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

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

Baseball

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

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

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

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

Enough baseball.

The Balkans

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

Jena Six

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

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

On January 8, the D.C. City Council gave final approval to the legislation that would provide authority to the new Chancellor to terminate non-union employees without cause. See our prior post "District of Columbia Non-Union School Employees To Be At-Will", Washington, D.C., Maryland, and Virginia Employment and Labor Law Blog, Dec. 27, 2007 at http://robertfitzpatrick.blogspot.com/2007/12/supreme-court-update-adea-disparate.html. (For full text of Act, see http://dccouncil.us/lims/default.asp).

Court Monitors and Special Masters

There has been controversy recently surrounding the fact that former Attorney General Ashcroft's business, the Ashcroft Group, was selected by the United States Attorney in New Jersey to monitor a False Claims Act settlement. See Philip Shenon, "Ashcroft Deal Brings Scrutiny in Justice Dept.", The Washington Post, Jan. 10, 2008, available at http://www.nytimes.com/2008/01/10/washington/10justice.html ; "Ashcroft Rakes It In With DOJ Settlement", available at http://www.talkleft.com/story/2007/11/25/124652/21 ; and "Pascrell Calls on House Judiciary Committee To Examine Deferred Prosecution Agreements", available at http://pascrell.house.gov/issues2.cfm?id=12817. In contrast, I have not heard a whisper of protest that the Supreme Court this past Tuesday named San Francisco lawyer, Kristin Linsley Myles, to be a Special Master to gather evidence and report to the Court on a dispute between South Carolina and North Carolina over sharing the waters of the Catawba River. Ms. Myles is a former clerk for Justice Scalia. For an excellent discussion on Special Masters, see Margaret G. Farrell, The Role of Special Masters in Federal Litigation, ALI-ABA Course of Study Materials for Civil Practice and Litigation Techniques in the Federal Courts (Oct. 14-16, 1993). See also materials submitted by Francis E. McGovern entitled Appointing Special Masters and Other Judicial Adjuncts: A Handbook for Judges, ALI-ABA Course of Study Materials for Civil Practice and Litigation Techniques in Federal and State Courts (Mar. 7-9, 2007).

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

Supreme Court Update

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

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

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

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

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

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

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

On Monday, the Supreme Court dismissed the Huber case as the parties had settled the matter. See our prior post, "Is The ADA An Affirmative Action Statute?", Washington, D.C., Maryland, and Virginia Employment and Labor Law Blog, at http://robertfitzpatrick.blogspot.com/2007/12/sprintunited-management-co-v-mendelsohn.html.

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

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

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

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

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

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

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

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

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

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

Collaborative Law

As a follow-up on my earlier post, "Collaborative Law", Washington, D.C., Maryland, and Virginia Employment and Labor Law Blog, http://robertfitzpatrick.blogspot.com/2008/01/collaborative-law-in-health-care-and.html, January 11, 2008, on collaborative law, see Marlissa Briggett's article in the Boston College Law Magazine on the topic, www.bc.edu/schools/law/alumni/magazine/2006/winter/currents.html.

Collaborative Law

In health care and family law, there appears to be a growing collaborative law movement. As I understand it, under collaborative law principles, opposing counsel agree that they will not litigate and that there representation is limited exclusively to working collegially, collaboratively, with their adversary to settle the controversy. One would think that the field of employment law would be ripe for such an approach to many controversies. After all, non-binding mediation in a relatively short period of time took off like wildfire, and now a significant percentage of employment controversies are amicably resolved in mediation. It will be interesting to see whether the collaborative law movement begins to take hold in the employment arena.

In a controversial decision, the Colorado Bar Association’s Ethics Committee has concluded as follows:

“[The practice of Collaborative Law violates Rule 1.7(b) of Colorado Rules of Professional Conduct insofar as a lawyer participating in the process enters into a contractual agreement with the opposing party requiring the lawyer to withdraw in the event that the process is unsuccessful. The Committee further concludes that pursuant to Colo.RPC 1.7(c) the client’s consent to waive this conflict cannot be validly obtained. Because Cooperative Law lacks the disqualification agreement found in Collaborative Law, the practice of Cooperative Law is not per se unethical. However, those participating in the Cooperative Law face unique ethical issues and must be mindful of myriad potential ethical pitfalls.” Colo. Bar Ass’n, Ethics Opinion 115: Ethical Considerations in the Collaborative and Cooperative Law Contexts, (2007) available at http://www.cobar.org/group/display.cfm?GenID=10159&EntityID=ceth.

Karen Fasler, in her article Show Me The Money!!: The Potential For Cost Savings Associated With A Parallel Program And Collaborative Law, The Health Lawyer, Vol. 20, No. 2, page 20, footnote 33 (December 2007)(available at http://www.abanet.org/abanet/common/login/securedarea.cfm?CFID=74999806&CFTOKEN=5fd073dabab1fb18-1AB951C4-9247-72D1-D31E05AD89D8F097&jsessionid=00305d34cfe32e6a3250TR&URL=%2Fhealth%2Fmo%2Fpremium%2Dhl%2Fhealthlawyer%2FV20%2F2002%2Epdf&ROLE=hl&AREATYPE=premium (members only)), had the following to say in footnote #33:

"Collaborative Law offers a distinct opportunity to facilitate resolution of issues arising in
the wake of medical injury. The process also has the potential for growth in a variety of
other legal fields. As the use of Collaborative Law has expanded, ethics committees from
various states have weighed in on several issues related to the process. For an excellent
discussion on this topic, see David A. Hoffman, A Healing Approach to the Law –
Collaborative Law Doesn’t Have to be an Oxymoron, THE CHRISTIAN SCIENCE MONITOR,
October 9, 2007 edition - an op-ed piece on the ABA Ethics opinion on Collaborative
Law (accessed on-line at http://www.csmonitor.com/2007/1009/p09s01-coop.html - last
accessed November 2007). Hoffman notes that ethics committees in five states
(Kentucky, Minnesota, North Carolina, New Jersey, and Pennsylvania) previously approved
the use of collaborative law agreements while only one state committee (Colorado) issued a
conflicting advisory opinion declaring such agreements unethical. Hoffman reports that
the ABA Ethics Committee has just released its own opinion declaring the Colorado opinion
to be simply wrong and squarely supporting the use of collaborative law as long
as clients are well informed about the process. Note: the ABA ethics opinion about
Collaborative Law is available on-line at the Colorado Collaborative Law Professionals’
website (accessed at http://cocollaborativelaw.com/Portals/0/EthicsOpinionABACL
2007.pdf - last accessed November, 2007)."

Commercial General Liability Insurance Policy Coverage - Fair Credit Reporting Act Claims

There have been a spate of claims filed around the country under the Fair Credit Reporting Act ("FCRA") class action, asserting that prescreened credit offers that, once responded to, permit access to a consumer's credit information, do not constitute a "firm offer of credit" for purposes of the FCRA and therefore the accessing of the individual's credit information violated the FCRA. See e.g., Cole v. U.S. Capital Inc., 389 F.3d 719 (7th Cir. 2004). See also April B. Chang, Valuables in Your Mailbox? How the Concept of Value in Cole v. U.S. Capital Inc. Enhances the FCRA's Guidelines Concerning Creditor Marketing, 10 N.C. Banking Inst. 209 (March 2006). Fieldstone Mortgage Company was sued in federal district court in Illinois on such a FCRA claim. Fieldstone submitted the claim to its commercial general liability carrier, Zurich American Insurance Co., contending that Zurich had a duty to defend. Zurich agreed to defend under a complete reservation of rights, including the right to seek declaratory relief, the right to withdraw from the defense, and the right to seek reimbursement of defense costs. Thereafter, Zurich filed a declaratory judgment action in federal district court in Maryland, seeking a declaration that it had no duty to defend or to indemnify. Fieldstone counterclaimed and sought summary judgment on Zurich's duty to defend under the coverage for "personal and advertising injury." Zurich cross-motioned for summary judgment. Judge Blake held that there was coverage, and ordered Zurich to defend. 2007 U.S. Dist. LEXIS 81570 (D.Md., Oct. 26, 2007).

Zurich argued that the policy's "advertising injury" language did not cover the FCRA claims and asserted, alternatively, that a policy exclusion precluded coverage. The court reviewed the right to privacy argument, with Zurich contending that FCRA does not establish a "right of privacy" recognized by the insurance policy, relying on Resource Bankshares Corp. v. St. Paul Mercury Insurance Co., 407 F.3d 631 (4th Cir. 2005). Judge Blake pointed out that Resource Bankshares made a distinction between two types of potentially affected privacy rights, one involving the manner of the advertisement and the other involving the content of the advertisement. In Resource Bankshares, the court found that the underlying statute, the Telephone Consumer Protection Act, was intended to protect consumers only from the intrusive nature of junk faxes - not the content of the faxes themselves.

Here, Judge Blake noted that the opposite situation was present - the Illinois FCRA lawsuit against Fieldstone involved not only the manner of Fieldstone's solicitation but also the message's content - the unauthorized accessing of the plaintiff's credit records.

The court then analyzed whether the term "publication" had been met by the facts and circumstances of this case - the word "publication" not being defined in the policy. Zurich argued that for it to constitute a "publication", the information that violated the right of privacy must be divulged to a third party. Judge Blake found that the majority of the circuits that have examined that question in the context of an "advertising injury" provision have found that publication to a third party is not an essential element of the claim.

Based on this analysis, Judge Blake concluded that Zurich had been obligated to pay Fieldstone's legal fees to defend as it had done during the pendency of the litigation. Fieldstone argued that Zurich was obligated to pay its legal fees associated with its defense against the declaratory judgment action and Judge Blake agreed, stating that "the benefit Fieldstone bargained for would be substantially dissipated if Fieldstone were forced to pay the costs of the suit brought by Zurich seeking to avoid its obligations."

Supreme Court Update

Kentucky Retirement Systems v. EEOC

Yesterday, the Court heard oral argument in Kentucky Retirement Systems v. EEOC, No. 06-1037. This was, for both sides, an extraordinarily well presented oral argument. Robert D. Klausner who argued for the Kentucky Retirement Systems was very strong and cogent in presenting his argument and in responding to the many questions in a factually very complex case. Malcolm L. Stewart an Assistant Solicitor General ably presented the government's point of view.

There was some discussion of the term "arbitrary" age discrimination, focusing on whether or not that adjective is, in fact, part of the statute. A reading of the argument would seem to indicate that that argument met with little, if any, favor with the justices. Justice Scalia, at one point, said of the term "arbitrary" which is in the preamble, that petitioner would be in a stronger position if it was in the legislative history. That seemed faint hope, given Justice Scalia's strong views about legislative history.

Bridge v. Phoenix Bond & Indemnity Co., No. 07-210

The Court accepted cert. in this civil RICO case to decide the issue that twice previously it had been unable to reach, that is, whether the plaintiff must demonstrate and prove reliance on the alleged misrepresentations by the defendant. This dispute arises out of notions of "proximate causation". The question being whether proof of injury in fact is sufficient or whether plaintiff must establish that its injury was proximately caused by the defendants' scheme. And, to establish that one was injured by a fraudulent scheme, it is argued, on the one hand, that the direct victim may recover whether or not it is the direct recipient of the false statements and, on the other hand, it is argued that the plaintiff must show that they in fact relied upon the defendants' material misrepresentations.

Sprint Communications Co., L.P. v. APCC Servs., Inc.

The Court also accepted cert. at its January 4th conference in Sprint Communications Co., L.P. v. APCC Servs., Inc., No. 07-552, the question being whether a plaintiff who has assigned to it the right to pursue a legal claim, and stands to gain no proceeds from the outcome of the litigation, has standing to sue. This is APCC's second trip to the Supreme Court. The Supreme Court granted Sprint's petition for cert. from the earlier decision (418 F.3d 1238 (2005)) , and vacated the judgment and remanded for further consideration in light of the Court's decision in Global Crossing Telecommunications, Inc. v. Metrophones Telecommunications, Inc., 127 S.Ct. 1513 (2007). Here, the standing question arises from payphone service providers assigning to APCC the right to litigate their dispute with Sprint over the amount of certain payments that Sprint was required by federal regulations to make to the PSPs. The PSPs assigned their claims to APCC for the purposes of collection and agreed to finance the litigation, and APCC then sued Sprint on behalf of the PSPs. Under the assignments, APCC can gain or lose nothing from the outcome of the case because all of the proceeds go to the PSPs. The D.C. Circuit held that APCC had standing to sue Sprint.

WKB Associates, Inc. v. Fair Housing Council, Inc.

At its January 4th conference, the Court declined to review the Sixth Circuit's decision in WKB Associates, Inc. v. Fair Housing Council, Inc., No. 07-421. A quick reading of the petition, the opposition and an amicus brief does not readily indicate why the Court declined to take the case, which would have presented a host of issues that several Justices on the Court have expressed an interest in addressing. Among the issues were the status of Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982), which had been relied upon, in part, as a basis for decisions regarding organizational standing. Another issue was whether organizational standing and the required demonstration of an injury in fact can be based upon the diversion of the organization's resources to litigation - related expenses. And, finally, the case presented a familiar issue for the Court, whether the continuing violation doctrine has any continued vitality in fair housing design and construction cases. Recently, Judge Bennett of the District of Maryland addressed some of these questions in Kuchmas v. Towson University, 2007 WL 2694186, 2007 U.S. Dist. LEXIS 66689 (D. Md., Sept. 10, 2007).


When Do State Anti-Discrimination Laws Preempt Common Law Claims

Recently, the D.C. Court of Appeals addressed the question whether a harassment claim under the local D.C. Human Rights Act "preempts" common law claims. Griffin v. Acacia Life Ins. Co., 2007 D.C. App. LEXIS 266 (D.C. May 24, 2007). The D.C. Court of Appeals held that the tort claim of negligent supervision could not be predicated on a violation of the D.C. Human Rights Act as a common law claim of negligent supervision may be predicated only on common law causes of action or duties otherwise imposed by the common law and not by duties imposed by statute. Thus, a negligent supervision claim could be predicated on a battery, for example, but not the Human Rights Act. The Court emphasized that it did not intend to suggest that the Human Rights Act preempts or otherwise abolishes common law causes of action based on the same set of operative facts. The Court also emphasized that its holding was limited to the tort of negligent supervision and its earlier decisions permitting common law claims for intentional infliction of emotional distress to be predicated on violations of the Human Rights Act were unaffected by this decision.

Now, there is an interesting law review that comprehensively covers this subject. See Jarod S. Gonzalez, State Anti Discrimination Statutes and Implied Preemption of Common Law Torts: Valuing the Common Law, 59 S.C.L. Rev. 115 (Fall 2007).

Has The Supreme Court Moved Somewhat Away From Strict Scrutiny In Affirmative Action Cases

Some had opined that Justice Kennedy's opinion in Parents Involved In Community Schools v. Seattle School District No. 1, 127 S. Ct. 2738 (2007) had approved less than strict scrutiny in certain circumstances. Now, we have an excellent piece of scholarship by Samuel Estreicher in the CATO Supreme Court Review where he discusses Justice Kennedy's concurrence which suggests less than strict scrutiny where race-conscious objectives are achieved through non-racial means. See Samuel Estreicher, The Non-Preferment Principle and the "Racial Tiebreaker" Cases, 239 (CATO Supreme Court Review 2007) (available at http://www.cato.org/pubs/scr/2007/estreicher.pdf).

Spoliation Of Evidence

Recently, in EEOC v. LA Weight Loss, 509 F.Supp. 2d 527 (D. Md. 2007), Judge Quarles of the Federal District of Maryland addressed the question whether EEOC was entitled to an adverse inference instruction because of the defendant's violations of Title VII's document-retention requirements set forth in 29 C.F.R. Section 1602.14.

"Don't Darken My Door Again" Clauses In Employment Settlements

In the most recent issue of The Labor Lawyer, there is an excellent article on the nettlesome question whether a clause in an employment discrimination settlement agreement that provides that the settling former employee will never reapply for employment with the settling employer are valid. See Charles H. Fleischer, Validity and Effect of Will-Not-Reapply Covenants in Employment Discrimination Settlement Agreements, Vol. 23, No. 2, 151 (Fall 2007, The Labor Lawyer).

Recruiting For Employees By Email

A troublesome article in the same issue of The Labor Lawyer suggests, in a piece of excellent scholarship, that there are a host of potential claims against employers merely for the fact that they attempt to recruit employees by email. See Theodore A. Olsen, The Dangers of E-mail Recruiting: One Person's "Sales Pitch" Is Another Person's "Spam", Vol. 23, No. 2, 163 (Fall 2007, The Labor Lawyer). For example, the author discusses the Controlling the Assault of Non-solicited Pornography & Marketing Act of 2003 (CAN-SPAM), 15 U.S.C. Sections 770-13(2004) and suggests that the criminal and civil provisions of that statute need to be considered before email recruiting.

Racism: An Embarrassment for India


As a devotee of cricket from my Jamaica days, I am saddened to see that Australia and India are literally on the verge of severing diplomatic relations on account of the fact that at the recent test match in Sydney, the Indian spinner Harbhajan Singh, a Sikh, was accused of racially abusing Andrew Symonds , the Australian all-rounder. Mr. Singh was given a three-match suspension after being found guilty, allegedly referring to Mr.Symonds, who is black, as a "monkey". Rather than apologize to Mr. Symonds , to Australian fans, and to his fellow countrymen, Mr. Singh has denied wrongdoing. The Board of Control for Cricket in India suspended the test match, and India is now consumed with anger at what they characterize as unfair treatment of Mr. Singh. A sad state of affairs.



Sullivan & Cromwell Sues Electronic Evidence Discovery Inc.


On December 28, 2007, Sullivan & Cromwell filed suit in the Southern District of New York against EED, a vendor providing electronic discovery services, alleging sub-standard and untimely services. The suit seeks a declaratory judgment that the law firm is not liable for approximately $710,000 in fees. See Civil No. 07-cv-11616.


Sanctions for Destruction of Personal Computer


In APC Filtration Inc. v. Becker, 2007 U.S. Dist. LEXIS 76221 (N.D.Ill., October 12, 2007), the court sanctioned a former employee/defendant in a misappropriation of confidential information and diversion of corporate opportunities case for the "crash" of defendant's personal computer. Defendant alleged that he took his computer to a repair shop where he was told that "the motherboard and hard drive were shot, and that the computer was not worth fixing." Defendant testified that he then threw the computer away with "other junk", admitting that he drove twenty miles from his home to a dumpster at a construction site to dispose of the computer. The court, finding that the computer was discoverable and that defendant had reasonable notice that the computer could become the subject of discovery, held that defendant had acted in bad faith and impaired plaintiff's ability to prove its case, warranting sanctions.


Class Action Filings on the Increase


If you had any doubt whether class action cases were on the increase, you only need to see the data for new class action filings in California state and federal courts in the Los Angeles, San Francisco, San Jose, Sacramento, San Diego, San Mateo, Oakland/Alameda, and Orange County areas. In the two week period from December 21, 2007 through January 3, 2008, there were 57 new class actions filed, 33 of which were employment-related.

40th Anniversary

January 8, 1968, 40 years ago today, at about this time of day, I put my hand up in the air and was admitted to practice law. 40 years, and all I heard this morning was it's Elvis' birthday. Do I feel like Rodney Dangerfield? Smile.

It has been a wonderful run; I have been privileged to represent many wonderful people, to fight many good fights, and in the course thereof to meet many interesting individuals. Hope I can continue to do this for another 40. It's just mid-life.

Vacation Pay

There is lots going on the vacation pay front.

In Minnesota, the Supreme Court in Lee v. Fresenius Medical Care, Inc., 2007 Minn. LEXIS 682 (Minn., Nov. 15, 2007), interpreting the state wage payment and collection statute, held that vacation benefits are "wholly contractual." In other words, whether or not an employer is obligated to pay a discharged employee his/her vacation depends upon the terms of the employer's policy. The Court found that the statute is a "timing statute," and does not mandate what an employer must pay a terminated employee, but rather when an employer must pay a terminated employee.


The Court noted that its interpretation conforms to the interpretations of similar statutes in Indiana and Maryland. For its statement regarding Indiana law, it relied upon Indiana Heart Assocs., P.C. v. Rahamonde, 714 N.E. 2d 309, 311 (Ind. Ct. App. 1999). For Maryland, it relied upon Rhoads v. F.D.I.C., 956 F.Supp. 1239, 1259-60 (D. Md. 1997), Rev'd on other grounds, 257 F.3d 373 (4th Cir. 2001). In Rhoads, Judge Kaufman held that a terminated employee was not entitled to accrued vacation pay under the Maryland WPCL because the employee manual in effect at the time of the employee's termination stated that "[i]f you are terminated for cause by the Association, payment for accrued vacation leave is forfeited."

Quite obviously, the Minnesota Supreme Court did not have the unreported decision of the Maryland Court of Special Appeals in Catapult Technology Ltd. v. Wolfe, No. 997, unreported (Md. Ct. Spec. App. 2006) (available at http://www.wagecollection.com/Opinion.pdf). In Catapult, Judge Barbera, with respect to Rhoads, had the following to say: " . . . Rhoads is a Federal District Court case, and, of course, is not binding authority on this Court. In any event, both Rhoads and Magee [Magee v. DanSources Technical Servs., Inc., 137 Md. App. 527 (2001)] were issued before Medex [Medex v. McCabe, 372 Md. 28 (Md. 2002)], which clearly held that an employer's personnel policies cannot be used to contravene the public policy that employees have a right to be compensated for their efforts." In response, the Maryland Department of Labor, Licensing and Regulation revised its opinion about vacation pay as follows: "When an employee has earned or accrued his or her leave in exchange for work, an employee has a right to be compensated for unused leave upon the termination of his or her employment regardless of the employer's policy or language in the employee handbook." The Catapult case settled, and therefore the issue will not be presented to the Maryland Court of Appeals.

Our thanks to Marc J. Smith of Wage Collection, who blogs on wage issues in Maryland and Washington, D.C.

The Minnesota Supreme Court noted that Montana in Langager v. Crazy Creek Productions, Inc., 954 P.2d 1169 (Mont. 1998) held that the employer is obligated to pay "earned" vacation.

The majority in the Minnesota Lee case noted that if it "held that employees have actually earned an absolute right to vacation pay as they accrue vacation hours for working each pay period, the legality of both the use-it-or-lose-it" policy that many employers have and caps-on-vacation-time-accrual policies would be called into question.

Judge Page wrote a vigorous dissent, noting that neither the Indiana or Maryland statutes were as similar as majority suggested.

The Iowa Caucus


A Simple Prayer

by

Robert B. Fitzpatrick

Mine eyes have seen . . .
Medgar, dead at the hand of hate,
Ross’ grocery store in Port Gibson, and the voices of hope,
Unita in Mayersville, Eddie Ford, Roosevelt and Pauline, and most especially, our Ms. Daisy, Ms. Minnie Ripley,

Mine eyes have seen . . .
Martin, dead at the hand of hate,
Tut gone forever, but Rosie at Head Start with the sparkling eyes of a child,
Then hope again, Bobby,

Mine eyes have seen . . .
Anna Walentynowicz in Gdansk, and,
The Philosopher King, Václav Havel,
And death yet again, Fr. Popieluszko, but hope alive at St. Stanislas Kostka,

Mine eyes have seen . . .
The smile, the erect bearing, and those wonderful shirts – after Robbin Island, and,
Lucky Dube voicing the hope,
And then death again this last fall as we killed our own, Lucky,

Mine eyes have seen . . .
And, my back straightened with pride this morning,
I thought I saw beyond the horizon,
Or, was it but a dream,

Protect your son, Oh Lord,
Work your will,
And let us see,
Whether the refrain is complete.


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


In response to my post regarding the opinion in Mayers of the D.C. Court of Appeals,
there has been some discussion that, for example, if a former employee, who alleges that he/she was constructively discharged as a result of an accumulation of intolerable acts, on the 365th day after the resignation/constructive discharge, the former employee's complaint might be time barred if the last of the series of intolerable acts that precipitate the resignation occurred 366 or more days before the filing. Frankly, while that is intellectually interesting, I doubt if any Judge would give the time of day to such an argument. The culminating event, the resignation/constructive discharge, has to be an actionable event even though, in a sense, all of the wrongs that lead the employee to quit Suders-like preceded resignation and, in some cases, could be all outside the one year statute of limitations.

On a nearly silly tangent, I have to assume that Maryland, even after Hass, in a constructive discharge circumstance where the person announces their resignation on day X to be effective on X plus two weeks, the statute of limitations begins to run from the announcement date, not the effective date of the constructive termination.

Having said the above, the discussion regarding my initial post, has led me to revise my conclusion that whether or not the courts denominate constructive termination cases as akin to Morgan - cumulative wrong cases is indeed of significant value to Plaintiffs. Let me explain my thinking.

If constructive termination is viewed as a cumulative wrong, then the entire string of events that eventually "breaks the camel's back" and culminates in a resignation called a constructive termination, under Morgan, so long as there is no break in the chain, the entire chain/string of events is actionable and all of the wrongs committed during the chain are compensable, not just the events that occurred within the one year D.C. Human Rights Act statute of limitations. So, if it is death by a thousand cuts over more than a year, the events before the year before filing are not only evidence, under Morgan they are liability events.

Thus, the jury can consider all of the events no matter how far back in time the chain of events goes, in assessing the amount of the jury's award. So, while maybe a bit esoteric, conceiving of constructive termination as a cumulative wrong is helpful for closing argument and for shutting down arguments that the events prior to the one year period unduly swayed the jury and affected inappropriately the amount of their award.

Also, viewing constructive terminations as cumulative wrongs shuts down arguments by the defense that the events occurred within one year before the resignation in toto do not amount to sufficient intolerability to justify an employee, like the police woman in Suders, saying "enough is enough", and having her resignation viewed as a fit response to the intolerable acts.

Supreme Court Update

January 4th Conference

There are no employment cases on the Justices' plate tomorrow at their Friday conference, but there are three cases that may be of interest. The first is Bridge v. Phoenix Bond & Indemnity Co., which is a RICO civil action raising the question whether false statements made to third parties can establish proxmiate cause where the plaintiffs did not rely on the statements but were nonetheless harmed by the statements.

The second case is WKB Associates v. Fair Housing Council which is a Fair Housing Act case raising two questions, the first being whether incurring pre-litigation expenses in investigating a potential claim satisfies the injury component of Article III standing and the second question is whether the statute of limitations runs from the sale date of each separate unit in the housing complex or runs from the sale of the final unit.

Finally, Sprint Communications Co. v. APCC Services is another Article III standing case, which raises the question whether a plaintiff who has assigned to it the right to pursue a legal claim, and stands to gain no proceeds from the outcome of the litigation, has standing to sue.

For the opinions, briefs, and petitions for cert., see http://www.scotusblog.com/wp/uncategorized/petitions-to-watch-conference-of-1408/.

January 11th Conference

The Justices meet in private conference on Friday, January 11th. There are at least three important employment cases on their plate at that conference in which they might accept cert.

The first is Crawford v. Metro. Gov't of Nashville & Davidson County, 211 Fed. Appx. 373, 2006 U.S. App. LEXIS 28280 (6th Cir. 2006) (petition for cert. available at http://www.scotusblog.com/movabletype/archives/06-1595_pet.pdf). The 6th Circuit held that the anti-retaliation provisions of Title VII were not violated by the employer’s allegedly retaliatory discharge of plaintiff who had cooperated in the employer’s internal investigation of a co-worker’s sexual harassment allegations against a supervisor, where there was no pending charge with the EEOC.

The second is Taylor v. Progress Energy, Inc., 493 F.3d 454 (4th Cir. 2007), re-aff’g 415 F.3d 364 (4th Cir. 2005, vacated and remanded by 2006 U.S. App. LEXIS 15744 (4th Cir. June 14, 2006), petition for cert. filed on October 22, 2007, available at http://www.scotusblog.com/wp/wp-content/uploads/2007/10/progresspetitionappendix.pdf. The Fourth Circuit, on rehearing and now with the benefit of an amicus brief from the Department of Labor, which disagreed with the Court’s interpretation of a DOL regulation prohibiting waivers of FMLA claims, nonetheless reaffirmed its earlier ruling. Judge Duncan dissented. The Fourth Circuit, disagreeing with the Fifth Circuit’s holding in Faris v. Williams WPCI, Inc., 332 F.3d 316 (5th Cir. 2003), held DOL regulation that prohibits waivers of FMLA claims absent DOL or court approval should be upheld. The Fifth Circuit had held that the regulation only barred the prospective waiver of substantive FMLA rights; whereas the Fourth Circuit held that the regulation applied to all waivers, both retrospective and prospective. In addition, the Fourth Circuit held that the regulation applies to all FMLA rights, both substantive and proscriptive, the latter preventing discrimination and retaliation.

The third is James v. Metropolitan Gov't of Nashville, 2007 U.S. App. LEXIS 14945 (6th Cir., June 20, 2007) (petition for cert. available at http://www.scotusblog.com/movabletype/archives/07-367_pet.pdf). The issue presented is: Whether under Burlington Northern & Santa Fe Railway v. White, a jury or a judge is responsible for determining whether an employer has violated the retaliation provisions of Title VII.

If Dual-Role Constitutes Conflict Of Interest, What Is The Standard Of Review Of A Benefit Determination?

Yesterday, we discussed the Solicitor General's invitation-brief recently filed in MetLife v. Glenn, No. 06-923, a petition for cert. from the Sixth Circuit's decision, 461 F.3d 660 (6th Cir. 2006).

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

So, if you represent a client in a benefit determination case, in addition to keeping your eye on MetLife, you need to determine what, if any, action the applicable state insurance commissioner has taken in light of NAIC's model legislation.


Emotional Distress Award Held To Be Excessive

In a non-employment case, Sloane v. Equifax Info. Servs., LLC, 2007 U.S. App. LEXIS 29805 (4th Cir., Dec. 27, 2007), the Fourth Circuit, Judge Motz writing for a panel including Judges Niemeyer and Michael, reduced a $245,000 award under the Fair Credit Reporting Act for mental anguish, humiliation, and emotional distress to a maximum of $150,000. While some might consider the "takeaway" of $100,00 as a defeat, in my judgment, a reading of Judge Motz's opinion says to me that this is largely a victory for Ms. Sloane. At every turn in her opinion, Judge Motz rejects the arguments being made by Defendant Equifax, which contended that the award should be no more than $25,000, a dollar number that Equifax, as Judge Motz underscored in her opinion, had taken "out of the air." Judge Motz also rejects Equifax's reliance on a line of employment discrimination cases and the low award FCRA cases that Equifax cherry picked for presentation to the Court.

There is excellent language in the opinion regarding the role of the courts in reviewing awards of compensatory damages. In rejecting Equifax's "out of the air" $25,000 argument, Judge Motz has the following to say: "Not only is such an unprincipled approach intrinsically un-sound, but it also directly contravenes the Seventh Amendment, which precludes an appellate court from replacing an award of compensatory damages with one of the Court's own choosing (citations omitted)."

Judge Motz finds that the plaintiff's proof is not merely "conclusory statements", but rather the Court finds that plaintiff "'sufficiently articulate[s]' true 'demonstrable emotional distress (citation omitted).'" She then analyzes the Plaintiff's evidence and finds that there is "substantial, if not overwhelming, objective evidence [that] supports an emotional distress award." Then, after a fascinating riff regarding identity theft and the citation by the Court of breathtaking statistics regarding the amount of data inputted every month by the "Big Three" credit reporting agencies (two billion items of information every month) and the number of credit reports that they issue each day (two million), the Court discusses the range of awards in FCRA cases and awards in defamation cases, the Court finding that "some guidance can be gained from case law concerning defamation." The Court says that its review of FCRA cases "suggests that approved awards more typically range between $20,000 and $75,000 (citations omitted)." Then, looking at defamation awards for emotional distress, the Court says that "courts frequently sustain emotional distress awards in the range of $250,000 in defamation cases (citations omitted)." Finally, stating that the panel does not believe that this case involves actual defamation and that there is almost no evidence to suggest harm to her reputation, the Court finds the maximum award supported by the evidence must be "significantly less than these defamation awards." And then, the Court awards a maximum of $150,000, and in the next breath states: "We recognize that even this amount is appreciably more than that awarded for emotional distress in most other FCRA cases. But, as explained earlier, the case at hand differs significantly from those cases."

As stated, in my judgment, this is a big win for Ms. Sloane and a big win for plaintiffs seeking significant awards of emotional distress, whether it be in FCRA cases, defamation cases, or employment discrimination or wrongful termination cases.

Fallout From Griffin v. Acacia Life Insurance Co.

Judge Robert E. Morin of the Superior Court of the District of Columbia had occasion in Le v. Interstate Management Co., LLC, civil case no. 2006 CA 008572 B (D.C. Sup. Ct., July 31, 2007), to apply the D.C. Court of Appeals holding in Griffin v. Acacia Life Insurance Co., 925 A.2d 564, 2007 D.C. App. LEXIS 266 (D.C., May 24, 2007). In Le, like Griffin, the EEOC forwarded the plaintiff's charge to the D.C. Office of Human Rights, and the Office of Human Rights automatically deferred its jurisdiction to the EEOC, thus raising the question whether, in light of Griffin, OHR's automatic deferral of its jurisdiction constituted a dismissal of the plaintiff's charge. Plaintiff argued that a 2001 amendment to the local law permitted the Court to distinguish Le from Griffin, an argument rejected by the Court on the ground that the amendment was merely designed to address the peculiar circumstances of D.C. Government employees. Thus, the Le Court found that the OHR's deferral of its jurisdiction in favor of an EEOC investigation after EEOC had cross-filed with it, constitutes a termination of OHR proceedings and would re-start the running of the one year statute of limitations which would have been tolled by the cross-filing.

So, the issue then became whether the failure of OHR to inform the Plaintiff of its decision to defer its jurisdiction provided any solace. First, Judge Morin reminded us that the District of Columbia does not recognize the concept of equitable tolling. Nonetheless, relying on Small v. D.C. Office of Human Rights, 768 A.2d 994 (D.C. 2001), and the fact that prior to Griffin all of the decisional law in circumstances like Griffin's and Le's, had deemed the statute to be tolled, the Court denied the defense motion for summary judgment on the ground that the Court could not say as a matter of law that the tolling of the statute of limitations had discontinued in these particular circumstances.

In my view, Judge Morin arrived at the correct result. There is a crying need for the City Council to resolve this mess. It is disgraceful that, after over four decades of anti-discrimination law, for plaintiffs to end up mired in arcane disputes involving cross-filing and deferral. This is just the sort of travesty that infuriated the Supreme Court in Holowecki v. Fed. Express Corp., 440 F.3d 558 (2d Cir. 2006), cert. granted, 2007 U.S. LEXIS 6823 (June 4, 2007). See transcript of Oral Argument at http://www.supremecourtus.gov/oral_arguments/argument_transcripts/06-1322.pdf.

Continuing Vitality Of McLaughlin v. Murphy, 436 F.Supp. 2d 732 (D. Md. 2005), Aff'd By Unpublished Per Curiam Opinion On Other Grounds, 2007 WL 1875933, 2007 U.S. App. LEXIS 15560 (4th. Cir., June 29, 2007)

As we pointed out in an earlier blog, the Maryland Court of Appeals has accepted cert. in Hoffeld v. Shepherd Electric Co., Inc., 2007 Md. LEXIS 744 (Md., Dec. 13, 2007). It would appear that the Court will be called upon to either embrace or reject the reasoning of Judge Blake of the Federal District bench in McLaughlin. McLaughlin was a mortgage loan salesman who was paid by commissions and who was terminated by his employer for cause. McLaughlin's commission contract provided that commissions were "earned" on any mortgage loan transaction that he originated when he submitted a "complete application form" for the loan, with the proviso that the commission was to be paid only if the loan "is subsequently funded, settled and not rescinded while the employee is still employed." Judge Blake determined that this contractual requirement did not transgress the Maryland wage collection and payment law (MWCPL).

In Hoffeld, the plaintiff also was a commissioned employee, and his employer provided in the commission plan that he would forfeit a commission earned for work performed prior to his termination, if the employer had not calculated the commission prior to the employee's termination. The trial court in Hoffeld, relying on McLaughlin, held that the plan did not transgress the MWCPL and the Court of Appeals' decision in MedEx v. McCabe, 811 A.2d 297 (2002) where the Court held that a contractual provision which conditioned payment of an employee's compensation for work already performed on his continued employment with the employer is void and unenforceable as against the public policy expressed in the MWCPL.

New EEOC Regulation That It Is Not Age Discrimination For Employers To Reduce Or Eliminate Health Benefits For Retirees When They Turn 65 And Become Eligible For Medicare


A copy of the regulations can be found at 29 C.F.R. 1625 and 1627.

Arbitration - Collective Bargaining Agreements Waiver Of Judicial Forum For State Anti-Discrimination Claims

In Sum v. Tishman Speyer Properties, Inc., 2007 N.Y. App. Div. LEXIS 1657 (N.Y. App. Div. Feb. 15, 2007); 2007 N.Y. LEXIS 3792 (N.Y. 2007) the Court of Appeals of New York has granted leave to the Plaintiff to appeal where the lower court enforced the CBA's arbitration provision which included arbitration of New York City's anti-discrimination law. A variation of this issue was recently decided by the Second Circuit in Pyett v. Pennsylvania Building Co., 498 F.3d 88 (2d Cir. 2007) in which Judge Cabranes, writing for the panel, held that a union-negotiated waiver of statutory rights in the CBA was unenforceable in light of the Supreme Court's decision in Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974). The Fourth Circuit, several years ago, in E. Associated Coal Corp. v. Massey, 373 F.3d 530, 533 (4th Cir. 2004) held that "a union-negotiated CBA may waive an employee's statutory right to litigate his employment discrimination claims in a judicial forum."

Cleaning Workers - New Contract

Local 32 BJ's Bargaining Committee announced Thursday, December 27th, that there was a tentative agreement on new contracts for commercial cleaners in Washington, D.C., Montgomery County, and Baltimore with the Commercial Building Cleaning Contractors Association. The new four-year contracts, according to the Local's statement, provide for significant wage increases, employer-paid family prescription drug coverage for all employees, and significantly improved medical insurance benefits for full-time employees. These contracts would apply to nearly 7,000 office cleaners.

Supreme Court Update

MetLife v. Glenn, No. 06-923, 461 F.3d 660 (6th Cir. 2006)

The Solicitor General recently filed an invitation-brief (available at http://www.usdoj.gov/osg/briefs/2007/2pet/6invit/2006-0923.pet.ami.inv.pdf) in support of the petition for cert. in this case, which presents the recurring ERISA issue as to the standard of review that the trial court's should utilize in ERISA benefit cases when the plan administrator is the employer, and thus evaluates whether or not to pay claims out of its own pocket. The first question that the Solicitor recommended the Court grant cert. on is whether or not that constitutes a conflict of interest that must be considered in determining the standard of judicial review. The Solicitor also recommended to the Court that it order the parties to brief how the Courts should weigh such conflicts of interest in reviewing discretionary benefit determinations made by such a "dual-role administrator."

The Fourth Circuit in Carolina Care Plan, Inc. v. McKenzie, 467 F.3d 383, 386-87 (4th Cir. 2006), cert. dismissed, Nos. 06-1182 & 06-1436 (July 30, 2007) held that a plan administrator that also pays plan benefits operates under a conflict of interest that must be taken into account on judicial review of a benefit determination. And, the 4th Circuit in Doe v. Group Hospitalization & Med. Servs., 3 F.3d 80, 87 (4th Cir. 1993) applied abuse-of-discretion review in such cases on a "sliding scale," whereby the plan administrator's decision is reviewed for reasonableness, and the particular degree of deference under Firestone to be afforded depends on the seriousness of the conflict of interest.

Employee Manuals - Disclaimers Of Contractual Intent

The D.C. Court of Appeals over the past decade has issued a series of decisions, finding that the particular language of the employee handbook and the language of the employer's disclaimer of contractual intent read together, raised a question for the jury as to whether or not the disclaimer effectively trumped any contract argument or not. See, e.g, Dantley v. Howard Univ., 801 A.2d 962 (D.C. 2002); Strass v. Kaiser Found. Health Plan of Mid-Atlantic, 744 A.2d 1000 (D.C. 2000); U.S. ex rel. Yesudian v. Howard Univ., 153 F.3d 731 (D.C. Cir. 1998); and Sisco v. GSA Nat'l Capital Fed. Credit Union, 689 A.2d 53 (D.C. 1997).

Over the holidays, I tripped over a 2006 opinion by Judge Lamberth, which draws a brighter line as to when this is a jury issue and when the employer gets summary judgment on this issue. See Youngblood v. Vistronix, Inc., 2006 U.S. Dist. LEXIS 51460 (D.D.C., July 27, 2006).

In Youngblood, the manual used permissive language, that is, repeatedly the word "may". For example, the manual in the disciplinary portion stated that the "employee may be notified" "Vistronix may take disciplinary steps" and "Vistronix may terminate the employee". Judge Lamberth held that such permissive language in conjunction with a disclaimer which stated as follows: "These guidelines do not constitute a contract or promise. Any individual employee can be terminated, at any time, with or without cause and without notice." Additionally, the employer had the employee Youngblood sign a receipt that affirmed his status as an at-will employee and that disclaimed any implied contract. Judge Lamberth contrasted this with Strass, where the handbook used mandatory language, that is, the word "shell".

Then, Judge Lamberth drew the bright line, saying that in Youngblood, there was "no logical incongruity between Vistronix's disclaimer and the language contained elsewhere in the handbook, or in the parties' bargain." In contrast, the disclaimer in Strass is "rationally at odds with some aspect of the parties' bargain, [and] the ambiguity as to the parties' intention raises a question of fact for a jury."

I commend Judge Lamberth's opinion as it seems to harmonize these cases that some of us have read too liberally as suggesting a jury question when there is not one.

Paid Sick and Safe Days Act of 2007

My thanks to Karen Minatelli of District of Columbia Employment Justice Center for being able to provide me with the revised version of this proposed District of Columbia legislation. On the D.C. City Council's website, you can find the original version of the bill, but not the revised version that was voted on by committee this past December.

The legislation provides that an employer of six or more employees shall provide for each employee not less than one hour of paid leave for every 26 hours worked, up to a maximum of 10 days within this minimum standard, per year.

An employer of less than 6 employees shall provide not less than one hour of paid leave for every 52 hours worked, up to a maximum of five days within this minimum standard, per year.

Paid leave so accrued may be used by the employee for an absence resulting for, among other reasons, an absence if the employee or the employee's family is a victim of stalking, domestic violence or sexual violence, provided the paid leave is directly related to social or legal services pertaining to the stalking, domestic violence or social violence. The legislation then lists several covered instances including time to relocate and time to take legal action.

Enforcement action is to be taken pursuant to the terms of the District of Columbia's Family and Medical Leave Act of 1990.

San Francisco, in a 2006 initiative supported by 61% of the electorate requires that employers of more than 10 employees give 9 days sick leave and employers of less provide 5 days of paid leave.

International Employment Law - Corporate Social Responsibility

Over the holidays I read a relatively new book on the toy industry. For those who are interested in where the overwhelming percentage of toys in the U.S. come from, and most particularly, the circumstances under which they are manufactured, I highly recommend chapter 8 entitled "Santa's Sweatshop" of Eric Clark's The Real Toy Story: Inside The Ruthless Battle For America's Youngest Consumers (2007 Free Press).

If you are interested in this issue and want to continue to monitor developments, I recommend China Labor Watch/National Labor Committee (http://www.chinalaborwatch.org/).

It will be interesting to see what effect China's new Employment Contract Law, which went into effect January 1st, will have on the practices described in Mr. Clark's book. For more on the new law, see http://www.chinalawblog.com/2007/11/chinas_new_labor_law_its_a_hug.html.

Federal Legislative Update

Senator Kohl (D - WI) has introduced last year S.1577, the Patient Safety and Abuse Prevention Act. The legislation would require long-term care facilities and providers to conduct criminal history background checks before hiring a direct patient access employee. This requirement would not go into effect until January 1, 2011. It provides immunity from liability for such employers in denying employment if the employer reasonably and in good faith relies upon credible information about such applicant provided by a criminal history background check. The legislation prohibits the hiring of an applicant who has disqualifying information disclosed in the background check. A quick read does not readily indicate whether compliance with the proposed legislation's procedures would trump a negligent hiring or negligent retention claim.

Proposed Legislation Prohibiting Discrimination Against Transgendered Persons

For those who have been following this issue, there is a provocative op-ed in last Friday's Wall Street Journal at W13 authored by the Journal's deputy Taste Editor, Naomi Schaefer Riley entitled Crossing Over (available at http://www.opinionjournal.com/taste/?id=110011050).

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

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

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

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

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

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

SOX's Preliminary Order Of Reinstatement Is Dealt A Setback

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

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

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

Calculation Of Front Pay

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

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

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

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

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

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

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

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

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

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

SUPREME COURT UPDATE


ADEA Disparate Impact - Burden of Persuasion on RFOA


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

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

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

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


Speech Or Debate Clause

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

Proximate Cause Jury Instructions

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

Summary Judgment Constitutional

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

Upcoming Oral Arguments

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


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


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


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

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

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

FLSA Donning and Doffing Police Officers Uniforms and Equipment

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

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

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

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

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

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

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

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

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

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

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

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

Do State Trade Secrets Acts Preempt Common Law Claims?

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

Anonymous Bloggers

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

Wage & Hour Collective and Class Actions

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

Spoliation of Evidence - Sanctions

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