The EmpLawyer

In Farris v. Shineski, the plaintiff, a former employee of the Department of Veteran’s Affairs (“the VA”), claimed that the VA discriminated against her based on disability when it terminated her employment.  She originally complained to the VA’s EEO counselor.   She then underwent an unsuccessful formal mediation through the VA’s Office of Resolution Management.  After the mediation failed, the VA Office of Resolution Management sent her a letter advising her of the deadline to file a complaint with the EEOC.  Plaintiff promptly informed her attorney of the deadline, and her attorney assured her that the filing would be made on time.  Although the deadline was January 2, 2009, plaintiff’s attorney filed the complaint on January 13, 2009, requesting that she be permitted to file the complaint late as the attorney inadvertently missed the original filing date due to the “holiday rush.”

Last month, the U.S. District Court for the First Circuit affirmed dismissal of plaintiff’s disability discrimination complaint due to the untimely filing.  The court rejected the plaintiff’s “equitable tolling” argument – i.e. that “circumstances beyond [plaintiff’s] control precluded a timely filing.”  The court noted that the plaintiff “is deemed bound by the acts of [her] lawyer-agent” and therefore, the plaintiff is bound by her lawyer’s error.

The deadline would likely have been tolled if (1) plaintiff had received inadequate notice of the statute of limitations; (2) plaintiff was awaiting the result of a motion for appointment of counsel and equity would justify tolling the deadline until the motion was acted upon; (3) the court  led the plaintiff to believe that she had done everything required of her; or (4)  affirmative misconduct on the part of a defendant lulled the plaintiff into inaction.  In this instance, the employer properly advised plaintiff of the correct deadline to file her EEOC complaint.  Thus, plaintiff’s complaint was properly dismissed as untimely, leaving her to possibly seek relief from her attorney rather than her employer.

John Ingalls, a long time store manager for Walgreens, thought he was untouchable because he had the goods on his employer.  In 2006, the roof of a Walgreens store partially collapsed during a rain storm.  Mr. Ingalls claims that his district manager asked him to transfer inventory from that store to other stores for sale without telling anyone.  Mr. Ingalls further claims that his employer was committing insurance fraud by declaring the store with the damaged roof “a total loss” when, in fact, there was inventory left to be sold to the public.  In addition, the transfer of pharmaceutical and tobacco products allegedly violated certain state and federal laws.

Mr. Ingalls did not say a word about these alleged violations by his employer until three years later, when Walgreens lowered the amount of his bonus.  In the course of complaining about this change, Mr. Ingalls stated that if Walgreens punished him for complaining, he would report them to the ATF and IRS.

Shortly after making this statement, Walgreens learned that Mr. Ingalls failed to ensure that employees under his supervision completed certain training sessions required by law and by Walgreens policy.  It also emerged that Mr. Ingalls encouraged employees to work “off the clock” in violation of wage-and-hour laws, and even altered timecards in order to avoid paying overtime.

During the investigation into his conduct, Mr. Ingalls said, “I can’t believe this.  Walgreens commits insurance fraud and you’re investigating me for this.”  Mr. Ingalls was terminated and then filed reports against Walgreens with the ATF and IRS.  He also filed suit for wrongful termination under New Hampshire law and for intentional infliction of emotional distress.  The wrongful termination claim was based on a theory that he was terminated for engaging in an act that public policy would encourage.

In Ingalls v. Walgreen Eastern Co., Inc., the United States District Court for the District of New Hampshire granted summary judgment in favor of Walgreens because the undisputed facts established that Mr. Ingalls had not been terminated for an act that public policy would encourage.  As the court stated:  “Public policy may support the right of an employee to be free from retaliation for exposing his employer’s fraudulent conduct.  It does not, however, support the right of an employee to keep quiet about the fraudulent conduct for three years and then to threaten exposure as a bargaining chip in an effort to keep his job.”  Public policy is generally determined by “the interests of society and . . . the morals of the time,” but in this case, the evidence established that Mr. Ingalls’s “actions were not designed to protect any interests other than his own.”

Three sales managers sued their former employer, a chain of banquet facilities that host high-end social functions, for overtime pay under the Fair Labor Standards Act (FLSA) in Hines v. State Room, Inc. The banquet facilities stated that the sales managers were exempt from the overtime requirement because they were administrative employees under FLSA, 29 U.S.C. §213(a)(1).

The FLSA’s administrative employees exemption applies to employees who: (1) make more than $455 a week exclusive of room and board; (2) perform office or non-manual work relating to the management or general business operations of the employer; and (3) have a primary duty that includes the exercise of discretion and independent judgment with respect to matters of significance.  The sales managers did not dispute that the first two parts of the test applied to them.  With respect to the third part of the test, they claimed that they did not have sufficient discretion or independent judgment to be considered administrative employees.

The sales managers’ role was to secure event business by cold calling potential clients and maintaining relationships with past clients, to serve as the primary client contacts, and to ensure the success of client’s events.  The sales managers also engaged in broader marketing efforts such as representing the company at the Chamber of Commerce convention.  In performing their role, the sales managers had discretion as to which cold calls to make, what to say to clients and potential clients in marketing the facility, how to help clients figure out the most appropriate venue and time for an event, how to counsel clients as to minimum charges, how to manage client expectations, and how to assist clients in designing the menu and other details for an event.

The sales managers stressd that they had no authority to make financial decisions or policy for the company.  They were bound by price schedules.  In addition, their management had final approval authority over client contracts.  The sales managers were not supervisors and had no direct authority over staff, although they would at times convey the details of an event to the staff.

The First Circuit was not impressed with the sales manager’ lack of financial authority and lack of authority for final approval of contracts.  First, the court noted that the lack of financial authority is only one factor that may be considered and is not dispositive.  Second, the regulations provide that an employee’s discretionary actions (such as initial contract approval) need not “have a finality that goes with unlimited authority and a complete absence of review.”  The court concluded that the sales managers were administrative employees, with the requisite discretion, because their role was integral as the face of the employer’s business, and based on the independent judgment they exercised as to “how best to represent the employer and to develop a proposal that would attract the prospective client to a contract with the venues.”   Thus, court affirmed the lower court’s summary judgment order, ruling that the sales managers were not entitled to overtime under the FLSA.

The Equal Employment Opportunity Commission filed an action today against Texas Roadhouse in the United States District Court for the District of Massachusetts.  The lawsuit alleges that Texas Roadhouse has been avoiding hiring people over 40 years of age for their more publicly-visible positions, such as wait staff, bartenders, and hosts, since at least 2007.   The lawsuit alleges that Texas Roadhouse specifically trained managers to emphasize youth in its hiring practices, and ensured that all images in its training manuals are of younger people.

The lawsuit also alleges that Texas Roadhouse used language indicative of discriminatory animus in refusing employment to workers over 40 years of age.  Specifically, the EEOC claims that unsuccessful applicants were told some of the following:

• “There are younger people here who can grow with the company”;
• “You seem older to be applying for this job”;
• “Do you think you would fit in?”;
• That the restaurant was “a younger set environment”;
• “We are looking for people on the younger side… but you have a lot of experience”; and
• “How do you feel about working with younger people?”

Before filing suit, the EEOC sought to settle the case.  Now, the EEOC seeks money damages for all of the applicants allegedly denied employment on account of their age, and additionally seeks to compel Texas Roadhouse to institute policies and procedures to prevent future occurrences of age discrimination.   It also seeks new training procedures for managers to avoid impermissible emphasis on age.

The EEOC press release can be found here.

On September 19, 2011, the US Department of Labor announced that it had reached agreements to share information with several states and the IRS in an attempt to deter the misclassification of employees as independent contractors.  This is part of the DOL’s prioritization of wage and hour law enforcement since Labor Secretary Hilda Solis took office with the Obama administration.  The stated goal of this new policy is to increase the severity of punishment by making the employer subject to multiple fines, instead of just one.  The states signing on to the DOL agreement are Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, Missouri, Montana, Utah, and Washington, with New York and Illinois indicating their intent to soon follow suit.

Previously, an employer caught misclassifying employees as independent contractors by a state agency would usually pay a fine only to that agency.  Under the new agreements, however, an employer in one of the signatory states will not only pay a fine to the state agency, but will be reported to both the DOL and the IRS.  The Department of Labor may seek its own fines and penalties from the offending employer.  The IRS may pursue action against the employer for unpaid back taxes.

The DOL has hired 300 additional investigators to pursue these so-called “wage theft” complaints.

In the last two weeks, two major decisions were added to the scoreboard in the battle over President Obama’s Health Care Law.

Virginia Health Care Rulings

The U.S. Court of Appeals for the Fourth Circuit dismissed two cases challenging the health care law.

In the first case, it overturned a lower court judge who had ruled the individual mandate unconstitutional.  Virginia originally contended the individual mandate provision conflicted with a state statute, which gave it standing to challenge the federal law. But the Fourth Circuit found Virginia did not have standing to challenge it.

A day after Congress passed the health care law in March 2010, Virginia enacted a law to shield its residents from the law. The Fourth Circuit said that was a “smokescreen” to attempt to trump the federal government’s authority.

The Fourth Circuit stated it could not rule on whether the mandate, which is due to take effect in 2014, was unconstitutional.  It noted, however, the importance of the mandate and even hinted at apparent frustration that Virginia’s lack of standing prevented it from deciding the issue.

In the second case, the Court ordered another lawsuit against the health care law, which targeted the penalty imposed for those who do not purchase insurance, be dismissed because the penalty had yet to be imposed.  Notably, in that ruling, two of the judges, appointed to the bench by Obama, said they would have found the law constitutional had they been able to rule on the merits of the case.

“I would hold that the challenged provisions of the Act are a proper exercise of Congress’ authority under the Commerce Clause to regulate the interstate markets for health services and health insurance,” wrote Judge Andre Davis.

Pennsylvania Health Care Ruling

A federal judge in Pennsylvania ruled that the individual mandate is unconstitutional.  Judge Christopher Conner held that the mandate is an unconstitutional extension of authority granted to the federal government under the Constitution’s commerce clause.

Prior Rulings

In late June, the U.S. Court of Appeals for the Sixth Circuit in Cincinnati upheld the individual mandate by ruling that Congress had the power to require Americans to buy health insurance.  That ruling contrasts with a ruling by the 11th Circuit in Atlanta in August against the individual mandate requirement in a challenge brought by 26 states that sued to block the law directly rather than pass their own statutes to do so.

In that case, the court overturned a decision that rejected the entire healthcare law.

The U.S. Supreme Court will likely decide the fate of the individual mandate and, perhaps, the entire law itself during its next term, which begins in October.

In a recent decision, the National Labor Relations Board ruled that employers may not terminate employees criticizing their working conditions using Facebook under certain circumstances.  The ruling stems out of the termination of five employees at Hispanics United of Buffalo.  One of the employees had posted comments from a co-worker relating to fellow employees on Facebook, and then commented that this individual was not providing enough help to Hispanics United’s clients.  The employee also asked her coworkers to give input on the situation.  Several comments followed, many of which related to the working conditions at Hispanics United, including excessive workloads.  Some comments also contained profanity.  The employee who had made the original comments regarding her fellow employees considered the postings to be “cyber-bullying.”  Hispanics United fired the employee who made the Facebook post, and four other employees who had commented on the post, claiming that the posts had constituted harassment.

An administrative law judge for the NLRB ruled, however, that the Facebook discussion was considered protected conduct under the National Labor Relations Act.  Section 7 of that Act protects the discussions of workers about the terms and conditions of employment.  This means that certain employee criticisms of their employers on social networking sites like Facebook and MySpace are protected by law.  Terminating an employee for posting such criticism on social networking sites may also lead to liability for employers.  This is not, however, to say that any posting about an employer constitutes protected conduct.  Posting confidential business or client information is not protected conduct, and an employee posting such information may be subject to termination.  Employees also may not defame management or the company.   Protected conduct is limited to discussions of the terms and conditions of employment.

There may often be a fine line between what constituted protected employee discussion of the terms and conditions of employment, and what might be outside of the zone of protection and subject to employer discipline.  In such cases, it is critical to approach the situation with caution in order to avoid potential liability.

The EEOC’s class action claim for sex discrimination against Bloomberg, L.P. failed in the Southern District of New York when Judge Loretta A. Preska dismissed the class action alleging a “pattern of discrimination” and emphasized that “the law does not mandate ‘work life balance.’”  As Judge Preska explained, “In a company like Bloomberg, which explicitly makes all-out dedication its expectation, making a decision that preferences family over work comes with consequences.”  Apparently, such consequences do not include a sex discrimination claim against the employer.

The individual plaintiffs remain in the case and will continue to press their claims against the company.  But their theory of a claim on behalf of a class of women who have chosen to balance “life” with “work” has been sternly rejected as having no legal basis.  While quotable, the opinion is not surprising.  Life choices de-emphasizing career are made by men and women all the time in the work place, and trade-offs are constantly made as a result.  The law does not mandate accommodation for a balanced life with family.  Rather, it simply requires that men and women face substantially similar trade-offs if in substantially similar circumstances when those decisions are made.  You can find the decision here.

The state unlawfully violated the right to privacy of a person who voluntarily supplied a DNA sample to police during a criminal investigation when the crime lab retained the sample beyond the limitations promised to him by the police as to the when they obtained the sample from the individual.  Such conduct also violated the Massachusetts Fair Information Practices Act (“FIPA”), according to the Massachusetts Appeals Court. The court held that DNA constitutes private information in which people generally have a reasonable expectation of privacy.  The court further held that the government must respect such expectation and may only retain DNA sample information in limited circumstances, and that the government in any event must honor limitations on consent obtained by police officers in collecting such information.

 In this case, Amato v. District Attorney, No. 10-P-354 (Mass. Ct. App. Aug. 25, 2011), see slip opinion posted here, the plaintiff sued for violation of the Fair Information Practices Act, invasion of privacy, and breach of contract.  The case arose out plaintiff’s DNA voluntary supply of his own DNA sample to police in connection with a 2002 murder investigation.  The plaintiff challenged the crime lab’s retention of his DNA sample despite the police officers’ earlier representation to him in an effort to induce the plaintiff to produce his DNA sample that any samples and related records “would be destroyed and would not become part of any State or Federal database” if they did not match DNA evidence taken at the crime scene. Notwithstanding that promise and the state’s successful prosecution of another man proven responsible for the murder, the state’s crime lab refused to destroy plaintiff’s DNA sample in its possession. 

 The trial court dismissed each of the plaintiff’s claims.  The Appeals Court reversed, stating that “[g]iven the circumstances under which the defendants induced [the plaintiff] and the others to allow access to this intensely private information [i.e., their DNA], including the promises of limited use and retention and the concomitantly restricted scope of consent granted, we are not convinced that the defendants have acted reasonably as matter of law.”

Last night, the President gave a speech outlining a proposal to increase employment in the United States.   There were numerous aspects to his proposal, including tax cuts and infrastructure spending of various kinds.  Many of these were aimed at individuals, state and local governments, and infrastructure construction, but some of the provisions will directly affect, and benefit, employers.

The biggest boon of this proposed package is a $65 billion dollar payroll tax cut for employers (as opposed to an existing payroll tax cut for employees, the extension of which is also part of President Obama’s proposal).  This tax cut would permit employers to cut their payroll tax bill in half for the first $5 million dollars of payroll expenditures.   Businesses also need not pay any taxes on new jobs or increases in wages from 2011, up to a total of $50 million.  This is intended to give cash-strapped businesses a significant boost, but would only last for the year 2012.

In an effort to reduce long-term unemployment, the jobs proposal also calls for an $8 billion dollar tax credit for employers who hire workers who have been unemployed for more than six months.  The proposal further calls for tax credits for businesses that hire veterans.  The plan will also permit businesses to deduct the full value of new equipment purchased.

The President is expected to ask the new “Super Congress” to incorporate the jobs package into their negotiations.

On Monday, August 15, 2011, the Massachusetts Appeals Court affirmed a jury verdict in favor of the plaintiff in the case of Monteiro v. City of Cambridge. The Appeals Court found no reason to disturb the jury verdict in favor of the plaintiff, Malvina Monteiro, who alleged that she was fired in retaliation for filing a discrimination complaint with the Massachusetts Commission Against Discrimination.  The jury originally awarded her more than $4.5 million dollars in compensatory and punitive damages, and with interest and fees the total award has already reached $7.6 million dollars.  With the likelihood of an award of attorney’s fees for the decade-plus of litigation leading up to this decision, the City of Cambridge may face a total bill of over $10 million dollars.

This case brings two critical issues into sharp relief.  First, take complaints of discrimination seriously, and make sure all of your employees, from the top to bottom, understand that taking retaliatory action in response to a complaint of discrimination is not only illegal, but extremely bad business.  Second, understand that what might initially appear to be a lawsuit for thousands of dollars can, if not handled correctly, become a lawsuit that costs you millions.  Although you might not always be able to avoid an employee acting in a discriminatory manner, seeking experienced legal counsel as soon as you are threatened with a charge of discrimination can help you to minimize any damage that might result.

On June 30, 2011, Judge Gorton of the United States District Court for the District of Massachusetts issued a memorandum and order in the case of Joyce v. Town of Dennis, et al.  This case arose out of a refusal to permit the plaintiff, Elaine Joyce, to participate in a men’s-only golf tournament in Dennis, Massachusetts.  Although Ms. Joyce was not permitted to play in that tournament, Dennis’s Golf Advisory Committee subsequently revised its policy to provide that all of Dennis’s golf tournaments would permit both men and women to participate.  Notwithstanding this change, Ms. Joyce filed suit, alleging eleven separate counts against the defendants.  Following cross-motions for summary judgment, the defendants were found liable on six counts, and the others were dismissed.  The defendants then offered Ms. Joyce a settlement of $35,001.00, to which she did not respond.  Following a jury trial on the issue of damages, Ms. Joyce was awarded compensatory damages of $15,000.00.  Ms. Joyce then petitioned the court for an award of attorney’s fees and costs in excess of $170,000.00.

Instead, the court ordered fees and costs of $30,000.00.  In reaching that result, the court concentrated on the the societal importance of the right vindicated, the degree of success reached by Ms. Joyce’s attorneys in comparison to the time they spent on the case, and the reasonableness of the conduct of Ms. Joyce’s counsel.  The court determined that since the Town of Dennis had already changed its policy before Ms. Joyce brought her claim, Ms. Joyce’s claim lost its greater societal importance and became one of personal import to her.  The Court also determined that the attorney’s fees request was disproportionate to the $15,000.00 in compensatory damages.  Finally, the Court determined that Ms. Joyce’s counsel had not acted reasonably.  The reasonable settlement offer of the defendants had been refused, which led to a jury trial that could have been avoided.  Plaintiff’s counsel also incurred significant fees with no clear care to the time spent on the matter.  Considering all those factors, the Court refused to require the defendants “to shoulder the entire burden of the engaging in avoidable litigation,” and awarded the significantly reduced $30,000.00 fee figure.

The full opinion is available here.

Connecticut will become the first state to require certain employers to provide paid sick leave when a billed signed July 5, 2011, goes into effect January 1, 2012.  Employers that employ 50 or more individuals in the state will be required to provide certain employees with 1 hour of paid sick leave for every 40 hours worked.  Accrued hours may carry over to following calendar years, but may never exceed 40 in any year.

The law does not apply to companies that already offer at least 5 paid days off for workers (including paid vacation, personal days or paid time off).  Also exempt from the law are manufacturers, salaried workers, temporary workers, and workers at nationally chartered non-profits.

Only “service workers” are covered by the bill.  The definition of “service worker” in the bill is broad and includes over 50 types of occupations, including positions such as food service managers, nurses, medical assistants, administrative assistants, and ambulance drivers. Employers should read the definition carefully to determine if the law applies to them.  Employees must have worked for the employer for at least 680 hours before using any accrued sick leave, and will not be entitled to leave if they did not work an average of ten or more hours a week for the employer in the most recent complete calendar quarter.  Leave may be used to care for an employee’s own illness, injury, or health condition, or that of the employee’s child or spouse.

The Labor Department can impose a $100 fine per violation, and a $500 fine for retaliation related to the law.  Employees may be awarded any appropriate relief, including payment for used paid sick leave, rehiring or reinstatement to the employee’s previous job, payment of back wages, and reestablishment of benefits.

Employers should carefully assess whether their employees will be covered by the law, and if so begin planning for its implementation in January 2012.