Class Action Certification Appeal Not Mooted by Settlement by Class Representative of his Personal Claims

In Narouz v. Charter Communications, LLC, 591 F.3d 1261 (9th Cir. 2010), a panel, Judge Smith, writing for himself and a New York District Judge, held that an appeal of the District Court’s refusal to approve a class action settlement was not mooted by the class representative’s release of his personal claims, reasoning that the class representative did not release the claims of the proposed class members and retained a personal financial interest arising from his rights to represent the class. Judge Rymer dissented in part, reasoning that the language of the settlement agreements constituted a waiver of the class representative’s right to appeal. Judge Rymer stated: “The agreement contains a comprehensive release and does not reserve the right to appeal a class certification claim.” This issue remains an open question for the Supreme Court. See United States Parole Commission v. Geraghty, 445 U.S. 388, 404 n.10 (1980); Deposit Guaranty Nat’l Bank, Jackson Miss. v. Roper, 445 U.S. 326, 334 n.6 (1980).

Tax Court Finds Portion of Settlement Excludable from Gross Income

In Domeny v. C.I.R., 2010 Tax Ct. Memo LEXIS 9 (Jan. 13, 2010), Senior Judge Gerber of the Tax Court found that the taxpayer who had received, in settlement of a hostile-environment case, compensation for a flare-up of Multiple Sclerosis symptoms allegedly caused by her work environment, was entitled to exclude those moneys from her gross income as compensation for “physical injuries or physical sickness”, pursuant to Section 104(a)(2) of the Internal Revenue Code. A copy of the opinion can be found here.

Supreme Court Holds “Public Disclosure Bar” Amendment Not Retroactive

Justice Stevens, writing for a seven Justice majority, held that the amendment to the “public disclosure bar” contained in section 10104(j)(2) of the Patient Protection and Affordable Care Act is not retroactive, stating that the legislation makes no mention of retroactivity and that would be necessary for its application to pending cases “given that it eliminates petitioner’s claimed defenses to a qui tam suit.” Graham County Soil and Water Conservation District v. United States ex rel Wilson, No. 08-304, 2010 U.S. LEXIS 2927 at *6 n.1 (Mar. 30, 2010).

Equal Access to COBRA Act

Senator Boxer (D-California), has introduced the Equal Access to COBRA Act, which would provide the same rights to same-sex couples as are provided to opposite-sex couples under COBRA to healthcare continuation.

The Human Rights Campaign has written an article regarding the bill. A copy can be found here.

Lactation / Breast Pumping Rights At Work Contained in the Patient Protection and Affordable Care Act

Of the many provisions in the recently enacted national healthcare legislation, one that went largely overlooked by the media grants new rights to breastfeeding mothers in the workplace via an amendment to the Fair Labor Standards Act. Under the provision, employers with more than 50 workers will have to provide new mothers, for up to one year after birth, with “reasonable” time to take unpaid breaks to express breast milk for their nursing children. Such employers will also be required to provide a private space for the employee to do so. The Department of Labor is supposed to hammer out the regulatory details sometime in the near future. This provision will not preempt state laws to the extent that they provide greater protections.

Articles discussing the requirement are available here, and here.

For a summary of state breastfeeding legislation in the U.S., click here.

Healthcare Legislation Contains Additional False Claims Act Amendments

The Patient Protection and Affordable Care Act contains several amendments to the False Claims Act, including amendments to its public disclosure bar and its original source exception, amendments which are designed to enhance private enforcement of the FCA. For a discussion of the amendments, see this revised alert from Fried Frank.

Divided Fifth Circuit Holds that Gross Does Not Apply to Title VII Retaliation Claims

In Smith v. Xerox Corp, 2010 U.S. App. LEXIS 6190 (5th Cir. March 24, 2010), Judge Reavley, writing for himself and Judge Wiener, held that the rationale of Gross does not apply to Title VII, specifically to Section 704(a) of Title VII, which is the retaliation provision of that statute. Judge Jolly wrote a vigorous dissent, in which he characterizes as “lame” the majority’s distinction between age discrimination cases under the ADEA and retaliation cases under Title VII. With this decision from the 5th Circuit, there now is a circuit split, with the 7th Circuit having twice stated that “unless a statute… provides otherwise, demonstrating but-for causation is part of the plaintiff’s burden in all suits under federal law.” Serwatka v. Rockwell Automation, Inc., 591 F.3d 957, 961 (7th Cir. 2010) (ADA) (citing Fairley v. Andrews, 578 F.3d 518, 525-26, rehearing denied, 2009 U.S. App. LEXIS 21263 (7th Cir. 2009) (42 U.S.C. § 1983)).

See also my previous presentation on Gross.

No Reasonable Expectation of Privacy in Delivered Emails

In Rehberg v. Paulk, 2010 U.S. App. LEXIS 5198 (11th Cir. March 11, 2010), a panel of that court, Judge Hull writing for Judges Carnes and Anderson, held that sending “emails to third parties constitute[s] a voluntary relinquishment of the right to privacy in that information.” The government investigators subpoenaed the emails directly from the ISP through which Rehberg transmitted his email messages. In essence, no one in the 11th Circuit should have any expectation of privacy in their emails from the moment one transmits the message, and should expect that the government can go to your ISP and obtain any and all of your otherwise private messages. See also Orin Kerr’s analysis of this case at the Volokh Conspiracy.

DOL Wage and Hour Division Opines That Typical Mortgage Loan Officer Is Not Exempt Under the FLSA

Having announced that the Wage and Hour Division will no longer release guidance in the form of detailed opinion letters on specific fact situations under the FLSA, but rather will issue general interpretations of the wage and hour laws and regs, the WHD issued its first such Administrator Interpretation # 2010-01, on March 24, 2010. In it, the Division concluded that employees performing the typical duties of a mortgage loan officer do not qualify as administrative employees exempt from the provisions of the FLSA. A copy of the Administrator Interpretation is available here. An article on the decision by Seyfarth Shaw is available here.

Computer Fraud and Abuse Act

Computer Fraud and Abuse Act

In recent employers in recent years have increasingly been using the Computer Fraud and Abuse Act (CFAA) (18 U.S.C. § 1030) to sue employees and former employees who make wrongful use of the employer’s computer system. Employers have been able to successfully hold employees and former employees liable under the CFAA for actions such as retaining or wrongfully accessing the employer’s computer systems or electronic documents without proper authorization.

Originally designed to punish hackers, particularly those who attack computers used for compelling federal interests (e.g., computers used by the federal government, large financial institutions, etc.), the CFAA establishes civil liability for anyone who “[k]nowingly and with the intent to defraud, accesses a protected computer without authorization, or defraud, or exceeds authorized access, and by means of such conduct furthers the intended fraud ended or obtains anything of value.” 18 U.S.C. § 1030(a)(4).

A current CFAA hot topic is a recently developed circuit split as to whether the
Act should be interpreted broadly or narrowly when an employer claims a former employee has acted “without authorization” or has “exceeded authorization” in accessing computer-stored information prior to termination of employment.

The narrower view, which has garnered significant support, is illustrated by the 9th Circuit’s holding in LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009), where the Court rejected the employer’s argument that an employee accesses electronic documents without “authorization” when the employee acts contrary to the employer employer’s interest or in breach of the employee’s fiduciary obligation of loyalty to the employer. Rather, where the employee’s actions are consistent with the access previously granted to him as an employee, the Court held that the employee acts with proper “authorization” within the meaning of the Act.

The broader view, which has proven thus far to be the minority view, is illustrated by the 7th Circuit’s decision in Int’l Airport Ctrs., LLC v. Citrin, 440 F.3d 418 (7th Cir. 2006), where the Court held that an employee can be found to have accessed a computer “without authorization” whenever he does so in breach of his duty of loyalty to the company.

Other recent CFAA developments are:

United States v. Drew, 2009 U.S. Dist. LEXIS 85780 (C.D. Cal.
Aug. 28, 2009) (dismissing a misdemeanor criminal complaint brought against an individual under the Act based upon the conscious violation of a website’s terms of service, as basing a misdemeanor violation on such conduct violated the constitutional “void-for-vagueness” doctrine).

Patrick Patterson Custom Homes, Inc. v. Bach, 586 F Supp.2d 1026 (N.D. Ill. 2008) (opinion discusses whether the defendant “knowingly cause[d] the transmission of a program, information, code or command, and as a result of such conduct intentionally cause[d] damage without authorization, to a protected computer”).

United States v. Middleton, 231 F.3d 1207 (9th Cir. 2000) (upholding a criminal conviction for violation of the Act in the form of intentionally causing damage to a “protected computer” without authorization).

Chas. S. Winner, Inc. v. Polistina, 2007 U.S. Dist. LEXIS 40741 (D.N.J. June 4, 2007) (dismissing for lack of federal subject matter jurisdiction because the plaintiffs failed to allege facts that show that they suffer they suffered a “loss” as defined under the Act).

Spangler, Jennings & Dougherty, P.C. v. Mysliwy, 2006 U.S. Dist. LEXIS 39602 (N.D. Ind. 2006) (denying plaintiff’s motion for summary judgment on its claim under the Act, because the plaintiff failed to provide any proof that it had been damaged by the defendant’s alleged violation of the Act).

Pearl Invs. LLC v. Standard I/O, Inc., 257 F. Supp. 2d 326, 2003 U.S. Dist. LEXIS 6890 (D. Me. 2003) (magistrate judge recommends that defendants be granted summary judgment as to plaintiff’s claim under the act, as the plaintiff showed no cognizable evidence that defendant’s alleged conduct damaged plaintiff’s computer system in any quantifiable amount).

Tyco Int’l Inc. v. Does, 2003 U.S. Dist. LEXIS 11800 (S.D.N.Y. July 11, 2003) (discussing compensatory damages under the Act for plaintiff’s costs associated with assessing the damage to its computer system and restoring its system after plaintiff’s attack).

For more information on this law see:

David Johnson, “Update on CFAA Circuit Split: District Courts in 8th Circuit Adopt Minority
View, Permitting Claims Where Defendant Exceeds His Authority to Access Computer”,
November 16, 2009, available here.

David Conforto, “Employees Beware: Computer Fraud & Abuse May Restrict Ability to
Retain Documents”, November 5, 2009, available here.

Amy E. Bivins, “Attorneys Advise Employers to Revisit Data Misuse Policies After Brekka
Ruling”, November 4, 2009, available at here.

Kenneth J. Vanko, “Two Views of the Computer Fraud and Abuse Act (Brekka and Pullen),
October 30, 2009, available at here.

Robert B. Milligan and Carolyn E. Sieve, “Establishing CFAA Violations by Former
Employees”, October 27, 2009, available at here.

David Johnson, “LVRC v. Brekka: 9th Circuit Decision Creates Circuit Split on Whether
CFAA Applies to an Employee Who Misuses His Authority to Access His Employer’s
Computer Files”, October 1, 2009, available at here.

Lori Bauman, “Ninth Circuit Narrowly Interprets Computer Fraud and Abuse Act”,
September 24, 2009, available at here.

David Johnson, “ES&H v. Allied Safety: Court Sidesteps Split in Authority over Whether
CFAA Applies to an Employee Who Misuses His Authority to Access His Employer’s
Computer Files”, September 24, 2009, available here.

Amy E. Bivens, “Brekka Case Shows Need for Comprehensive Strategy to Shield Data
from Insider Misuse”, September 20, 2009, available here.

Roy Ginsburg, “When Workers Steal Data to Use at New Jobs”, August 5, 2009, available here.

Faithless Servant Doctrine

The Faithless Servant Doctrine is a New York state common law doctrine under which employers may refuse to pay employees for the time the employees were unfaithful to their duties. Courts have gone so far as to rule that employees must forfeit all compensation received after their first disloyal act. See, e.g., Phansalkar v. Andersen Weinroth & Co., L.P., 344 F.3d 184 (2d Cir. 2003) (applying New York law). Of particular note to attorneys practicing outside of New York – while the doctrine originated in and is primarily applied in the New York State court system, other courts (whether applying New York law or the law of another jurisdiction) have occasionally applied the doctrine, at least to some extent.

The original New York Case which established this doctrine was Murray v. Beard, 102 N.Y. 505, 508 (1886). In this case, which originally established the Faithless Servant Doctrine, an agent was held to uberrima fides in his dealings with his principal, and if he acts adversely to his employer in any part of the transaction, or omits to disclose any interest which would naturally influence his conduct in dealing with the subject of the employment, it amounts to such a fraud upon the principal, as to forfeit any right to compensation for services. Some recent New York cases applying the doctrine are William Floyd Union Free Sch. Dist. v. Wright, 61 A.D.3d 856, 2009 N.Y. App. Div. LEXIS 3067 (N.Y. App. Div. Apr. 21, 2009); Design Strategy, Inc. v. Davis, 469 F.3d 284 (2d Cir. 2006) (applying New York law); Phansalkar v. Andersen Weinroth & Co., L.P., 344 F.3d 184 (2d Cir. 2003) (applying New York law); and South Pierre Assocs. v. Meyers, 12 Misc.3d 955 (Civ. Nt. N.Y. Cty. 2006).

The Faithless Servant doctrine has been accepted or rejected to varying extents in other jurisdictions. Mark Jacoby has a detailed explanation and citations for most of these various state rules in his article “Disloyalty Doesn’t Pay: New York’s ‘Faithless Servant’ Doctrine” Mar. 2004.

States adopting the Faithless Servant doctrine include: California (J.C. Peacock, Inc. v. Hasko, 16 Cal. Rptr. 518, 522-24 (Cal. Ct. App. 1961)); the District of Columbia (Riggs Inv. Mgmt. Corp. v. Columbia Partners, L.L.C., 966 F. Supp. 1250, 1266 (D.D.C. 1997) (holding that “no compensation is owed an employee who has breached his duty of loyalty to his employer,” and that the employee must return to his employer compensation he earned following the disloyal act)); Maryland (Shipley v. Meadowbrook Club, Inc., 126 A.2d. 288, 291 (Md. 1956) (disloyal agents may be denied compensation, “particularly where there is a conflicting interest, concealment, or a willful and deliberate breach of his contract”)); Georgia (Vinson v. E.W. Buschman Co., 323 S.E.2d 204, 207 (Ga. App. 1984)); Illinois (ABC Trans Nat. Transport v. Aeronautics Forwarders, Inc., 413 N.E.2d 1299, 1314-15 (Ill. App. 1980)); Missouri (Zakibe v. Ahrens & McCarron, Inc., 28 S.W.3d 373, 385-86 (Mo. App. 2000) (collecting additional cases)); Oregon (Horton v. Whitehill, 854 P.2d 977, 980 (Or. App. 1993)).

States that have adopted some aspect of the doctrine include: Massachusetts (Meehan v. Shaughnessy, 535 N.E.2d 1255, 1266-67 (Mass. 1989); Chelsea Indus. v. Gaffney, 449 N.E.2d 320, 327 (Mass. 1983)); Delaware (Technicorp Int’l II, Inc. v. Johnston, No. 15084, 2000 Del. Ch. LEXIS 81, *196, *199 (Del. Ch. May 31, 2000); Citron v. Merritt-Chapman & Scott Corp., No. 3130, 1977 Del. Ch. LEXIS 183, *12 (Del. Ch. May 4, 1977)); Pennsylvania (Fidelity Fund, Inc. v. Di Santo, 500 A.2d 431, 439-40 (Pa. Super. Ct. 1985)); New Jersey (Cameco, Inc. v. Gedicke, 724 A.2d 783, 790-91 (N.J. 1999)); and Texas (Burrow v. Arce, 997 S.W.2d 229, 241-42 (Tex. 1999)).

Some states that have rejected the Faithless Servant Doctrine include: Connecticut (Dunsmore & Assocs., Ltd. v. D’Alessio, 2000 Conn. Super. LEXIS 114 (Conn. Super. Ct. Jan. 6, 2000) (unpublished)); Florida (Wallace v. Odham, 579 So. 2d 171, 175 (Fla. Dist. Ct. App. 1991)); and Rhode Island (Oken v. National Chain Co., 424 A.2d 234 (R.I. 1981).


Some interesting developments in the Faithless Servant doctrine were laid out in the following two cases. In Astra USA, Inc. v. Bildman, 914 N.E.2d 36 (Mass. 2009), the court, applying New York law, held that a CEO fired for sexual harassment and misappropriation of company funds must relinquish $7 million in salary and bonus paid to him by the former employer. The court in Bildman cited Feiger v. Iral Jewelry, Ltd., 363 N.E.2d 350 (N.Y. 1977), for the following: “One who owes a duty of fidelity to a principal and who is faithless in the performance of his services is generally disentitled to recover his compensation, whether commissions or salary . . . Nor does it make any difference that the services were beneficial to the principal, or that the principal suffered no provable damage as a result of the breach of fidelity by the agent.”

In Phansalkar v. Andersen Weinroth & Co., 344 F.3d 184 (2d Cir. 2003), the court reversed S.D.N.Y. Judge Shira Scheindlin and held that the disloyal employee must disgorge all compensation received from the date of his first disloyal act. In so holding, the Second Circuit in Phansalkar did not extend its prior holdings in Musico v. Champion Credit Corp., 764 F.2d 102 (2d Cir. 1985) and Sequa Corp. v. GBJ Corp., 156 F.3d 136 (2d Cir. 1998), in which it held that a disloyal employee need not disgorge compensation received for transactions in which the employee had been loyal.

More information on the doctrine can be found in the following articles:

Ronald Minkoff, “Suing Disloyal Employees & Agents: Court Gives Employers a Powerful New Weapon”, April 2004, available here.

Mark A. Jacoby, “Disloyalty Doesn’t Pay: New York’s ‘Faithless Servant’ Doctrine”, March 2004, available at here.

Stephen M. Bainbridge, “The Faithless Servant Doctrine and Partner (or Agent) Compensation”, November 9, 2003, available here.

Gary J. Mennitt, “The Faithless Servant Doctrine – Developments in the Law”, March 2, 2001, available here.

Oral Complaints as Protected Conduct Under the FLSA

Today the Supreme Court granted cert in Kasten v. Saint-Gobain Performance Plastics Corp. (09-834). The question presented for review is: whether an oral complaint of a violation of the Fair Labor Standards Act is protected conduct under the anti-retaliation provision, 29 U.S.C. § 215(a)(3). The opinions below and briefs can be found here.

OFCCP Ramping Up

As part of her 2011 budget request, DOL Secretary Solis requested for the Office of Federal Contract Compliance Programs an allocation of $113.4 million (an increase of $8 million from the 2010 level) and 788 employees to:

• “[B]roaden its enforcement efforts and focus on identifying and resolving both individual and systemic discrimination”;

• “[F]ocus its attention on a broad range of issues that arise in individual cases, including harassment, retaliation, termination, and failure to promote”;

• “[S]tep up” monitoring of federal contractors’ self-auditing process; and

• Renew its emphasis on reviewing the construction industry, as prescribed by Executive Order 11246, Equal Employment Opportunity.

See the rest of Secretary Solis’s budget request here.

State and Local Pension Funds: $2 Trillion Deficit

The March 15 Barron’s features an interesting, albeit frightening, article detailing the developing state and local, public employee pension deficiencies. The article notes that, according to a recent study conducted by the Pew Center, eight states (Connecticut, Illinois, Kansas, Kentucky, Massachusetts, Oklahoma, Rhode Island, and West Virginia) lack funding for more than a third of their pension liabilities, and 13 others are less than 80% funded. While the Pew report estimates that the states are currently in the hole $452 billion, other industry observers place that number closer to $2 – $3 trillion. See Robert Novy-Marx and Joshua D. Rauh, The Intergeneration Transfer of Public Pension Promises, Chicago GSB Research Paper No. 08-13, Sept. 2, 2008, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1156477.

Check out the full Barron’s article, entitled “The $2 Trillion Hole,” here.

Hostile Work Environment – Single Incident of Harassment

Can a single incident of harassment satisfy the “sufficiently severe or pervasive” standard (Harris v. Forklift Systems, Inc., 510 U.S. 17, 21 (1993); Meritor Savings Bank, FSB v. Vinson, 477 U.S. 57, 65, 67 (1986)) required to demonstrate an actionable hostile work environment claim under Title VII and similar statutes?

1. There is no “magic number” that gives rise to an actionable hostile work environment claim. Harris, 510 U.S. at 23 (“[W]e can say that whether an environment is ‘hostile’ or ‘abusive’ can be determined only by looking at all the circumstances.”). See also, e.g., EEOC v. WC&M Enters., Inc., 496 F.3d 393, 400 (5th Cir. 2007) (“Under the totality of the circumstances test, a single incident of harassment, if sufficiently severe, could give rise to a viable Title VII claims as a well as a continuous pattern of much less severe incidents of harassment.”); Terry v. Ashcroft, 336 F.3d 128, 148 (2d Cir. 2003) (noting that the relevant test for harassment is “quality or quantity”); Cerros v. Steel Techs., Inc., 288 F.3d 1040, 1047 (7th Cir. 2002) (“[A] sufficiently severe episode may occur as rarely as once, while a relentless pattern of lesser harassment that extends over a long period of time also violates the statute.”); Bowen v. Missouri Dep’t of Soc. Servs., 311 F.3d 878, 884 (8th Cir. 2002) (“A claimant need only establish discriminatory conduct which is either pervasive or severe.”); Smith v. Norwest Fin. Acceptance, Inc., 129 F.3d 1408, 1413 (10th Cir. 1997) (“The [Supreme Court’s] test is a disjunctive one, requiring that the harassing conduct be sufficiently pervasive or sufficiently severe . . .”).

2. In fact, courts have found that a single, sufficiently severe “episode” of harassment can create a hostile work environment. See, e.g., Lockard v. Pizza Hut, Inc., 162 F.3d 1062 (10th Cir. 1998) (finding a one-time event in which a waitress had her hair pulled by a customer, who also grabbed and placed his mouth on her breast, was severe enough to create an actionable hostile work environment); Quinn v. Green Tree Credit Corp., 159 F.3d 759, 768 (2d Cir. 1998) ("[E]ven a single incident of sexual assault sufficiently alters the conditions of the victim's employment and clearly creates an abusive work environment."); Tomka v. Seiler Corp., 66 F.3d 1295, 1305 (2d Cir. 1995) (noting that a “single incident of sexual assault sufficiently alters the conditions of the victim’s employment and clearly creates an abusive work environment” under Title VII); Howley v. Town of Stratford, 217 F.3d 141 (2d Cir. 2000) (finding that a single instance of an “extended barrage of obscene verbal abuse” created a hostile work environment); Williams v. New York City Housing Auth., 154 F. Supp. 2d 820, 825 (S.D.N.Y. 2001) (“Racially motivated physical threats and assaults are the most egregious form of workplace harassment . . . The display of a noose would fall within this category of intimidating conduct.”); Johnson v. Potter, 177 F. Supp. 2d 961, 965 (D. Minn. 2001) (in finding that the snapping of a bullwhip at the feet of the plaintiff, an African American, created a hostile work environment, the court noted that such an action “raise[s] images so deeply a part of this country’s collective consciousness and history, any explanation of how one could infer a racial motive appears quite unnecessary”); Tootle v. Dep’t of the Navy, EEOC No. 07A40127, 106 LRP 8351 (2006) (finding co-worker harassment on a single “noose” incident).

3. Further, courts have also found that a single, sufficiently severe use of a derogatory word or phrase can create a hostile work environment. See, e.g., Rodgers v. Western-Southern Life Insurance Co., 12 F.3d 668, 671 (7th Cir. 1993) (“Far more than a ‘mere offensive utterance,’ the word ‘ni[**]er’ is pure anathema to African-Americans. Perhaps no single act can more quickly ‘alter the conditions of employment and create an abusive working environment’ than the use of an unambiguous racial epithet such as ‘ni[**]er’ by a supervisor in the presence of his subordinate.”) (quoting Meritor, 477 U.S. at 67); Rocha Vigil v. City of Las Cruces, 119 F.3d 871, 873 n.3 (10th Cir. 1997) (noting that Harris, supra, “does not mean that [a] severely degrading, racially derogatory insult of the worst kind escapes actionability under Title VII simply because it is used only occasionally”); Reid v. O’Leary, 1996 U.S. Dist. LEXIS 10627, at *4 (noting that “it is very possible that the term ‘[Co[*]n-A[*]s]’ is racially derogatory or severe enough, in and of itself, to create a hostile work environment”); Kwiatkowski v. Merrill Lynch, No. A-2270-06T1 (N.J. Super. Ct. App. Div. Aug. 13, 2008), opinion available at http://lawprofessors.typepad.com/laborprof_blog/files/kwiatkowski_v_merrill_lynch.pdf (“[i]n our view, the patent offensiveness of the ‘stupid f[*]g’ comment renders it quite similar to the [jungle bunny] comment made to the plaintiff in Taylor [, infra]. As plaintiff’s treating psychiatrist noted, the effect of such a comment was to make him question his identity and his decision to identify himself as a gay man in a straight world. Thus, as in Taylor [, infra], we believe the comment made to plaintiff was the equivalent of a ‘receiving a slap in the face” because the injury was ‘instantaneous’.”); Taylor v. Metzeger, 152 N.J. 490 (1998) (finding that the single utterance of the term “jungle bunny” was sufficient to convert plaintiff’s work environment into a hostile one); Gamboa v. U.S. Postal Service, EEOC Request No. 05890633 (1989) (complainant established a disability harassment claim based upon two derogatory comments to a deaf employee used on one occasion). See also, e.g., Charles R. Lawrence III, If He Hollers Let Him Go: Regulating Racist Speech on Campus, 1990 Duke L.J. 431, 452 (1990) (“The experience of being called ‘ni[**]er,’ ‘sp[*]c,’ ‘J[*]p,’ or ‘k[*]ke’ is like receiving a slap in the face. The injury is instantaneous.”); Mari J. Matsuda, Public Response to Racist Speech: Considering the Victim’s Story, 87 Mich. L.Rev. 2320, 2338 (1989) (“However irrational racist speech may be, it hits right at the emotional place where we feel the most pain.”).

Also worth keeping an eye on is the fact that, due to recent publicity garnered by high-level federal government officials’ and public personalities’ derogatory use of the “R” word (“re[*]ard”), use of the "R" word may be on the cusp of attaining “one strike, you’re out” status in the harassment context, similar to the “F” and “N” words. See, e.g., Lauren Beckham Falcone, Rahm Emanuel Deserves a Liberal Scolding, BostonHerald.com, Feb. 4, 2010, available at http://bostonherald.com/entertainment/lifestyle/view.bg?articleid=1230450&chkEm=1 (commenting on White House Chief of Staff Rahm Emanuel’s use of “fu[**]ing re[*]arded” during a White House strategy meeting, the author notes, “the use of the R-word is not an innocuous euphemism. It’s as hateful and belittling and bullying as racial slurs and homophobic epithets and sexual harassment.”). See also Jake Tapper and Huma Kahn, Obama Apologizes for Calling His Bad Bowling “Like the Special Olympics”, ABCNews.com, Mar. 20, 2009, available at http://abcnews.go.com/Politics/story?id=7129997&page=1 (discussing President Barack Obama likening his self-proclaimed sub-par bowling ability to that of a participant in the Special Olympics).

The DOL’s Proposed “Employee Misclassification Initiative”

Testifying before the House Committee on Appropriations’ Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, Department of Labor Secretary Hilda Solis announced DOL’s proposed “Employee Misclassification Initiative.” The Initiative would provide the following:

• $12 million and 90 new investigators for DOL’s Wage and Hour Division to “ensure that workers are employed in compliance with the laws we enforce”;

• Support for “new, targeted [Employee and Training Administration] efforts to recoup unpaid payroll taxes due to misclassification and promote the innovative work of States on this problem,” including $10.9 million for a pilot program awarding States that successfully “detect[] and prosecut[e] employers that fail to pay their fair share of taxes due to misclassification and other illegal tax schemes that deny the Federal and State [Unemployment Insurance] Trust Funds hundreds of millions of dollars annually”;

• $1.6 million for DOL’s Office of the Solicitor and allocating 10 employees to “support enforcement strategies, with a focus on coordination with the States on litigation involving the largest multi-State employers routinely abuse independent contractor status”;

• $150,000 for OSHA to “train inspectors on worker misclassification issues”; and

• Proposed legislative changes that would “require employers to properly classify their workers, provide penalties when they do not, and restore protections for employees who have been classified improperly.”

Check out Secretary Solis’s prepared statement here.

Solicitor General’s Views Requested on Two ERISA Cert

On Monday, March 8, 2010, the Supreme Court requested the views of the Solicitor General on two cert petitions in Amara v. Cigna Corp., No. 09-804, the petitions raising questions regarding remedies under ERISA for alleged misleading or inadequate disclosures regarding pension plan changes. Both parties petitioned for cert. from the lower court’s opinion of the 2nd Circuit, 2009 U.S. App. LEXIS 21941 (2009). SCOTUSblog has a detailed description of this case.

The Citizen Participation Act

Congressman Steve Cohen (D.-Tennessee) has introduced H.R. 4364, The Citizen Participation Act, which he described as federal anti-SLAPP legislation, legislation designed to prevent meritless lawsuits. A SLAPP suit is “Strategic Lawsuit Against Public Participation.” California has such legislation. See Cal. Code Civ. Proc. 425.16.

For more information see the Citizen Media Law Project, Simple Justice, The Legal Satyricon, and Popehat.

Only In Washington, D.C.: “I Opposed It, and I Was in Favor of It.”

The venerable liberal organ, The Washington Post, above the fold yesterday has the following:

“After laying the groundwork for a decisive vote this week on the Senate's health-care bill, House Speaker Nancy Pelosi suggested Monday that she might attempt to pass the measure without having members vote on it.”

"It's more insider and process-oriented than most people want to know," the speaker said in a roundtable discussion with bloggers Monday. "But I like it," she said, "because people don't have to vote on the Senate bill."

Once you get passed the shock and awe of Speaker Pelosi’s undemocratic cram down, one has to seriously ask oneself whether this is constitutional. See INS v. Chadha, 462 U.S. 919 (1983), an opinion by then Chief Justice Burger for himself, Justices Brennan, Marshall, Blackmun, Stevens, and O’Connor with Justice Powell filing a concurrence and Justices White and Rehnquist filing dissents. See David Kopel’s post about this topic.

Free Speech at Risk – Follow-up

My prior post on Snyder v. Phelps is available here.

Howard Bashman at How Appealing reports on several reactions in the media to the Court’s decision to accept cert in Snyder v. Phelps:

The York Sunday News published an article entitled: “What the Supreme Court sees in Snyder v. Phelps”

The Los Angeles Times had an editorial entitled: “Protecting the vile: Distasteful protests by a fringe religious group at military funerals are still protected by the 1st Amendment"

The Baltimore Sun had an editorial entitled: "Free speech is paramount: Everyone has a right to express their views, even when they're deplorable"

Michael Smerconish had an op-ed in the Philadelphia Inquirer: "Free (and hateful) speech vs. the right to gather: Justices should rule against a Kansas church group that protested at a fallen Marine's funeral"

Employees' Right to Review and Copy Items in Their Personnel Files

Alan Sklover over at the Sklover Working Wisdom blog recently posted an entry on employees’ legal right to “review and copy items in their HR files.” Check out his entry here.

Of special note, Mr. Sklover provides an up-to-date, state-by-state list of laws governing employees’ rights to review their files.

Brokerage Firm Allows Brokers to Take Book of Business With Them When They Depart

Virgina Non-Compete Law Blog reports about one small brokerage house, Huntington Investment Co., that allows employees/brokers to keep their book of business if and when they leave the company.

Denial of Preferred Office Space May be a Materially Adverse Action for a Burlington Northern Retaliation Claim

Paul Mollica’s Daily Developments in EEO Law reported last Wednesday on a First Circuit decision, Lockridge v. University of Southern Maine, 2010 U.S. App. LEXIS 5018 (1st Cir., March 10, 2010) in which the Court stated that the denial of the employee’s request for office space may be an materially adverse action for purposes of a Title VII retaliation claim after Burlington Northern.

7th Circuit Declines to Relax Standard for Mandamus after Mohawk Industries

The Federal Evidence Review Blog reported last Thursday on a March 3rd 7th Circuit decision, In re: Whirlpool Corp. (7th Cir. March 3, 2010) (per curiam) (http://federalevidence.com/pdf/2010/03-Mar/In.Re.Whirlpool.Corporation.pdf), in which the Court, after finding, in light of Mohawk Industries, that it did not have jurisdiction to consider an interlocutory appeal from an adverse attorney-client privilege ruling, further rejected a request to “relax” the standard for a petition for write of mandamus.

Substantial Number of Employees Knowingly Violate IT Policies

Today’s Ohio Employer’s Law Blog reports that 12% of employees knowingly violate IT policies, according to a recent survey conducted by an IT security company Fiberlink.

Is Swierkiewicz Still Good Law After Iqbal?

SCOTUSblog reports on in its petitions to watch, on the petition for cert. in Townes v. Jarvis (Docket No. 09-729) in which petitioner Townes presents the question whether Swierkiewicz is any longer the law of the land after last term’s divided opinion in Iqbal. Townes arises from the 4th Circuit, 577 F.3d 543 (4th Cir. 2009), an opinion written by Judge Diana Gribbon Motz for herself and Judge Gregory, an opinion from which Judge Shedd dissented. Townes is a habeas petition which alleges intentional discrimination, and the majority of the 4th Circuit’s panel held that he had failed to allege facts sufficient to satisfy the element of intentional discrimination.

Before the Supreme Court, in Mr. Townes’ petition in which he is represented by Arnold & Porter, he asserts that there is a “deep and mature Circuit split on the pleadings standard applicable to intentional discrimination claims.” He notes that, in dicta, the Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), reaffirmed Swierkiewicz v. Sorema, N.A., 534 U.S. 506 (2002), stating that “Swierkiewicz did not change the law of pleading, but simply re-emphasized… that the Second Circuit’s use of a heightened pleading standard for Title VII cases was contrary to the Federal Rules’ structure of liberal pleading requirements.” Townes further notes that the Supreme Court, within days after Twombly, in Erickson stated that pro se plaintiff need not allege “[s]pecific facts” and “need only ‘give the defendant fair notice of what the claim is and the grounds upon which it rests.’” Then, in Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), the Court, making no reference to Swierkiewicz, outlined a “two-pronged” approach under which, first, a court could identify “pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth”, and, second, “[w]hen there are well-pleaded factual allegations, the court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” 129 S. Ct. 1937, 1950 (2009). Thereafter, Mr. Townes contends that the Circuits have diverged as to whether Swierkiewicz remains good law citing Jordan v. Alternative Resources Corp., 458 F.3d 332, 346 (4th Cir. 2006) as well as Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3rd Cir. 2009), both of which reject Swierkiewicz. Mr. Townes contrasted those holdings with holdings in the Second, Sixth, Seventh and District of Columbia Circuits which continue to apply Swierkiewicz in intentional discrimination cases. See Boykin v. KeyCorp, 521 F.3d 202, 212-16 (2d Cir. 2008) (applying Swierkiewicz and holding that complaint sufficiently stated a claim where plaintiff simply alleged that denial of loan was based on her race and sex); Ruffin v. Nicely, 183 E App’x 505, 513 (6th Cir. May 18, 2006) (holding that plaintiff sufficiently stated race-discrimination claim by alleging that he was an African-American man who applied for, but was not selected to receive, a state contract because he "may be able to uncover direct or indirect evidence of racial animus"); Lindsay v. Yates, 498 F.3d 434, 440 n.6 (6th Cir. 2007) (finding "no basis for concluding that Swierkiewicz is no longer good law" after Twombly "[b]ecause the Supreme Court majority [in http://www.scotusblog.com/2010/03/petitions-to-watch-conference-of-3-19-10/#more-17182] distinguished Swierkiewicz and nowhere expressed an intent to overturn it"); Tamayo v. Blagojevich, 526 F.3d 1074, 1085 (7th Cir. 2008) (reversing district court’s dismissal of Title VII complaint alleging that female plaintiff was paid less than similarly-situated males on account of her sex because the allegations "certainly provide[d] the defendants with sufficient notice to begin to investigate and defend against her claim"); Aktieselskabet AF 21. November 2001 v. Fame Jeans Inc., 525 F.3d 8, 15 (D.C. Cir. 2008) (noting that "[re]any courts have disagreed about the import of Twombly" and holding that Twombly "leaves the long-standing fundamentals of notice pleading intact"); see also Al-Kidd v. Ashcroft, 580 F.3d 949, 974 (9th Cir. 2009) (concluding that the Twombly Court "reaffirmed the holding of Swierkiewicz" and "expressly disclaimed any intention to require general ’heightened fact pleading of specifics’ " (quoting Twombly, 550 U.S. at 570)).

Reversing an 8-year old decision sure raises serious question regarding the Court’s adherence to stare decisis.

Imbroglio in Virginia over Gay Rights for State Employees

The Commonwealth’s Attorney General and Governor have taken us on a rollercoaster ride over the past week or so over the question whether gay employees of the state have effective protections against sexual orientation discrimination. Here is how the story unfolded.

The new Attorney General, Kenneth T. Cuccinelli, II (R), on March 4th issued an opinion letter, stating that a state college or university could not include “sexual orientation”, “gender identity”, “gender expression”, or “like classification” as a protected class in its non-discrimination policy, absent specific authorization from the General Assembly. And, the Attorney General opined that, given that fact that the Virginia General Assembly has not included any of these categories in the Virginia Human Rights Act which applies specifically to “educational institutions” he found that the universities lacked authority to enact such policies. He went on to state that no state agency can reach beyond the boundaries established by the General Assembly. The Attorney General noted that, since 1997, the General Assembly has on more than 25 occasions considered and rejected bills adding “sexual orientation” to various non-discrimination statutes.

This controversy has a long provenance. In 2006, when the current governor was Attorney General, he issued Opinion No. 05-094 which held that Executive Order No. 1 (2005) issued by then Governor Mark R. Warner (D), an executive order which added “sexual orientation” to the list of protected classes under the Commonwealth’s non-discrimination policy, was beyond the scope of executive authority and, therefore, unconstitutional. That opinion stated, among other things, the following: “Changing public policy of the Commonwealth is within the purview of the General Assembly and, therefore, beyond the scope of executive authority and is unconstitutional.” Ignoring that opinion, then governor Timothy Kaine (D), issued Executive Order No. 1 (2006), prohibiting discrimination in state government based on, among other things, “sexual orientation.”

When former Attorney General McDonnell (R) was elected governor, he revised and reissued the executive order on non-discrimination, and deleted “sexual orientation” from the order, consistent with his opinion as Attorney General. Executive Order No. 6 (January 14, 2010).

On March 10th, in response to the hue and cry over Attorney General Cuccinelli’s opinion letter, Governor McDonnell issued Executive Directive No. 1 (2010), in which he orders that the Executive Branch shall not discriminate in the “hiring, promotion, compensation, treatment, discipline, and termination of state employees” with regard to sexual orientation. However, the Directive does not specifically provide protection from retaliation against employees who make claims of sexual orientation discrimination, which now go to the Commonwealth Director of Human Resource Management. In Virginia, I am told, an Executive Order carries the force of law; whereas an Executive Directive is a statement of policy which is not legally binding.

So, at a practical level, what does all of this mean for gay state employees, including faculty at state colleges and universities? Before the new Governor’s new Executive Order, replacing the Executive Order of Governor Kaine, employees had grievance rights to the office of Equal Employment Services of the Department of Human Resources Management for employment decisions based on sexual orientation, and retaliation against employees pursuing those rights was prohibited. The new Governor’s new Executive Order, despite the Executive Directive of Wednesday, means that employee’s may no longer use the grievance procedure and the remedial provisions of Va. Code §§ 2.2-3000, et seq. (2.2-3004(A)). So, the real action, in a sense, was when the new Governor issued the new Executive Order. The Attorney General’s opinion letter, frankly, seems consistent with the new Executive Order and the prior opinion of the now-Governor when he was Attorney General.

So, we shall see if the General Assembly continues to reject attempts to include “sexual orientation” among protected categories, or whether this brouhaha results in passage the proposed legislation. And, remember, regardless of what may go on in the Virginia General Assembly, the Congress, in all likelihood, will be passing ENDA soon, and that will, except for small employers, effect the same result – a prohibition on employment discrimination in both the public and private sector.

Beneath the sturm und drang of politicians and interest groups positioning for advantage, no one seems to be discussing what, at least to this commentator, seems to be serious questions of law.

First, I sure would like to see someone responsibly address, not with rhetoric but with law, the authority of Governor Kaine (D) and his predecessor Governor Warner (D) for the issuance of an Executive Order prohibiting a form of discrimination that the General Assembly had not prohibited. On its face, it would seem to be almost a legislative act, and thus a usurpation of the power of the legislature. But, then I vaguely recall that President Harry Truman, long before the Congress passed any of the modern Civil Rights laws, had the courage to issue Executive Orders to desegregate the military. But then, there are those who believe that executives often exceed their constitutional powers through the use of executive orders. Having said that, it would be worthwhile if someone in this fight addressed those questions of the powers of an executive.

Second, does anyone know of other instances in the history of the Commonwealth of Virginia where the Governor has refused to follow the advice of his lawyer, the Attorney General. After all, that, as I understand it, is what Governor Kaine did. He didn’t like, presumably for political reasons, the opinion of his Attorney General, so, he just ignored it. In other contexts, to ignore the advice of your lawyer is tantamount to willful indifference to the law and could subject one to severe punitive damages. So, we have a sitting Governor, Governor Kaine, who by the way happens to be a lawyer, ignoring the advice of his lawyer. Pretty interesting what politics will get one to do. I would be interested to see if Governor Kaine ever articulated the legal basis for his defiance of the advice of his lawyer, the Attorney General.

Third, it seems a bit over the top to figuratively place Governor McDonnell in the stock because he, once he became Governor, did precisely what, as Attorney General, he said a Governor of Virginia should do and got elected overwhelmingly with the voters full well knowing what his position was. Wouldn’t it have been extraordinarily hypocritical if he had issued an Executive Order which did not conform with is opinion issued as Attorney General. And, absent some legal articulation as to why his legal opinion as Attorney General is wrong as a matter of Virginia law, it seems pretty hypocritical for the other side in this battle to be criticizing him.

Fourth, now let’s turn to the current Attorney General who has taken nothing but grief for some days. Given the fact that his predecessor had opined that “sexual orientation” is not a proper subject for an Executive Order, and given the fact that there now is no Executive Order prohibiting “sexual orientation” discrimination in state employment in Virginia, how can you fault the Attorney General, as a matter of law, for advising educational institutions that they could not prohibit “sexual orientation” discrimination in the manner they heretofore had? Unless I am missing something (and I am sure someone will let me know if I am), it seems ineluctable that, in those circumstances, the educational institutions should not have been doing what they were doing.

Fifth, it seems that, under Virginia law, the new Governor, in the issuance of his Executive Directive, has done as much as the Governor is empowered to do with the possible exception of his failure to include in the Executive Directive some statement about retaliation.

I am sure that it is fanciful for me to assume that the responses to my questions will be something other than personal attacks, but I have real thick skin, and am used to the personal slurs. I hope that I also get some responsible dialogue about the law.

First Amendment Under Assault

This week’s decision in Milavetz Gallop & Milavetz, 2010 U.S. LEXIS 2206 (2010), which I blogged Wednesday, led me to take a look at what is going on in Holder v. Humanitarian Law Project, 552 F.3d 916 (9th Cir. 2009), cert granted Sep. 30, 2009, No. 08-1498 & 09-89. This case involves a constitutional challenge to provisions of the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA) which criminalizes as “material support or resources” for terrorists, “expert advice or assistance”. 18 U.S.C. 2339B(a)(1). In this long running litigation, in one of the two cases, the District Court held that, among other terms, “expert advice or assistance” is unconstitutionally vague despite an amendment and clarification by the Congress in the midst of this litigation when it enacted the Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA). The 9th Circuit affirmed, and the Solicitor General in her brief to the Supreme Court argues that there is no First Amendment violation. I have the full briefs and the transcript of oral argument, and will comment further on the importance of this case next week.

Religious Discrimination: Some Fascinating Developments

It looks like we are going to have a lot to discuss over the coming months regarding the Obama Administration and its approach to freedom of religion and the workplace. Today, I am just quickly going to touch on some of the controversies that are brewing.

First, this past Tuesday, the White House Advisory Council on Faith-Based and Neighborhood Partnerships submitted its final report. While 176 some pages of reading, certainly all religious institutions that receive federal social services funds, need to be aware of the report’s discussion, on which the Council was divided, with the majority advocating that churches should be required to form separate corporations in order to receive federal monies.

Second, the Coalition Against Religious Discrimination, a coalition of some 26 civil rights groups, sent a letter on Tuesday to the President, advocating that religious-based hiring in federally funded social service programs be banned, and that churches be required to create separate corporations as a predicate to seeking secular government-funded social services.

Third, the Coalition requests that the White House direct the DOJ’s Office of Legal Counsel to withdraw the Bush Administration’s June 29, 2007 memo interpreting the Religious Freedom Restoration Act of 1993.

Supreme Court Approves, Despite First Amendment, Government Supervision of Legal Advice – Impact on LMRDA Battle?

In Milavetz, Gallop & Milavetz v. United States, 2010 U.S. LEXIS 2206 (2009), the Supreme Court, Justice Sotomayor writing, held that the First Amendment did not trump the provision of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 which prohibits bankruptcy attorneys from giving certain kinds of advice to clients, e.g., advising clients to incur more debt prior to filing for bankruptcy. Justices Scalia and Thomas each filed concurrences, Justice Scalia expressing concern about Justice Sotomayor relying on legislative history and Justice Thomas reiterating concerns expressed in earlier dissents regarding the Court’s applying a lesser level of scrutiny to what it characterizes as commercial speech.

Last December DOL released its regulatory plan for 2010 (WSJ writeup here), and it included that DOL would propose substantial changes to an employers’ obligation to report information regarding union organizing. One law firm reports the DOL is considering narrowing an existing and longstanding exemption in the Labor-Management Reporting and Disclosure Act of 1959 from reporting “advice” provided by an employer’s labor relations consultants and attorneys. In the absence of such an exemptions, section 203(a)(4) of the LMRDA (29 U.S.C. 433) requires employers to disclose certain agreements or arrangements between the employer and labor relations consultants, including those where an objective is to persuade employees regarding their rights to organize and join a labor union, or to refrain from doing so. One would have thought such governmental requirements crossed the First Amendment line, but after Monday’s decision from the Supreme Court, one wonders.

Proposed Federal Whistleblower Enhancement Act

Politico yesterday had an article regarding the competing Senate and House bills designed to strengthen whisteblower protections for federal employees and the controversy over federal employees in security work, e.g., the FBI. Representative Van Hollen’s (D. Md) bill (H.R. 1507) provides essentially the same protections to security workers as to other employees; whereas Sen. Akaka’s (D Hawaii) bill (S. 372) provides limited protections to federal security workers. The difference, according the article, has created a split among interest groups lobbying for passage with some willing to accept Senator Akaka’s version in order to get legislation and at least one group apparently unwilling to agree to the Akaka compromise.

Violence in the Workplace

There is a terrific three part blog in the Alabama Employment Law Reporter (here, here and here) on guns and violence in the workplace. In part 3, they report that the Alabama Senate has passed a bill by a vote of 26-2, that would permit employees to keep legal firearms in their vehicles on company premises so long as they are locked out of sight, such as in the glove compartment or trunk. For some reason, electric utilities are exempted. (See my discussion of guns in the workplace at page 277-278 of my Emerging Employment Issues Paper here.)

Standing to Complain of Harassment

The Alabama Employment Lawyer reports on a recent 11th Circuit decision in Dees v. Hyundai Motor Manufacturing Alabama, LLC, 2010 U.S. App. LEXIS 4064 (11th Cir. Feb. 26, 2010), in which the panel held that a former employee lacked standing to sue regarding harassment. Here is what the court said:

“Assuming without deciding that harassment or hostile work environment is a cognizable claim under USERRA, Dees lacks standing to bring such a claim. Dees admits that he has not suffered any lost wages or employment benefits resulting from the alleged harassment. Further, an injunction requiring HMMA to comply with USERRA would not benefit Dees as he is no longer an HMMA employee. While Dees relies on non-binding cases to establish that he can be granted "equitable relief," he only specifically mentions attorneys' fees. However, the statute provides for three specific remedies for USERRA violations and does not provide for other "equitable relief" or attorneys' fees. 38 U.S.C. § 4323(d)(1)(A)-(C). As such, Dees lacks standing to bring a USERRA harassment claim because he does not allege that he is entitled to any of the relief provided by USERRA. Accordingly, we affirm the district court's grant of HMMA's motion for summary judgment.”

Coworker Gives Employee a Bottle of Mountain Dew; Employee, While Intoxicated, Drinks the Contents which is Toxic; Workers’ Compensation Claim?

As reported in Lynch Ryan’s blog, the Vermont Supreme Court in Cyr v. McDermott’s, Inc., 2010 VT 19 (2010) held that the Workers’ Comp claim might be compensable, remanding for a determination on whether it occurred in the course of employment.

If drinking, at home, a bottle of what an employee thought to be Mountain Dew given to the employee by a non-supervisory co-worker, gives rise to a legitimate Workers’ Compensation claim, I have to wonder whether a layoff (or even “persistent perceived job insecurity”) which adversely affects the employee’s health and life expectancy, gives rise to a Workers’ Compensation claim. A recent New York Times article discusses the physical and emotional impact on employees of job insecurity.

Can an Individual be Sued Under the FMLA Even Though the Individual is Not a Corporate Officer?

The courts are split on this issue – some hold that only corporate officers can be sued; whereas hold that any individual can be sued irrespective of his/her status within the corporate hierarchy. Recently, Judge O’Neill in Narodetsky v. Cardone Industries Inc., 2010 U.S. Dist. LEXIS 16133 (E.D.Pa. Feb. 24, 2010), held that all employees of the corporation are subject to suit under the FMLA. Judge O’Neill’s opinion collects cases reflecting the split among the courts.

International Flavors And Fragrance Beware!

Jon Hyman of Kohrman Jackson and Krantz reports that the city of Detroit has settled for $100,000 with an employee who complained that Detroit failed to reasonably accommodate her perfume allergy after she complained that a co-worker’s perfume made it difficult for her to breathe. In addition, Detroit agreed to adopt a policy prohibiting employees from wearing scented products.

I am virtually speechless in the face of such silliness. As Mr. Bumble in Oliver Twist said: “The law is an ass.” I think, in this case, Dickens’ characterization is almost charitable.

Teacher In Religious School Protected By Title VII’s Prohibition On Religious Discrimination

Ohio Employer Law Blog reports on the 6th Circuit’s decision in Perich v. Hosanna-Tabor Evangelical Lutheran Church and School, Nos. 09-1134/1135 (6th Cir. Mar. 9, 2010), in which the court held that the “ministerial exception” did not prevent an ADA discrimination case proceeding against a religious institution on behalf of a teacher. Judge Clay wrote the opinion and was joined by Judge Guy. Judge White wrote a concurring opinion, agreeing that the “ministerial exception” did not bar the ADA claim, but disagrees with the other judges regarding how deep the split is among the courts as to whether parochial school teachers are or are not ministerial employees for purposes of the exception.

Waiver Of Collective FLSA Actions In Arbitration Approved

Daniel Schwartz/Connecticut Employment Lawyer reports on Pomposi v. GameStop, Inc., 2010 U.S. Dist. LEXIS 1819 (D.Ct. Jan. 11, 2010), in which Judge Bryant blessed an arbitration “agreement” that prohibited FLSA collective actions. In her decision, Judge Bryant distinguished In re American Express Merch. Litigation, 554 F.3d 300 (2nd Cir. 2009) on the ground that the claims at issue were not prohibitively expensive to litigate on an individual basis.

Paycheck Fairness Act

Marcia McCormick reports that the Senate HELP Committee meets this week to consider the Paycheck Fairness Act (my paper on this topic is available here).

Free Speech At Risk

Bad facts make bad law.

The Supreme Court yesterday accepted cert. in Snyder v. Phelps, 580 F.3d 206 (4th Cir. 2009), cert granted March 8, 2010. In this case, the 4th Circuit two judge majority (Judge King writing for himself and Judge Duncan) upheld the First Amendment right of individuals to picket the funeral of a homosexual Marine who died in Iraq, the pickets using the funeral as a platform to gain media attention for their anti-homosexual message. Judge King aptly quoted from a 1993 decision by Judge Hall of that court in which Judge Hall stated that judges defending the Constitution “must sometimes share [their] foxhole with scoundrels of every sort, but to abandon the post because of the poor company is to sell freedom cheaply. It is a fair summary of history to say that the safeguards of liberty have often been forged in controversies involving not very nice people.” Kopf v. Skyrm, 993 F.2d 374, 380 (4th Cir. 1993) (internal quotation marks omitted).

For those of us who practice employment law in the 4th Circuit, including Maryland from where this case arose, the opinion of Judge Shedd concurring with the other two judges on the panel, is a startling message regarding intentional infliction of emotional distress claims. Judge Shedd, driven by the doctrine of constitutional avoidance, finds that these facts do not satisfy the elements of an IIED claim under Maryland law, stating that “this conduct simply does not satisfy the heavy burden required for the tort of intentional infliction of emotional distress under Maryland law.”

As there were four votes on the Supreme Court to take cert. in this case, one must be concerned that the Court is prepared to create a major exception to the First Amendment.

Any Takers On A Wager That The Supreme Court Is Itching To Reverse The 9th In Nelson v. NASA, Cert. Granted March 8, 2010?

In this case, the 9th Circuit, NASA v. Nelson, 568 F.3d 1028 (9th Cir. 2009), held that plaintiffs who challenged NASA’s background check policy were entitled to a preliminary injunction against enforcement of the policy. The plaintiffs are various contract employees who work for NASA contractors. The panel concluded that it was likely unconstitutional for NASA to ask various people who knew the contract employees broad questions which were arguably not “narrowly tailored” to the government’s interests.

Form 42 solicits “any adverse information” concerning “financial integrity,” “abuse of alcohol and/or drugs,” “mental or emotional stability,” and “other matters.”

If this is an unconstitutional intrusion into one’s informational privacy, what about those questions that the bar admission people routinely ask prospective new lawyers? One can think of other examples of such broad questioning. What about questioning by the police during an investigation? And, so on.

How Much Is A Kiss Worth?

In King v. McMillan, 2010 U.S. App. LEXIS 2308 (4th Cir. 2010), Judge Michael, writing for the panel, upheld a jury verdict of $50,000 in compensatory damages (remitted to that dollar number from the jury’s verdict of $175,000) and $100,000 in punitive damages in a battery claim where a former female deputy sheriff sued the sheriff for forcing her to kiss him. The court describes the incident as follows:

“At the end of the meeting [wherein the sheriff urged the plaintiff not to quit] McMillan [the then sheriff] asked King [the female deputy sheriff] for a hug, grabbed her around her waist, and pulled her down to sit on his lap. McMillan told King that he would not let her go until she gave him a kiss. King tried to give him a peck on the cheek, but McMillan insisted upon a ‘real kiss’... After McMillan forced a full kiss on King’s lips, she ran out of the room into a restroom, where she cried for about ten minutes. King submitted a letter of resignation several days later.”

The Fourth Circuit declined to disturb the judgment for $50,000 in compensatory damages as well as the $100,000 judgment for punitive damages.

Of further interest is the holding by the court allowing the testimony of other women describing their own experiences of harassment by the then sheriff. The could held that such testimony was relevant on the question of whether the sheriff’s conduct was because of the deputy’s sex, and whether the unwelcome conduct was sufficiently severe or pervasive to create a hostile work environment. Further, interestingly, the court approved the lower court’s instruction to the jury that the testimony of the other women was only relevant to the “severe or pervasive” element if the deputy “was aware of [the harassment described in the testimony] during the course of her employment.” Further, the court approve the lower court’s instruction to the jury that the incidents of harassment about which the deputy was unaware of during the course of her employment, could nonetheless be considered by the jury as relevant to the element of whether the sheriff’s conduct toward the deputy was because of her sex.

Finally, the court rejected the defense of the new sheriff, Sheriff Johnson, a woman, who contended that the district court erred in substituting her as a defendant in place of the former sheriff McMillan in plaintiff’s Title VII claim which had been filed against the sheriff in his official capacity. Sheriff Johnson interposed state law provisions which the court rejected on Supremacy Clause grounds, finding that to accept the new sheriff’s argument, “would permit states to draft laws defining state and local offices in such a way as to limit the liability of their occupants under federal law.”

The Supreme Court is currently considering a variation on this argument involving the intersection of Federal Civil Rule 23 and a state substantive statute sought to be enforced in federal court under diversity jurisdiction, a state statute that barred class action treatment of claims under it. Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., 549 F.3d 137 (2nd Cir. 2008), cert. granted, 2009 U.S. LEXIS 3340 (May 4, 2009), Docket No. 08-1008.

Secretary of Labor Hints that the President Will Name Craig Becker as a Recess Appointee to NLRB

Secretary of Labor Hilda Solis told AFL-CIO officials at their annual meeting that they would be “very pleased” with how the nomination of Craig Becker to the NLRB would be resolved. On February 9th, the Senate failed to invoke cloture on Becker’s nomination by a 52-33 vote.

Many (ShopFloor, Jeffrey Hirsch, and Mark Toth) speculate that Secretary Solis was hinting that Becker would be appointed during the upcoming Congressional recess.

Some Interesting Employment Developments

The Impact of Gross v. FBL Financial Services, Inc.

A big issue since the Supreme Court's Gross opinion has been its rationale's application to other statutes (see my recent paper on this here). But, possibly more interesting is the majority's statement that the Court has never addressed the application of McDonnell-Douglas to ADEA cases. Most courts, subsequent to Gross, have said that the McDonnell-Douglas burden-shifting framework remains unchanged in ADEA and other statutes affected by the rationale of Gross. We collect some of those case citations in the paper. One district court (Bell v. Raytheon Co., 2009 U.S. Dist. LEXIS 67016 (N.D. Tex. July 31, 2009)) held that even after plaintiffs established a prima facie case of age discrimination, the burden did not shift to the defendant to articulate a legitimate non-discriminatory reason because they did not prove that age was the but-for cause of the adverse decision. As the courts continue to address this issue, it will be interesting to see whether, like the Bell court, they incorporate into the prima facie stage of McDonnell-Douglas a heightened but-for requirement.

Supreme Court Decides Mac’s Shell Serv., Inc. v. Shell Oil Products Co.

A unanimous Supreme Court on March 2nd rejected the franchisee argument in this case that there could be a constructive termination even though the franchisee never terminated the relationship with the franchisor. The Court similarly rejected the "constructive non-renewal" argument where the franchisee had signed a renewal agreement. Justice Alito, writing for the Court, references employment discrimination constructive discharge case law in one paragraph of the opinion. There does not appear to be anything in the opinion that unsettles existing employment discrimination constructive discharge law.

Verbal Complaint Under FLSA Held not to be Protected Activity

The Seventh Circuit in Kasten v. Saint Gobain Performance Plastics Corp., 570 F.3d 834 (7th Cir. 2009), petition for cert. filed (Jan. 12, 2010), held that a verbal complaint does not constitute protected activity under the FLSA, as the FLSA uses the phrase “file any complaint,” which the court held connotes the use of a writing.

Annual Report of the White House Task Force on the Middle Class

The other day Vice President Biden's Task Force on the Middle Class issued its February 2010 Annual Report. If one could ever say with a straight face that a government-issued report makes interesting reading, this one does, not because it is great prose, but because it signals some of the directions in which this Administration is headed.

First, like the State of the Union Address, the report places emphasis on the enforcement of equal pay for women and, most particularly, the Lilly Ledbetter Fair Pay Act (Pub. Law No. 111-2). It makes no mention of the Paycheck Fairness proposed legislation (H.R. 11, S. 182) (see my paper on the topic here), but, as we get closer to the mid-term elections, you can bet that there will be a push for enactment of that legislation.

Second, the report genuflects to the Employee Free Choice Act, rather than recognizing what everyone else in this town knows, that is, it was dead on arrival. No mention made of the RESPECT Act (H.R. 1644, S. 969), but my guess is that that is where the action may be with an effort to tack it on to some other piece of legislation. The RESPECT Act would overrule the Supreme Court's decision in NLRB v. Kentucky River Community Care, Inc., 532 U.S. 706 (2001) , involving the definition of supervisors under the National Labor Relations Act. (See my legislative update paper for more information. Available here).

Third, the report talks about federal contract dollars "should not be awarded to irresponsible sources with unsatisfactory records of business ethics, including noncompliance with labor and employment, tax, fraud, and consumer protection laws." The report goes on to state that "substandard wages and benefits can have negative impacts on employees' productivity and stability", suggesting that there will shortly be recommendations to implement those ideas. This town has been abuzz (see Washington Post overage here and here) for about a week regarding rumors that the Administration is about to attempt to impose new wage and benefit requirements on federal contractors.

Fourth, the report places substantial emphasis on a major push by DOL to challenge misclassifications of employees as independent contractors (see my paper on the topic here).