Respect Your Elders: Lessons from Age Discrimination Cases

Age discrimination is an under-utilized tool for redressing workplace grievances, in part due to the perception by practitioners that it is difficult to prevail on claims under the Age Discrimination in Employment Act, (“ADEA”), 29 U.S.C. § 621, et seq. One sad consequence of this is that the body of law surrounding age discrimination is often overlooked when bringing claims related to other protected characteristics. This is unfortunate because, as with many other areas of life, our elders have much to teach us. This article is a discussion of some of the areas in which age discrimination case law can inform our approach to the litigation of discrimination based on other protected characteristics.

I. INCONSISTENT EVALUATIONS

“The lawyer’s truth is not Truth, but consistency or a consistent expediency.”
- Thoreau

Pointing to inconsistent explanations proffered by an employer for an adverse employment action is a time-honored way of demonstrating pretext under the McDonnell-Douglas framework. Several recent age-related cases dealt with the circumstances under which inconsistent performance evaluations would be capable of giving rise to a similar inference of discrimination.

In Barker v. Ellington Bd. of Educ., No. 3:12-cv-00313, 2013 U.S. Dist. LEXIS 171324, 2013 WL 6331159 (D. Conn. Dec. 5, 2013), the plaintiff, an elementary school teacher, was terminated when her contract was not renewed. Plaintiff alleged that the decision not to renew her contract was due to age discrimination, and brought suit under the ADEA.

In defense of its non-renewal decision, the School Board cited poor performance evaluations received by Ms. Barker during the school year preceding her termination. Barker, 2013 U.S. Dist. LEXIS at *32-34. Ms. Barker argued that these evaluations were internally inconsistent in that the narrative comments and notes prepared in support of the evaluations contradicted the criticism of her performance made elsewhere in the evaluation and that, as such, it was permissible for the jury to infer that the School Board’s stated reason for termination was pretextual. Id. For example, one of the criticisms contained in Ms. Barker’s performance evaluation was that she did not give a “clear statement of her lessons”, but in the supporting description of Ms. Barker’s teaching, the evaluator noted that she “read[] an opening statement from the book” and “referr[ed] to a cork board describing the subject of the lesson.” Id. at 34-35 (internal quotations omitted).

Although recognizing that an employer’s termination decision need not be correct – or even rational – the Court nevertheless denied summary judgment to the employer. Id. at 38. The Court, citing Reeves v. Sanderson Plumbing Prods., 530 U.S. 133 (2000), denied the employer’s motion for summary judgment, explaining that “discriminatory intent can be inferred from the falsity of an employer’s justification for its adverse action[,]” and that the internal contradictions in the plaintiff’s performance evaluation, upon which the employer had based its termination decision, were capable of giving rise to an inference of discriminatory intent. Id. at *37-*38.

Not all disagreements surrounding a performance review are sufficient to demonstrate the “falsity of an employer’s justification” sufficient to support an inference of discrimination. In Mattera v. JPMorgan Chase Corp., the federal district court for the Southern District of New York granted the employer’s motion for summary judgment based, in part, on its holding that neither “an employee’s disagreement with her employer’s evaluation of her performance” nor the “claim that he had received good performance evaluations in the past” were sufficient to create an inference of discrimination. 740 F. Supp. 2d 561, 576-77 (S.D.N.Y. 2010). In so holding, the Court explained that “[d]isagreements regarding poor performance evaluations and claims of prior good performance do not, as a matter of law or logic, mean that present poor performance reviews were unfounded.” Id. at 574. Similarly, in Godfrey v. Ethan Allen, Inc., the Second Circuit noted “[t]hat [plaintiff] had been favorably evaluated in the past is irrelevant.” No. 96-7978, 1997 U.S. App. LEXIS 12334 at *6 (2d Cir. May 23, 1997); see also Billet v. CIGNA Corp., 940 F.2d 812, 826 (3d Cir. 1991) (“Prior good evaluations alone cannot establish that later unsatisfactory evaluations are pretextual”).

To leverage inconsistent performance reviews into evidence supporting an inference of discrimination, employees should simply focus on how the inconsistencies identified meet the traditional burden of demonstrating the falsity of the proffered reason for termination. The most obvious of such circumstances is when the evaluation which led to the adverse action is, itself, internally inconsistent, as was the case in Barker. Even if the evaluation is not internally inconsistent, unfavorable evaluations might still give rise to an inference of discrimination in context with other data – for example, if the unfavorable review states criticisms distinct from those contained in a termination memo, if they are inconsistent with objective performance metrics generated around the same time as the performance review, or if the criticisms in the performance evaluation are otherwise provably false.

  II. JOB QUALIFICATIONS

“I adore adverbs; they are the only qualifications I really much respect.”
- Henry James

To establish a prima facie case of age discrimination, a plaintiff must show, among other things, that she was qualified for the job in question. See Blizzard v. Marian Technical Coll., 698 F.3d 275, 283 (6th Cir. 2012). At this stage, however, the plaintiff can carry this burden by demonstrating that her qualifications are “at least equivalent to the minimum objective criteria for employment in the relevant field.” Wexler v. White’s Fine Furniture, Inc., 317 F.3d 564, 575-76 (6th Cir. 2003). Although these qualifications can vary, they generally include such criteria as education, experience, and demonstrated possession of the pertinent skills. Id. at 576. Significantly, the question of whether an employee possesses a “subjective” quality – such as leadership or management skill – is left to a later stage of the McDonnel Douglas analysis. See Celluci v. RBF Citizens, N.A., Civ. No. 12-6038, 2013 U.S. Dist. LEXIS 177282 (E.D. Pa. Dec. 18, 2013) quoting Weldon v. Kraft, Inc., 896 F.2d 793, 798 (3d Cir. 1990).

In Isolato v. Kelly Servs., the federal district court for the Eastern District of Michigan addressed whether a plaintiff’s claim for Social Security Disability Insurance (“SSDI”) benefits prevented him from demonstrating he was qualified for a particular job. 945 F. Supp. 2d 825, 830, 834-35 (E.D. Mich. 2013). Prior to initiating litigation, plaintiff had filed for SSDI benefits as an individual who was “totally disabled”, and indicated in that filing that he was “disabled and unable to perform any substantial gainful activity[.]” Id. at 835.

In approaching this question, the Court in Isolato first noted that, under the Supreme Court’s analysis in Cleveland v. Policy Mgmt. Sys. Corp., 326 U.S. 795 (1999), the receipt of SSDI benefits did not automatically estop the recipient from pursuing an ADA claim, but that such receipt did create a “strong presumption” against the success of such a claim that the recipient must rebut. Isolato, 945 F. Supp. 2d at 830. The Court found that this analysis applied equally to claims under the ADEA. Id. at 831; see also McClaren v. Morrison Mgmt. Specialists, Inc., 420 F.3d 457, 463-64 (5th Cir. 2005) (applying Cleveland to ADEA claims); Detz v. Greiner Indus., Inc., 346 F.3d 109 (3d Cir. 2003) (same).

Finding that Plaintiff had not presented an explanation for the statements made in his application for SSDI benefits and the instant lawsuit, the Court granted defendant’s motion for summary judgment. Id. at 835. In so holding, the Court distinguished the holding of the Sixth Circuit in Kiely v. Heartland Rehabilitation Servs., 359 F.3d 386 (6th Cir. 2004) in which the Sixth Circuit had found that plaintiff’s assertion that he was “legally blind” was not necessarily inconsistent with his assertion that he was qualified to perform his job. In Kiely, the Court noted that a reasonable juror could find that plaintiff’s claim for SSDI was based upon his blindness, not an inability to work. Id. at 390.

To preserve claims for employment discrimination, whether under the ADEA, ADA, or otherwise, counsel should make note of the distinction, identified by the court in Isolato, between an assertion that an employee’s disability entitles them to benefits and an assertion that an employee’s inability to work entitles them to benefits. To the extent possible, an applicant for SSDI benefits should focus the claim on proving that the applicant meets the criteria listed for one or more particular disability(ies), rather than on an inability to find work. See Overton v. Reilly, 977 F.2d 1190, 1196 (7th Cir. 1992) (holding that an award of SSDI benefits based on a particular disability was not inconsistent with a claim of discrimination). Even to the extent that an SSDI benefits applicant cannot so phrase such claims, the applicant should be careful about the statements made in the application regarding the applicant’s ability to perform work.

III. MITIGATION OF DAMAGES

“That terrible mood of depression of whether it’s any good or not is what is known as the Artist’s Reward.”
- Ernest Hemingway

An employee claiming damages for lost wages is required to make efforts to mitigate his or her damages by obtaining comparable employment. Waver v. Casa Gallardo, Inc., 922 F.2d 1515, 1527-28 (11th Cir. 1991). These efforts must be “reasonable under the circumstances”. Ford Motor Co. v. EEOC, 458 U.S. 219, 231 n.15 (1982).

In Harris v. CVS Caremark Corp., No. 1:11-cv-732, 2013 U.S. Dist. LEXIS 11591, 2013 WL 365259 (N.D. Ala. Jan. 29, 2013), the federal district court for the Northern District of Alabama was faced with the question as to whether, and to what extent, mental impairments suffered by the plaintiff impact the nature of efforts which are reasonable “under the circumstances”. In Harris, the plaintiff had, in fact, accepted a job, but failed to actually start in that position due to his depression over his termination. Id. at *10. It is not clear from the decision whether or not plaintiff had received a clinical diagnosis of depression. In any event, the Court held that this testimony, as well as other testimony from plaintiff regarding the negative impact that defendant’s termination of his employment had on his mental state, created a triable issue of fact as to whether plaintiff had taken reasonable steps under the circumstances to mitigate his damages. Id. at *35.

IV. INTERSECTIONAL DISCRIMINATION

“Fools ignore complexity. Pragmatists suffer it. Geniuses remove it.”
- Alan Perlis

The Supreme Court first recognized that Title VII extended to discrimination against identifiable sub-groups of protected classes in Phillips v. Martin Marietta Corp., 400 U.S. 542 (1971). In Phillips, the court held that Title VII prohibited discrimination against a sub-group of women who had pre-school-age children. Id. at 544. The holding in Phillips has since been expanded to include other sub-groups. E.g. Jefferies v. Harris Cty. Community Action Ass’n, 615 F.2d 1025 (5th Cir. 1980) (combination of race and sex discrimination); Sprogis v. United Airlines, 444 F.2d 1194, 1194-98 (7th Cir. 1971) (marital status); see also Minna J. Kotkin, Diversity & Discrimination: A Look at Complex Bias, 50 Wm. & Mary L. R. 1439 (April 2009); Bradley Allen Areheart, Intersectionality and Identity: Revisiting a Wrinkle in Title VII, 7 Geo. Mason U. Civ. Rts. L.J. 199, 201-202 (2006); Darren Lenard Hutchinson, Identity Crisis and the Development of an Adequate Theory of Subordination, 6 Mich. J. Race & L. 285, 308-309 (2001); Rosalio Castro & Lucia Corral, Comment: Women of Color and Employment Discrimination: Race and Gender Combined in Title VII Claims, 6 La Raza L.J. 159, 162 (1993); Virginia W. Wei, Note, Asian Women and Employment Discrimination: Using Intersectionality Theory to Address Title VII Claims Based on Combined Factors of Race, Gender & National Origin, 37 B.C.L.R. 771, 776 (1996); Elizabeth V. Spelman, Inessential Women: Problems of Exclusion in Feminist Thought, 114-32 (1988); Elaine W. Shoben, Compound Discrimination: The Interaction of Race and Sex in Employment Discrimination, 55 N.Y.U. L. R. 793, 793-98 (1980); Joanne Song, Between the Cracks: Discrimination Laws and Older Women, Univ. Cal. At Irvine Dept. of Economics (April 2011) (available at: http://paa2013.princeton.edu/papers/130235) (accessed March 13, 2014).

While such intersectional claims are broadly recognized, some courts have resisted attempts by plaintiff to “combine the protected categories[.]” See Ganaway v. Pittsburgh Dept. of Public Safety, No. 2:05-cv-1657, 2008 U.S. Dist. LEXIS 8077 (W.D. Pa. Feb. 4, 2008); Taylor v. Procter & Gamble Dover Wipes, 184 F. Supp. 2d 402, 407 (D. Del. 2002); Floyd v. New Jersey, Civ. No. 89-5293, 1991 U.S. Dist. LEXIS 10102 ((D.N.J. July 16, 1991) (all holding that Title VII protects sex or race, each of which must be analyzed separately); but see Shazor v. Prof’l Transit Mgmt., Ltd., No. 13-3253, 2014 U.S. App. LEXIS 2943, 2014 WL 627406 (6th Cir. Feb. 19, 2014) (allowing an intersectional sex-plus-race claim to proceed, holding that “Title VII does not permit plaintiffs to fall between two stools when their claim rests on multiple protected grounds”); Chadwick v. Wellpoint, Inc., 561 F.3d 38, 43 (1st Cir. 2009) (noting that “sex plus” claims are permitted when not all members of a disfavored class are discriminated against).

In Doucette v. Morrison Cnty., No. 12-cv-00373, 2013 U.S. Dist. LEXIS 75177, 2013 WL 2359660 (D. Minn. May 29, 2013), the Court addressed a case of intersectional, “sex-plus” age discrimination under the Minnesota Human Rights Act, Minn. Stat. § 363A.01, et seq. Although the Minnesota Supreme Court has not held that age is a criteria which an employer could use to discriminate against some members of one sex but not the others, the Court noted that “district courts within this circuit have recognized sex-plus-age claims[.]” Id. at *35-*36; see also Hall v. Mo. Highway & Transp. Comm’n, 995 F. Supp. 1001, 1005 (E.D. Mo. 1998). In Doucette, the Court found that, even if a sex-plus-age claim had been properly pled, that it would fail to survive the employer’s motion for summary judgment. Doucette, 2013 U.S. Dist. LEXIS 75177 at *36. The evidence adduced by plaintiff included a claim that younger women were treated more favorably than plaintiff and that older men were likewise treated more favorably than plaintiff due to the “old boys club.” Id. at *36-*37. This evidence, however, did not demonstrate that the adverse disciplinary actions taken against plaintiff were on account of her age and sex, or that the stated reasons for her termination were a pretext for discrimination.

On the federal level, it is not yet clear whether the ADEA, as opposed to Title VII, can support a claim for “intersectional” discrimination. The Second Circuit, in Gorzynski v. JetBlue Airways Corp., the Court seemed to accept such a claim, explaining that “there is no need for us to create an age-plus-sex claim independent from [plaintiff’s] viable ADEA claim. Even if some subset off employees protected by the ADEA were not subject to age-based discrimination were not subject to age-based discrimination, [plaintiff] may still have encountered such discrimination.” 596 F.3d 93 (2d Cir. 2010). In Wittenburg v. Am. Express Fin. Advisors, Inc., No. 04-922, 2005 U.S. Dist. LEXiS 29471 (D. Minn. Sept. 19, 2005) the court denied summary judgment on plaintiff’s combined sex-plus-age discrimination. On appeal, the Eighth Circuit divided the claims and considered them individually, finding each sufficient standing alone, and did not comment on the district court’s alternate analysis. Wittenburg v. Am. Express Fin. Advisors, Inc., 464 F.3d 831 (8th Cir. 2006).

Two cases from the Eastern District of Pennsylvania further illustrate the approach courts have taken to this issue. In Arnett v. Aspin, the federal district court for the Eastern District of Pennsylvania noted that such “sex-plus” under Title VII do not “allege that an employer discriminated against a protected class as a whole, but rather that the employer disparately treated a subclass within the protected class.” 846 F. Supp. 1234, 1238 (E.D. Pa. 1994). In Arnett, the defendant argued that plaintiff’s claims of age discrimination under the ADEA and sex discrimination under Title VII should be construed as two separate claims. Id. at 1237. While noting that age discrimination claims could be brought only under Title VII, the Court nonetheless allowed a “sex-plus-age” claim to proceed under Title VII. Id. at 1240-41.

The next year, the Eastern District of Pennsylvania addressed the question of whether an “age-plus” claim was cognizable under the ADEA, rather than Title VII. See Kelly v. Drexel Univ., 907 F. Supp. 864 (E.D. Pa. 1995). Recognizing that Arnett had not specifically addressed this issue, the Court held that there was “no authority to recognize an “age-plus-disability” discrimination claim under the ADEA. Id. at 875 n.8. As such, plaintiff was not entitled to protection as a subclass of older, disabled, workers. Id. For further discussion of the decision in Kelly, see Kotkin, 50 Wm. & Mary L. Rev. at 1480.

Other courts have reviewed the evidentiary requirements for such intersectional or “complex” discrimination claims in more detail. For example, in Jefferies v. Thompson, the federal district court for the District of Maryland addressed a situation in which the plaintiff, an African American woman, claimed discrimination based on her age, sex, race, and her “race and gender combined”. 264 F. Supp. 2d 314, 319 (D. Md. 2003). While finding sufficient direct evidence to deny summary judgment as to the plaintiff’s race claim, the court was more skeptical regarding her “complex” claim of race and gender discrimination. In analyzing this claim, the court noted that “the more specific the composite class in which the Plaintiff claims membership, the more onerous [the plaintiff’s burden of persuasion] becomes.” Id. at 327. This is, at least in part, due to the difficulty in collecting sufficient evidence to permit a meaningful comparison between the plaintiff’s sub-group and employee’s in general. Id. at 328.

Employment attorneys should be aware of the remedies for intersectional discrimination. In particular, the Fifth Circuit in Jefferies and the Sixth Circuit in Shazor both took strong stands against allowing plaintiffs to “fall through the cracks” merely because biases against their race, sex, or other protected characteristic was, in essence, triggered by another characteristic, whether protected or unprotected. Plaintiffs may want to adopt the phrasing of the Second Circuit in Gorzynski, when it held that plaintiffs are protected from discrimination, whether under Title VII, the ADEA, or otherwise, based on their protected characteristics regardless of whether other individuals who shared those protected characteristics experienced discrimination.

V. INQUIRIES ABOUT CHARACTERISTICS RELATED TO PROTECTED CLASSIFICATIONS

“Retirement may be looked upon either as a prolonged holiday or as a rejection, a being thrown on to the scrap-heap.”
- Simone de Beauvoir

While perhaps less broadly applicable than the other subjects dealt with herein, one additional issue faced by older workers involves retirement-related inquiries by their employers. Several courts have addressed the question of whether such inquiries are capable of giving rise to an inference of discrimination. The reasoning behind the refusal of courts to use such inquiries to infer discriminatory intent on the part of employers is instructive in other matters involving employer inquiries regarding unprotected activities or characteristics correlated with protected characteristics.

In DeBarr v. Cleveland Clinic Found., the federal district court for the Northern District of Ohio granted the employer’s motion for summary judgment on the employee’s claim of age discrimination. 917 F. Supp. 2d 676, 683 (N.D. Ohio 2013). In that case, the plaintiff had relied, in part, on several inquiries from his employer over a period of years regarding if and when plaintiff was planning to retire. Id. In each instance the plaintiff-employee indicated he had no plans to retire. Id. The Court found that these exchanges did not provide direct evidence of age discrimination “because they do not require the conclusion that plaintiff was terminated because of his age, and require inferences by a fact finder.” Id.

In Colosi v. Electri-Flex Co., the plaintiff asked the court to infer discriminatory intent from, among other evidence, two occasions on which plaintiff’s supervisor asked him when he was intending to retire. 965 F.2d 500, 502 (7th Cir. 1992). Noting first that “[t]here is no direct evidence of age discrimination” the Seventh Circuit held that the retirement-related exchanges did not create an inference of discrimination because “a company has a legitimate interest in learning its employees’ plans for the future, and it would be absurd to deter such inquiries by treating them as evidence of unlawful conduct.” Id. Similarly, in Doucette, the federal district court for the District of Minnesota found that a retirement inquiry did not provide evidence of discriminatory intent, reasoning that “[t]he question itself was neutral, and [plaintiff] makes no effort, beyond repeating it, to indicate how it demonstrates discriminatory intent.” 2013 U.S. Dist. LEXIS 75177 at *38-*39.

In sum, employees will face an uphill battle in using evidence of inquiries related to legitimate employer interests as either direct or indirect evidence of discrimination, even if those inquiries are tangentially related to protected characteristics. Of course, some laws, such as the Genetic Information Non-Discrimination Act, 122 Stat. 881 (May 21, 2008) (“GINA”) prohibit a broad swathe of what might otherwise be potentially legitimate inquiries, so it is important that employment lawyers think beyond traditional Title VII remedies when representing clients in such circumstances.

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

Charting the Un-Discovered Country: Discovery About Discovery

Charting the Un-Discovered Country: Discovery About Discovery

Technology Assisted Review (“TAR”), also known as predictive coding, is increasingly popular as a means of controlling discovery costs, especially with large organizational defendants faced with the mounting costs of reliably searching and producing hundreds of gigabytes – or even terabytes – of potentially discoverable information.  TAR proponents tout studies showing its ability to simultaneously lower costs and increase search recall and precision (both these terms of art are discussed below).  See Maura R. Grossman & Gordon V. Cormack, Technology-Assisted Review in E-Discovery Can Be More Effective and More Efficient Than Exhaustive Manual Review, Rich. J.L.& Tech., Spring 2011, at 8-9, (available at http://jolt.richmond.edu/v17i3/article11.pdf).  Indeed, advancements in TAR technology have been made which, when properly employed, can allow predictive coding algorithms to deal effectively with situations which have complicated the use of TAR in the past, such as low-richness data sets (data sets with a low percentage of responsive documents), unrepresentative initial seed sets, and other potential complications.

The numbers, however, tell only a part of the story.  TAR is not a one-size-fits all solution, and each search process must be individually tailored to the data set under review.  This tailoring (or “training”) can be conducted in a number of different ways, but generally involves creating one or more “seed set(s)” of documents, having a human reviewer review and code the “seed” or “training” documents, and then feeding those coding decisions back to the algorithm so it can learn the distinction between relevant and non-relevant documents.  Most training processes are iterative and some TAR tools involve the correction of errors made by the algorithm.  The training process is repeated until the algorithm’s recall (the percentage of responsive documents retrieved) and precision (the percentage of retrieved documents which are responsive) are within acceptable limits.  The “seed sets” themselves can be generated in several ways, including hand-picking documents using keyword or otherwise, reviewing a random sample of documents, and/or through the use of “intelligent learning” algorithms (“active learning”) to select documents that would assist the algorithm in learning, independent of direct human intervention.  These techniques are not mutually exclusive and different predictive coding algorithms may make use of them either singly or in combination, depending on the needs of the production and the characteristics of the data set.  As noted above, not all TAR tools and protocols are created equal so some diligence is needed in selecting a tool and implementing a reasonable and defensible process. 

With TAR’s increasing popularity, the training process is being subjected to increasing scrutiny, with a growing number of attorneys seeking “discovery about discovery” to ascertain the methods used to train the TAR process – and to identify any errors, omissions, or flaws in that process.  In particular, the creation and composition of the iterative “seed sets” used to train the algorithm are often the subject of great interest to plaintiffs, who may wish to review, and potentially provide input into, the generation of the seed set and/or the conduct of the training process. 

The courts are still struggling to determine how to approach the thorny issues present at the intersection of broad discovery, the work product doctrine, the attorney-client privilege, and the cooperation protocols enunciated by the Sedona Conference.  Some have expressed hesitation regarding discovery about discovery, while others argue in favor of broad discoverability.  Notably, Judge Paul Grimm, writing in a law review, stated simply that, at least in the context of record preservation, “[i]t is axiomatic that an opponent may routinely obtain discovery of a client’s actions taken to implement the duty to preserve information[,]” explaining that “[i]t is of no moment that the…search was conducted at the direction of counsel.  Parties are permitted to inquire into an opponent’s efforts to preserve relevant information[.]”  Hon. Paul W. Grimm, et al. “Discovery About Discovery: Does the Attorney-Client Privilege Protect All Attorney-Client Communications Relating to the Preservation of Potentially Relevant Information?”, 37 Balt. L.R. 413 (2008) (available at:http://www.aporter.com/resources/documents/9_Grimm_et_al_Discovery_About_Discovery%5B1%5D%5B1%5D.pdf).  While TAR is currently used principally in support of document review and production efforts, it is hard to see why the processes used by a party to identify responsive documents should be provided greater protection than the processes used to identify the location of potentially responsive documents. 

A number of courts have relied on Rule 26(f) and the Sedona Conference’s Cooperation Protocol to permit discovery about discovery.  For example, courts have compelled disclosure of the data repositories (e.g. custodians and sources) searched, as well as the search terms used to conduct that search.  See Am. Home Assurance Co. v. Greater Omaha Packing Co., Inc., No. 8:11-cv-270, 2013 U.S. Dist. LEXIS 129638, 2013 WL 4875997 (D. Neb. Sept. 11, 2013); Apple Inc. v. Samsung Electronics Co. Ltd., No. 12-cv-0630, 2013 U.S. Dist. LEXIS 67085 (N.D. Cal. May 9, 2013); Uelian de Abadia-Peixoto v. U.S. Dept. of Homeland Sec., Civ. No. 11-04001 (N.D. Cal. Aug. 23, 2013) (all compelling production of search terms); see alsoRalph Losey, More Courts Are Requiring Disclosure of Keywords, E-Discovery Law Today (May 28, 2013) (available at:http://www.ediscoverylawtoday.com/2013/05/more-courts-are-requiring-disclosure-of-keywords/).  Other courts have permitted wider-ranging discovery on discovery in appropriate circumstances.  For example, in Ruiz-Bueno, III v. Scott, the federal district court for the Southern District of Ohio found that, by refusing to provide discovery on discovery, defendants had “fail[ed] to acknowledge the nuanced nature of discovery.”  No. 2:12-cv-0809, 2013 U.S. Dist. LEXIS 162953, 2013 WL 6055402 (S.D. Ohio Nov. 15, 2013).  While noting that, ideally, the need for discovery on discovery should be obviated by the Rule 26(f) planning process, the Court nevertheless held that “[s]imply put, when plaintiffs expressed some skepticism about the sufficiency of defendants’ efforts to produce…defendants’ counsel should have been forthcoming with information…[t]hat did not happen.  The Court has the power…to make that happen now.” 

            The debate about discovery of the discovery process, as it relates to TAR, primarily revolves around the “seed set”.  While this terminology implies a single “set” of documents, TAR programs are trained in many different ways, and often make use of an iterative process with multiple “sets” of documents coupled with human review and correction.  As such, discovery about the seed set should be viewed as discovery of the documents and processes used to “train” the algorithm to recognize responsive and non-responsive documents. 

            However, rather than address a deficiency after the fact as in Ruiz-Bueno, potentially after the expenditure of substantial time and expense by both parties, plaintiffs may be better off trying obtain transparency and cooperation in advance – either through agreement with defendants or by use of a motion to compel cooperation.  In Moore v. Publicis Groupe, Magistrate Judge Andrew Peck avoided the need for “discovery about discovery” by encouraging that the that the seed set be disclosed to plaintiff’s as part of the discovery protocol.  287 F.R.D. 182 (S.D.N.Y. 2012); see also William A. Gross Constr. Assocs., Inc. v. Am. Mfrs. Mut. Ins. Co., 256 F.R.D. 134 (S.D.N.Y. 2009) (Peck, M.J.) (holding that the parties must cooperate in selecting appropriate key-words to facilitate computerized search for relevant e-mails).  Indeed, under the protocol outlined in Moore, the parties agreed to participate cooperatively in an iterative process which included conferring several times regarding the composition of the seed set, and on the training process in general.  Id.  In that case defendant committed to provide to plaintiff all non-privileged documents used as part of the seed set, regardless of final relevancy.  Id. at 185, 192 (while not entering a ruling on the subject, the Court noted that “[i]f you do predictive coding, you are going to have to give your seed set, including the seed documents marked as nonresponsive to the plaintiffs counsel[.]”). 

Other courts also appear to have contemplated the establishment of the same sort of collaborative effort envisioned by the Sedona Conference and established in Moore.  See, e.g. Gordon v. Kaleida Health, No. 08-cv-378S, 2013 U.S. Dist. LEXIS 73330 (W.D.N.Y. May 21, 2013) (Foschio, M.J.);  Hinterberger v. Catholic Health Sys., No. 08-cv-380S, 2013 U.S. Dist. LEXIS 73141 (W.D.N.Y. May 21, 2013) (Foschio, M.J.); see alsoSedona Conference, The Sedona Conference Cooperation Proclamation, 10 Sedona Conf. J. 331 (2009) (available at: https://thesedonaconference.org/cooperation-proclamation).  But see H. Christopher Boehning & Daniel J. Toal, ‘Seed Set’ Documents Should Not Be Discoverable, New York Law Journal (Feb. 4, 2014) (available at: http://www.newyorklawjournal.com/id=1202641220784);  In Gordon and Hinterberger, the plaintiff moved to compel Defendants to “engage in meaningful meet and confer discussions regarding an ESI protocol” and, if an agreement could not be reached, to compel the submission by each party of a proposed protocol for adoption by the Court.  Id.  The Court in Gordon denied plaintiff’s motion in each case without prejudice, explaining that “Defendants state they are prepared to meet and confer with Plaintiffs… regarding Defendants’ ESI production using predictive coding… [a]ccordingly, it is not necessary for the court to further address the merits of Plaintiffs’ motion at this time.”  Gordon, 2013 U.S. Dist. LEXIS at *11; see also Hinterberger, 2013 U.S. Dist. LEXIS at *10 (same).   While the Court in Gordon and Hinterberger did not find any need to enter an order, given defendants’ expressed willingness to cooperate, where defendants prove unwilling to cooperate – or where there is reason to doubt the sufficiency of their production – a court may prove more amenable to compelling either cooperation or permitting discovery on discovery, as did the court in Ruiz-Bueno, above.  2013 U.S. Dist. LEXIS 162953, 2013 WL 6055402.

At least one court, however, has taken a more restrictive view about the discoverability of the seed set.  This position is well summarized by the federal district court for the Northern District of Indiana in In Re: Biomet M2A Magnum Hip Implant Prods. Liability Litig., No. 3:12-MD-2391, 2013 U.S. Dist. LEXIS 172570 (N.D. Ind. Aug. 21, 2013).  In that case, plaintiff requested that defendant produce “the discoverable documents used in the training of the ‘predictive coding’ algorithm.”  Defendants disclosed only that the discoverable documents used in the training had already been provided, without specifically identifying those documents.  Id. at *2.  After first noting that it was “self evident” that plaintiff did not have a right to discover the entirety of the “seed set” used to train the algorithm, the Court addressed whether defendant was required to disclose which of the admittedly responsive documents were used in training the algorithm.  Id. at *3.  The Court held that Rule 26(b)(1) does not permit discovery into the use to which defendant put discoverable documents prior to their production.  Id. at *4.  Nevertheless, the Court called defendant’s refusal to cooperate “troubling” and indicated that, although it could not compel production of the seed set, that “[defendant]’s cooperation falls below what the Sedona Conference endorses[,]”, going on to state that “[a]n unexplained lack of cooperation in discovery can lead a court to question why the uncooperative party is hiding something, and such questions can affect the exercise of discretion.”  Id. at *5. 

            Given the concerns identified by Biomet, plaintiff’s counsel should work assiduously with defense counsel to arrive at an agreeable protocol whereby, to the extent practicable, they are able to review and participate in the creation of the “seed set” and the training of the TAR algorithm used.  This cooperation is desirable not only for its potential to resolve this issue with a minimum of time and expense, but also to ensure that the real goal – maximal production of responsive information in an efficient, and timely, fashion – can be achieved with a minimum of collateral litigation.  It is worth noting that even the Court in Biomet found defendant’s lack of transparency “troubling”.  As such, it may be that courts would be more open to mandating such cooperation than to mandating after-the-fact discovery on discovery.  That said, if such a compromise cannot be reached, plaintiff should consider moving to compel cooperation and/or to compel entry of a cooperative discovery protocol. 

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

The Enforceability of Physician Non-Competes

It is worth noting, as an initial matter, that the American Medical Association has stated that "covenants not to compete restrict competition, disrupt continuity of care, and potentially deprive the public of medical services.” AMA Opinion 9.02, "Restrictive Covenants and the Practice of Medicine", AMA Code of Medical Ethics (Updated June 1998) (available at http://www.ama-assn.org/ama/pub/physician-resources/medical-ethics/code-medical-ethics/opinion902.page).  The opinion goes on to note that restrictive covenants are unethical “if they are excessive in geographic scope or duration in the circumstances presented, or if they fail to make reasonable accommodation of patients’ choice of physician.”  Id.

There is little precedent regarding the treatment of physician non-competes (or of non-competes in general) in the District of Columbia.  In Deutsch v. Barsky, the D.C. Court of Appeals was called upon to review a trial court's determination that a non-compete between a dentist and his former employer was void as against public policy.  795 A.2d 669 (D.C. 2002).  After finding that there was no per se bar to medical (or at least, dental) non-competes, the Court went on to set forth the proper inquiry, and held that, assuming the contract not to compete was otherwise valid, "it must plainly appear that it contravenes public policy before the courts will declare it void upon that ground." Id. at 674 (quoting Godfrey v. Roessle, 5 App. D.C. 299, 303-04 (D.C. 1895).   While the Court did not further address the special circumstances of non-competes in the medical field, its reliance on case law from other professions in reaching its decision that summary judgment in favor of the defendant-dentist was inappropriate reveals that such concerns are muted, at best.  E.g. Erikson v. Hawley, 12 F.2d 491 (D.C. 1926) (Court enforced ten year non-compete agreement enjoining defendant from practicing orthodontia within D.C.). 

That said, there is little precedent in the District of Columbia on this point, and - especially given the lack of specific attention to this issue in Deutsch, the enforceability of physician non-competes can fairly be considered an open question.  See Zulima Farber, et al., “Are Physician Post-Employment Noncompete Agreements Enforceable?”, Metropolitan Corporate Counsel (March 1, 2004) (available at: http://www.metrocorpcounsel.com/articles/3746/are-physician-post-employment-noncompete-agreements-enforceable) (“jurisdictions such as the District of Columbia…have no definitive case law regarding physician-noncompete agreements.”).  This is particularly true when the physician practices in a highly specialized field of medicine if it may be difficult for patients to find an alternate healthcare provider.  D.C. is somewhat unique in that many otherwise reasonable geographic restrictions (e.g. restrictions of a 10, 25, or 50 mile radius) would include the entirety of the District of Columbia, and, in many cases, the vast majority of the D.C. metropolitan area.  To the extent that the physician at issue practices in a sub-specialty with few other practitioners, the difficulty in obtaining alternative treatment may weigh in favor of blue penciling – or voiding – the non-compete provisions on public policy grounds.  See Wheeler v. Fredericksburg Orthopaedic Assocs., 44 Va. Cir. 399 (Va. Cir. Ct. 1998) (finding non-compete unenforceable based, in part, on fact that no other surgeons in plaintiff’s sub-specialty practiced in the area and patients would need to travel 50 miles for next nearest doctor).  Of course, some courts have found that "unique" or "extraordinary" skills possessed by a doctor may, on a case-by-case basis, actually support the enforcement of a reasonable restrictive covenant.  See BDO Seidman v. Hirshberg, 12 N.E.2d 1220 (N.Y. 1999).  

In the absence of D.C. law on point, a D.C. court may turn to Maryland law.  Under Maryland law, covenants not to compete may be enforced “only against those employees who provide unique services, or to prevent the future misuse of trade secrets, routes or lists of clients, or solicitation of customers.”  Becker v. Bailey, 268 Md. 93, 97, 299 A.2d 835 (1973).  Unfortunately, much like in D.C. – though to a slightly lesser extent – there is “a general paucity of Maryland case law regarding covenants not to compete specifically in the healthcare industry, and no Maryland court has conducted a thorough analysis of such covenants or explicitly defined their scope.”  Robert Niccolini, Esq., “Covenants Not To Compete in Healthcare: A Maryland Primer”, Maryland State Bar Association (2007) (available at: http://www.msba.org/sec_comm/sections/health/docs/homepage/noncompetes/CovNottoCompeteRobN.pdf).  Despite this, the Maryland Court of Special Appeals, in Holloway v. Faw, Casson & Co., strongly implied that some level of special protection was appropriate for physicians.  572 A.2d 510 (Md. Ct. Spec. App. 1989).  In Holloway, the Court addressed whether accountants deserved special protection from restrictive covenants as a matter of public policy.  In reaching its conclusion that they did, the Court noted that accountants, like lawyers and physicians, had a special relationship with their clients deserving of protection.  Id. at 517; See also Niccolini, “Covenants Not to Compete in Healthcare: A Maryland Primar” at p.9. 

Nationally, there is great deal of disagreement among courts as to whether, and how, physicians should receive special protection from non-competes.  E.g. S. Elizabeth Wilborn Malloy, “Physician Restrictive Covenants: The Neglect of Incumbent Patient Interests”, 41 Wake Forest L. Rev. 189 (Spring 2006); Robert W. Horton, “Restrictive Covenants in Physician Employment Relationships”, American Health Lawyers Assoc. Member Briefing (April 2013) (available at: http://www.bassberry.com/files/upload/AHLA_Article_Horton_and_Padgett_April_2013.pdf).  By way of example, Illinois has repeatedly upheld physician non-competes.  In a typical case, Canfield v. Spear, the Illinois Supreme Court reasoned that: "[i]t cannot be said that the public interest is adversely affected if a physician decides to move from one community to another, nor does it become so if the move results from some agreement made in advance. If a severe shortage exists in any particular place young doctors will tend to move there, thus alleviating the shortage."  44 Ill. 2d 49, 52 (1969).  Wyoming appears to follow a similar approach.  See Oliver v. Quynn, 2013 WY 70 (2013) (quoting Canfield).  

The majority rule, however, seems to afford at least some protection to physicians.  In Cmty. Hosp. Group, Inc. v. More, 869 A.2d 884 (N.J. 2005), the New Jersey Supreme Court reversed the decision of a lower court to enforce just such an agreement because the lower court had “failed to focus on the adverse impact the geographic restriction [in the non-compete agreement] would have on neurological patients seeking treatment at [defendant’s employer’s] emergency room.  Without [defendant]…necessary neurological treatment to an emergency room patient could be compromised.”  Id. at 899.  Accordingly, the Court found that there was “overwhelming” evidence that prohibiting Defendant from attending neurological patients in the geographical area specified would injure the public interest.  The Court, while prepared to accept a non-compete covering a limited geographical distance “less than thirteen miles”, specifically instructed the lower court, on remand, that any geographical restriction should exclude defendant’s current employer.  Id. at 900.  See also Duneland Emergency Physicians Med. Group v. Brunk, 723 N.E.2d 963 (Ind. Ct. App. 2000) (restrictive covenant unenforceable when it would compromise emergency room care); Premier Health Care Servs., Inc. v. Schneiderman, 2001 Ohio 7087 (Ohio Ct. App. Dec. 28, 2001) (public interest weighed against granting injunction against physician-defendant); Emergicare Sys. Corp. v. Bourdon, 942 S.W.2d 201 (Tex. Ct. App. 1997) (refusing to enforce covenant that would have prevented doctor from serving public as emergency doctor);

Non-competes with regard to physicians also face regulatory hurdles.  For example, the Federal Trade Commission recently relieved a group of cardiologists from a non-compete agreement which it determined implicated antitrust concerns.  See Karen Cheung-Larivee, “FTC Antitrust Agreement Frees Cardiologists From Non-Compete Contract”, FierceHealthcare (Dec. 6, 2012) (available at: http://www.fiercehealthcare.com/story/ftc-antitrust-agreement-frees-cardiologists-non-compete-contract/2012-12-06).  Furthermore non-compete agreements in the context of physician recruitment can implicate, and be barred by, the Stark Laws.  In particular under 42 C.F.R. 411.357(e)(4)(vi), physicians and physician practices are prohibited from placing restrictions on the practice of physicians which they recruit that would “unreasonably restrict the recruited physician’s ability to practice medicine in the geographic area served by the hospital.”  Between 2004 and 2007 the Centers for Medicare & Medicaid Services (“CMS”) took the position that imposing a non-compete agreement on a recruited physician would violate the Stark Law.  See I. Paul Mandelkern & Jason S. Rimes, “CMS Rules That Non-Compete Provision Complies With Stark Laws Physician Recruitment Exception”, National Law Review (Nov. 3, 2011) (available at: http://www.lowndes-law.com/publications-presentations-blogs/1085-cms-rules-that-non-compete-provision-complies-stark-laws-physician-recruitment).  However, in 2007 CMS issued an advisory opinion which found that a proposed physician recruitment arrangement, which included a non-competition provision, met the requirements of the Stark Law.  See CMS Advisory Opinion AO-2011-01 (available at: http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/downloads/CMS-AO-2011-01.pdf).  Although properly drafted non-compete agreements can comport with the Stark Law, it does present another avenue of attack, even to otherwise reasonable non-compete agreements, which would prohibit a physician from practicing within the geographic area covered by a hospital. 

 


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

Holds on Holds: Can Sending Litigation Holds to Certain Third Parties Constitute Defamation or Tortious Interference?

by Robert B. Fitzpatrick

 Photo courtesy of ediscoverylawreview.com

In International Portfolio v. Purplefish, LLC, No. 12-06748 (Pa. Sup. Ct. Dec. 24, 2013), the Pennsylvania Superior Court recently held that a party that sent “litigation holds” to the opposing party’s business associates and clients did not, in so doing, unlawfully defame or tortiously interfere with the other party’s business. For plaintiffs’ attorneys handling cases against large employers, in which the employer’s customers or suppliers may become involved in the litigation, the International Portfolio decision is an important one because it provides room to distribute litigation holds without fear of tort claims.

The case involved a hedge fund that brought Racketeer Influenced and Corrupt Organizations (RICO) Act and fraud claims against the company that managed its debt portfolios. In a move that has become a prudent and standard practice in litigation, the hedge fund’s counsel sent litigation hold letters to other clients and associates of the defendant company, explaining what the litigation involved and the duty to preserve any documents potentially related to the litigation. 

The defendant company then brought suit in state court against the fund for defamation and tortious interference with contractual relations, alleging that the letters were not sent in the normal course of litigation proceedings - which would merit both the judicial and the litigation privilege - but were sent only to “defame, disparage, and harm Appellants.” The company argued that the facts mirrored those of Bochetto v. Gibson, 860 A.2d 67 (Pa. 2004), in which an attorney faxed a complaint to a reporter, and was later found liable for defamation.

The trial court dismissed the claims with prejudice. On appeal, the Pennsylvania Superior Court, in a December 24, 2013 opinion by Judge Joseph D. Seletyn, affirmed the trial court’s order of dismissal. Expounding on the reasons for the judicial and litigation privileges, Judge Seletyn quoted from the Pennsylvania Supreme Court’s opinion in Binder v. Triangle Publications, Inc., 275 A.2d 53, 442 Pa. 319, 324 (Pa. 1971):

“The reasons for the absolute privilege are well recognized. A judge must be free to administer the law without fear of consequences. This independence would be impaired were he to be in daily apprehension of defamation suits. The privilege is also extended to parties to afford freedom of access to the courts, to witnesses to encourage their complete and unintimidated testimony in court, and to counsel to enable him to best represent his client’s interests.”

            The court distinguished the facts of the case from those in Bochetto, reasoning that Bochetto’s activities were outside the regular course of normal judicial proceedings, while the attorneys for the fund in this instance were acting well within the regular course of proceedings by sending litigation holds with the intention of preserving evidence for litigation.

            The case, though unpublished, again demonstrates that attorneys are generally well within their rights to send litigation holds to third parties, even if those third parties are clients or business associates of the other party. No need to put holds on holds.


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