant cert., and, as best I can determine, took no action today one way or the other. The issue in this case is whether Title VII permits an employer, when setting retirement benefits, to discriminate between who took pregnancy disability leave before the Pregnancy Discrimination Act came into effect and other employees who took any other kind of temporary disability leave during that same period.

January 11th Conference

Taylor v. Progress Energy, Inc., 493 F.3d 454 (4th Cir. 2007), re-aff’g 415 F.3d 364 (4th Cir. 2005, vacated and remanded by 2006 U.S. App. LEXIS 15744 (4th Cir. June 14, 2006), petition for cert. filed on October 22, 2007, available at

The Fourth Circuit, on rehearing and now with the benefit of the amicus brief from the Department of Labor, which disagreed with the Court’s interpretation of a DOL regulation prohibiting waivers of FMLA claims, nonetheless reaffirmed its earlier ruling. Judge Duncan dissented. The Fourth Circuit, disagreeing with the Fifth Circuit’s holding in Faris v. Williams WPCI, Inc., 332 F.3d 316 (5th Cir. 2003), held DOL regulation that prohibits waivers of FMLA claims absent DOL or court approval should be upheld. The Fifth Circuit had held that the regulation only barred the prospective waiver of substantive FMLA rights; whereas the Fourth Circuit held that the regulation applied to all waivers, both retrospective and prospective. In addition, the Fourth Circuit held that the regulation applies to all FMLA rights, both substantive and proscriptive, the latter preventing discrimination and retaliation.

At the Court's January 11th conference, the Court had requested that the Solicitor General file an invitation-brief. Now, this should get real interest. The Solicitor of Labor filled an amicus brief at the Fourth Circuit when the petition for rehearing was filed, and the panel rejected the Department's interpretation of the statute. The Supreme Court, in Auer and Coke, deferred to the Department's interpretation as expressed in Supreme Court briefs. In Auer, the Department's interpretation was first expressed in the Supreme Court brief, and the Court genuflected to it. The Fourth Circuit in Progress Energy, did not genuflect. Should be interesting.

Engquist Redux

When the Supreme Court took Engquist the other day (, it passed on a fascinating second issue that the cert. petition presented, that is whether a state "split recovery" punitive damages statute violates the Takings Clause of the Constitution.

The supreme courts in six states have upheld the statutes against federal takings challenges. Cheatham v. Pohle, 789 NE 2d 467, 474075 (Ind. 2003); Evans v. State, 56 P.3d 1046, 1058 (Alaska 2002); Mack Trucks, Inc. v. Conkle, 263 Ga 539, 436, SE 2d 635, 639 (1993); Gordon v. State, 608 So 2d. 800, 801-02 (Fla. 1992) (per curiam); Shepherd Components, Inc. v. Brice Petrides-Donohue & Associates, 473 NW 2d 612, 619 (Iowa 1991). But two state supreme courts have held the statutes violate the federal Takings Clause. Kirk v. Denver Publishing Co. 818 P 2d 262, 273 (Colo. 1991); Smith v. Price Development Co., 125 P 3d 945 (Utah 2005). One U.S. District Court has held that a split recovery statute violates the Excessive Fines Clause. McBride v. Gen. Motors, Corp., 737 F. Supp 1563, 1578 (MD Ga. 1990).

Customer Preference

There is a recent customer preference case, Simple v. Walgreen's Co., 2007 U.S. App. LEXIS 29729 (7th Cir., Nov. 14, 2007), where Walgreen's attempted to defend assignments to its stores based upon racial demographic data, attempting to justify the denial to an African American of a promotion to manage a store in Pontiac, Michigan because Pontiac was not ready to have a black manager. Judge Posner rejected this bit of nonsense out of hand.

Historically, the courts have been loathe to bless customer preference as a justification for employment practices based on a protected characteristic. See Diaz v. Pan Am. World Airways, 442 F.2d 385 (5th Cir. 1970); Gerdom v. Continental Airlines, Inc., 692 F.2d 602 (9th Cir. 1982); Fernandez v. Wynn Oil Co., 653 F.2d 1273 (9th Cir. 1981); 29 C.F.R. 1604.2(a)(1)(iii) (preferences of co-workers or customers are not a BFOQ).

Now, what's interesting is what is going on beneath the radar screen in the interaction between law firms and their clients. Increasingly, I hear reports of clients insisting that, if the law firm wants their business, the law firm must assign African Americans to work on the account. Why is this not as odious in the eyes of the law as Walgreen's saying that Pontiac is not ready for a black manager at its store there?

Background Checks

The Ninth Circuit in Nelson v. National Aeronautics and Space Administration, 2008 U.S. App. LEXIS 498 (9th Cir., Jan. 11, 2008), issued an opinion allowing scientists at NASA's Jet Propulsion Laboratory to continue working until the question of their privacy challenge to the requirement of a new domestic security rule that they submit to background checks was decided.

Black Holes

Some can't sleep nights for fear that an asteroid or meteorite will collide with Earth during the night. Well, for those of you who comfortably sleep despite asteroid phobia and meteorite phobia, let me share with you the latest scientific discovery which undoubtedly will lead to more insomnia. Professor Kelly Holley-Bockelmann of Vanderbilt University has just presented at the American Astronomical Society's annual meeting about renegade black holes roaming the Milky Way. She says that there are breakaway black holes, that have broken away from that giant black hole that sits at the center of our galaxy, and they are, as best she can discern, indiscriminately roaming the Milky Way. They are, of course, invisible, although they do emit Hawking radition. So, any second now, we could be sucked in to a black hole, and no longer exist. The title alone of an article from the Australian News is disquieting -- "Hundreds of hungry black holes may me lurking in our milky way galaxy, waiting to gooble unsuspecting planets and stars that cross their paths." Night, night.

Thursday, January 17, 2008

We have been silent for a few days as we have been in the midst of a titanic battle in court under the Computer Fraud and Abuse Act. Many interesting issues that I hope to later discuss, once the dust clears in the litigation.

I am a certified baseball nut. So, this blog will occasionally have posts about baseball, some that might marginally have something to do with employment law, and most probably just having to do with the greatest game that God ever invented. So, with that fair warning, I thought I would start the day with some baseball.


Tuesday, February 26, forty days from today, will be the first spring training games. The Mets play Michigan at noon, and that should be the first game of the spring training schedule.

In the midst of all the embarrassments about the drug scandal, the sad news comes that one of the greats died the other day. Johnny Podres who helped pitch the Brooklyn Dodgers to their one World Series died last Sunday. Podres pitched Game 7 in 1955 against the Yankees in their park, and, of course, the Dodgers won, having lost the World Series seven times before. Podres mentored Curt Schilling. Schilling had very nice things to say on his blog the other day about Podres. In his obituary, he is described as "old-school", and that he "disdained technological advances such as computerized charts." He once said: "I don't know nothin' about computers, I know pitchers."

In embarrassing contrast, Major League Baseball appeared on Capitol Hill on Tuesday of this week. And, what did we learn. First, Miguel Tejada may get indicted for lying under oath in his 2005 Congressional testimony. As far as I am concerned, I would be a happy man if Bonds, Tejada, and the others share a jail cell for a long time. We also shockingly learned that Major League Baseball granted an extraordinary number of drug exemptions to Major League ballplayers in 2007, allowing them to use performance-enhancing drugs because of alleged medical disorders. Now, before I tell you the medical disorder du jour, put your seat belts on, the vast majority of the players requested exemptions for stimulants used to treat attention-deficit disorder. Give me a break.

Then, you have the embarrassing shill for the union, Donald Fehr, who probably should be indicted as a co-conspirator and placed in a dark dank jail cell for a long time. Finally, in stark contrast to Mr. Fehr who is deserving of zero respect, we have the Baseball Hall of Fame passing over Marvin Miller, and on the same ballot, selecting Bowie Kuhn. I could hardly think of anyone more deserving to be in the Hall of Fame than Marvin Miller, and, at least comparatively speaking, anyone less deserving than Bowie Kuhn. But, life ain't fair.

Enough baseball.

The Balkans

Okay, I guess after taking a few days off, I am having trouble getting back into the swing of things in terms of employment law. I read the other day an op-ed piece about potential trouble spots in the Balkans, and came away saying to myself that you probably could count on one hand the people in our government who have an awareness of the many powder keg issues in that area that could explode into unrest in the coming months. For example, how many of us have a clue as to what is Mitrovica, much less its significance in this area of the world. Now, if you passed that test, can you find for me on a map Abkhazia? How about South Ossetia? Okay, you're a genius and you've gotten the first three. How about Trans Dnestr? Or Nagorno-Karabakh? If you are seriously interested, what provoked this rather silly post was Anatol Liven's op-ed in the Financial Times of this past Monday entitled "Balkan Unrest Remains a Recipe for Disaster."

Jena Six

Remember a few weeks back when everyone was in a dither about the so-called Jena Six. While I do not profess to know the full story, Charlotte Allen's article entitled "Jena: A Case of the Amazing Disappearing Hate Crime" that appeared in the January 21 edition of The Weekly Standard, is well worth reading to get a very different perspective on the matter than you might get from reading the Washington Post and the New York Times.

D.C. School Legislation Authorizing Termination of Non-Union Employees Passes

On January 8, the D.C. City Council gave final approval to the legislation that would provide authority to the new Chancellor to terminate non-union employees without cause. See our prior post "District of Columbia Non-Union School Employees To Be At-Will", Washington, D.C., Maryland, and Virginia Employment and Labor Law Blog, Dec. 27, 2007 at (For full text of Act, see

Court Monitors and Special Masters

There has been controversy recently surrounding the fact that former Attorney General Ashcroft's business, the Ashcroft Group, was selected by the United States Attorney in New Jersey to monitor a False Claims Act settlement. See Philip Shenon, "Ashcroft Deal Brings Scrutiny in Justice Dept.", The Washington Post, Jan. 10, 2008, available at ; "Ashcroft Rakes It In With DOJ Settlement", available at ; and "Pascrell Calls on House Judiciary Committee To Examine Deferred Prosecution Agreements", available at In contrast, I have not heard a whisper of protest that the Supreme Court this past Tuesday named San Francisco lawyer, Kristin Linsley Myles, to be a Special Master to gather evidence and report to the Court on a dispute between South Carolina and North Carolina over sharing the waters of the Catawba River. Ms. Myles is a former clerk for Justice Scalia. For an excellent discussion on Special Masters, see Margaret G. Farrell, The Role of Special Masters in Federal Litigation, ALI-ABA Course of Study Materials for Civil Practice and Litigation Techniques in the Federal Courts (Oct. 14-16, 1993). See also materials submitted by Francis E. McGovern entitled Appointing Special Masters and Other Judicial Adjuncts: A Handbook for Judges, ALI-ABA Course of Study Materials for Civil Practice and Litigation Techniques in Federal and State Courts (Mar. 7-9, 2007).

One wonders if there ought not be competitive bidding for these plumb assignments.

Supreme Court Update

Engquist v. Oregon Department of Agriculture, 478 F.3d 985 (9th Cir. 2007), petition for cert. in No. 07-474 granted, 76 U.S.L.W. 3364 (Jan. 11, 2008).

The issue presented is whether the Court's "rational basis" analysis in Village of Willowbrook v. Olech, 528 U.S. 562 (2000) applies to public employers who intentionally treat similarly situated employees differently with no rational bases for arbitrary, vindictive, or malicious reasons.

In Olech, the Court recognized the viability of " . . . equal protection claims brought by a 'class of one,' where the plaintiff alleges that she has been intentionally treated differently from others similarly situated and that there is no rational basis for the difference in treatment." The Olech Court held that a complaint alleging that the Village demanded a larger easement from the plaintiff than other similarly situated property owners; that the difference in treatment was irrational and wholly arbitrary; and that the Village ultimately relented in accepting a lesser easement was "sufficient to state a claim for relief under traditional equally protection analysis." 528 U.S. at 565.

Based upon Olech, seven Circuits recognized that public employees could state a rational basis equal protection claim against public employers to challenge individual employment decisions.
See Scarbrough v Morgan County Bd. Of Educ., 470 F3d 250, 260-61 (6th Cir 2006); Hill v Borough of Kutztown, 455 F3d 225, 239 (3d Cir 2006); Whiting v Univ of Miss, 451 F3d 339, 348-50 (5th Cir 2006); Neilson v D’Angelis, 409 F3d 100, 104 (2d Cir 2005); Levenstein v Salafsky, 414 F3d 767, 775-76 (7th Cir 2005); Campagna v Mass Dep’t of Envt’l Prot., 334 F3d 150, 156 (1st Cir 2003); and Bartell v Aurora Public Schools, 263 F3d 1143, 1148-49 (10th Cir 2001).

In contrast, the Ninth Circuit in Engquist, created an exception to Olech for public employment cases, predicating its exception on a concern that Olech was unnecessary due to the number of legal protections public employees enjoy, that the application of Olech to public employment would upset the common law at-will rule, and that such an exception would generate a flood of cases requiring federal review of a multitude of public agency personnel decisions. 478 F.3d at 993. See also Robert C. Farrell, Classes, Persons, Equal Protection, and Village of Whillowbrook v. Olech, 78 Wash. L. Rev. 367 (2003).

The Fourth Circuit has recognized Olech in Willis v. Marshall, 426 F.3d 251 (4th Cir. 2005), a non-employment case, where the plaintiff was barred from a municipal community center for "dirty dancing".

Huber v. Wal-Mart, 486 F.3d 480 (8th Cir. 2007), cert. granted, 128 S.Ct. 742 (Dec. 7, 2007), cert. dismissed, 2008 U.S. LEXIS 1095 (Jan. 14, 2008).

On Monday, the Supreme Court dismissed the Huber case as the parties had settled the matter. See our prior post, "Is The ADA An Affirmative Action Statute?", Washington, D.C., Maryland, and Virginia Employment and Labor Law Blog, at

James v. Metro Government of Nashville, No. 07-367, cert denied, James v. Metro. Gov't, 2008 U.S. LEXIS 930 (U.S., Jan. 14, 2008)

The Court denied cert. in this case which presented the question whether a judge or jury has the role of deciding whether a worker has been retaliated against for protesting discrimination in the workplace.

This is the James' case second visit to the Supreme Court. Following the decision in Burlington Northern, James sought cert. and the Supreme Court, in light of its Burlington Northern decision vacated an earlier decision of the Sixth Circuit finding that certain retaliatory actions were not adverse employment actions under section 704(a) of Title VII. The Court remanded the case for reconsideration. 127 S. Ct. 336 (2006).

Thereafter, following a series of Sixth Circuit decisions, the Court of Appeals held on remand that it is for the Courts to determine whether the facts or allegations of a particular case meet the Burlington Northern standard. See McNeill v. U.S. Dep't of Labor, 2007 WL 1880599, *6 (6th Cir., June 27, 2007); Michael v. Catepillar Financial Service Corp., 2007 WL 2176220, *7 (6th Cir., July 31, 2007); Watson v. City of Cleveland, 202 Fed. Appx. 844, 855 (6th Cir. 2006).

Five other Circuits have adopted the holding of the Sixth Circuit that judges are to determine whether the Burlington Northern standard has been satisfied, and four other Circuits have held that juries should decide.

The Fourth Circuit in Csicsmann v. Sallada, 211 Fed. Appx. 163 (4th Cir. 2006), found that the alleged retaliatory act did not meet the Burlington Northern standard because "This court has never found" that a materially adverse action existed based on the type of retaliation alleged in that case. See also Parsons v. Wynne, 2007 WL 731398, *1 (4th Cir., Mar. 9, 2007). In contrast, the District of Columbia Circuit has held that it is for juries to decide whether a retaliatory act could have deterred protected conduct. See Vlikonja v. Gonzales, 466 F.3d 122 (D.C. Cir. 2006). See also Czekalski v. Peters, 475 F.3d 360, 365 (D.C. Cir. 2007).

John R. Sand & Gravel Co. v. United States (Jan. 8, 2008).

The majority opinion, written by Justice Breyer, relying on stare decisis, adheres to the Court's interpretation of a statute of limitations applicable to claims presented to the Court of Federal Claims (28 U.S.C. Section 2501) as jurisdictional, finding that the Court's decision in Irwin v. Dep't of Veteran's Affairs, 498 U.S. 89 (1990) was distinguishable. The Court, quoting Justice Brandeis, states that "in most matters it is more important that the applicable rule of law be settled than that it be settled right." Burnet v. Coronado Oil & Gas Co., 285 U.S. 393, 406 (1932) (dissenting opinion).

Justice Ginsburg, in her dissent, responding to the stare decisis argument, states: "It damages the coherence of the law if we cling to outworn precedent at odds with later, more enlightened decisions." Justice Ginsburg also notes that 28 U.S.C. Section 2401(a) contains a time limit materially identical to that in Section 2501, and that the Courts of Appeals are divided on the question whether Section 2401(a) is jurisdictional. In conclusion, Justice Ginsburg states: "After today's decision, one will need a crystal ball to predict when this Court will reject, and when it will cling to, its prior decisions interpreting legislative texts."

For employment lawyers, I think the important question is whether the majority in any way suggests that Irwin, which is only seventeen years old, remains good law. Irwin held in a Title VII case against a federal agency that the statute of limitations is subject to equitable tolling - "namely, 'that the same rebuttable presumption of equitable tolling applicable to suits against private defendants should also apply to suits against the United States.'" (citation omitted). I do not read the majority as suggesting that Irwin is anything other than good law. Clearly, in cases against the federal government, where there is an existing interpretation of a statute of limitations as jurisdictional, it would appear that an overwhelming majority of this Supreme Court will not overturn those precedents even though they are out of step with more modern interpretations that statutes of limitations against the federal government should be treated the same as statutes of limitations against private parties. As the dissent noted, Oliver Wendell Holmes' famous quote, seems applicable here. "It is revolting to have no better reason for a rule of law than that so it was laid down in the time of Henry IV. It is still more revolting if the grounds upon which it was laid down have vanished long since, and the rule simply persists from the blind imitation of the past." Holmes, The Path of the Law, 10 Harv. L. Rev. 457, 469 (1897).

Collaborative Law

As a follow-up on my earlier post, "Collaborative Law", Washington, D.C., Maryland, and Virginia Employment and Labor Law Blog,, January 11, 2008, on collaborative law, see Marlissa Briggett's article in the Boston College Law Magazine on the topic,