Temporal Proximity Trumped by Unawareness of Plaintiff’s Request for Medical Leave

In Krutzig v. Pulte Home Corp., 2010 U.S. App. LEXIS 7029, 15 Wage & Hour Cas. 2d (BNA) 1879 (11th Cir. April 5, 2010), the plaintiff was terminated the day after her request for medical leave. Despite that extreme temporal proximity, the defense prevailed because it was established that the supervisor who made the decision to fire the plaintiff was unaware of the plaintiff’s request for medical leave.

Some years ago in Strickland v. Water Works and Sewer Board of Birmingham, 239 F.3d 1199 (11th Cir. 2001), the 11th Circuit had held that reinstatement after FMLA leave was not an absolute right, and that, if an employer can show that it refused to reinstate an employee for a reason unrelated to FMLA leave, the employer is not liable for failing to reinstate the employee after the employee has taken FMLA leave. In Krutzig, the 11th Circuit decided the companion issue, that is, whether the FMLA right to commence leave is absolute, and the court, following the reasoning of the 6th, 8th, and 10th Circuits, held that the right to commence FMLA leave is not absolute, and that an employee can be dismissed, preventing the employee from exercising his / her right to commence FMLA leave, if the employee would have been dismissed regardless of any request for FMLA leave. See also Phillips v. Mathews, 547 F.3d 905 (8th Cir. 2008); Bones v. Honeywell Int'l, Inc., 366 F.3d 869, 877 (10th Cir. 2004); Arban v. West Publ'g Corp., 345 F.3d 390 (6th Cir. 2003).

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Further Musings on Gross and the Cat’s Paw Case (Staub)

Last week, when we first posted (here) about the Supreme Court’s acceptance for the third time now of a cat’s paw case, we noted that the Solicitor General, in her amicus brief, had added the adjective “substantial” to the motivating factor causation standard, transforming it from the illicit motive being a motivating factor to it being a substantial motivating factor. If indeed that is the ultimate definition of motivating factor causation, I wonder if there is really, at least in the minds of some judges, any substantial difference between this causation model and “but-for” causation. I note that former Justice O’Connor in Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S. Ct. 1775 (1989) concluded that a “substantive violation of the statute only occurs when consideration of an illegitimate criterion is the ‘but-for’ cause of an adverse employment action.” Id. 109 S. Ct. at 1797. Justice O’Connor went on to state that “in order to justify shifting the burden on the issue of causation to the defendant, a disparate treatment plaintiff must show by direct evidence that an illegitimate criterion was a substantial factor in the decision.” Id. 109 S. Ct. at 1804 (emphasis supplied).

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Employer Sued for Violating RICO by Knowingly Hiring and Assisting Illegal Workers

In light of the debate currently raging over Arizona’s new immigration law, it seems appropriate to consider an interesting recent development in immigration law enforcement in the employment law context.

In Edwards v. Prime Inc., 2010 U.S. App. LEXIS 7322 (11th Cir. April 9, 2010), the 11th Circuit recently held that former employees of an Alabama restaurant successfully pled an actionable claim that the restaurant had violated the Racketeer Influenced and Corrupt Organizations Act by knowingly hiring illegal immigrants and giving them fraudulent identification and Social Security numbers. The Court reversed the decision of the district court, which had granted the restaurant’s motion to dismiss on that count.

For more details on this development, see this blog post about the case by Mark Engstrom, Editor of the CCH Rico Business Disputes Guide. You can also find a copy of the Edwards opinion here.

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Arbitration – Supreme Court’s Opinion in Stolt-Nielsen

Justice Alito delivered a 5-4 opinion today in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 2010 U.S. LEXIS 3672 (2010) (available here), in which the majority held that imposing class arbitration on parties who have not agreed to authorize class arbitration is inconsistent with the Federal Arbitration Act. Here, sophisticated parties, shipping companies and one of their customers, entered into a standard contract which contained an arbitration clause. The arbitration clause was silent as to whether class claims were cognizable in arbitration under the agreement. Eventually, AnimalFeeds sought arbitration on behalf of a class of purchasers of parcel tanker transportation services. The parties agreed to submit the question whether their arbitration agreement allowed for class arbitration to a panel of arbiters. The panel determined that the arbitration clause permitted class arbitration. A federal district court vacated that holding, and the Second Circuit reversed. And then yesterday, the Supreme Court reversed the Second Circuit, holding that where the agreement to arbitrate does not explicitly authorize class claims, class arbitration may not be imposed upon the parties.

The question not yet addressed by the Court, as it was not presented in this case, is whether under employment anti-discrimination laws and employment standards laws (e.g. FLSA), an arbitration agreement between less sophisticated parties, either by its silence as in this case or explicitly, can preclude class action claims in arbitration. In Pomposi v. GameStop, Inc., 2010 U.S. Dist. LEXIS 1819 (D. Conn. Jan. 11, 2010) (available here), Judge Vanessa Bryant of the District of Connecticut sitting in Hartford, held that an arbitration agreement that precluded collective action FLSA claims was enforceable. In that case, plaintiff had signed a written acknowledgment certifying that he had received a copy of the defendants store mangers’ handbook. Said acknowledgment stated as follows: “I understand that by continuing my employment with GameStop following the effective date of GameStop C.A.R.E.S., I am agreeing that all workplace disputes or claims, regardless of when those disputes or claims arose, will be resolved under the GameStop C.A.R.E.S. program rather than in court. This includes legal and statutory claims, and class or collective action claims in which I might be included.” The defendant’s program referenced in the acknowledgement was set forth in a brochure and a set of rules, one of which stated that no claim “may be initiated or maintained on a class, collective or representative action basis either in court or under these rules, including in arbitration.”

It will be a case like Pomposi , presumably, that will bubble up to the Supreme Court for it to decide whether an employer can not only force employees to arbitrate discrimination and employment standards claims in arbitration, but also preclude employees from pursuing those claims on a collective or class action basis. Of course, the Congress may enact the Arbitration Fairness Act (available here) which would preclude mandatory pre-dispute employment arbitrations, thus presumably mooting this controversy. And, as we will soon discuss in a post, the so-called Franken Amendment may not only be re-enacted for FY2011 for DOD appropriations, it may serve as a template to be included in the appropriations bills for other agencies.


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Spoliation of Evidence and Adverse Inference Instructions in Administrative Proceedings

A colleague recently posed the following question (paraphrased below) on a listserv that I subscribe to:

Where a party, under a state administrative investigation, is served with a subpoena by the state attorney general’s office, and that party then proceeds to destroy evidence notwithstanding the subpoena, is there any authority to support an order of civil remedies / penalties against that party, aside from the obvious potential for monetary sanctions – for example, an adverse inference instruction?

While I had already done some research on this issue in the past, the question piqued my curiosity enough that I decided to research the issue a little further. I first posed the above question to a respected friend and colleague. His off-the-cuff take on the issue was:

The spoliation doctrine stems from the violation of a common law duty owed TO THE COURT to preserve evidence needed to resolve a foreseeable legal dispute. It is a specific duty owed not to a litigant, but to the court, and the sanction of adverse inference (or any other sanction) is derived from the court’s inherent authority, or from procedural rules such as Fed. R. Civ. P. 37… [But], I do not recall any cases saying that an administrative tribunal has ‘inherent authority’ to sanction in connection with its proceedings. I also wonder whether, absent a statutory or administrative duty to preserve records (like the EEOC requirement for preserving employment records) there can be any legally enforceable ‘obligation to preserve’ evidence that might be relevant to a foreseeable admin proceeding.

I proceeded to consult my existing research on the issue, and to research the issue a bit further on my own.

In the context of traditional civil litigation, there are a slew of opinions to support the proposition that a court can order an adverse inference jury instruction and/or monetary sanctions against a party who orders or negligently allows spoliation of evidence, after that party has been put on reasonable notice of a potential legal dispute. See, e.g.:

• Rimkus Consulting Group, Inc. v. Cammarata, 2010 U.S. Dist. LEXIS 14573 (S.D. Tex. Feb. 19, 2010) (ordering an adverse inference instruction where there was evidence substantiating that former employees intentionally deleted some relevant electronic communications after there was a duty to preserve them, even where the former employer was not significantly prejudiced because it had sufficient evidence to support its claims);
• Southeastern Mech. Serv., Inc. v. Brody, 657 F. Supp. 2d 1293 (M.D. Fla. Aug. 31, 2009) (ordering an adverse inference instruction for spoliation of data on handheld devices);
• KCH Serv., Inc. v. Vanaire, Inc., 2009 U.S. Cist. LEXIS 62993 (W.D. Ky July 22, 2009) (granting adverse inference instruction against party who failed to adequately preserve electronic and other evidence);
• Arteria Prop. Pty Ltd. v. Universal Funding V.T.O., Inc., 2008 U.S. Dist. LEXIS 77199 (D.N.J. Oct. 1, 2008) (granting an adverse inference for failure to preserve a website, finding “no reason to treat websites differently than other electronic files”);
• Optowave Co., Ltd. v. Nikitin, 2006 U.S. Dist. LEXIS 81345 (granting adverse inference jury instruction for destruction of internal e-mails prior to litigation);
• In re Napster, Inc. Copyright Litig., 462 F. Supp. 2d 1060 (N.D. Cal. Oct. 25, 2006) (deletion of email evidence led to adverse inference instruction and monetary sanctions, but not default judgment).

And, there are just as many cases in the civil litigation context where courts have, for various reasons, denied motions requesting that such sanctions be imposed. See, e.g.:

• Scalera v. Electrograph Sys., Inc., 262 F.R.D. 162 (E.D.N.Y. Sept. 29, 2009) (despite finding that the defendants had “unquestionably breached a duty to preserve emails”, denying plaintiff’s motion for an adverse inference instruction absent evidence that the destroyed emails would have been favorable to plaintiff’s position); and
• ACORN v. County of Nassau, 2009 U.S. Dist. LEXIS 19459 (E.D.N.Y. Mar. 9, 2009) (despite finding that defendant was grossly negligent for failing to implement a litigation hold, denying plaintiff’s motion for an adverse inference instruction because plaintiff failed to establish the relevance of the information destroyed).

For over 100 various legal blog posts on this subject in general, see this search result from Justia.com’s “Blawg Search” function. (And by the way, in case you have never used it, I have found “Blawg Search” to be an invaluable tool for supplementing my traditional legal research).

But more to the heart of the specific question at hand – my research also revealed a number of cases where adverse inference instructions and similar remedies have been imposed for spoliation of evidence leading up to or during the course of administrative proceedings. As my esteemed colleague had anticipated, most of these cases arose in a context where the relevant governing administrative statute explicitly allows for such remedies, but the cases I found are nevertheless instructive. See, e.g.:

• In the Matter of Deutsche Bank Securities, Inc., Exchange Act Release No. 46,937, Administrative Proceeding File No. 3-10957 (Dec. 3, 2002) (SEC fined brokerage firms in an administrative proceeding, under the Securities Exchange Act of 1934, for failing to preserve internal e-mail communications);
• Gennetten v. Navy, EEOC No. 01973098 (1999) (holding that adverse inference should have been drawn against the agency for its failure to maintain selection documents; and thus finding that the agency had discriminated against the complainant and ordering that complainant be retroactively placed in his position).

However, there have also been administrative cases where the ordinary spoliation rules have been held to not apply. See, e.g.:

• Yao v. Board of Regents, 256 Wis. 2d 941 (Ct. App. 2002) (holding that the relevant state statute does not bind state administrative agencies to the “common law or statutory rules of evidence”, and therefore the doctrine of spoliation does not apply to state administrative proceedings).

As indicated above, I find this to be a fascinating topic. As such, if readers have any additional comments, case law, etc. on this subject, I would thoroughly welcome any such feedback.

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Preliminary Injunction Vacated as Disparate Impact on African Americans of Hiring Practice Benefits Hispanics

In NAACP v. North Hudson Regional Fire & Rescue, 2010 U.S. Dist. LEXIS 40067 (D.N.J. Apr. 23, 2010), Judge Debevoise vacated a preliminary injunction which he had issued on February 18, 2009 (NAACP v. North Hudson Regional Fire & Rescue, 255 F.R.D. 374 (D.N.J. 2009)), in this disparate impact challenge to the defendant fire department’s use of residency requirements for hiring. The defendant fire department, which serves several communities in North Hudson County, New Jersey, requires that job applicants reside in the municipalities of Guttenberg, North Bergen, Union City, Weehocken, or West New York. The plaintiffs, African Americans from Hudson, Essex, and Union Counties, who did not reside in any of the member municipalities, argued that the residency requirement had a disparate impact on African American job applicants. The defendant fire department employed two African Americans, 64 Hispanics, 255 whites, and two individuals identified as being of “other” races. The district court, in its preliminary injunction, ordered that the defendant fire department cease hiring candidates from the existing list and only hire from a list expanded to include residents of Hudson, Essex, and Union counties. The fire department had appealed the issuance of the preliminary injunction, which was entered for the benefit of plaintiffs—African American job applicants. On appeal, Hispanic applicants intervened, arguing that the district court’s preliminary injunction disadvantaged them by diluting the likelihood of Hispanics being hired by defendant fire department.

The Third Circuit sua sponte remanded (NAACP v. North Hudson Regional Fire & Rescue, 2010 U.S. App. LEXIS 4213 (3d Cir. Mar. 1, 2010)) the matter in light of the Supreme Court’s decision in Ricci v. DeStefano, 129 S. Ct. 2658 (2009). On remand, the district court found that “striking down the residency requirement might make the NHRFR [defendant fire department] liable for disparate treatment to the Hispanic intervenors . . .” The district court, on remand, concluded that it was “faced with hiring practices that may cause disparate impact to one minority group [African Americans], but that benefit another minority group [Hispanics].” In short, the district court found that while the residency requirements disadvantaged African Americans, Hispanic applicants would be disadvantaged by a change in the residency requirements, and taking into account the traditional preliminary injunction factors, the district court concluded that it should vacate the preliminary injunction that it had issued prior to the Ricci decision.

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Arbitration - Can the Arbiter Decide Issues of Substantive Arbitrability?

In Rent-A-Center West, Inc. v. Jackson, 581 F.3d 912 (9th Cir. 2009), cert. granted, 175 L. Ed. 2d 941 (U.S. 2010) (Docket No. 09-497), the Supreme Court is considering, in part, whether the parties to an arbitration agreement can agree that the arbiter decide both substantive and procedural arbitrability questions . See the ScotusWiki page on the case, complete with briefs, a copy of the 9th Circuit decision, and a transcript of the oral argument before the Supreme Court, here. It would appear that Delaware has already resolved these questions. In James & Jackson, LLC v. Willy Gary, LLC, 906 A.2d 76 (Del. 2006), the Delaware Supreme Court held that if the language of the agreement states a clear intention on the part of the parties that any issue of substantive arbitrability is to be decided by the arbiter, that is permissible. A copy of the opinion is available here. And, quite recently, Vice Chancellor Strine in Orix LF, LP v. INSCAP Asset Mgmt., LLC, 2010 De. Ch. LEXIS 70 (Del. Ch. Apr. 13, 2010), applied Willy Gary. A copy of the opinion is available here. For a discussion of that recent opinion see this recent post in the Delaware Corporate and Commercial Litigation Blog.

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“Today’s Bullies are Tomorrow’s Civil Rights Defendants”

The Baltimore Sun, reporting on Tom Perez’ testimony on April 20th before the Senate Judiciary Committee, quotes the Assistant Attorney General for the Civil Rights Division, presumably in the context of alleged bullying of an LGBT individual, as stating, “Today’s bullies are tomorrow’s civil rights defendants.” Here are some highlights from the prepared testimony:

• The new Administration has filed 29 new employment discrimination cases.

• Nineteen of the 29 are USERRA cases.

• The other 10 are Title VII cases.

• Mr. Perez states that the Division is working “to reinvigorate its Section 707 pattern or practice enforcement program, establishing a targeting initiative that employs a systematic approach to identify potential cases.”

• Mr. Perez reports that the division has more than a dozen ongoing pattern or practice investigations.

• The Division is challenging, on a state-wide basis, New Jersey’s examinations for promotion to police sergeant on a disparate impact theory, contending that the exams used by all municipalities in New Jersey have a disparate impact upon African Americans and Hispanics. United States v. State of New Jersey, No. 2:33-av-00001 (D.N.J.), Complaint available here.

• Mr. Perez took credit for the decision in United States v. City of New York, 631 F. Supp. 2d 419 (S.D.N.Y. 2009). Even though this case was filed in 2002, when George W. Bush was President, and the last pleading, before Judge Pauley III’s July 2, 2009 decision, was filed in 2008, when George W. Bush was still President.

One personal note—sadly, in Mr. Perez’ discussion of school desegregation litigation, he refers to ongoing litigation against the Walthall, Mississippi schools. Forty-one years ago, when I started practicing law as a staff attorney in Jackson, Mississippi for the Lawyers Committee for Civil Rights Under Law, one of the cases that was then being litigated by another civil rights organization, was indeed the Walthall schools.


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Rehabilitation Act—Does Section 504’s Sole Causation Standard Apply to Section 501 Claims?

Recently, the Fourth Circuit in Dank v. Shinseki, 2010 U.S. App. LEXIS 7824 (4th Cir. Apr. 15, 2010), recognizing that there is a split in the circuits on this issue and no definitive decision from that circuit, found that it was not necessary for its decision in Dank to reach the issue. Section 504 of the Rehab Act states specifically that the employer’s action must be “solely by reason of” the illicit disability animus; whereas Section 501 of the same Act is silent in that regard. The government argued in Dank that this issue had already been resolved in its favor by the Fourth Circuit, relying upon Spencer v. Early, 278 F. App’x 254 (4th Cir. 2008) and Edmonson v. Potter, 118 F. App’x 726 (4th Cir. 2004). The Dank panel held that neither of those cases specified the standard for Section 501 nor addressed the issue of whether it is a different standard from that applicable to Section 504.

Judge Duncan, writing for the unanimous panel in Dank, noted that the Fifth Circuit is the only circuit that has squarely addressed this issue, holding in Pinkerton v. Spellings, 529 F.3d 513, 515-19 (5th Cir. 2008), that Section 501 requires only that disability be a motivating factor behind the employment action. Further, Judge Duncan notes the decisions of the D.C. Circuit (Adams v. Rice, 531 F.3d 936, 944 (D.C. Cir. 2008)) and the Eleventh Circuit (Nadler v. Harvey, 2007 WL 2404705, at *4 (11th Cir. Aug. 24, 2007)), where those courts applied the “solely by reason of” standard to claims raised under Section 501 and to Rehabilitation Act claims in general.

So, the issue remains largely unsettled, and now clearly is an unresolved question in the Fourth Circuit.


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Cat’s Paw - The Facts

Last Friday, after receiving last month an amicus brief from the Solicitor General recommending that the Court take the case, the Supreme Court took cert in a so-called cat’s paw case, Staub v. Proctor Hospital, Supreme Court No. 09-400. Presumably, this will be a decision of monumental importance to all employment law practitioners. A few years back, the Court had an opportunity in Hill v. Lockheed Martin Logistics Management, Inc., 543 U.S. 1132 (2005) (No. 03-1443) and later in BCI Coca-Cola Bottling Co. v. EEOC, 549 U.S. 1334 (2007) (No. 06-341) to shed some light on the circumstances in which an employer can be held liable based on the unlawful intent of officials who caused or influenced but did not make the ultimate employment decision, but the petitions were withdrawn in both cases before any decision from the Court. This issue has roiled the lower courts for many years now. See, e.g., Ricci v. DeStefano, 129 S. Ct. 2658, 2688-89 (2009) (Alito, J. concurring) (“One standard is whether the subordinate "exerted influenc[e] over the titular decisionmaker." Russell v. McKinney Hosp. Venture, 235 F.3d 219, 227 (CA5 2000) …. another is whether the discriminatory input "caused the adverse employment action." See BCI Coca-Cola Bottling Co. of Los Angeles, [450 F.3d 476,] 487 [CA10 2006)] …. The least employee-friendly standard asks only whether "the actual decisionmaker" acted with discriminatory intent, see Hill v. Lockheed Martin Logistics Management, Inc., 354 F.3d 277, 291 (CA4 2004) (en banc).”)

So, we will be posting about this case over the next weeks and months, and I thought that it would help all of us if I set forth the facts. I went to the Solicitor General’s brief, and relied upon it, to cobble together the extended statement of the facts set forth below. Having said all this, the first issue that comes to my mind is that this may be, in terms of the statutory language before the Court, the ideal case from the plaintiff’s point of view. I say that because the statute at issue, USERRA, provides in § 4311(c)(1) that a “motivating factor” is the causation standard, not Gross “but-for” causation. The other issue that I noticed is, what I would characterize as a concession, the Solicitor General in her amicus brief stating that protected status or conduct is a “motivating factor” in an action when it plays a “substantial” role in bringing that action about. I assume that the lawyers debated long and hard whether they needed to add the adjective “substantial”, and for strategic reasons decided to add it. I wonder if that will come back to haunt plaintiffs downstream. Now, for the statement of the facts.

Vince Staub, a member of the United States Army Reserve, was employed by Proctor Hospital as an angiography technologist. Janice Mulally, who was second in command of the department where Mr. Staub worked, was openly hostile to his reserve duties. For example, she "scheduled him for additional shifts without notice," saying that the extra shifts were a way for him to "pay back the department for everyone else having to bend over backwards to cover [his] schedule for the Reserves.” The head of Mr. Staub’s department, Michael Korenchuk, was also critical of Mr. Staub's military weekend duty obligations, which he called "a b[u]nch of smoking and joking and [a] waste of taxpayers['] money." After Mr. Staub returned from active duty in early 2003, Mr. Korenchuk knew "that Mulally was 'out to get' [Mr. Staub]," but he did nothing to stop her.

In January 2004, Mr. Staub was ordered "to report for 'soldier readiness processing'" in anticipation of another call to active duty. Mr. Korenchuk was concerned about the expense of having to hire a temporary replacement for Mr. Staub. A few weeks later, Ms. Mulally gave a written warning to Mr. Staub for not being at his work area. According to Ms. Mulally, employees in Mr. Staub's unit were supposed to report to the diagnostic imaging services unit whenever they were not working with a patient in the angiography unit. Mr. Staub disputed that such a policy existed or that he had violated it, but Mr. Korenchuk signed Ms. Mulally's warning to Mr. Staub in order "to get her off of his back." Under the terms of the warning, Mr. Staub was required to report to Mr. Korenchuk or Ms. Mulally whenever he did not have any patients and whenever he needed to leave his work station.
In April 2004, Angie Day, a former co-worker of Mr. Staub's, met with Mr. Korenchuk; Vice President of Human Resources Linda Buck; and Chief Operating Officer R. Garrett McGowan to complain that Mr. Korenchuk had failed to address Ms. Day’s concerns that Mr. Staub was "abrupt" in dealings with her and that Mr. Staub would "absent himself from the department.” Mr. McGowan ordered Ms. Buck to create a plan to solve Mr. Staub's availability problems. Before Ms. Buck did that, however, Mr. Korenchuk reported to Ms. Buck on April 20, 2004, that he was unable to locate Mr. Staub and that Mr. Staub had failed to report in as instructed. Based on that report and a review of Mr. Staub's personnel file, Ms. Buck decided that Mr. Staub should be discharged.

At the time Mr. Korenchuk was unable to find Mr. Staub, Mr. Staub was in the cafeteria having lunch with one of his coworkers, Leslie Sweborg. When Mr. Staub returned from lunch, he told Mr. Korenchuk that he and Ms. Sweborg had looked for him earlier and had left him a voice mail regarding leaving for lunch. Mr. Korenchuk then escorted Mr. Staub to Ms. Buck's office, where he was given his termination notice. The notice stated that Mr. Staub was being discharged for failing to follow the terms of the January warning, which required him to inform Mr. Korenchuk or Ms. Mulally before leaving the general diagnostic area. The notice stated: "To date, [Mr. Staub] has ignored that directive." Similarly, Ms. Buck's documentation of her meeting with Mr. Korenchuk stated that her termination decision was "[b]ased on the disciplinary action done in January and the continuing problems." When Mr. Staub arrived in Ms. Buck's office, Ms. Buck did not ask him about the January warning or whether he had reported in as directed. Ms. Buck simply asked him to sign the termination notice, and a security guard immediately escorted Mr. Staub out of Ms. Buck's office.

Mr. Staub thereafter unsuccessfully challenged his termination through the hospital’s grievance process. Although Mr. Staub argued in his grievance that Ms. Mulally had fabricated the basis for the January warning, "Buck did not follow up with Mulally about this claim * * * and she did not investigate [Mr. Staub's] contention that Mulally was out to get him because he was in the Reserves." Ms. Buck's investigation consisted solely of discussing the January warning with another Human Resources employee who received information from Ms. Mulally and was present when the warning was given, but not when the alleged misconduct occurred.

Mr. Staub filed suit against the hospital in the United States District Court for the Central District of Illinois, alleging that his termination violated USERRA. With the parties' consent, the district court referred the case for a jury trial before a magistrate judge. As required by Brewer v. Board of Trustees of the University of Illinois, 479 F.3d 908, 917 (7th Cir.), cert. denied, 552 U.S. 825 (2007), the court instructed the jury that "[a]nimosity of a co-worker toward the [Mr. Staub] on the basis of [Mr. Staub's] military status as a motivating factor may not be attributed to [the hospital] unless that co-worker exercised such singular influence over the decision-maker that the co- worker was basically the real decision maker." The court also instructed that "[i]f the decision maker is not wholly dependent on a single source of information but instead conducts its own investigation into the facts * * * , [the hospital] is not liable for a non-decision maker's submission of misinformation or selectively chosen information or failure to provide relevant information to the decision maker."

The jury returned a special verdict in which it found that Mr. Staub "proved by a preponderance of the evidence that [his] military status was a motivating factor in [the hospital's] decision to discharge him" and that the hospital failed to prove that Mr. Staub "would have been discharged regardless of his military status." The jury awarded $57,640 in damages. The magistrate judge subsequently denied the hospital’s motion for judgment as a matter of law or for a new trial.

The court of appeals reversed. Staub v. Proctor Hospital, 560 F.3d 647 (7th Cir. 2009). The court began by stating that the case involved what it described as the "'cat's paw' theory" of liability, a term derived from a La Fontaine fable in which a monkey persuades an unwitting cat to pull chestnuts out of a hot fire. Under that theory, "the discriminatory animus of a nondecisionmaker is imputed to the decisionmaker where the former has singular influence over the latter and uses that influence to cause the ad verse employment action"-in other words, where the decisionmaker is the dupe, or cat's paw, of the employee with a discriminatory motive. The court emphasized that liability under the cat's paw theory requires "a blind reliance, the stuff of 'singular influence.'"

The court of appeals held that the jury instructions were "not technically wrong" because they told the jury that it could "only consider nondecisionmaker animosity in the case of singular influence, and even then that the employer is off the hook if the decisionmaker did her own investigation." But the court added that if there is insufficient evidence to support a finding of "singular influence," then the district court "has no business admitting evidence of animus by nondecisionmakers.” In this case, the court of appeals concluded, the magistrate judge had erred in admitting evidence of Ms. Mulally's animus-"the strongest proof of anti- military sentiment"-without first "making a threshold determination of whether a reasonable jury could find singular influence."

The court of appeals went on to hold that, based on the evidence presented at trial, the hospital was entitled to judgment as a matter of law. The court stated that Ms. Buck, who made the decision to fire Mr. Staub, was "free of any military-based animus," and "a reasonable jury could not find that Ms. Mulally (or anyone else) had singular influence over Buck." Instead, the court found, "Buck looked beyond what Mulally and Korenchuk had said" about Mr. Staub. Although her "investigation could have been more robust," the court continued, the decisionmaker need not "be a paragon of independence" so long as she "'is not wholly dependent on a single source of information' and conducts her 'own investigation into the facts relevant to the decision.'" (quoting Brewer, 479 F.3d at 918). The court therefore concluded that "a reason able jury could [not] have concluded that [Mr. Staub] was fired because he was a member of the military."


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New Federal Mandate for Employers: Lactation Rights for Mothers

On March 29, I blogged about the workplace lactation and breast pumping rights, amending the FLSA, contained in the Patient Protection and Affordable Care Act (“PPACA”).

Section 4207 of the PPACA, now codified as 29 U.S.C. § 207(r)(1)-(4) is the new federal mandate, requiring that employers provide reasonable break time for nursing mothers to express breast milk. The full text of the FLSA amendment is as follows:

SEC. 4207. REASONABLE BREAK TIME FOR NURSING MOTHERS.
Section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 207) is amended by adding at the end the following:
‘‘(r)(1) An employer shall provide—
‘‘(A) a reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child’s birth each time such employee has need to express the milk; and
‘‘(B) a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk.
‘‘(2) An employer shall not be required to compensate an employee receiving reasonable break time under paragraph (1) for any work time spent for such purpose.
‘‘(3) An employer that employs less than 50 employees shall not be subject to the requirements of this subsection, if such requirements would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business.
‘‘(4) Nothing in this subsection shall preempt a State law that provides greater protections to employees than the protections provided for under this subsection.’’

So, here are the important takeaways:

1. Employers must furnish a private place, not a bathroom.

2. The place must be shielded from view and shielded from intrusion by coworkers and the public.

3. The mandate applies to all nursing mothers of infants aged 12 months or less.

4. The federal mandate only mandates the right to express breast milk, and does not a right to breast feed the infant at work.

5. But, state law may mandate not only greater lactation rights, but also may mandate breastfeeding rights. So, be sure to check your state law. Connecticut, for example, since 2001 has by statute provided that employees can express breast milk or breastfeed on the job during meals or break periods, and that employers must make reasonable efforts to provide a place nearby the work area that is not a toilet stall to express milk in private as long as it would not impose an undue hardship on the operation of the employer. Conn. Stat. Gen. Stat. § 31-40w.

6. Employers of 50 or more employees have no exemptions; whereas employers of less than 50 employees are only exempt if they can meet the Section 207(r)(1)(3) “undue hardship” test.

7. The amendment contains no effective date.

8. The amendment contains no penalties for non-compliance, and no explicit private right of action.

9. Presumably, the Department of Labor will issue regulations or some form of guidance regarding, although the amendment does not require DOL to do so.

David S. Fortney, Esq. of Fortney Scott in D.C., recently blogged on the amendment, posing the following questions confronting employers:

• Are the breaks to be counted towards hours worked that must be compensated? Short breaks running from 5 to 20 minutes generally are counted as hours worked under the FLSA regulations (29 CFR § 785.18) and subject to compensation for non-exempt employees. The amendment states that the employer shall not be required to compensate an employee receiving “reasonable” break time. Mr. Fortney asks whether “reasonable” means breaks of 20 minutes or less, or is this a different standard. The DOL regulation reads as follows:

“Rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry. They promote the efficiency of the employee and are customarily paid for as working time. They must be counted as hours worked. Compensable time of rest periods may not be offset against other working time such as compensable waiting time or on-call time.”

• Will travel time between the work location and the private location for expressing milk be compensable?

• For employers with fewer than 50 employees, what constitutes the “undue hardship” that would qualify for the exemption? Note that the exemption is not automatic, but instead only available if employers with fewer than 50 employees can meet the “undue hardship” requirement.

Please be sure to visit our website at http://RobertBFitzpatrick.com

The Use of Credit Checks by Employers is Under Attack on Many Fronts—Oregon Statute is but One Example

We will be posting with frequency about the various statutory, regulatory, and litigation (disparate impact challenges) attacks on management’s reliance on credit checks to screen or otherwise evaluate candidates for employment. Oregon has enacted a statute that takes effect July 1, 2010, and would prohibit employers from considering for employment purposes any information that bears on credit-worthiness, credit standing, or credit capacity, unless such information is “substantially related” to the individual’s current or potential job. If an employer concludes that credit information meets this job-related standard, the employer must provide the employee or job applicant with the reasons for its determination, and must do so in writing. Federally-insured banks and credit unions are exempt from the statute, as well as those employers who are required by federal or state law to rely on individual credit history reports. Further, the statute does not apply to certain public safety officers. The Oregon Bureau of Labor and Industries recently announced rules implementing the statute with the opportunity to comment by May 3rd.

When is a Severance Plan an ERISA Plan?

Many advocate that employers should craft severance pay plans so that they qualify as ERISA plans; the principal argument being that if the plan contains explicit language conferring discretion on the plan administrator to interpret the text of the plan and in applying that interpretation to the facts presented, the federal district courts’ scope of judicial review will be quite limited. The flip-side is that there is no cognizable claim for attorneys’ fees in a common law breach of contract case; whereas ERISA has a fee-shifting provision, albeit one that is not as hefty as, for example, Title VII’s.

A recent decision by Chief Judge McAuliffe of the District of New Hampshire is illustrative of the analysis that the courts use to determine whether a severance plan qualifies as an ERISA plan. See Sargent v. Verizon Servs. Corp., 2010 U.S. Dist. LEXIS 15408 (D.N.H. Feb. 22, 2010).

Can the States Ban Discretionary Clauses in ERISA LTD Plans?

Thanks to Scott Riemer of the Long Term Disability Law Blog, we can report that the New York State Insurance Department has issued a proposed regulation prohibiting insurance carriers from inserting discretionary clauses in insurance policies, including LTD policies. If lawful, such clauses would prevent plan administrators from anything other than applying the actual text of the plan—somewhat akin to Justice Scalia’s “originalism.” One must wonder whether such laws are preempted, although insurance does get special treatment under ERISA. I assume that it is the insurance provisions of ERISA that give the New York regulatory authorities a leg-up on winning the fight over the legality of this proposed regulation, and I further assume that a state law banning discretion in a severance pay plan governed by ERISA, would be preempted. See Zipperer v. Raytheon Co., 493 F.3d 50, 53 (1st Cir. 2007) (“While ERISA’s preemption is not boundless, it is far reaching.”); see also Sargent v. Verizon Servs. Corp., 2010 U.S. Dist. LEXIS 15408, at *20 (D.N.H. Feb. 22, 2010). Finally, see my blog of today’s date regarding a recent New Hampshire federal district court decision as to whether a severance plan is subject to ERISA.

Covenant of Good Faith and Fair Dealing

Delaware continues to generate opinions on the implied duty of good faith and fair dealing. The latest is Nemech v. Schrader, 2010 Del. LEXIS 150 (Del. Sup. Ct. Apr. 6, 2010). Note that there is a vigorous dissent in the case by Justice Jacobs, joined by Justice Berger. There is much to be found in the opinion to assist counsel and other courts in applying the implied covenant. Here, quickly, is one statement taken from an earlier Delaware Chancery Court opinion, Amirsaleh v. Bd. of Trade of the City of New York, 2008 Del. Ch. LEXIS 131 (Del. Ch. Sept. 11, 2008):

“[T]he law presumes that parties never accept the risk that their counterparties will exercise their contractual discretion in bad faith.”

So, Bucky, You Are Thinking of Permitting Employees to Telecommute

Employers were urged recently by not only the President’s Council of Economic Advisers to embrace workplace flexibility, including telecommuting, the First Lady and the President himself showed up at the workplace flexibility forum to deliver remarks endorsing such ideas. So, being a good citizen, you are considering encouraging telecommuting. After all, Al Gore would give you gold stars for reducing your carbon footprint. But, wait a minute—what about the tax implications? The South Florida Business Journal, last Friday, has a fascinating article that is just the tip of the iceberg in terms of some tax issues that employers considering telecommuting, ought to consider. The article points out that, in a recent tax ruling, Colorado imposed on a Miami-based company with one telecommuter in Colorado, income tax obligations and sales tax obligations. The article indicates that state income tax authorities, in this dismal economy, are increasingly aggressive and creative in finding ways to generate revenue, and imposing tax obligations on companies located elsewhere with a single employee in the state who telecommutes may be enough to permit significant taxes being imposed.

Federal Contractors and Their Efforts to Stave Off Unionization

Littler Mendellsohn reported Wednesday on its D.C. Employment Law Update Blog that the Obama administration is about to issue a proposed rule through the Civilian Agency Acquisition Counsel and the Defense Acquisition Regulations Council that implements Executive Order 13494 (Economy in Government Contracting), prohibiting contractors from passing through to the government for payment any expenditures on union avoidance campaigns.

Credit History Reports; Criminal History Reports; and Educational Qualifications

We will be blogging with frequency about these topics in the following days and weeks, as it is clear that the Obama administration has made challenges to employers’ use of credit history reports, criminal history reports, and even education qualifications in certain circumstances, a priority. The latest development that we uncovered is a nation-wide hiring discrimination suit filed last September in federal district court in Maryland against Freeman, a national convention, exhibition, and corporate events marketing company, challenging its alleged reliance on credit history reports and criminal background checks. The case is pending in Greenbelt before Judge Roger Titus (EEOC v. Freeman, No. 09-cv-02573 (D. Md.)). There are a number of interesting pending motions, and we will report further on them in later blogs.

Maryland Legislative Session Ends

Governor O’Malley, after the Maryland legislature adjourned, signed first the Maryland False Claims Act. While the relators’ bar is not 100% happy with the legislation, nonetheless the camel’s nose is now under the tent. To read the actual statute, go here.

We earlier blogged about the amendment to the Maryland Wage Payment & Collection Act regarding overtime as being included in that statute’s definition of wages. That legislation was enacted, and is available here.

A proposed amendment to the Maryland Human Relations Law to include “family responsibilities” as a protected class failed to get out of committee.

Additional Gross Developments on “But-For” Causation

I have previously blogged about Gross here and here and have an article on the firm’s website about Gross here.

In Hunter v. Valley View Local Schools, 579 F.3d 688 (6th Cir. 2009), the Sixth Circuit, relying upon a DOL regulation (29 C.F.R. § 825.220(c)) interpreting the FMLA, found that mixed-motive theory applied to the FMLA. The DOL regulation provides that an employer may not use FMLA leave as a “negative factor” in employment decisions. And because the Sixth Circuit previously found the regulation to be a reasonable interpretation of the FMLA, the Hunter court found that mixed-motive analysis continued to apply. The Hunter court did not, however, apply Gross.

In Rasic v. City of Northlake, 2009 U.S. Dist. LEXIS 88651, at *17 (N.D. Ill. Sept. 25, 2009), an FMLA case, the United States District Court for the Northern District of Illinois noted the following:

“We suspect that there is more than a passing chance that if presented with the question, the Seventh Circuit would find that this statutory formulation [29 U.S.C. § 2615(a)(2) of the FMLA] (“for opposing”) is not distinguishable in any meaningful way from the ADEA formulation (“because of”) that Gross held requires proof of causation.”

The Seventh Circuit in Serafinn v. Local 722, Int’l Bhd. of Teamsters, 2010 U.S. App. LEXIS 5279 (7th Cir. Mar. 12, 2010), in review of a mixed-motive instruction in a retaliation suit brought by a former union member under the Labor-Management Reporting and Disclosure Act, which contains nearly identical statutory language (“for exercising”) to the FMLA. Finding the mixed-motive instruction inappropriate, the court pointed to Webster’s dictionary’s definition of “for”—“because of.” Id. at *5.

Unpaid Internships

The threat by the Obama administration's Secretary of Labor Solis to aggressively enforce, as against for-profit entities, the notion that interns must be paid a minimum wage, has generated an extraordinary amount of discussion in the blogosphere. Among the many blogs on this topic worth reading are Lawffice Space, Jackson Lewis’ Wage & Hour Law Update, Swarthmore’s Daily Gazette, and the Workplace Prof Blog.

A New Twist on “Non-Competes”

Rob Radcliff reports on the anti-trust investigation of technology companies (e.g., Google, IBM) that allegedly have agreed that there will not be mobility of certain “geek” employees from one tech company to another. In other words, allegedly these companies have agreed that if you will stay away from my talent, I will stay away from yours. The Justice Department is investigating. Rob, with tongue-in-cheek, styled his blog yesterday about this as “how to enforce a non-compete without a non-compete.”

FICA Tax Treatment of Severance Pay

In United States v. Quality Stores, Inc., 2010 U.S. Dist. LEXIS 15825 (W.D. Mich. Feb. 23, 2010), a case where the employer sought a refund of $1,000,125 in Federal Insurance Contributions Act (FICA) taxes paid with regard to severance payment to former employees, Judge Janet T. Neff held that payments made to employees in a reduction-in-force were not “wages” for FICA purposes. The parties had stipulated that the payments were made on account of the employees’ involuntary separation from employment.

A conflicting ruling was issued in 2008 by the Federal Circuit in CSX Corp. v. United States, 518 F.3d 1328 (Fed. Cir. 2008), which reversed 52 Fed. Cl. 208 (Fed. Cl. 2002).

There are a series of revenue rulings from 1957 to 1990 in the matter, summarized in CSX Corp., 518 F.3d at 1334-40.

The Sixth Circuit will now determine whether it agrees with Judge Neff or the Federal Circuit. If the former, there will be a circuit split, and maybe resolution by the Supreme Court.

Employers should request refunds in the interim, and employees' counsel should condition severance agreements on requests for refunds.

Pattern or Practice Claims

There are several open questions regarding pattern or practice claims. One is whether an individual can maintain a private, non-class action pattern or practice claim. Some courts have suggested that they cannot. See, e.g., U.S. v. City of New York, 631 F. Supp. 2d 419, 427 (S.D.N.Y. 2009) ("Courts have held that an individual cannot maintain a private, non-class, pattern-or-practice claim."); Tucker v. Gonzales, No. 03 Civ. 3106, 2005 U.S. Dist. LEXIS 21616, 2005 WL 2385844, at *5 (S.D.N.Y. Sept. 27, 2005) (collecting cases holding that pattern or practice claims are limited to class actions); see also Blake v. Bronx Lebanon Hosp., No. 02 Civ. 3827, 2003 U.S. Dist. LEXIS 13857, 2003 WL 21910867, at *5 (S.D.N.Y. Aug. 11, 2003) (doubting the propriety of a pattern or practice claim in a non-class action complaint).

ENDA - Transsexuals

How little some of us know about transsexuals was underscored for me the other day when I read about an Iranian movie “Be Like Others” directed by Tanaz Eshaghian, which is about transsexuals in the Islamic Republic of Iran. In Iran, sex-change operations are legal. Interestingly, over two decades ago, Ayatollah Khomeini issued a fatwa making sex-change permissible for “diagnosed transsexuals.” As homosexuality is punishable by death in Iran, apparently they flock to the country’s best-established gender reassignment surgeon, Dr. Bahram Mir Jalali, so that they can live “a decent life.”

Paycheck Fairness Act

April 20th has been designated by some NGOs as Equal Pay Day. Keep your eye on the status of the Paycheck Fairness Act as we move closer to April 20th. April 20th was selected as these groups contend that, for the average full-time female employee to earn the same amount of money as the average male employee, said average female employee would need to work nearly four additional months – until the third week of April – on account of an alleged 23% gender gap.

The House of Commons in London last week enacted a similar piece of legislation. A state-written summary of The Equality Act 2010 is available here. The actual law is some 251 pages in length.

WSJ in its Weekend Edition here discusses all of this as well as competing studies on the pay gap between men and women. Interesting research by two Cornell University economists, Francine D. Blau and Lawrence M. Kahn, who concluded that the “unexplained” gender gap, as of 1998, was 9%.

You can view my paper on the Paycheck Fairness Act here and my prior blog post on the Act here.

Does Disparate Impact Analysis Apply to Federal Employee Discrimination Cases?

Judge Urbina in Aliotta v. Bair, 576 F. Supp. 2d 113 (D.D.C. Sep. 18, 2008) recognized that it is an open question whether whether ADEA disparate impact cases are legally cognizable against federal employers. See Hazen Paper Co. v. Biggins, 507 U.S. 604, 610 (1993); Koger v. Reno, 321 U.S. App. D.C. 182, 98 F.3d 631, 639 n.2 (D.C. Cir. 1996) (declining to decide whether such a claim was cognizable because the plaintiff failed to establish a prima facie case). The court in Smith v. City of Jackson, 544 U.S. 228 (2005), applied the Title VII interpretation to 29 U.S.C. § 623, a section that does not apply to federal employers, and there is "good reason to doubt that [federal employee] plaintiffs have a cognizable ADEA disparate impact claim." Breen v. Mineta, 2005 U.S. Dist. LEXIS 35416, 2005 WL 3276163, at *7 (D.D.C. Sept. 30, 2005). Members of the D.C. District Court remain divided on the issue. In Breen v. Peters, the court concluded that 29 U.S.C. § 633a, the section prohibiting age discrimination in federal employment, did not preserve sovereign immunity against disparate impact claims because the text of the section prohibits discrimination, not intentional discrimination. 474 F. Supp. 2d 1, 6 (D.D.C. 2005). "The text of § 633a does not explicitly or implicitly require a plaintiff to prove that the federal employer was motivated by animus or intended to discriminate in violation of the law. In short, the plain language of § 633a does not support the distinction between disparate treatment and disparate impact." Id. In contrast, in Silver v. Leavitt, the court relied on "the significant question of sovereign immunity, and the Supreme Court's acknowledgment that the nature of the ADEA differs markedly from that of Title VII" to conclude that a disparate impact claim was not legally cognizable against a federal employer. 2006 U.S. Dist. LEXIS 12949, 2006 WL 626928, at * 13 (D.D.C. Mar. 13, 2006).

West Virginia Mine Disaster

Why is it “same old; same old” in the West Virginia mines? Fifty years ago, two doyens of the Democratic Party, the wannabe presidential candidates, John F. Kennedy and the ever-ebullient Hubert Horatio Humphrey, were traveling into the most remote hollows of West Virginia in the run-up to the crucial primary vote on May 10th. One can go back and look at the promises made to West Virginians to eliminate poverty and to make the mines safe. And, then look at the reality of the last 50 years with mine disaster after mine disaster, and the silence of the media with respect to the roles of the congressional delegation from West Virginia, which has Senator Byrd, the oldest and most senior United States senator; the “failure” of Mr. Trumka’s United Mine Workers to protect its members at a mine that had 1,500 safety violations in a short period of time; and the unquestioned abdication of the Obama’s mine safety administration from its statutory responsibilities to protect miners. It is a sad commentary on the state of the American media that all that is being said is an evil man micro-manages this mine and contributes a lot of money to the Republican Party—the implication being that it is Republicans and this one man who killed these miners. The reality is that the Democratic Party of JFK and HHH defaulted massively on their promises to the good people of West Virginia; the West Virginia congressional delegation, which is hardly a bunch of eunuchs, failed in their jobs; the union seemingly did little or nothing, and certainly should have shut down a mine with 1,500 safety violations; and the federal mine safety establishment, like the good bureaucrats like they are, generated a blizzard of paper and nothing else. In other cultures, all of these very powerful people who, by their negligence and indifference, allowed these miners to die, would stand in front of the families, bow their heads, and ask for forgiveness. Instead, we will undoubtedly have a congressional sideshow where the Democrats try to portray this as somehow the responsibility of the prior administration. Shame on all of you.

With Tongue-in-Cheek, Judge Patel Skewers an Argument for the Application of the Law of India

Thomas Weisel Partners LLC v. BNP Paribas, 2010 U.S. Dist. LEXIS 32332, at *20 n.5 (N.D. Cal. Apr. 1, 2010):

“The court rejects [defendant’s] argument, relegated to its 105th footnote, that the court must apply Indian law to the breach of fiduciary duty claim because TWIPL was incorporated in India. It also may do well to keep in mind Gandhi’s admonition that “[y]ou cannot neglect the nearer duty for the sake of a remote.” 25 Mahatma Gandhi, The Collected Works of Mahatma Gandhi 160 (1967). [Plaintiff] was incorporated in California, meaning California law will apply to the breach of fiduciary duty claim.”

FMLA Leave as a Reasonable Accommodation

Thanks to the Work Matters Blog for pointing out Carmona v. Southwest Airlines Co., 2010 U.S. App. LEXIS 5893 (5th Cir. Mar. 22, 2010), where SW argued that regular attendance was a necessary qualification for the job, but because SW had approved requests for intermittent FMLA leave, then attendance on scheduled days could no longer be viewed as a necessary qualification. The court said that "there was sufficient evidence that [SW's] own actions reflected that attendance on scheduled days was not required."

Captive Audience Meetings

In 1948—62 years ago—in Babcock v. Wilcox, in light of the passage of the Taft-Hartley Act of 1947, which added new Section 8(c) to the NLRA, the NLRB abandoned its per se rule against employer captive audience meetings. But, Craig Becker, one of President Obama’s two recess appointments to the NLRB, said in a 1993 article:

“Although the Board ratified captive audience speeches on account of the free speech proviso, such conduct involves an element of coercion easily distinguishable from expression. The captive audience speech is diametrically opposed to the ‘free and open discussion’ the Board professes to promote.” Craig Becker, Democracy in the Workplace: Union Representation Elections and Federal Labor Law, 77 Minn. L. Rev. 495, 559 (1993).

Will the Obama Board attempt to erode 62 years of precedent?

Next Wednesday at 12:30 p.m. EDT I will host a discussion / debate between Paul Secunda of Marquette University Law School and Scott Oborne of Jackson Lewis, on the future of captive audience meetings. You can register for the seminar with ALI-ABA here.

OSHA Awards $570,000 to a Whistleblower under the Federal Rail Safety Act Against the New Jersey Transit Rail

OSHA’s award can be found here and their press release here.

Tip of the hat to the Train Law Blog, and congratulations to Cahill, Goetsch & Perry, PC, who represented the whistleblower, Anthony Araujo.

Both Houses of Maryland Legislature Pass Clarification on Overtime

The Maryland House and Senate have passed identical overtime clarification bills (H.B. 214 and S.B. 694).

Upon signature by the Governor, the Maryland Wage Payment and Collections Law’s definition of “wage” will include “overtime wages.” If there is no bona fide dispute that wages were to be paid, the law, as it has for years, provides for trebles, as well as attorneys’ fees.

Recess Appointments Should be “Hesitant to Override Precedent”

Speaking to both union- and management-side labor lawyers about her experience at the Wilma Liebman, now Chairman of the National Labor Relations Board, was quoted as saying, “Recess appointees should be hesitant to overrule precedent because it could be seen as a rush to judgment and undermine public confidence. In contrast, a decision to overrule precedent by a fully confirmed board can be perceived as having more credibility.”

She continued, “Recess boards should be caretakers and keep the railroad running and not make major policy decisions.”

With President Obama’s recess appointments of Craig Becker and Mark Pearce, we’ll see if Chairman Liebman is still of the same opinion.

Hat tip to Jackson Lewis for pointing this out.

FMLA: 9th Circuit Holds Judges to Decide the Amount of Front Pay

In Traxler v. Multnomah County, 2010 U.S. App. LEXIS 4050 (9th Cir. Feb. 26, 2010), the 9th Circuit held that, under the FMLA, front pay is an equitable remedy that must be determined by the court, and not by the jury, as to both the availability of the remedy and the amount of any award. Hunton & Williams Labor Law Legislative Updates, Ninth Circuit: Judges Must Decide Front Pay in FMLA Cases, Posted on Mar. 31, 2010, available here.

Headscarves

The Wall Street Journal had an interesting article on April 5, 2010, discussing President Sarkozy’s push in France to enact a ban on the Muslim veil. Peter Berkowitz, Can Sarkozy Justify Banning the Veil?, Wall Street Journal, Apr. 5, 2010, available here. Interestingly, several states, including Oklahoma (H.B. 1645) and Minnesota (N.F. No. 989), have defended rules or proposed laws that would require individuals to remove religious head coverings as a condition to receiving a driver’s license photograph. In response, groups have proposed an amendment to the PASS ID Act (S. 1261) that would explicitly protect the “right” of individuals to wear religious head coverings without removal or modification in a driver’s license and other identification photographs. The version of the PASS ID Act recently reported from the Senate’s Committee on Homeland Security and Governmental Affairs provides that “religious headgear is acceptable as long as the face is not obscured.” S. Rep. No. 111-104 (2009), available here. For more information on the PASS ID Act, including news and blog coverage, click here.

Lilly Ledbetter Act Judicially Incorporated Into the Texas Commission on Human Rights Act

Russell Cawyer of the Texas Employment Law Update posted regarding an extraordinary decision from the Houston Court of Appeals in which the court concluded that it would apply the terms of the Lilly Ledbetter Act to a suit under the Texas Human Rights Act. Prairie View A&M University v. Chatha, 2010 Tex. App. LEXIS 2318 (1st Dist. Ct. App. Houston Apr. 1, 2010), available here. The plaintiff, Professor Chatha, was promoted to full professor in 2004. On September 25, 2006, she filed an administrative complaint with the EEOC, alleging discrimination. Thereafter, the Texas Workforce Commission – Civil Rights Division issued a right-to-sue letter, and she filed suit in state court, under the Texas Commission on Human Rights Act ("TCHRA"), alleging that she is discriminatorily underpaid.

The University claimed that she did not file her administrative complaint on a timely basis, as the alleged adverse action occurred in 2004 when she was promoted to full professor at a lower pay rate, substantially more than 180 days before she filed suit under the Texas statute.

Plaintiff argued, in response, that her complaint was timely filed under the Lilly Ledbetter Fair Pay Act, which amended Title VII to allow for claims based on her most recent paycheck at the lower rate. Arguing that the Ledbetter Act is applicable to the Texas statute, Plaintiff contended that her claim was timely and a waiver of the state’s immunity was established.

Relying on the reasoning of two federal district court decisions (Klebe v. University of Texas Systems, 649 F. Supp. 2d 568, 570-71 (W.D. Tex. 2009) (Magistrate Judge Andrew W. Austin), and Lohn v. Morgan Stanley D.W., Inc., 652 F. Supp. 2d 812, 829 (S.D. Tex. 2009) (District Judge Melinda Harmon), the court in Chatha held that, to achieve the Texas statute’s purpose, a Texas state court would apply the terms of the Lilly Ledbetter Fair Pay Act to a suit under the Texas Commission on Human Rights Act. The TCHRA states that one of its purposes is to “provide for the execution of the policies of Title VII of the Civil Rights Act of 1964 and its subsequent amendments…” Tex. Lab. Code Ann. § 21.001. All three courts rely on that statutory language for the decisions to incorporate the LLFPA into the TCHRA.

Supreme Court to Decide Whether a Verbal Complaint is Protected Activity Under the Anti-Retaliation Provision of the FLSA

The FLSA provides in section 215(a)(3), in pertinent part, as follows:

[I]t shall be unlawful for any person to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter, or has testified or is about to testify in any such proceeding, or has served or is about to serve on an industry committee.

In Kasten v. Saint-Gobain Performance Plastics Corp., 570 F.3d 834 (7th Cir. 2009), the original panel of the 7th Circuit, judge Flaum writing for Circuit Judge Bauer and District Judge Kapala, held that internal complaints are cognizable as protected activity under the FLSA, and went on to hold that verbal complaints are not protected activity as the statute uses the term “filed”, suggesting to the panel that a complaint must be written.

On consideration of the petition for rehearing, all other members of the Circuit joined their decision and voted to deny rehearing, with Circuit Judges Rovner, Wood, and Williams dissenting. The dissenters note that the court’s decision has been rejected by the 6th Circuit (EEOC v. Romeo Cmty. Sch., 976 F.2d 985, 989-90 (6th Cir. 1992)); 8th Circuit (Brennan v. Maxey’s Yamaha, Inc., 513 F.2d 179, 181-82 (8th Cir. 1975)); 9th Circuit (Lambert v. Ackerley, 180 F.3d 997, 1003-07 (9th Cir. 1999)); 10th Cir. (Marshall v. Parking Co. of Am.-Denver, Inc., 670 F.2d 141, 142-43 (10th Cir. 1982)); 11th Circuit (EEOC v. White and Sons Enters., 881 F.2d 1006, 1011-12 (11th Cir. 1989)); as well as the views of a host of district courts (585 F.3d 310, n. 1 (7th Cir. 2001)) and the view of the United States Department of Labor for some 50 years (citing Goldbert v. Zenger, 43 Lab. Cas. (CCH) 31,155, at 40,986 (D. Utah 1961)).

One wonders whether the 1997 decision of Auer v. Robbins, 519 U.S. 452, may not carry the day. In Auer, the Court held that the Secretary of the United States Department of Labor’s position was worthy of deference even though advanced in litigation and “[t]here is simply no reason to suspect that the interpretation does not reflect the agency’s fair and considered judgment on the matter in question.” 519 U.S. at 462.

Counterclaims May Sometimes By Some Courts Be Deemed Retaliation

In 2008, Fourth Circuit held in Darveau v. Detecon, Inc., 515 F.3d 334, 340-41 (4th Cir. 2008) that a counterclaim brought against a plaintiff in an action under the Fair Labor Standards Act (“FLSA”) may constitute an adverse employment under the FLSA’s retaliation provision. Darveau, 515 F.3d at 343. Other courts have held that the potential chilling effect of an employer’s lawsuit against a discrimination or retaliation plaintiff is an adverse action for retaliation purposes because the lawsuit might dissuade a reasonable worker from engaging in protected conduct. See, e.g., Steward v. Gonzales, No. 03-1962, 2007 WL 647003, *15 n.42 (E.D. La. Feb. 28, 2007) (holding that retaliatory conduct following the filing of plaintiff’s lawsuit sufficiently supported a claim for retaliation, particularly where the Supreme Court had abrogated the Fifth Circuit’s “ultimate employment action” requirement in Burlington); Rosania v. Taco Bell of Am., Inc., 303 F. Supp. 2d 878 (N.D. Ohio 2004) (employer’s filing of counterclaim can constitute retaliation under the Family and Medical Leave Act); Gill v. Rinker Materials Corp., No. 3:02-CV-13, 2003 WL 749911, at *5 (E.D. Tenn. Feb. 24, 2003) (concluding that “the adverse action requirement for a retaliation claim encompasses an allegedly bad faith counterclaim brought by the employer against its former employee”); Nesselrotte v. Allegheny Energy, Inc., No. 06-01390, 2007 WL 3147038, at *12 (W.D. Pa. Oct. 25, 2007) (rejecting in light of Burlington Northern assertion that counterclaims cannot be retaliatory).

You can see my article on this topic here.

Many thanks and attribution to Jason Zuckerman of The Employment Law Group for bringing this topic to my attention.

Ethics – Ex Parte Contact Rule Prohibits Email Transmitted to Both Counsel for a Represented Party and the Represented Party

The New York City Bar Association Committee on Professional and Judicial Ethics in Formal Opinion 2009-1 held that an attorney would violate the ex parte contacts rule of DR 7-104(A)(1) by sending a copy of an email or letter simultaneously to the represented person as well as that person’s lawyer. The Committee opined that sending a copy to the addressee’s lawyer does not satisfy the duty to obtain prior consent from a represented person’s counsel before contacting the person directly. The Committee further advised that, in the context of an email chain among attorneys and their clients, a lawyer’s prior consent for a “reply to all” communication may sometimes be inferred from the lawyer’s conduct or acquiescence. Having said that, the committee stated that best practice is to obtain express consent either orally or in writing from counsel.

Collateral Source Rule

Many have struggled with the application of the collateral source rule where the plaintiff has received LTD benefits. A 2007 opinion by Judge Keeley of the Northern District of West Virginia sets forth a detailed analysis of the problem and the case law, and is well worth reading when this issue arises in your next case. See Calef v. FedEx Ground Package System, Ltd., 2007 U.S. Dist. LEXIS 64853 (N.D.W.Va. 2009).

Preemption of State Rest Break Law

In 520 South Michigan Avenue Associates, Ltd. v. Shannon, 549 F.3d 1119 (7th Cir. 2008), cert. denied, 2009 U.S. LEXIS 7144 (Oct. 5, 2009), the Seventh Circuit held that a state rest break statute was preempted by the NLRA’s Machinists preemption doctrine. See Machinists v. Wisconsin Employment Relations Commission, 427 U.S. 132 (1976). The statute at issue, the Illinois Hotel Room Attendant Amendment to the One Day Rest in Seven Act, required that hotel room attendants be given two rest breaks and a meal during workdays as well as shifting the burden of proof to the employer in retaliation actions under the statute. Judge Manion, writing for the panel, stated that the Amendment was preempted under Machinists preemption doctrine as the Amendment was not a minimum labor standard; it did not have general applicability, but instead applied to only one occupation in one industry in a single county.