Connecticut Employment Law Blog : Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

Although I tipped my hand yesterday through some posts (here and here) and an interview with the Connecticut Law Tribune, here are some takeaways for employers from the Ricci v. DeStefano case.

1. The Decision Applies to Private Employers.   Before Ricci was decided, the case could've gone two ways -- it could have been based on constitutional (equal protection) grounds, or on statutory (Title VII -- the law prohibiting race and gender discrimination) grounds. The Court decided to go with the latter.  Why does that make a difference? Because Title VII applies to both private and public employers; if it had been decided on equal protection grounds, it would likely have applied only to public (governmental) employers.
    
2. Testing Will Never Be The Same.  Whether public or private, employers who use tests to assist them in hiring and promotional decisions get some guidance now in the area. Unfortunately, the guidance that the Supreme Court provides isn't particularly illuminating. Parsing things out, the court suggests that if a test is designed to be race-neutral, the fact that the numbers come out differently than an employer expects is not, in and of itself, enough to throw out the results of the test. There needs to be something more, some "strong evidence in fact". What that is remains to be seen.
   
   But supposing that an employer does accept the results of the test, can it defend itself from a disparate impact claim? The court says yes.  The court suggests that as long as an employer designs a test that is that is “job related for the position in question and consistent with business necessity” that might get the employer some traction in defending a claim of disparate impact.  Even in that case, however, the Court opens to the door to employees too: The employee can still win a disparate impact claim if the employer refuses to adopt an available alternative practice that has less disparate impact and serves the employer’s legitimate needs.
   
   As a result, employers who use testing in particular will need to be able to rule out other alternatives that it might have used to make its hiring and promotional decisions. (Note: Title VII does contain specific provisions regarding testing as well so employers should not forget to look to the statutory language as well.) 
    
3. Affirmative Action Plans and Diversity Plans Are OK For Now. Maybe.  Some larger companies have programs now that try to ensure that the makeup of their workforce properly represents the makeup of the population.  For example, the employer may track "high potential" employees (particularly minorities) within their corporation to ensure that they receive proper consideration for promotions and opportunities.  Are these programs ok?
   
   The court suggests that it will allow for some affirmative action plans and notes that employer's "voluntary compliance efforts" are essential to the success of Title VII:
   "[We do not] question an employer’s affirmative efforts to ensure that all groups have a fair opportunity to apply for promotions and to participate in the process by which promotions will be made. But once that process has been established and employers have made clear their selection criteria, they may not then invalidate the test results, thus upsetting an employee’s legitimate expectation not to be judged on the basis of race. ... "
   
   For employers, it suggests that you can review your policies and practices that ensure that minorities have a fair chance to succeed, but reinforces the view that you still cannot make your decisions to hire and promote based on race.  But how much "affirmative efforts" an employer can use, remains an unanswered question from Ricci.
    
4. Tread Cautiously In Conducting a Disparate Impact Analysis for Layoffs and Terminations.  One area that disparate impact claims arise is in the context of layoffs and reductions in force. For example, an employee may claim that the black workers were twice as likely to be laid off as white workers.   As a result, many employers have started to conduct a disparate impact analysis before the termination to see if the raw statistics are of concern.  If they are, employers sometimes reconsider their decisions or re-engineer the layoff criteria to remove such a disparate impact. In other cases, employers simply review the particularly data to ensure that the decisions were fair.  
   
   Ricci leaves open the question of whether that practice is legal under Title VII.  The court does suggest that the city "was not entitled to disregard the tests based solely on the racial disparity in the results".  Does this mean that employer -- once it settles on a process for terminations -- cannot change that system after it runs the numbers? At one point is the employer "stuck" with the results? That will likely be the subject of litigation at some point. 
    
5. Don't Expect This Law to Remain Static.  One thing is certain -- there are likely to be some more changes to this law in the years to come. One way is through Congressional action (as Senator Patrick Leahy has already suggested). Another way is through additional Supreme Court action. Indeed, Justice Scalia has suggested that there are battles yet to come on this issue:
   
                   [The] resolution of this dispute merely postpones the evil day on which the Court will have to confront the question: Whether, or to what extent, are the disparate-impact provisions of Title VII of the Civil Rights Act of 1964 consistent with the Constitution’s guarantee of equal protection? The question is not an easy one.

As a reminder, I'll be participating in a free webinar next week on this subject. I anticipate that it'll focus on the practical implications of the decisions and additional steps that employers can take now to avoid becoming the next test case before the Court. 

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For a case out of little Connecticut, the Ricci v. DeStefano case today sure has drawn big interest. Seems like everyone has an opinion on the matter.

There are plenty of wrapups of the case out today. Many of them are, predictably, saying much of the same thing: Interesting case; probably applies to private employers; still waiting to see the impact.

For the mainstream local media approach, the Connecticut Law Tribune has two pieces here and here (I'm quoted in the latter).  The Hartford Courant's piece is here. For a slightly less-mainstream approach, the New Haven Independent's report has some good local feedback here and here.  And Slate magazine has some great "breakfast table" discussion pieces about the case in easy-to-understand language as well. 

But there are a few analytical pieces I've reviewed today that stand out and I thought I would highlight a few that break through the clutter.

I've been reviewing the decision today as well and will have some additional thoughts (with action steps for employers) in an upcoming post.

• Walter Olson, whose Overlawyered blog is celebrating TEN years this week (amazing, eh?) has a piece in Forbes.com entitled, appropriately, "Sued If You Do, Sued If You Don't".  Walter seems to have gotten to the bottom of things -- the court was troubled by the prospect of an employer who basically says "trust me" when it provides its rationale for its decision, when the truth behind the decision is far less clear:

Monday's crucial ruling is on the question: how serious does the prospect of litigation over an employment practice have to be before an employer is allowed to lean over in the opposite (discriminatory) direction to avoid liability? Justice Kennedy's majority rejected New Haven's contention that a "good faith" fear of liability should be enough, but also rejected the firefighters' contention that reverse discrimination could be justified only to avoid an outright collision between the two legal requirements. Instead, Justice Kennedy selected a middle ground: to discriminate against majority applicants, employers will need a "strong basis in evidence" that they otherwise "would have been liable."

Even now, The New York Times is no doubt preparing an editorial grimly portending the return of white supremacy at the hands of a callous Court. But the moral is probably a narrower one: If you're going to shaft white applicants, don't be as blatant about it as New Haven was. Kennedy was clearly angered by the after-the-fact disavowals and excuses by the city that, in his words, were "blatantly contradicted by the record." The Court is traditionally unsympathetic to employers that invent "pretextual" reasons for biased decision making; this time that principle happened to cut in an unexpected direction.

• The World of Work blog has its take on the decision and predicts something else -- a bill from Congress. In addition, the blog suggests that employers need not worry about the case (something that I disagree on, to a degree, as I'll discuss in an upcoming post):

Ultimately, the Ricci decision will have little to no impact on most employers, but represents a small victory for employers (despite the positioning here that held against the city/employer). Employers can now take a somewhat more confident stand in backing test results that may demonstrate some disparate impact, so long as the test was objective and no other less discriminatory alternative exists. The Ricci decision may not last for long, however. Political condemnation by Democrats has been swift, with Senator Patrick Leahy (D-VT) saying that "it is less likely now that employers will conscientiously try to fulfill their obligations under this time-honored civil rights law. This is a cramped decision that threatens to erode these protections and to harm the efforts of state and local governments that want to build the most qualified workforces." Don't be surprised if Congress passes legislation down the road aimed at upending the Ricci decision.

• Michael Fox, at the always reliable, Jottings by an Employer's Lawyer, also highlights a little-discussed topic that I have also been thinking about today -- affirmative action plans.  He predicts that the decision could impact the way employers think about their affirmative action plans. 
• The professors at the Workplace Prof blog are, not surprisingly, hard at work trying to make sense of the decision as well. While some of the analysis is geared towards academics, they make a good point for employers: Title VII is going to be a mess to navigate.

The result is also going to make it difficult for employers to navigate Title VII, although maybe not more than it was before this decision. Employers will likely do nothing to evaluate their hiring or promotional processes until those processes have run their courses. There is very little incentive for employers to try avoid disparate impact liability any more than they would have before this decision, and more incentive not to change anything, just in case that change is itself discrimination.

I'm not necessarily sure I agree with this because it presumes that employers don't care about their employees or care about ensuring that their workplace is free from discrimination. Many employers already have systems in place to review their hiring and promotional practices; it's difficult to see why employers would simply dismantle these programs in light of Ricci.

• And lastly, I would be remiss if I didn't mention the excellent coverage by the SCOTUSBlog, which provides this analysis (with the rhetoric) today.  The likely result from Ricci? More litigation:

The new standards the Court has imported into the Title VII legal equation are not really specific or well-defined, so it very likely will take future lawsuits to sort out just what the new requirements mean. In practical terms, it is very likely that employers will have to go to greater lengths to assure that testing protocols are race neutral, and will have to have sounder legal advice about the risks they take under Title VII if they apply test results that have a negative impact on minority workers.

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A further read-through of the Ricci v. DeStefano case today has reinforced my view that there are going to be some real lessons learned for employers out of this case.  The case had the potential of being a very narrow decision which would have minimized the impact to employers. However, because the court addresses head-on various Title VII issues, it's likely to creep into much larger issues and it's not out of the question to see it impact affirmative action plans or diversity programs.

Because of that, I've decided to spend a good deal of time discussing this case and the impact on employers in Connecticut and beyond in a webinar scheduled for July 8th at noon EDT.  You can register for it for free here.  Space will be limited so be sure to sign up today. 

In this session, I anticipate we'll discuss::

-- The basics of Title VII and how it applies to employers
-- The differences between "disparate impact" and "disparate treatment" claims
-- How employers should deal with the use of tests in the workplace and what it is permissible to do when the test results seem "off"

-- What the lessons are to be learned from Ricci, and steps employers can take to avoid reverse discrimination claims in the future

-- What is "reverse" discrimination and whether employers need to be concerned about such claims

-- What the impact this decision will have on affirmative action plans and diversity programs

As time permits, we will also wrap up the other Supreme Court employment law decisions in the 2008-09 term and the takeaway for employers in each of those cases, including an important age discrimination case.

Looking forward to having you all join us. 

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In closing out its 2008-09 term today  the U.S. Supreme Court ruled 5-4, along ideological lines that the city of New Haven violated Title VII in refusing to promote a group of white firefighters and refusing to apply the results of a test that it claimed would have had a disparate impact on minorities.

The decision in Ricci v. DeStefano (download here) is bound to be heavily reviewed, scrutinized and analyzed.  Indeed, because Judge Sotomayor (who was involved in the original decision at the Second Circuit) has now been nominated for the Supreme Court, the decision has been highly anticipated.

But despite the hyperbole about this case beforehand, the case has pitted two competing issues against each other - the city's alleged fear that the test, if applied, would have had a disparate impact on minorities (opening itself up to a lawsuit) and the firefighter's right to be promoted based on doing well on the test.  The Court said that the city's fear was not sufficient to not use the test and that not using the test was a violation of Title VII.  

Indeed, in its decision, the Supreme Court goes one big step further; it provides the city with a defense to a possible disparate impact lawsuit:

Our holding today clarifies how Title VII applies to resolve competing expectations under the disparate-treatment and disparate-impact provisions. If, after it certifies the test results, the City faces a disparate-impact suit, then in light of our holding today it should be clear that the City would avoid disparate-impact liability based on the strong basis in evidence that, had it not certified the results, it would have been subject to disparate-treatment liability.

I've previously discussed the case extensively in a variety of posts which can be found here and here.

Justice Ginsburg provides the dissent here and predicts that the case will be difficult to apply in practice and further suggests that employers may have a difficult time fiting within its parameters:

As a result of today’s decision, an employer who discards a dubious selection process can anticipate costly disparate-treatment litigation in which its chances for success—evenfor surviving a summary-judgment motion—are highly problematic. Concern about exposure to disparate-impact liability, however well grounded, is insufficient to insulatean employer from attack. Instead, the employer must make a “strong” showing that (1) its selection method was“not job related and consistent with business necessity,” or (2) that it refused to adopt “an equally valid, less-discriminatory alternative.”

I'll refrain from any big snap judgments until I review the decision at length (93 pages and all) but suffice to say that this decision will be the new starting point for employers who worry about disparate impact claims.  It's application to private employers will no doubt be scrutinized as well, but I'm going to review the whole decision before drawing too many conclusions.

What's interesting is that the court decided the case on Title VII grounds instead of the "Equal Protection Clause" questions that it also faced. What this means is that private employers need to pay much closer attention to this case than had it been decided on the other grounds. After all, Title VII applies just as much to private employers as it does to the government.  

My firm will be presenting a free webinar on this case and its impact on employers on July 8th at noon. Details will be forthcoming in a post later today. 

In the meantime, if you're looking for other instant analysis, check out the SCOTUSBlog for their posts.

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Those waiting for a decision in the hotly-anticipated Ricci v. DeStefano case will have to wait a few more days (likely Monday). The U.S. Supreme Court released the decisions for the day this morning and Ricci was not among them. It is now expected to be released early next week. It is one of just three cases remaining on the court's docket.

In the meantime, Slate has published a lengthy piece today about the story "behind" the case.  It appears to be well-sourced and detailed and provides the type of insight you would expect from Slate. As the article states: 

The story behind Ricci is just one example of an entrenched conflict over municipal hiring that extends back in time and across the country. For at least two generations, competition for jobs in many cities has been framed as a battle between one ethnic or racial group and another over who is an insider and who is an outsider. Black firefighters first brought a suit over discrimination in New Haven in 1973. They won. So did minority firefighters who sued Cleveland, Birmingham, St. Louis, New York City, Newark, Bridgeport, Buffalo, Philadelphia, Massachusetts (statewide), San Francisco, Baltimore, and Minneapolis, according to the NAACP Legal Defense Fund. 

But those victories all came in the 1970s. More recently, white firefighters have begun to fight back in court. Frank Ricci's case isn't the first reverse discrimination suit in a fire department. In 2001, four white men sued the Boston Fire Department for hiring minority candidates who had scored lower than the plaintiffs on a civil-service exam. They were the first to challenge the Boston department's affirmative-action policy since it had been upheld by the U.S. Supreme Court in 1989. In 2004, they won. Last year, a Los Angeles jury awarded two white fire captains $1.6 million in damages in a suit claiming that they had been punished more severely than a minority officer for participating in the same prank. The New Haven suit, meanwhile, has spurred a similar one by white firefighters, also over promotional exams and test scores, in nearby Bridgeport, Conn.

 

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In case you missed it, a California court recently upheld a $4.1 billion aribration award to a former executive who brought a wrongful termination suit against his former employer. (The National Law Journal has a good analysis today of what happened here, as well.)   

Although this blog covers issues applilcable to Connecticut employers, the lessons learned from this California case -- which seems to be the largest single plaintiff employment law case award ever -- are applicable to employers everywhere. 

Numerous other blogs have done a great job recapping the case so I'm not going to spend time here doing so. For a employee perspective, check out the Employee Rights Post recap.  For an employer perspective, check out the Manpower Employment Blawg.  (And for a humorous perspective, check out World of Work's "First Annual Dr. Evil Award".) 

But the lessons learned from this case are simple: If you're an employer and you make promises, you'll be bound by them. Even if they lead to really really big numbers.  Proper drafting of employment contracts and follow through on the issues that such contracts raise can help an employer avoid similar issues in the future. 

For more links about the case, check out Overlawyered.

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 A decision last week by the Second Circuit might seem fairly trivial. After all, the Court stamped a "summary order" in the case of Cunningham v. NY State Dept. of Labor (download here)  on June 10, 2009 thereby making sure the case doesn't have precedential effect.

But employers shouldn't ignore this decision; it illustrates the differences between retaliation and discrimination claims and the relatively low standard necessary to bring a claim of retaliation and get such a claim before a jury.

The case discusses what is an "adverse employment action".

 Without getting too technical, think of an adverse employment action as something that an employer does that is bad enough that the employee can then sue.  

After all, ordinary everyday work grievances are not enough; the employer must do something more than that in order for the employee to then be able to bring a claim. 

But is it possible for an employer to take an adverse action that is not enough to support a claim of discrimination, but IS enough to support a claim of retaliation? The court answers that question "yes" in Cunningham.  

In Cunningham, the employee claimed that he was reassigned from a fifth-floor office to a first-floor office (among other things).  The court said that this was not enough to state a claim for discrimination. In other words, that claim isn't the type of "adverse employment action" that can support a discrimination claim. 

But the employee's retaliation claim survives because the standard of what an "adverse employment action" is different and less demanding for those claims.

The Second Circuit concludes that "[i]n a retaliation claim, '[w]hether a particular reassignment is materially adverse depends upon the circumstances of the particular case, and should be judged from the perspective of a reasonable person in the plaintiff’s position, considering all the circumstances.'”

The court goes on to state that "a retaliation plaintiff must “present evidence sufficient to create a genuine triable issue as to whether the reassignment to which he was subjected could well have dissuaded a reasonable employee in his position from complaining of unlawful discrimination.'”

You might scratch your head at first but you've read that correctly: the Court is, in essence, saying that reassignment of an office isn't enough to bring a discrimination claim over, but is enough (at least here) to bring a retaliation claim.  Put another way, different standards apply to both claims.

What's the takeaway for employers? As I've stated previously for retaliation claims, careful documentation of the decisions you make as well as consistency, can help minimize the risk that the claims will go anywhere. But as this case demonstrates, it's not going to take a lot for an employee to be able to satisfy the low burden necessary to keep such a claim alive.

(H/T Wait a Second)

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UPDATED 6/16/09 

While all eyes are on the Ricci v. DeStefano case now pending at the U.S. Supreme Court, another high-profile case from Connecticut may end up making its way to the court docket later this summer.

The case is Church Homes (d/b/a Avery Heights) v. NLRB and dates all the way back to 1999 when employees went out on long and notable strike.  

Permanent replacements were hired (ostensibly without the union's knowledge) and the union -- when it learned of this -- made an unconditional offer to return to work; an issue has arisen ever since of whether the hiring of permanent replacements was an unfair labor practice in this situation. 

For additional background, you can find the Company's website here and this blog post by the Adjunct Law Prof blog.   The union's website can be found here.  The Hartford Courant has covered this from time to time, such as this article from 2001 on the ongoing strike. 

In late 2004, the the National Labor Relations Board issued its first decision that the company did not have an independent unlawful motive in hiring the permanent replacements. The Union appealed to the Second Circuit, which ultimately vacated the Board's decision and remanded it stating that failing to inform the union could be evidence of an unlawful motive.  

The NLRB then re-heard the case and issued a supplemental decision in mid-2007 finding a unfair labor practice because of the company's failure to reinstate the permanently replaced economic strikers upon their unconditional offer to return to work.  The majority of the board protested its decision in a footnote but said its needed to follow the Court of Appeals instructions.

This time, it was the Company that appealed to the Second Circuit contending that the Board erred by improperly placing a burden of proof on it.  On December 29, 2008, the Second Circuit issued a summary order denying the Company's request for relief and affirming the Board's decision.

On March 31, 2009, Church Homes filed a petition for certiorari with the Supreme Court.  While petitions are a common occurrence (and routinely denied), this case may get a closer look than most.  

Church Homes is asking the Supreme Court to consider three questions:

1. Did the Board unlawfully shift the burden of proof from the General Counsel by holding that it would find the Company acted for an independent unlawful purpose unless the Company proved that it had a legitimate reason for not disclosing its hiring plans to the Union?
2. Did the Board err when it disregarded as hearsay the testimony of a witness as to why the Company did not inform the union of its staffing plans and required the Company to produce actual evidence of the Union's potential for disruption?
3. Did the Board err when it found that the Company hired permanent replacements for an independent unlawful purpose?

The Supreme Court may have been tipping its hand a bit as well as to which way its leaning.  On May 20, 2009, the Supreme Court requested that the U.S. government to chime in on the case and offer its opinion.  The Solicitor General now has until July 20, 2009 to file its response.  

Will the Supreme Court take the case and look at the issues regarding strike replacements and the burdens of proof associated with such claims? Stay tuned. 
 

Note: Due to an editing error, an early version of this post contained an incorrect description of the earlier NLRB decision. The post has been updated to clarify this disposition of the matter.

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The Supreme Court is expected to rule later this month on the controversial case of Ricci v. DeStefano, the case out of New Haven, Connecticut involving a group of white firefighters who have alleged discrimination by the city.

But what will happen after the court rules on the case?

That's the subject of an interesting post by the New Haven Independent today who talked with Linda Greenhouse, a former reporter for The New York Times who covered the U.S. Supreme Court for many years:

When the U.S. Supreme Court finally decides city firefighters’ fate this month, the wait for promotions probably won’t be over. It will likely return to Judge Janet Bond Arterton’s New Haven courtroom.

And it could take a while.

That’s the most likely scenario of several sketched out by a leading Supreme Court expert, Linda Greenhouse, when asked about Ricci v. DeStefano. The court is to issue a decision before its term ends in late June.

Greenhouse predicts that those expecting a quick outcome are going to be disappointed:

“Folks in New Haven who are expecting a clear ruling out of this, may be quite surprised,” said Greenhouse. Greenhouse covered the former Supreme Court for The New York Times for 30 years; she won a Pulitzer Prize doing it. She is now a faculty member at the Yale Law School.

“It may leave them as confused as they’ve been all along,” Greenhouse predicted.

Because the case has also been a lightning rod for criticism for Supreme Court nominee Sonia Sotomayor, expect to hear lots more about it in the weeks to come.

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Suppose you've drafted a fairly lengthy agreement entitled "Employment, Non-Solicitation, and Confidentiality Agreement" for an employee to sign. And suppose that among the provisions is a paragraph entitled "Agreement Not to Solicit". And now suppose that the language details various items that the employee is prohibited from doing.

What's the issue, you may ask? Well, suppose as well that  the paragraph is missing "operative language". In other words, it's missing a few key words about the employee's responsibility under the agreement such as "I shall not" or "I will not" do those prohibited tasks. 

Is the agreement (and the specific paragraph prohibiting solicitation) still enforceable?

According to an Appellate Court decision released this morning (and officially released June 16, 2009), the answer is a most definite "yes".

In Hilb Rogal & Hobbs Co. v. Randall (download here),  the court held that

despite the missing language, it is clear from the title of the employment agreement, the title of paragraph six and the language found under paragraph six that the parties intended that the defendant would be prohibited from engaging in solicitation for two years. ...  The fact that the employment agreement imposes remedies for violations of paragraph six further evidences that paragraph six was intended to prohibit certain conduct.

From a legal perspective, the case is important because the Appellate Court reached this conclusion without having the "reform" (or rewrite) the contract:

Contrary to the trial court, we do not believe that the contract at hand needed to be reformed for the court to be empowered to supply an obvious missing term consistent with the clear intent expressed in the balance of the contract language. ... Because the intent of the nonsolicitation agreement is plain from an objective reading of the contract, a request for reformation is not necessary to enforce the provision.

Why is this case important for employers?

There are several takeaways from this decision. First, employers should never overlook the importance of proper drafting.  Just a few missing words here has caused lots of grief for this employer.  Even agreements that seem perfunctory (and perhaps borrowed from other agreements) should be scrutinized to ensure that no language has been lost in the drafting and revisions.

Second, the Court seems to approve of the contract even though the only consideration for the agreement was a promise of continued employment by the employer. In addition, the Court tacitly approves of the non-solicitation clause's two-year prohibition without any consideration of whether the scope of that provision is overly broad.  Employers should keep this in mind as they draft future agreements.

Overall, the decision is a sensible one and elevates substance over form. That doesn't mean that employers should draft their agreements in haste; but it does mean that if there is a clerical errors or inadvertant omissions, employers can still try to enforce that agreement.

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With all the developments the last week or two with the Connecticut legislative session, it's been difficult to keep up with everything ELSE happening in employment law. 

So, time for a "Quick Hits" post, where I recap some of the stories you might have missed relating to the world of labor and employment law that might be of interest to employers in Connecticut and beyond.

• Michael Moore, of the Pennsylvania Labor & Employment Blog, has a long-awaited followup to his guest post in this blog last year on Body Mass Index being the next type of claim out there under the ADA.  This time, he looks at the effect of the new ADA amendments on such claims.
   
• In what should be a surprise to no one, the U.S. Government has delayed implementation of E-Verify yet again for federal contractors. (My most recent post on E-Verify is here.) The newest date is September 8, 2009.  Don't hold your breath on this one.
   
• The World of Work was among numerous blogs that reported this week on a new case out of California overturning a $105M verdict in favor of baristas who claimed that they shouldn't have had to share the "tip jar" with shift supervisors. (H/T Overlawyered)
   
• As you may know, the NLRB - a five member board - has only had two appointees lately. A recent appellate court called into question the legitimacy of the decisions by the board. The inevitable appeals have now started, reports the Workplace Prof blog. I have a hard time believing that this decision is going to be upheld but we'll see. For employers, however, unless you have a case up at the Board level, this isn't something that will impact them, at least in the short term. 
   
• The intersection between Twitter and employment law -- the subject of an earlier post by me -- gets the scholarly treatment with an interesting seminar article. Some of it states the obvious such as "Users must be careful what they tweet. Twitter is subject to vast potential liability, as is any electronic communication tool." But it's refreshing to see someone looking at the subject from a treetop level.  

 

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Over the last 24 hours, much virtual ink has been spilled on a case pending before the U.S. Supreme Court, Ricci v. DeStefano, because Judge Sonia Sotomayor -- one of the judges handling the case at the Court of Appeals -- has been nominated to the Court. (I've covered the case in various posts here.)  From a Connecticut perspective, the Hartford Courant does its own recap here.

The question, frankly, is why such a fuss? 

Back in September 2006, U.S. District Court Judge Janet Arterton issued a lengthy opinion in which she dismissed the firefighters reverse discrimination claims and found for the city of New Haven.  Judge Arterton is no stranger to employment law cases, having represented mainly employees in private practice before getting appointed to the bench.  The decision is well worth the read.  Reasonable people can disagree with the outcome, but Judge Arterton's decision hardly lacks logic or thorough reasoning. 

The firefighters appealed and the case went up to the Second Circuit.  Judge Sotomayor was one of three Second Circuit judges selected to serve on a panel to hear the case.  In the summer of 2008, she and two other judges decided to affirm the district court's decision. 

The two other judges, Judges Pooler and Sack, and Judge Sotomayor all agreed that they did not have anything to add to Judge Arternon's decision so they issued a "per curiam" opinion which, in essence, adopted the lower court's reasoning.  (I should note that they original issued a summary order on the case, later turning it into a "per curiam" decision.  Summary orders are quite commonly used in the Second Circuit).  While not an everyday occurrence, it's not uncommon for courts to use "per curiam" decisions either.  (Of course, perhaps the most famous "per curiam" decision was in Bush v. Gore, but that's an argument for another day.)   

Here was the essence of the the Second Circuit's decision:

We affirm, for the reasons stated in the thorough, thoughtful, and well-reasoned opinion of the court below. Ricci v. DeStefano, 2006 U.S. Dist. LEXIS 73277, 2006 WL 2828419 (D.Conn., Sept. 28, 2006). In this case, the Civil Service Board found itself in the unfortunate position of having no good alternatives. We are not unsympathetic to the plaintiffs’ expression of frustration. Mr. Ricci, for example, who is dyslexic, made intensive efforts that appear to have resulted in his scoring highly on one of the exams, only to have it invalidated. But it simply does not follow that he has a viable Title VII claim. To the contrary, because the Board, in refusing to validate the exams, was simply trying to fulfill its obligations under Title VII when confronted with test results that had a disproportionate racial impact, its actions were protected.

The firefighters appealed to the Second Circuit again, asking the entire court to hear the case en banc (meaning that all 13 judges would hear the case). That request was rejected by a 7-6 margin and featured a spirited dissent by Judge Cabranes. 

The case now is pending before the U.S. Supreme Court where another split decision is expected.

The attack on Judge Sotomayor from some on the Ricci case seems to focus on the fact that she and two other judges decided to dismiss the claim in a "per curiam" decision, rather than in a lengthy one. However, there are many reasons why a case might be decided in that fashion and to attribute and speculate as to the reasons it was used in the Ricci case seems to be reaching for an argument that might not otherwise exist.  And regardless, there were many other judges in the Second Circuit who did not believe the case warranted any further decision either as determined by the en banc vote.  Are all of them disqualifed from serving on the Second Circuit too?

Some critics have gone even further, claiming that her decision in the Ricci case showed that she "reads racial preferences and quotas into the Constitution, even to the point of dishonoring those who preserve our public safety." 

All of these critcisms of Judge Sotomayor seem to be a reach for an argument that doesn't really seem to exist based on her handling of the Ricci case. And it certainly doesn't suggest that she is unqualifed to serve on the U.S. Supreme Court. After all, if the Supreme Court rules in favor of the city, does that mean that the justices are also "reading racial preferences and quotas into the Constitution"? The answer is obvious: No.

So, what are we ultimately to make of the Ricci case? In my view, not much.  It is, quite simply, a difficult decision in which very bright people can disagree.  And judges don't get to pick and choose the cases they are asked to judge. 

As the Workplace Prof succienctly said last month, "One of the reasons that this case is so challenging and so divisive is that this case seems to be all about the framing of the issue. It is very difficult to separate that framing from the factual question of the parties’ subjective intent or the credibility question of whether to believe their assertions. The way that the facts and law get merged together make for a doctrinal mess. It seems like people talk past each other constantly."

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A quick update on the Mortgage Lenders Network matter I've covered a few times before (here and here.) 

Earlier this month, a Delaware bankruptcy court approved of a $2.7 million settlement of a class-action lawsuit filed on behalf of more than 1600 employees, many of whom worked in Connecticut.

The settlement, first reported by the Hartford Courant, essentially covers wages and salaries that should have been paid during the 60-day WARN notice period.  The average payout per employee is $1,636. 

The Courant adds a few more details:

Monday's settlement is separate from the civil lawsuit seeking unpaid wages and commissions being pursued by the attorney general and the state Department of Labor. That lawsuit seeks $2.6 million for about 100 employees.

Charles A. Ercole, a lawyer for the Philadelphia law firm that negotiated Monday's settlement, said Monday that MLN was left with few assets when it filed for bankruptcy. But the company has subsequently been able to recover some money from lenders who provided lines of credit to fund MLN's mortgage business, Ercole said.

"It is a very good settlement under the circumstances," Ercole said.

Final court approval is expected after a hearing Aug. 5. Checks could be sent out in early fall, Ercole said.

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UPDATED 5/19/09

The U.S. Supreme Court has been very busy this morning.

First, in a 7-2 decision, the Court held that an employer (inthis case AT&T) did not violate the Pregnancy Discrimination Act when it gave less retirement credit for pregnancy leaves that occurred prior to the passage of the act. 

In addition, the Court found that because the company's pension payments were in accord with a bona fide senior seniority system, they were insulated from challenge under Title VII.  

You can read the court's decision in AT&T v. Hulteen here (including an interesting dissent by the Court's only female Justice, Justice Ginsburg.

The Workplace Prof blog did a good job at recapping oral argument several months back and predicting a fact-based decision.  Ultimately, I think the decision is a bit of a surprise, particularly because it was not a close vote. 

For employers who have long-standing pension plans, the decision provides some much needed clarity on what laws should apply for long-serving employees and whether the PDA applied retroactively.  However, this decision is not going to have much impact for most employers because changes to the law in 1978 now require employers to treat pregnancy-related absences the same as other medically-related conditions. 

In other business, the U.S. Supreme Court solicited the views of the U.S. government in the case of Lewis v. City of Chicago to decide the following question:

Where an employer adopts an employment practice that discriminates against African Americans in violation of Title VII’s disparate impact provision, must a plaintiff file an EEOC charge within 300 days after the announcement of the practice, or may a plaintiff file a charge within 300 days after the employer’s use of the discriminatory practice?

(Note: An earlier version of this post suggested that the court granted certiorari in the Lewis matter; that has been corrected.)

(H/T SCOTUSblog)

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In a unanimous decision released publicly today, the Connecticut Supreme Court narrowed the scope of the qualified privilege that employers have been able to invoke in defamation claims involving intracorporate communications.  In doing so, the court held that the defamed party (typically an employee) does not need to prove "actual malice" to defeat a qualified privilege claim.

As a result of this this ruling, employees may have an easier time establishing a defamation claim and employers will need to make sure that any workplace statements they make can be backed up.

The case, Gambardella v. Apple Health Care (download here) won't be "officially released" until May 19, 2009.  But the holding may give employers another reason to worry about what they say in the workplace about others.

It was a worry that the employer here highlighted as the court acknowledged:

The crux of the defendants’ claim is that the purpose underlying the privilege, namely, to
encourage the free flow of information necessary for efficient, intelligent employment decisions, is hindered only if the speaker acts with actual malice because only false information, not mere bad faith, impedes the free flow of information necessary for employment decisions.  Consequently, the defendants contend, actual malice should be the standard to defeat the qualified privilege in the context of intracorporate communications with respect to employment decisions. We are not persuaded.

Instead, the court distinguished prior cases (including the landmark Torosyan v. Boehringer Ingelheim case) and found that a broader standard should apply even though the employer's reading of various decisions. In fact, the court goes out of its way to say that "although we acknowledge that these footnotes [in prior cases] may be interpreted consistently with the defendants’ contentions, we reject this interpretation." 

Therefore, it is clear that the settled law in Connecticut is that a showing of either actual malice or malice in fact will defeat a defense of qualified privilege in the context of employment decisions. The defendants have provided no compelling  reason to depart from our well established jurisprudence and require a showing of actual malice exclusively simply because the qualified privilege arises in the context of intracorporate communications in connection with employment decisions. Accordingly, we reject the defendants’ invitation to do so.

Observant practitioners will remember the title of this case from a prior appellate court decision in 2005 which remanded the case to the trial court on the defamation issue.  Gambardella v. Apple Health Care, Inc., 86 Conn. App. 842 (2005).

 

Continue Reading...

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Going to a trial with an employment discrimination case is expensive. Which is one reason why many employers will ask the court to dismiss a claim before trial using a process known as "summary judgment". 

But a recent federal court case illustrates the difficulty that employers still have in getting courts to grant summary judgment and how cases that seem small can end up becoming big.  

The case, Rolon v. Pep Boys -- Manny, Moe & Jack, 601 F. Supp. 2d. 464 (D.Conn. 2009) (download here) , arose out of claims by a customer service representative that she was discriminated and retaliated against because of her gender and pregnancy.    She claimed that two months after she returned to work because of her pregnancy in 2006, she was questioned about her use in 2003 of an employee discount for relatives and friends who were not eligible for it.  The company said it's investigation of this employee arose out of a separate investigation in the fall of 2005.

The company ultimately terminated the plaintiff's employment for alleged improper use of the employee discount. The plaintiff alleged that this was a coverup for discrimination and that comments by her supervisor such as "Go home and be with your baby. We don't have work for you", supported her discrimination claims.  She also claimed she had management approval for her use because no employee discount could be used without management approval.

The federal court held that there was sufficient evidence and a sufficient dispute about certain facts that entitled the plaintiff to a trial.  Of course, the court did not address the ultimate merits of the claim and whether the plaintiff was right or wrong. The only issue for the court to look at was whether there was enough evidence that could support a claim of discrimination. Here, the court said there was.

For employers, this case is a classic example of how termination decisions will be scrutinized by the court.  Although the court doesn't address the issue head on, it goes out of its way to point out that the events that the employee was being fired over concerned just $200 and occurred three years prior to the actual termination.  In its decision, the court fails to note of any similarly situated employees who might have been terminated or other examples of how the policy had been consistently applied.

The employment at will doctrine in Connecticut allows employers to fire employees for any reason or no reason. While that technically remains true, that doesn't mean that courts won't review reasons that may seem a little fishy to it.  Here, it seems that the court was troubled by the reason for the termination decision and said that there was enough evidence (if credited by a jury) that suggested that the reason was a pretext for discrimination.

Ultimately, the employer here may very well prevail at trial.  But to do so, it'll have to make an expensive point over a $200 employee discount misuse. 

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In the next month or so, the U.S. Supreme Court is expected to issue its decision (or multiple decisions) in the Ricci v. DeStefano matter (for background, see my prior posts here).

In the meantime, other bloggers and writers have been adding their views to fill out the spectrum. 

On the Talking Points Memo site, one thoughtful post suggests that the lower courts got it right in finding that there was no discrimination.

On the Connecticut Employee Rights blog, Rick Hayber hopes the Supreme Court "gets it right":

I do not believe that New Haven refused to promote Mr. Ricci because he is white. I believe that it simply concluded that the test must have been biased. If true, this is simply not discrimination. Lets hope the Supreme Court gets it right!

The Connecticut Law Tribune also has this recap of the case so far.

Lastly, the SCOTUSblog has this thorough recap of oral argument.

Stay tuned. This one promises to be interesting.

 

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Blog readers may remember my philosophy on Connecticut Supreme Court cases on employment discrimination -- they take on perhaps even more significance than they might otherwise deserve because they happen so infrequently.

But even that philosophy has its limits as a case decided today shows. For most employers in Connecticut, this is one case that you can probably just ignore.  Even employment lawyers like myself will have a tough time getting too excited about this one. 

Only government attorneys will truly find something of interest in this one because it tries to answer the question of whether a state employee can sue the state in state court without first seeking permission from a claims commissioner.  

In Lyon v. Jones (download here), the Connecticut Supreme Court said "no", the employee does NOT need to receive permission from the claims commissioner before filing suit and that the Appellate Court had it wrong when it made that requirement. The court also decided that the employee could not pursue the claim further because she already had the opportunity to pursue her claim in federal court first (and lost).

For employees, the take away from the case is to follow the various procedural requirements  of the statutes. For employers, making sure that employees follow those procedures may be another way to get a case dismissed.

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There's lots of coverage this morning on the Ricci v. DeStefano (otherwise known as the New Haven firefighter reverse discrimination claim) oral argument at the Supreme Court yesterday -- among the most significant discrimination cases arising in Connecticut in years.  Here's a wrap-up:

• Ellen Simon, of the Employee Rights Post, rightly points out the dilemma facing New Haven in this situation. She suggests that Justice Kennedy may be the swing vote; the question is whether he tries to stake out a middle ground by sending the case back down to the lower courts for more analysis without declaring either side a winner or loser right now.
   
• The Hartford Courant provides some comments from the parties about the oral argument. 
   
• Law.com shares the view that all eyes are going to be on Justice Kennedy to see how he shapes the analysis.  According to the article, for what it's worth, the reporter observed: "Kennedy, the object of all the attention, did not explicitly tip his hand, but overall seemed sympathetic to the white firefighters who claim they were discriminated against on the basis of race, in violation of Title VII of the Civil Rights Act, when the city did not give them the promotions."
   
• Carole Bass, of the New Haven Independent, provides some additional on-scene coverage of the argument and framed the issue that the court seemed to focus on as "Was it a 'race-based' decision? Or simply 'race-conscious'?"
   
• For a more scholarly discussion of the case, the Workplace Prof blog does an excellent job at summarizing the many different sides to the case.  As he states, the case is not an easy call, either to analyze or predict: "One of the reasons that this case is so challenging and so divisive is that this case seems to be all about the framing of the issue. It is very difficult to separate that framing from the factual question of the parties’ subjective intent or the credibility question of whether to believe their assertions. The way that the facts and law get merged together make for a doctrinal mess. It seems like people talk past each other constantly."

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If only all trial and deposition transcripts happened this quickly....

The Supreme Court held oral argument in the Ricci v. DeStefano case earlier today. The transcript is now available here. 

The Workplace Prof has the snap judgment which seems pretty on point from my initial scans:

I've skimmed it enough to see that there's a lot there to digest more fully. My initial impression is that the court seemed to divide along familiar lines with Ginsburg, Souter, Stevens, and Breyer questioning the petitioners fairly heavily, and Roberts, Scalia, and Alito questioning the respondents closely. Kennedy questioned both sides about equally, and Thomas was characteristically quiet. 

Most of the argument seemed to focus on whether the decision not to certify the test was race discrimination or simply racial consciousness and what kinds of evidence an employer would need to have before it could act in this manner.

There's lots to be fascinated by in the transcript, but one exchange with Chief Justice Roberts stood up on my first glance. He asks the U.S. Government whether the promotion of diversity can be a compelling state interest in employment decisions.  While he asks for a yes or no answer, the following exchange happened:

MR. KNEEDLER: We think -- we think it probably is a compelling state interest, but it is not one that -- that can be advanced by race -- by racial classifications. And that -- and that is our basic submission here. ...
CHIEF JUSTICE ROBERTS: Can it be advanced by taking actions to avoid what is perceived as a disparate impact?
MR. KNEEDLER: Yes.

But whether the public employer can take action on that seems to be where the court is struggling with in the exchange that follows:

CHIEF JUSTICE ROBERTS: In other words, the disparate impact is regarded as something you can intentionally respond to by drawing racial distinctions solely because you would like a more diverse workforce?
MR. KNEEDLER: No, not drawing racial distinctions. That's our -- this -- the employer's response here did not draw racial distinctions. It did not say so many black firefighters would be promoted --
CHIEF JUSTICE ROBERTS: It didn't care --
MR. KNEEDLER: -- and so many white --
CHIEF JUSTICE ROBERTS: It didn't care -- it had to draw racial distinctions because it looked at the test and said, we think there's a problem because of the racial makeup of who's going to get the promotions.

But whatever the result, the decision isn't an easy one to resolve since it puts two competing interests "at war" with each other, as Justice Scalia stated at oral argument.  

The court will, however, resolve this one way or another.  A decision is expected before June.

 

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Later this morning, the United States Supreme Court will hold oral argument on an important reverse discrimination case brought by a group of firefighters in New Haven, CT.  I've summarized the case in prior posts (including the latest here).

This case, Ricci v. DeStefano, presents recurring issues regarding proper application of Title VII and the  Equal Protection Clause to the civil service. New Haven firefighters and lieutenants claim that they should have been promoted based on job-related examinations and merit selection rules mandated by local law. The City of New Haven has thus far refused because city officials believed that the examination and rules may have had a disparate impact on minorities. 

I'll be commenting later today about the oral argument (once the transcripts become available here) but suffice to say that the media hype surrounding this case is in full force. 

So, what exactly are the questions that the court will decide? Well, perhaps not the questions that everyone wants.  The issues are, as they always are with the Supreme Court, a little more technical in nature. They are as follows: 

1. When an otherwise valid civil service selection process yields unintended racially disproportionate results, may municipalities reject the results and the successful candidates for reasons of race absent the demonstration required by 42 U.S.C. § 2000e- 2(k) [Title VII]?
    
2. Does 42 U.S.C. §2000e-2(l) [Title VII] which makes it unlawful for employers "to adjust the scores of, use different cutoff scores for, or otherwise alter the results of, employment related tests on the basis of race ... ," permit employers to refuse to act on the results of such tests for reasons of race?
    
3. If, citing the public interest in eradicating political patronage, racism and corruption in civil service, a state's highest court mandates strict compliance with local laws requiring race-blind competitive merit selection procedures, does 42 U.S.C. §2000e-7 permit federal courts to relieve municipalities from compliance with such laws?

As for various previews of the case, you can find the SCOTUS Blog preview here, the Workplace Prof blog recap here, and the Hartford Courant's recap here. 

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Appellate Court decisions can be frustrating.  Every once in a while, instead of deciding the merits of the matter, the court will reject an appeal because a party did not "preserve" the issue at the lower courts through a proper protest. 

That's what happened in Mokonnen v. Pro Park, Inc. (download here)  from the Connecticut Appellate Court, in a decision that will be officially released later this month.  At issue: what are the questions a jury should answer in an employment discrimination matter.

The federal courts covering Connecticut that have looked at the issue for federal discrimination claims have pretty much rejected the use of what's known as a "McDonnell Douglas" balancing test.  That test, created by the U.S. Supreme Court, is supposed to be used to help judges decide some cases. Instead, some courts started using it to instruct the jury.  However, federal courts have disavowed that in recent years, finding the test confusing for juries.

In Connecticut, state court judges have an advantage with model jury instructions that are written to provide some guidance to them in an area of law that might be unfamiliar to them.  Among them, is an instruction on state discrimination law that explicitly rejects that analysis:  

The charge does not refer to the prima facie or burden shifting aspects of McDonnell Douglas because whether or not a plaintiff has established a prima facie case is an issue for the court and many federal courts have found that the burden shifting language has no place in a jury charge.  

Which is why the Appellate Court case here is so surprising and frustrating. In the background of the case, the decision suggests that the jury was given several questions to answer on the discrimination question.  In fact, the plaintiff contended on appeal that the jury interrogatories did a poor job of instructing the jury on the McDonnell Douglas concepts.

But alas, the Appellate Court didn't address that issue opting to reject the appeal on procedural grounds.  (And, in fairness to the judge, the current model jury instructions are effective January 1, 2008.)

Thus, we'll have to wait for another day for some additional appellate court pronouncements.

For employers going to trial, presentation of evidence is obviously important. But overlooking the "details" like jury instructions or interrogatories can lead to disappointing results as well. 

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Yesterday, the Supreme Court heard oral argument in Gross v. FBL Financial Group, one of the several employment cases on the docket for this term. For full background, the SCOTUS Blog is a great resource and I discussed it in an earlier post here.  From an employee perspective, the Employee Rights Post shares some interesting perspectives as well as well. 

Its mostly a theoretical discussion, but one that could impact how the courts look at discrimination cases. 

It was expected that oral argument would look at the issue of whether, under the ADEA, an employee needs direct evidence of discriminatory intent to get a mixed motive instruction under the Supreme Court's previous decision in Price Waterhouse.

But, according to the transcript of the argument , oral argument did not go exactly as planned and at least got the court is to think about the whole mixed motive paradigm.  While its too early to predict the demise of it, this case may now signal where the court wants to move on this confusing part of employment law cases. 

One employment law attorney who attended the argument shared his thoughts with me this morning:

It seemed fairly straightforward: In Desert Palace [a mixed motive case under Title VII, the Court] said no [you don't need direct evidence], and its analysis did not seem to be controlled by statutory language, but rather general principles of law. In any event, the employer's attorney got a number of members on the court considering whether there should be a mixed motive analysis of all. He was arguing that the burden should never shift to employer, that the burden of proving whether the employer would have made the adverse employment decision in the absence of the improper motive should be the employee's. It was a very interesting oral argument. My guess is that the Court won't overrule Price Waterhouse here, but that it would be interested in rethinking the whole mixed motive paradigm in some future case, but who knows.

A decision is expected before the court completes its term this year.  This is one case worth watching, particularly for employers who often try cases in federal court.

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It's FINALLY a nice spring day outside in Connecticut (see the picture of the Connecticut River taken this morning) so no need to spend a minute more than necessary to catch up on some other employment law-related items you might have missed during the week:

• A topic near and dear to my heart, background checks, had several good posts written about them. The first, from the BeenVerified.com blog, recaps online identity issues and emphasizes the importance, yet again, of doing background checks before hiring.  And the EmployeeScreenIQ Blog reports on various schools and employers who fail to follow the law and don't accept electronic signatures for conducting such checks.
   
• Several blogs, including the Ohio Employer's Law Blog and the Workplace Prof blog, report on the Department of Labor's new commitment to wage & hour enforcement cases. Because of this, Jon Hyman suggests that employers need to be extra vigilant in uncovering wage and hour violations in their own workforce.
   
• Although I previously discussed the new whistleblower provisions in the stimulus package, the Laconic Law Blog does a good job discussing this further.  As the post suggests, "Any organization receiving stimulus funds should be aware of these provisions because, among other things, they contain posting requirements."
   
• For employers receiving funds from the government under TARP (Troubled Asset Relief Program), the United States Citizenship and Immigration Services explained new requirements that employers must meet before hiring foreign nationals to work with H-1B visa.  The Washington Employment Law Update has the details. 
   
• The Florida Employment Law Blog has a timely post about the pitfalls of reducing salary and pay of exempt workers as a way to cut costs in these tough economic times.  The post suggests ways for employers to avoid running afoul of such rules. 

 

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As state legislators go forward with a hearing today on the AIG issues (you can view the hearing on CT-N, here), one of the recurring themes suggested in various newspapers articles and by state leaders is that there were lots of ways that the employer could have avoided paying these retention payments.

Perhaps.

But suppose you were an employer that was going through financial difficulties arising from the subprime mess and decided to avoid paying some commissions to salespeople involved with these mortgages -- even if just for a short while.  Under such circumstances, what would the State of Connecticut do then? Give you a free pass, particularly if those employees who got you into the mess may be the same employees to whom you owed wages?

Well, it turns out you don't have to theorize about it .  There continues to be a case that I first reported on in September 2007 about an employer who failed to pay some commissions due to executives and salespeople, a company named Mortgage Lenders Network  

That case illustrates that, for much less money than was paid to the AIG employees, an employer could get into a heap of trouble. So much trouble, in fact, that the State might go beyond just requesting double damages for failure to pay wages, but might issue an arrest warrant to the company President for such a failure.

You remember that company, right? The company had built a nationwide presence by making subprime loans and was in the midst of building a big new headquarters in the state. But by late 2006, it was going through some financial difficulties as credit lines came to a halt and then it allegedly failed to pay some employees commissions -- at least $1.6 million total. (These were, after all, the same employees, who participated in the company's subprime lending practices.)

Ultimately, MLN filed for bankruptcy.  What did the state do then? It had an investigator from the Department of Labor look into the situation and ultimately issued an arrest warrant for the Company's president back in March 2007 for failure to pay wages and sales commissions on time. 

That arrest has been stayed and delayed for nearly two years as the MLN President has pursued various appeals and motions in the bankruptcy court and federal court in Delaware.  Recently, in January 2009, the District Court of Delaware denied latest Mr. Heffernan's appeal; he has since filed appeal papers with the Third Circuit. 

In one of the motions filed by the State of Connecticut in December 2007, the State reiterated its strong stance against employers who fail to pay wages and commissions on time, even if the employer was going to pay the employees later because of financial difficulties: 

Under Connecticut law, any employer or any officer or agent of an employer or any other person authorized by an employer to pay wages who violates any provision of the Connecticut statutes governing the payment of wages may be fined not less than $2000.00 nor more than $5,000.00 or imprisoned not more than five years for each offense if the total amount of all unpaid wages owed to an employee is more than $2000.00. Conn. Gen. Stat. Sec. 31-71g(1)...Under Connecticut's wage laws, it is no defense that the malfeasor later made restitution to the employees by paying the wages after they were due under state law. Under the law, late payment of wages incurs the same penalties as non-payment. 

A separate civil wage action was also announced by the state in a press release  back in February 2008. 

There is no doubt that the MLN and AIG cases are quite different and that using the MLN case as an analogy is not perfect. (The MLN case concerns sales commissions primarily, for example, while the AIG concerns retention or "stay" bonuses -- which may or may not be "wages".)

But if the State was willing to go after an employer for failing to pay just $1.6M in wages and sales commissions, is it fair now to suggest to employers in Connecticut, like AIG, that they can now simply ignore obligations they make to their employees because they are going through financial difficulties and can't really afford to pay them?

I look back on my September 2007 post about the MLN prosecution and can't help but think of the irony of my last paragraph:

[T]he state's continued pursuit of this employer demonstrates that failing to pay wages is one type of action that the state won't tolerate. For employers in the state, its a good lesson and one that more employers would be wise to follow.

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Suppose an employee files a complaint against your company and it's quickly dealt with.  Now suppose, ten months later, that you, the employer, fire that employee  -- ostensibly for financial reasons.  Is the timing between the original complaint and the termination enough to support a claim for retaliation?

Previous federal court cases in Connecticut have concluded, in general, that the timing -- standing alone -- is not enough.  I discussed one such case here.   

But a new Second Circuit decision, released as a summary order yesterday, suggests a way around that limitation --- at least in some distinct circumstances.

The case, Brenes v. City of New York, arises out of First Amendment retaliation claim brought by a New York school teacher who had gone to the New York Post months before his eventual termination.  The court suggests that an employer can be liable for retaliation if they waited to retaliate, so long as there was a reason why the employer may have delayed its action.

The Wait a Second blog fills us in on the rest of the details:

"A reasonable jury could infer from these facts that [the supervisor] expected that [employee]’s position would disappear in June, and that she therefore had no incentive to further retaliate against him until it became clear that he would be returning to [the school]. When considered in this light, [the employee]’s series of negative performance evaluations at the start of the next school year is suspicious and could plausibly support an inference of retaliation, particularly given that [the employee] previously received only satisfactory evaluations from prior supervisors and [his supervisor]."

This case allows retaliation plaintiffs to overcome the presumption that, without direct evidence of retaliatory intent ("You're fired because you blew the whistle six months ago"), an adverse action needs to take place more than a few months after the protected activity. 

For employers, this case -- while a rare example of the court finding a possible link of retaliation many months after the original complaint -- demonstrates the importance of documentation and consistency in evaluations and discipline.  Retaliation cases are among the most difficult to defend and this new Second Circuit decision might give some employees another way to establish a retaliation claim that might not otherwise survive.

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Nine months after a jury found his employer liable for firing a reservist called to active duty after the 9/11 attacks, a federal judge awarded Michael Serricchio over $1.3M in damages on his federal claim in a decision handed down late last week.

It is believed to be the largest judgment ever awarded under The Uniformed Services Employment and Reemployment Rights Act (USERRA), a federal law that protects service members' reemployment rights when returning from a period of service in the uniformed services, including those called up from the reserves or National Guard, and prohibits employer discrimination based on military service or obligation.

You can read the court's decision here.  The court's judgment is available here and also includes an order of reinstatement. 

The Hartford Courant had a lengthy piece over the weekend spelling out the reaction to the court's decision including much of its background.

While the amount of the court's judgment is significant, the outcome wasn't that unexpected after a jury decided the issue of liability last summary. The federal court only had to decide what, if any damages, it would award.   Before the court held the bench trial on damages, it afforded each party the opportunity to submit trial briefs on the issue. You can view the employer's brief here and the employee's brief here. The court held a bench trial last fall on the issue of damages and issued its decision late last week.

For employers, USERRA is one of the least-understood federal employment laws. Back in 2007, I discussed it at length. The Department of Labor also has an extensive website on the subject.  For employers with reservists or those called to active duty, understanding USERRA is crucial to avoiding expensive and time-consuming claims under that law. 
 

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The Second Circuit Court of Appeals released an unpublished decision earlier this week that should give employment law practitioners (and judges) some pause as they go to trial on discrimination claims.  It should serve as a cautionary tale about the use of certain language in jury instructions and it provides some guidance as to where the court might be headed if it had to decide the issue head-on again. 

For those who haven't tried cases (or for employers), you might be surprised to learn in every case, the judge has a good deal of discretion as to how to tell a jury what the rules are that it needs to follow. These so-called "jury instructions" vary from case to case and often times, attorneys for both sides have the opportunity to submit proposed instructions for the court to follow.

In discrimination cases, the Court of Appeals has said that a plaintiff does not need to prove that discrimination was the sole motivating factor, the primary motivating factor, or the real motivating factor in the adverse employment action (typically the decision to fire him or her).  Instead, that employee or former employee must only prove that discrimination was "a motivating factor" in the adverse employment action.

But what happens when a court instructs a jury that a plaintiff must prove that the employer took adverse action against him "intentionally and with a discriminatory animus because of his disability"? That was what the Second Circuit, in Olson v. New York (download here) had to decide. 

The court said that such an explanation (and particularly the "because of" language) could have been "confusing to the jury" and that it was "troubled by some of this wording". 

Ultimately, the court took a pass on deciding whether that language was truly objectionable saying that, under the facts in this case, there was "overwhelming evidence at trial that [the Plaintiff] was fired for legitimate non-discriminatory reasons".  The court found that any error in the jury instruction language in this case was "harmless".   

For companies and attorneys about to try a discrimination case, this case should serve as a warning that using a "because of" phrase may not hold muster, particularly without any further explanations about what that means. 

In a closer case than the facts of Olson presented, the Second Circuit decision suggests that the Court might reverse and send the case back down to the District Court for another trial.  Given the costs of going to trial nowadays, that's a risk that may not be worth taking.

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While some matters get all the headlines, the work of the state and federal courts move on.  One such case came out earlier this week and I highlight it because it touches on a point that employers sometimes lose sight of -- the ability to still make subjective decisions and have that decision supported by a court later on.

The case, Spell v. State of Connecticut (D. Conn., March 17, 2009)(Thompson, J.) (download here), relates to an applicant's claim that he was not hired for a position with the Chief State's Attorney's office because he was African-American. He claimed he was “more qualified than any of the Caucasian applicants selected to fill the ... positions.”  He also claimed that he was more mature and has more education than the Hispanic applicant who was ultimately hired for the position and that he had more experience than that person as well. 

The court granted the State's motion for summary judgment, effectively dismissing the applicant's claims on multiple grounds.  Part of the court's decision focused on the theory that courts will not circumvent the judgment of the employer and that even subjective criteria are allowed in some circumstances:

Although Spell alleges that he was “more qualified than any of the Caucasian applicants selected to fill the ... positions,” this allegation is insufficient to support a conclusion that the Chief State's Attorney's enumerated reasons were pretextual in this case.... Employers may base their hiring decisions on some subjective criteria.  Title VII only requires that a hiring decision not be based on a discriminatory reason; it “does not require that the candidate whom a court considers most qualified for a particular position be awarded that position.” Thus, it was not improper for the Chief State's Attorney to base its decision to internally promote [one person], rather than accept a new hire, on its subjective impressions of his work.

What's the Take Away for Employers From This Case?

Employers have to make difficult hiring and hiring decisions all the time.  Every attempt should be made at the time to base the decisions on supportable items.  Objective criteria (this person has a certificaion that another applicant doesn't) always help, but that does not mean that you should disregard subjective criteria (this person was more enthusiastic at the job interview) entirely. Courts willl support employer decisions in those cases but, as is the case above, the employer had some pretty good explanations for the court to rest its analysis on.

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Two of the three wrestlers, whose lawsuit against World Wrestling Entertainment, Inc. ("WWE") was dismissed late last month, have asked a federal court to reconsider the matter and give them another opportunity to plead their case against the WWE.

In a motion to alter/amend the judgment filed late Wednesday (download available here), Scott Levy and Christopher Klucsartis contend that the court should have allowed them to raise claims under the federal law regarding employee benefits (ERISA), after the court made its initial ruling dismissing the matter. They also contend that they should be allowed another opportunity to raise certain state law claims with additional facts.

The wrestlers attach a copy of a proposed amended complaint that they would file, if the court gives them an opportunity to do so and propose that the matter be seen again as a class action claim. The amended complaint has some new details about the extent that the wrestlers contend that the WWE "controlled" their behavior. It'll be of interest to wrestling fans to see what allegedly happens "behind the scenes". 

As followers of this story will recall, there were originally three wrestlers who brought suit against the WWE, with Michael Sanders being the third. He is apparently not involved in this latest request and the proposed amended complaint drops him as a named plaintiff.  The materials submitted by the two remaining wrestlers are silent as to the reasons why Mr. Sanders has decided not to pursue this matter further at this time.

Even if these claims were allowed to proceed, WWE has previously argued that the claims (even if amended) are barred by a statute of limitations.  I would suspect that the WWE will argue that the amendments here would be futile because the claims would ultimately be dismissed. 

WWE will have until the end of March to respond to this latest motion and a decision from the court can be expected no earlier than mid April 2009. 

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An employee who contended that he was fired after complaining about a physically threatening co-worker cannot bring a wrongful discharge claim, in a decision released by the Connecticut District Court.  The case, Ferrer v. T.L. Cannon Management Corp. (download here), does suggest, however, a way for employees to bring such claims in the future -- with some artful language in the complaint. 

Readers of this blog will be aware  that Connecticut is an at-will employment state, absent some contractual promises or some other exception that may apply. In general terms, that means is that an employee can quit any time for any reason and that an employer can fire the employee at any time for any reason (so long as it's not an illegal one such as race, gender, etc.) 

Two Connecticut Supreme Court cases are required reading for this concept: Sheets v. Teddy's Frosted Food, Inc. 179 Conn. 471, 427 A.2d 385 (1980), and Parsons v. United Technologies Corp. 243. Conn. 66, 89, 700 A.2d 655 (1997).  [Disclosure: I worked on the Parsons matter.] 

Those cases created a notable exception to the at will standard:

• In Sheets, the Court held that an at-will employee may sue for wrongful discharge if he is fired for complaining about, or refusing to participate in, his employer’s violation of public policy.
• In Parsons, the Court ruled that the public policy embodied in the state statute requiring employers “to exercise reasonable care to provide for [their] servants a reasonably safe place in which to work,” Conn. Gen. Stat. § 31- 49, provides grounds for a wrongful discharge claim when an atwill employee is fired for refusing to work in conditions posing
  an “objectively substantial risk of death, disease or serious bodily injury.”

So, in the Ferrer case, the District Court was asked to extend the Parsons exception to a situation where the employee was allegedly discharged after informing his manager that a co-worker threw a punch at him and missed. The complaint also alleged that the co-worker assaulted another employee about a year earlier.

Continue Reading...

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In a closely-watched case, a federal district court last week threw out claims by three wrestlers that they were employees, rather than independent contractors of the World Wrestling Entertainment, Inc. (WWE) in a thorough repudiation of their claims.

The decision in Levy v. WWE (download here) is based, in part on the language of the wrestlers' contracts (which can be found here). I've discussed this case extensively in a variety of posts here.

If there were any doubt that the WWE is entertainment, not a sport, the court readily dismisses that at the outset:

Though wrestling is a sport in which two combatants engage in efforts to throw each other, as presented by defendant it is not a competitive engagement but is a staged pseudo-match, scripted, choreographed by agents of defendant and executed by wrestlers assigned by defendant which directs and controls the wrestlers’ conduct and the outcome.

Alas, the rest of the decision is not nearly as theatrical as a WWE match. Indeed, it is more akin to the Olympic-style wrestling matches you might see -- methodical with only flashes of action.

The court dismisses the claim that WWE breached the wrestlers' contracts by not doing tax withholdings (assuming they were employees) because the court finds that the wrestlers weren't harmed by that action.  Indeed, the court also finds that the claim that the wrestlers were deprived of benefits connected to the withholdings to be "fabricated":

The allegation of a deprivation of benefits "paid for by such withholding" is fabricated of whole cloth as withholding is subtracted from an employee’s compensation and paid to the government for application to an employee’s tax liability. It accrues no added earnings which plaintiffs make no claim were not paid in full to them. No particular benefits are claimed to have been lost.

As to the unjust enrichment claim, the court dismisses that claim because there is an express contract (namely the booking contracts) that prevents such claims from being raised. The court also finds that the statute of limitations on many of the wrestlers' claims also applies.

The wrestlers can move to have to decision reconsidered or can take an appeal.  However, given the court's thorough dismissal of their claims, it's difficult to see that they have any real good options left.  

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Nearly 15 years ago, the Connecticut Supreme Court came out with a pair of decisions that seemed to put to rest the question of whether the CHRO was authorized to award emotional distress damages to employees who filed suit and prevailed in state law employment discrimination cases. 

But, as discussed below, the CHRO has lately been suggesting otherwise.  This has important implications to employers in defending against such claims.  In order to understand where we are, we need to look back at some of the key cases and issues related to them, so bear with me for a bit.

The Background Cases

• The first case, Bridgeport Hospital v. CHRO, 232 Conn. 91 (1995), held that the CHRO had no authority to award emotional distress damages in state law employment discrimination claims involving race, gender, physical disability, age and the like. It's holding was unequivocal: "The issue before the court is whether General Statutes § 46a-86 authorizes the award of damages for emotional distress and attorney's fees for a violation of General Statutes § 46a-60(a)(1). We conclude that it does not." (Open disclosure: My current firm successfully represented the hospital in that matter.)
• In the companion case, Fenn Mfg. Co. v. CHRO, 232 Conn. 117 (1995), the Court held that no emotional distress damages were available to claims of pregnancy discrimination in the employment context. It's holding was also unequivocal:  "The issue before the court is whether...[the CHRO], is authorized pursuant to General Statutes § 46a-86(a) to award damages for emotional distress based upon a violation of General Statutes § 46a-60(a)(7).  We hold that CHRO is not so authorized."
• In a followup case the next year, the CHRO argued that another statute, Conn. Gen. Stat. §46a-58 authorized the CHRO to award emotional distress damages in employment discrimination cases. The Connecticut Supreme Court, in CHRO v. Truelove & MacLean, Inc. 238 Conn. 337 rejected that claim as well: "The commission's argument is that § 46a-58 (a) encompasses claims of discriminatory employment practices and that violations of § 46a-58 (a) entitle a claimant to damages for emotional distress pursuant to § 46a-86 (c). We disagree."

The Supreme Court Reintroduces Such Claims, At Least According to the CHRO

Case closed right? Not according to the CHRO, which has started using another case as the basis for re-introducing emotional distress awards BACK into employment discrimination claims. Specifically, in arguments to CHRO hearing officers and in mediations, CHRO staff refer to CHRO v. Board of Education of Cheshire, 270 Conn. 665 (2004), in which a student claimed discrimination against a public school principal and board of education.  The CHRO's premise is that while Conn. Gen. Stat. 46a-58 can't be used to bring garden-variety employment discrimination claims, it can be used to piggyback other claims through it.

Because the Court in Cheshire doesn't overturn its prior cases and is dealing with a student's discrimination claim, it's admittedly a bit difficult to parse the logic, but there's plenty of discussion in Cheshire about how some types of other discrimination claims can allow the complainant to recover emotional distress damages. 

Continue Reading...

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To bring state law employment discrimination claims to court, it is well-known that an employee has to first file the claim with the state agency responsible for investigating the claim (the CHRO) (Conn. Gen. Stat. Sec. 46a-101(a)).  And most people believe that all the employee has to do is then wait for the CHRO to issue a "release of jurisdiction" to the employee, and then file a claim in Superior Court within 90 days of receipt of the release (Conn. Gen. Stat. Sec. 46a-101(e)).

But a recent Superior Court case reminds us of another limitation on the ability of individuals to bring claims in Superior Court that is found in another section, Conn. Gen. Stat. Sec. 46a-102.  That statute states that: 

Any action brought in accordance with section 46a-100 shall be brought within two years of the date of filing of the complaint with the commission.

Thus, even if the individual gets a release of jurisdiction, the employee must STILL file a claim of discrimination in Superior court within two years of the original filing of the claim with the CHRO.

In Wright v. Teamsters Local 559 (2009 WL 242401) (available via Westlaw only), the labor union challenged the subject matter jurisdiction of a member to bring a discrimination claim against it on these grounds. 

The procedural history of that case is straightforward: The plaintiff filed an administrative complaint with the CHRO on October 12, 2004, alleging he was the victim of race and color discrimination. Over seventeen months later, on or about April 4, 2006, the plaintiff amended his administrative complaint to add a new claim of age discrimination. On August 28, 2006, the plaintiff received a release of jurisdiction from the CCHRO and, thereafter, on November 28, 2006, he filed a claim in Superior Court

The employee did not dispute the timeliness of the underlying discrimination claim, but claimed that the filing of an amended complaint should restart the statute of limitations period. The Superior Court held that the age discrimination claim related back to the other discrimination claims:

The court finds that the plaintiff's age discrimination claim in the amended complaint relates back to the original complaint: it involves the very same set of alleged facts and actors as the race and color claims; it involves the same claims of harm and injury; and it is based on the very same statutory subsection. It is in effect, the same cause of action.

The case is a strong reminder to employers that the procedural requirements for filing claims must be strictly followed by individuals bringing discrimination claims against it.  And with the delays at the CHRO investigative stage as long as they are, this statute is one that should not be overlooked in defending claims of discrimination.

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Time for a few multiple-choice questions:

1. In the fiscal year ending September 30, 2008, the number of cases filed in federal court in Connecticut was: a) up significantly over 2007; b) about the same as 2007; c) markedly down from 2007.

2. Since 2003, the number of cases filed and pending in the federal court in Connecticut is: a) trending noticeably upwards; b) remaining fairly constant; c) trending noticeably downwards.

3. In 2008, the median time it took a civil case to get to trial in federal court in Connecticut was: a) 18 months; b) 25 months; c) 32 months; d) 40 months 

If you answered c) to each of the questions, you are well on your way to becoming an expert on court statistics.

But for those needing a little extra study, you can find the new statistics for Connecticut (and every other federal court) available on the U.S. Courts website here. The statistics were just released and reveal overall trends in the federal court system.

Why is this important for employers? Employers should be aware of the federal court statistics because many claims of discrimination are brought under federal law (and therefore, in federal court).  If there are big increases in the numbers of discrimination cases, you would expect to see a noticeable uptick in the court caseload.  

The fact that the caseload has decreased in 2008 and has continued to decrease for multiple years reveals that whatever trends may be happening at an administrative level or national level, they haven't translated in Connecticut to significantly more cases as of yet..  Compare this with the New York City area which shows the caseload trending higher over the last several years. 

In fact, Connecticut seems be running counter to the national numbers, which showed the number of cases filed in district courts nationwide was up 4.3% over 2007.)  Employers should also be cognizant that they were not likely to get a quick outcome of the case. Waiting 32 months for a trial is, as the statistics reveal, quite common in Connecticut.

Employers should not draw too many conclusions from the statistics.  After all, the most recent statistics of charges pending at the EEOC shows quite a number of claims in the pipeline. While 2008 may not have been the most litigious one for employers in Connecticut, where 2009 ends up remains a big question.

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Here's a warning: If you don't get involved with labor unions or collective bargaining agreements, you might as well skip over this next post because things don't get much more technical (or mundane, depending on your perspective) than the following case discussion. 

In a divided 3-2 decision, the Connecticut Supreme Court held that the collective bargaining agreement between the named defendant, the town of Greenwich, and the Silver Shield Association, the union representing the town’s police officers, did not cover the promotion to the position of police captain, which is a position outside the bargaining unit. (Note: the decision will be officially released on February 24, 2009.)  Justice Katz writes the dissenting opinion.

The case, Honulik v. Town of Greenwich, will have some significance for those who practice labor law in the state because it will help define what areas should be the subject of mandatory bargaining and what areas shouldn't.  In this case, the court was asked to examine, among other items, the scope of the "past practices" clause in the collective bargaining agreement. That clause stated:

All benefits and obligations which are not described in this [a]greement or in either the manual or plan and which are now enjoyed by or required of the employees are specifically included in this [a]greement by reference just as though each such benefit or obligation was specifically set forth.

Ultimately, the court concludes that other provisions of the agreement belie the notion that
the past practices clause governs the nonmandatory bargaining subject of promotion to police captain.  The court notes that:

We also observe that our conclusion leaves intact the current status of labor law in our state. To conclude that past practices clauses protect nonmandatory subjects of bargaining, in the absence of express language to the contrary, would set forth a rule of law that might have the perverse effect of encouraging municipalities and other employers to behave erratically with respect to permissive subjects of bargaining so as not to create a past practice precedent. That we will not do.

For employers (and even some labor/employment law attorneys), it's hard to get excited about this case. It's lengthy and fact-specific and doesn't lend itself to some overarching analysis.  But this case does reinforce the notion that employers should get sound legal advice when negotiating the terms of an agreement with a union.  Nothing beats good quality drafting of collective bargaining agreements to avoid any future disputes later on.

As an aside, I can't help but chuckle at the following footnote (footnote 17, if you're curious), buried in Justice Katz's dissent :

In light of the urgency to resolve this expedited public interest appeal as expeditiously as possible, I do not address the remaining arguments of the parties.

In case you are curious, the court held oral arguments on the case on April 15, 2008, nearly 10 months ago.

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 With another holiday weekend approaching, there's time enough this morning for a few quick stories about a wide range of employment issues with relevance to employers in Connecticut.  As I look out from my office (and wondering where the snow is in Hartford), here are a few stories to ponder:

• The Connecticut General Assembly is just beginning its 2009.  Inside the Capitol, a blog run by the Connecticut Business and Industry Association, has started posting updates relating to new labor bills being introduced.  The first is entitled Workers’ Compensation and Rehabilitative Therapy For Individuals Who Have Witnessed a Colleague’s Death.  Suffice to say, the CBIA doesn't think much of the bill.  
   
• Back in Washington, DC, new employment law bills continue to be introduced. The Washington DC Employment Law Update has word of a new bill which would increase penalties to up to $50,000 per offense for employers who hire undocumented workers.  This bill seems unlikely to be on the administration's agenda in the near term, but it's worth tracking. 
   
• A blog I've followed for a while, the Evil HR Lady, had an interesting post this week about "super secret HR stuff" that she shared.  You'll be happy to learn, however, that there really isn't much super secret stuff out there.  But she also provides some helpful information about when an HR manager should act to save the company money in both the short and long term.  
   
• The Wait a Second blog (which reports on matters relevant to the Second Circuit Court of Appeals -- in which Connecticut is located) reports on a thorny case trying to determine what is protected free speech for employees and whether the filing of a retaliation claim can give rise to a free speech claim.  Although the specific case is out of federal court in New York, it touches on issues and cases directly relevant to Connecticut issues.  
   
• Never one to hide her true feelings, Connecticut Law Tribune columnist (and attorney) Karen Lee Torre suggests in a column this week that Lilly Ledbetter -- of recent U.S. Supreme Court fame -- is no victim.  Considering that Torre has represented plaintiffs in employment law cases for a living, her dismissal of Ledbetter is striking. It's well worth reading to understand that the Ledbetter case was more about statute of limitations, and less about sex discrimination.  Meanwhile, the bill is expected to be debated in the U.S. Senate today.
   
• Particularly for employment lawyers out there, the Workplace Prof reports on a recent NLRB decision that held that an attorney's question to an employees about their union activities, including whether they voted for the union, constituted an unfair labor practice. 
   
• Finally, with all of the focus on the new FMLA regulations, employers shouldn't forget about the new ADA amendments as well.The Delaware Employment Law Blog recently highlighted a resources that I've suggested for years, from the Job Accommodation Network (JAN) JAN has now updated its site with additional resources in compliance with the new law. 

For those who don't know about JAN, Molly DiBianca fills you in: 

All wise employers know about the power of JAN.  JAN is a treasure trove of accommodation-related information. If you have questions about what options there are for accommodating just about any disability, JAN is the place to look. And JAN provides not only the answer but actually gives you direct resources for purchasing the necessary goods and services.

 

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The U.S. Supreme Court today agreed to consider the case of New Haven, Connecticut firefighers who alleged reverse discrimination when the city denied them promotions despite high test scores, ostensibly out of fears that the test may have discriminated against minority applicants.  

I've covered the case, Ricci v. DeStefano, previously here and here, and will post more about it in the upcoming days. But you may be wondering what the specific question is that the court will consider.

The court accepted the case to decide the following question:

Whether municipalities may decline to certify results of an exam that would make disproportionately more white applicants eligible for promotion than minority applicants, due to fears that certifying the results would lead to charges of racial discrimination.

The case challenges the very notion of an employer who, ostensibly, is trying to do the "right" thing by preventing a claim of race discrimination from occurring, but by doing so, impacts white employees.  Workplace Prof blog recently discussed this conundrum that arises in this situation:

This case is a very important one, but a really difficult one, too, that goes to the heart of our notions of discrimination and the meaning of Title VII. Essentially, this brings up the usual debate about whether affirmative action is race discrimination, and if so, whether it should be illegal. But this case adds a wrinkle that brings the whole system of Title VII into doubt. Here, the City argues that it believed in good faith that the promotion process would violate Title VII by creating a disparate impact. The plaintiffs dispute that, saying that the City was motivated by politics and race, but they further argue that even if the City did in good faith believe that it was avoiding a disparate impact claim, that should be no defense to a disparate treatment claim.

So, is a decision not to create a disparate impact really race discrimination in disguise? I think the answer to that is complicated. Every decision not to use a particular criteria because it has an impact on a particular group is necessarily considering that group's status. So in one sense, yes, there is a consideration of status in there somewhere. On the other hand, does that mean that employers must continue to use criteria that they know have a disparate impact unless that use is challenged and a court validates some other criterion? That seems an odd result.

It's much too early to predict the outcome; we'll have to first read the tea leaves at oral argument. But regardless, I would expect a deeply divided decision by the Court. After all, this issue caused severe fractures in the Second Circuit when it was originally decided.

The firefighters' brief is due February 19, 2009 and the City's response is due March 18, 2009. A decision is expected before the end of the Court's term in June.

(H/T Workplace Prof, SCOTUSBlog)

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UPDATED 2/10/09

Sometimes, by coincidence, two unrelated decision get released in close proximity to one another that they bring some greater clarity to the law.

Yesterday, I discussed a Connecticut Superior Court case that found that certain discussions did not create an employment contract and that the employee was properly classified as "at-will".

Earlier this week, a federal court in Connecticut granted an employer's motion for summary judgment after finding that a Corrective Action memorandum did not create an employment contract either (and did not create any other claims).

In Ide v. Winwholesale, Inc. (download here), Judge Squatrito was asked to address whether the employee's termination -- after allegedly being "coerced" into signing a Corrective Action memorandum -- violated an important public policy. The court found that it did not and found that there was nothing inherently wrong with the memorandum either. 

The court indicated that, in essence, the plaintiff and a co-worker were engaging in a back-and-forth tit-for-tat that ultimately led to them both being disciplined.  The employer then issued a Corrective Action memorandum to address the issues.  The memo is similar to the type that many companies use to address disciplinary and performance issues with their employees: it spells out what was unacceptable and sets forth a plan to make sure the employee follows procedures on a going-forward basis. 

The employee blamed a fellow co-worker for his problems. But the court rejected that argument calling it the "But he started it!" defense.  This court did not stop there; the Court also found that the employee's argument that there was a "genuine issue of fact" concerning the Corrective Action memorandum forced the court to ask "So what?" 

The court then delivers the knockout punch to the plaintiff's case:

[The plaintiff] further argues that the Corrective Action memorandum constituted a contract, but, because he was coerced into signing the Corrective Action memorandum, the contract was void. The merit of this argument escapes the Court. There is no indication that the parties expected or intended the Corrective Action memorandum to be a “contract,” nor has Ide established in any way that the Corrective Action memorandum satisfies the legal standard for a contract (i.e., offer, acceptance, consideration).

What's the takeaway for employers here?

Courts will still use common sense in deciding employment cases.  Here, the employer had detailed the reasons for its decision is a clear and concise fashion and used a corrective action memorandum that backed up its reasoning.  The importance of documentation and, at least the appearance of, fairness, made this a fairly easy case for the Court to dispose of.

In essence, the employer did what would be expected of it. It learned about violations of the company's policies, addressed them, and then fired the employee when he failed to correct the deficiencies noted.

One important last note for employment law practitioners: The court takes the employer to task on one procedural issue -- namely the filing of a motion to strike portions of the plaintiff's affidavit that was filed in response to the motion for summary judgment. The court suggests that the federal rules of civil procedure do not allow for such a practice and "The parties to an action 'should have faith . . . that the court knows the difference between admissible and non-admissible evidence, and
would not base a summary judgment decision simply upon the self-serving ipse dixit of a particular party.'"

The court suggests that if a party wants to object to portions of an affidavit, that the party should argue it in the summary judgment briefing itself.

UPDATE: Portions of the underlying decision, which have no impact on the outcome of the case, have been redacted by request.

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Suppose you, as a hiring manager, have a discussion with one of your current employees about a job opening within the company at another location. In the course of that discussion, you indicate that you would expect that employee to work in that position for two years before moving on to other possible opportunities. 

After that conversation, you put down the terms of the offer in writing that says nothing about a two-year position, but rather discuss an annual salary etc. In addition, you have an employee handbook states that all employees are employees-at-will, except if there is an an agreement for a specified period of time by the CEO or hiring manager to the employee.

The question that then arises is: Does that conversation create a contract for employment for a two year period?

A recent unpublished Connecticut Superior Court decision suggests no and dismissed the claim at the summary judgment stage.

In Urgo v. Bassett Furniture Direct-NE, LLC, 2008 WL 5255663 (Nov. 25, 2008) (also available at Conn. Bar Association site here), the Court (Judge Edward Domnarski, presiding) held that, in the circumstances, the conversation did not create an actual contract.

The conversation between the parties regarding the length of time that the plaintiff would be expected to manage the store did not create an actual contract commitment for a period of employment. The plaintiff had been employed by the defendant for several years and she had employed at various locations within the defendant's organization. Considering the conversation in the context of the surrounding circumstances, the plaintiff was attempting to establish how long she would be expected to stay in [the new location] before moving on to other opportunities. The defendant agreed to pay a housing allowance to the plaintiff on a monthly basis. The plaintiff had to sign a one-year lease which she claims is evidence of a one-year contract of employment. The court cannot conclude that his third-party agreement translates into a contractual commitment from the defendant. It is significant that the plaintiff's testimony indicates that she knew that there were no guarantees regarding the length of her employment. ....

...Although the plaintiff and...the CEO of the defendant, did communicate regarding the plaintiff's employment those communications do not establish an intention by the defendant to alter her "at will" status. The plaintiff has not satisfied her burden of presenting evidence that the defendant had agreed to some form of contract commitment and that there was a meeting of the minds between the parties.

For employers, this case emphasizes two important points:

• Employee handbooks (and disclaimers present in them) provide valuable and supportive evidence to courts about the scope of an employment relationship. Even better, having each individual employee sign off on receipt of the handbook or policies provides yet further evidence.
• Put offers in writing; the clearest way to avoid oral contracts from being created is to make sure that an offer in writing supersedes any prior contracts.  For more on offer letters, you can find more earlier detailed post here.

 

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The slow season of employment law news continues, which makes this a perfect time to roll-out the occasional Quick Takes post to discuss interesting nuggets and updates to recent posts.

• The Statewide Grievance Committee, on the day before Christmas, issued a formal reprimand to Maureen Duggan for "fraud and conduct prejudicial to the administration of justice".   Ms. Duggan, as you may recall, wrote an anonymous letter complaining about the former state ethics chief, Alan Plofsky.   Ms. Duggan was also ordered to attend nine hours of ethics training. 
   
• Meanwhile, you might also be wondering what ishappening with the employment complaint filed by that former ethics chief against the state?  The short answer is, nothing. The parties finished their briefing on the summary judgment motion back in June 2008 and the case is still awaiting a decision. In the meantime, the parties filed a status report with the court on December 10th (download here), essentially saying the same thing.   
   
• The Second Circuit recently reinstated an age discrimination claim, overturning a district court decision granting the employer's summary judgment.  It's yet another example of the relatively high burdens that employers have to win a case before trial. Wait a Second has the details of Carras v. MGS 782 Lex, Inc., 2008 WL 5273278 (2d Cir. Dec. 19. 2008):

The 62 year-old plaintiff was fired from his job as Chief Financial Officer of a shoe importing company. The defendant argued that plaintiff was fired for cost-cutting reasons. The district court thought the jury could only find that cost-cutting was the real reason, not the plaintiff's age. But the plaintiff produced evidence that he was willing to work for a lower salary and that the corporate vice president repeatedly told the president that plaintiff was too old and that the president capitulated to the vice president's wishes that plaintiff be terminated. Management had also openly joked about plaintiff's age on several occasions. Plaintiff was also replaced by a 26 year-old.

• Will the Employee Free Choice Act pass in the new Congress? World of Work blog suggests that EFCA is not a done deal. 
   
• A new blog, Minding the Workplace, made its debut this month.  Written by Suffolk University Law Professor, David Yamada, the target audience of the blog is workplace dignity, bullying and psychological health topics.  It's worth taking a look at for a different perspective on the issues.
   
• The New York Law Journal today reports on a new Second Circuit case that enacts a less deferential standard of review under the Employee Retirement Income Security Act where the plan administrator is conflicted because it both evaluates eligibility and pays benefits. In McCauley v. First Unum Life Insurance Co.

Coming tomorrow: A Year-End Wrap Up...

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The WWE has filed its reply brief (download here) in further support of its motion to dismiss yesterday contending that three former wrestlers "cannot escape the clear language of the booking contracts". For background on the case involving "Raven" and two other former wrestlers, click here. 

The brief is filled with lots of "smackdowns" (to borrow a wrestling phrase) chiding the wrestlers about not doing their research before filing their claims (p2, footnote 1),  about conducting a "fishing expedition" (p2, footnote 2), about pursuing futile claims (p3), about using "sleight-of-hand tactics" (p7, footnote 5), and, well, just about everything else.

The brief is a lawyers' dream -- and a wrestling fan's cure for insomnia. (The new movie, "The Wrestler" may be a better entertainment choice.) The arguments are thick with legal analysis that frankly will only excite those with an interest in this arcane area of law. But the gist of the argument is that the claims are filed too late and are barred by various legal theories.  And even when there might be viable claim under ERISA, the wrestlers never amended their complaint to add it (and WWE contends that it is too late to do so now).

Is there anything all that new or revealing? No, not really,  At the end of the day, the plain language of the booking contracts is what should control the outcome of the case, argues the WWE. It's not very different from the argument it made in its first brief.

Zach Lowe, of the AmLaw Daily blog, provided this delicious update on the case (and welcome to readers of the blog as well).

I would expect that a decision on the matter will not be forthcoming for several more months. Until then, the matter is likely to remain fairly quiet. 

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The U.S. Supreme Court today agreed to hear the case of Gross v. FBL Financial Services. Inc. putting the issue of "Whether a plaintiff must present direct evidence of discrimination in order to obtain a mixed-motive instruction in a non-Title VII discrimination case" squarely before the court (H/T ScotusBlog).

The case, arising out of a 8th Circuit decision (available here), involves an Iowa executive who alleged that he did not get promoted because of his age.  A jury found in his favor and the company appealed, claiming that the jury instructions were improper.  The 8th Circuit reversed the lower court's decision finding error in giving a mixed-motive instruction.   

The National Employment Lawyers Association filed an amicus brief, in support of the executive's claims. That brief was accepted by the court today as well.

According to the executive's petition to the court, the issue raised will resolve an issue that was left open in the Court's 2003 decision in Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003).  In that case, the Court held that in a Title VII case a plaintiff is not required to present direct evidence of
discrimination in order to obtain a mixed-motive instruction. Desert Palace expressly reserved decision as to whether such direct evidence would be required in a non-Title VII case.  The case now before the Court concerns the Age Discrimination in Employment Act.

For employers, a decision in this case either way is not likely to have a significant impact on HR practices. Rather, the decision will be most relevant to employers litigating employment discrimination cases in the federal courts, particularly when it comes to what each party does or does not need to show to win the case. 

For some additional background on mixed-motive cases after Desert Palace, this article has some helpful analysis.

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In employment litigation in federal court (let's leave state court out of this discussion -- it's a whole different animal), filing a motion for summary judgment is seen by employers as their last, best chance to win a case before the matter is sent to a jury. After all, if the court grants the motion, a jury never sees the case and the case effectively ends (subject to an appeal).

Over the years, there have been various decisions that have suggested that summary judgments should be more of the exception rather than the rule.   Nevertheless, summary judgment still remains a tool that employers have in their toolbox  to defend against discrimination claims.

But besides the rules and the decisions that guide how courts should rule on such motions,  who judges the matter also plays a role in the ultimate outcome. As discussed below, this is important for employers and in-house counsel to understand when litigating discrimination claims.

Two recent decisions by two Connecticut federal judges illustrate that point.  In one case, Judge Vanessa Bryant granted an employer's motion for summary judgment in a fairly short decision involving a Title VII claim . In another, Judge Christopher Droney denied an employer's motion for summary judgment on the Title VII claims. 

Continue Reading...

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Whenever someone gets into trouble, we've all heard one phrase at some point or another, particularly as a parent or child: "But So-and-so Is Doing the Same Thing!" 

That is, at its essence, an argument that is sometimes made in discrimination cases.The legal name for it is "similarly situated" but the concept it entails is that a company cannot treat two people who did the same thing differently because of race, age, etc. 

And so, when employees are disciplined (or perhaps fired) for engaging in certain behavior, they will sometimes claim that other co-workers (perhaps white, or male, or younger) engaged in the same activity and were not disciplined or fired.

A recent case out of the Second Circuit (based on a District of Connecticut decision) addresses that same point. 

In Billue v. Praxair, Inc. (download here), the Plaintiff argued that co-workers who engaged in similar activities were not disciplined in the same way. The Second Circuit held that the workers were not similarly situated.

The case, which was decided by summary order on November 20, 2008, isn't groundbreaking.  The court merely emphasized that to be "similarly situated", the employees must be similarly situated in "all material respects".  Here, the court found that there were differences:

This [allegedly comparable] employee, who is white, left his delivery truck unattended for five minutes, with the rear trailer doors locked, within 100 yards of the defendant’s property, and under the surveillance of defendant’s security cameras. By contrast, plaintiff, who is African-American, urinated in a public parking lot along a highway, temporarily abandoned his truck for roughly 20 minutes while he shopped in a sporting goods store, and did not secure the truck pursuant to defendant’s protocols. Accordingly, we conclude that defendant’s conduct was materially different....

In other words, while both workers may have violated company rules, the plaintiff's actions were simply different (and worse) than his co-worker.  

What's the takeaway from this case for employers?

Employers should continue to enforce disciplinary policies evenly and in a fair manner. Circumstances may differ and courts will allow employers to make those distinctions, but make sure you, as an employer, can articulate the rationale behind those distinctions.

(H/T Wait a Second)

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Many weeks after the WWE filed its motion to dismiss the lawsuit brought by three former WWE wrestlers ("Raven" and "Kanyon" and others -- otherwise known as Scott Levy, Chris Klucsartis and Michael Sanders ), the wrestlers have fired back filing their papers opposing WWE's motion.  (For full coverage of this lawsuit, click here.) 

The papers, filed late Wednesday afternoon, are available for download here.  There aren't, as some much have hoped for, any more source documents attached to it (such as the wrestlers contracts that were attached to WWE's original motion) so readers will just have to make do with legal arguments.

For those following the matter, the opposition papers use much of the same theory that was advanced in the complaint -- that the WWE is pure entertainment, not sport, and the WWE controls everything about it.

Specifically, the wrestlers claim that the WWE exercises:

virtually complete dominion and control over its wrestlers -- determining when and where the wrestlers will perform, where and how they will train, scripting the fight and wrestlers' pre- and post-fight interviews, controlling the wrestlers' costumes, props and personas and pre-ordaining the results of each fight.

The wrestlers argue that the court should look to the specifics of the relationship, not the contracts themselves.  They contrast themselves with professional boxers, an interesting comparison.   Moreover, they argue that its too early for the court to decide the issues -- and that the case should proceed with discovery (in other words, each party asking the other party questions and for certain documents). 

Interestingly, the wrestlers also bring up the fact that in 2001 WWE argued that a former wrestler (Nicole Bass) should be barred from bringing certain claims because she was an employee, not an independent contractor -- the reverse position argued here.   

However, the wrestlers highlight an interview given to a British newspaper in August 2008 about the case that suggests a bit more complicated of a picture. While the result is the same -- she was treated as an employee, not an independent contractor, it appears the WWE argued that she was not an employee. 

In the interview, K&L Gates attorney Jerry McDevitt noted that the only time WWE litigated the issue - it actually lost on the legal argument (though ultimately prevailed in the case on other grounds).

The independent contractor v employee situation has only come up once before in litigation in the long history of the WWE, when they were sued for sexual harassment by former female wrestler Nicole Bass.

Jerry reveals: “The sexual harassment laws, of the United States at least, are purposely designed to protect employees and do not extend to independent contractors.

“However the interpretation given under Title VII of the Civil Rights Act which covers sexual harassment is very broad, as it wants to include in it as many people as possible.So a preliminary issue that came up was whether she was an employee, for Title VII purposes, or an independent contractor. 

She was determined to be an employee.

As I've often said, you can't do complete justice to an argument in a short post, so review it for yourself to get a complete picture.

The WWE will now have 10 days to file a reply to this, if it wishes (and I can't imagine that it will leave this argument unchallenged). After that, the court will rule on the motion. Don't expect a decision overnight, however. It is likely that a decision won't be forthcoming for at least 2-3 months.

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Yesterday, I discussed the employment contract portion of a new Appellate Court case, Ziotas v. The Reardon Law Firm (download here). 

Today, I'll discuss the second part of the court's decision on whether the associate's bonus could be said to be "wages". Why is this important? Because under state law (Conn. Gen. Stat. 31-72), failure to pay wages to an employee is a violation of law and could entitle the employee to double damages.  Here, the Appellate Court said that the bonus could be "wages" and remanded the case to the Superior Court for further analysis of this issue.

The issue, the court said, is whether any agreement or offer gave the employee the right to compensation in exchange for services that the employee provided:

It is not relevant whether the amount of that bonus was calculated on the basis of the number of hours worked, as a percentage of the defendant’s net income or on some ‘‘other basis of calculation,’’ which may or may not incorporate the efforts of others. The issue instead is whether the terms of the parties’ employment agreement, as alleged in the complaint, vested in the plaintiff a right to compensation in the form of a bonus in exchange for the services that he had provided during the first ten months of 1998. ...

Under these facts and circumstances, namely, the agreement between the plaintiff and the defendant, the bonus could have been classified as wages for purposes
of § 31-71a (3).

Why is this important to employers in Connecticut? Because if an employer's agreement with an employee is not precise as to why and when a bonus will be paid out, it is certainly possible that the court will find that the bonus is in exchange for the employee's services (and thus "wages").  As a result, even if the employee leaves in the middle of a calendar year, the employee might be able to claim that he or she is entitled to a pro-rata bonus.

Some employers have structured offer letters and agreements to make it clear that bonuses are contingent on an employee still being employed as of the day of payout. Others have indicated that bonuses are entirely discretionary on behalf of the company, thereby removing any reference to the bonus being tied to the employee's exchange of services.

Regardless of the path or paths that the employer chooses, this Appellate Court decision is a good reminder to employers to review their bonus structures with their employees and ensure that the language that is used (particularly for the upcoming calendar year) is precise and accurate.

For extra credit, employers may also want to take a look at a 2002 Supreme Court decision which clarified the rules on wages and bonuses further. The case, Mytych v. May Dept. Stores Co., 260 Conn. 152, 159, 793 A.2d 1068 (2002), can be found here.   Even better, employers should discuss this with legal counsel to get a greater understanding of the exposure that the company may have about this issue.

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In a decision released today, the Connecticut Appellate Court upheld a lower court judgment that found that a local lawfirm breached its employment contract to an associate by failing to pay that associate a bonus.

It's rare to see lawfirms involved in employment disputes, and even rarer, to have cases proceed all the way to an appeal.  Yet, that's exactly what has happened to the case of Ziotas v. The Reardon Law Firm (download here). It will no doubt be strange to cite as a precedent a case involving other attorneys in the state.

But aside from the novelty of the type of case, the facts of the case are a bit more mundane.  (As with all case descriptions, the "facts" are taken from the court decision itself.  There is no doubt that the parties believe that there are additional "facts" surrounding this matter too.)

 An associate who left the firm contended that he was entitled to a pro-rata bonus payment under the terms of an employment contract he had.  The firm refused and argued that it was not required to pay him a bonus under the agreement.  The lower court (and now Appellate Court) disagreed with the lawfirm and found that the associate was entitled to the bonus under the agreement.

The Court found that the lawfirm had expressly promised the associate that he was entitled to a bonus. Just because the amount of the bonus was uncertain, the court ruled, does not make the promise of a bonus no less certain. Thus, the court upheld the lower court decision to find that the lawfirm needed to pay the associate a pro-rata bonus.

The court also addressed whether the claim for bonus falls within the state's wage statutes (and concludes that it did). I'll address that portion of the claim in an upcoming post because it has implications for other employers as well.

In the meantime, this case reinforces the age-old notion that no matter the type of employer, the terms of employment between the employer and employee should be articulated in a clear and concise fashion.  It's Monday-morning quarterbacking to say that a well-drafted employment agreement in this case could have avoided the dispute present here, but I'm sure the parties each wish they could have avoided nearly a decade's worth of litigation with such documentation.

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Earlier this year, a case out of New Haven caused quite a stir at the Second Circuit when it addressed (or, as some people believe, failed to address) a reverse discrimination case. 

Now, word comes that the firefighters who lost the case are seeking to have the U.S. Supreme Court decide the issue by asking the nation's highest court to review the matter. Doug Malan, from the The Connecticut Law Tribune reports:

A group of 20 New Haven firefighters are pushing to have the nation’s highest court determine if the city discriminated against them when it denied promotions despite high test scores. For some of the men, the U.S. Supreme Court’s decision on whether to hear their case will determine whether the firefighters remain in what they believe to be dead-end jobs due to their skin color.

After a divided Second Circuit this summer turned down the firefighters’ appeal, national law firms and advocacy groups have lined up to assist the New Haven parties on both sides.

The plaintiff firefighters in Ricci v. DeStefano allege that they are victims of a system that was changed in midstream to favor black firefighters over white and Hispanic ones and that they have been blocked from attaining fire lieutenant and captaincy ranks. In 2004, the city of New Haven told its Civil Service Commission to stop administering two written exams that were used to determine the most qualified candidates for promotion because too few minority candidates were advancing. City officials feared a lawsuit would be filed by minorities under the federal Civil Rights Act.

Although the case was originally set for a conference on September 29, 2008, that date has been extended.  A check of the Supreme Court's docket does not yet give an indication on when the court will review the matter and determine whether to take the case.  But given the other matters under consideration, it is not unreasonable to expect a ruling on whether to accept the case by the end of the year.

The case is notable for employers in Connecticut because there aren't a lot of reverse discrimination cases out there. If the Supreme Court decides to hear the case, it is likely that there will be some new guidance about what is, and is not, appropriate in such cases.

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It has been several months since my last update on the matters involving former state Ethics Chief Alan Plofsky and the strange case of the lawyer who penned an anonymous letter complaining of Mr. Plofsky. (For background on the matters, you can find my prior posts here.)

The developments have been slow to occur, but an article last week in the Connecticut Law Tribune gives us some details.  As to the lawyer that wrote the anonymous letter, state officials have suggested that she be given a reprimand: 

State officials say Maureen Duggan should be reprimanded and ordered to attend legal ethics classes for writing a phony letter that helped bring down former Ethics Commission Director Alan S. Plofsky.

That’s the suggestion that Chief Disciplinary Counsel Mark Dubois made last Thursday to the Statewide Grievance Committee after an investigation into Duggan’s conduct dating to 2004. Duggan, a former attorney in Plofsky’s office, drafted a letter filled with typos to the ethics commission’s chairwoman describing how money was being wasted by the office and employees routinely left before the end of the workday. She made it appear that the unsigned letter was from a parking lot attendant.
 

Ms. Duggan also apologized for the incident, according to another report. 

And what happened to the underlying case that was brought by the former state ethics chief against the state? The state moved for summary judgment early this year.  However, the court has yet to rule on that motion.  A decision is expected soon.

In the meantime, the parties filed a joint status report in mid-September which provides some further background in the case.

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A fascinating article yesterday in Law.com entitled "Are Social Networking Sites Discoverable?" is well-worth a read to any company involved in litigating against former or even current employees.

While the authors write in the context of a product liability case, the premise and subject is equally applicable to claims involving employees as well as the conclusion that information on these sites is likely discoverable:

Although these sites provide users with a sense of intimacy and community, they also create a potentially permanent record of personal information that becomes a virtual information bonanza about a litigant's private life and state of mind. The converse thus becomes the moral for litigation counsel -- this new generational fount of potentially discoverable information should be high on the list of priorities when evaluating a new matter.

As a result, the authors suggest that defense counsel use some of these practice tips including running searches on the individuals and witnesses and investigating whether any of the key players use social networking sites.  And if so, ask for information about postings and make a request that such information be preserved. 

I'd add to the list of to-do items, a consideration of a subscription to a site like Spokeo.com.  How does it work? Enter in a person's e-mail address, and the site will conduct a search (a la Google) of several dozen social networking and information-sharing sites.  Thus, so long as the person hasn't set their privacy settings to "high", you can find information about the person's accounts with Amazon (shopping), Flickr (photos), LinkedIn (professional social network) and Myspace (largest social networking).  Importantly, all this information is publicly available to search engines: it's just that often times people don't think it is.

The law in this area is still developing, but some of the same discovery rules still apply: Information can still be sought so long as it is likely to lead to the discovery of admissible evidence. And information that is publicly available on the Internet (through Google searches or otherwise) is still fair game -- much like old paper files from government resources.

So, as companies defend against discrimination claims, they should not forget that looking at social networking sites like Facebook or MySpace may provide lots of information about the person's friends, opinions and views. 

You might even find a comment in which the employee talks about the lawsuit.

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Here's a quick update on some items and topics that have been covered by the blog over the past year:

• Earlier this week, I raised the issue of whether the rising unemployment rate would also lead to more employment lawsuits. Reuters yesterday released a very good and balanced article on the subject. I shared my thoughts with the reporter who was kind enough to add those comments to the article. You can check it out here. 
   
• The lawsuit brought by three wrestlers against the WWE is continuing..but at a snail's pace.  As you may recall, WWE filed a motion to dismiss in early October on the merits of the case. The wrestlers' response was due on November 10th. However, the wrestlers have now sought an extension of time and their response will now be due in a few weeks. In the meantime, the wrestlers did mention in their most recent filing the possibility of adding or incorporating claims that other wrestlers have. No word on any details, but we can expect some new developments by month's end.
   
• A few weeks ago, I commented on the provocative article that suggested getting rid of performance reviews.  SHRM has a good article posted today that argued that performance reviews should not be eliminated. Instead, managers must "own" the reviews (subscription required).

Whether individuals believe in performance reviews or not, organizations are increasingly looking to hold managers accountable for accurate, timely and unbiased appraisals which help manage performance and head off legal issues.

“A lot of people are asking questions, given the financial crisis, about what HR or human capital programs companies should be focused on and performance management would definitely make my short list,” said Laura Sejen, Watson Wyatt’s global practice director for strategic rewards in New York. “It’s more important than ever to make sure that employees and managers are clear about organizational goals and priorities.”

• Last year, I wrote about a case that held that the National Bank Act may preempt certain state law discrimination claims.  The Employer Law Report reports that two new cases have also followed suit, making it that much more important for national banks to learn about their available defenses in employment discrimination claims.
   
• Last, in response to my article on Veteran's Day, I received a very nice phone call from an officer of the Naval Enlisted Reserve Association (NERA). Reservists are an often-overlooked part of our military and I commend them for the work they are doing on behalf of our men and women fighting in the wars in Afghanistan and Iraq.

 

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Goin' to the chapel and we're Gonna get married
                               ----- "The Chapel of Love", by the Dixie Cups

Today (November 12th) is the day that many lesbian and gay couples will indeed be going to the chapel (or town clerk's offices, or other places); it's the day that they can get officially married.  (For those that somehow missed it, the Connecticut Supreme Court approved of same-sex marriages in a ruling last month.)  A Public Defender links to a fairly thorough report on what is likely to occur today here and the New Haven Independent has the details on a variety of weddings that are planned for today after the official court ruling implementing the Supreme Court's decision. 

To be entirely accurate, it's the first day that town clerks will have the forms and be able to process applications for marriage licenses.  (You can find a list of all town clerks here.) After the license is issued, the couples have 60 days to actually get married. But some couples are expected to get married immediately after the licenses are issued.

Why is this important for Connecticut employers? Because as of tomorrow, there are obviously going to be a few employees who will now be newly married.  As such, the employee is entitled to have all the rules applicable to married couples apply to them.

This means that under Connecticut FMLA rules, employees will be entitled to take time off to care for a same-sex spouse's serious health condition or enroll in some types of medical/dental plans.

What should employers do now? Go through your policy and procedure manual and your benefit plans and gain an immediate understanding as to what will apply, what may apply, and what will not apply. If it's easier to visualize, use a green, yellow and red-light list to separate the issues and figure out which ones needs to be followed up on.  

For example, one issue that remains confusing will be the application to federal income tax withholding because federal tax laws differ from Connecticut laws.

After sorting through the issues, figure out which ones need to be followed up on and make a decision on how the company will treat situation.  Without a clear understanding of the issues up front, employers will be open to making decisions on the fly -- and more often than not, mistakes  tend to occur when employers make hasty decisions.

Get things right the first time by ensuring that your policies regarding marriage are sexual-orientation-neutral.  And by all means, if you give your married employees a bouquet of flowers for the happy occasion, do the same for any same-sex couples.

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The headlines over the weekend for Connecticut have not been kind.  Two were particularly striking. First, the Courant ran a story entitled "Sizable Job Losses Expected in State".  The second was a story about the expected closing of The Goodwin Hotel, one of Hartford's premier hotels. 

Both indicate a local economy that is teetering between lousy and downright awful.  As a result, there is likely to be more unemployment .  And with that, more people will be considering filing suit; such is the nature of economic downturns.

For those companies looking for a free primer on the subject of wrongful discharge claims in the state, the Connecticut Law Libraries have just posted a pretty good website with links to a variety of key statutes and summaries.  (You can also save the date of December 16th; I'll be presenting a program for the CBIA on reductions in force as well.  Details are forthcoming soon.)

Although times may be looking bleak, companies should still not ignore the law at this point.  A prior post earlier this year focused on five issues that employers should become knowledgeable on in this economic downturn. (You can also click here, for all of my reduction in force posts.)  For employers, ask yourself how prepared you are to confront these issues.  Preparation is the key and often, when layoffs are needed, they always seem to need to occur in just a few days time.

For companies looking for other ways to save costs, the Ohio Employer's Law Blog has an interesting post up this morning about the risks that increase with such an action.

Times are tough, but employers that abide by the law can ensure that they don't compound the issues and financial difficulties that they may already be facing.

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There's been a lot happening over the last few days, both election and non-elected related -- too much to keep up with. In fact, with the election dominating the news, some other interesting items have felt overlooked.  So it seemed an appropriate time for a post recapping some of the most interesting and noteworthy items that I've come across the last few days:

Obama and The New Administration:

• John Phillips, over at The Word on Employment Law, has a terrific piece up this morning about what the election has meant to him, as an employment lawyer. 
• PointofLaw.com picks up on a WSJ article that suggests that the Employee Free Choice Act may end up being put on the backburner for the time being.
• VentureBeat.com has a post about how technology may play a major role in the Obama administration and the implications for businesses (along with a hint that Change.gov is coming soon)
• A good recap of the changes to the Connecticut legislature (now, overwhelmingly Democratic) can be found at CT News Junkie. 
• WSJ Law Blog has an interview with an employment lawyer who predicts of softening of the stance against unions.
• Workplace Prof has a wide-ranging post that foresees perhaps great changes to the workplace that will allow the United States to be "the envy of the world insofar as how it treats its working men and women."  Nothing like setting the expectations low...
• Lastly, my friend and former law school professor, Kimberly Norwood, has an inspiring piece up on Blackprof.com this morning about how the election can reshape a generation of kids. 

Other Employment Law Items:

• The Laconic Law Blog recaps the Mental Health Parity bill that got lost in the discussion of the financial rescue plan.
• The Second Circuit, which has been strangely quiet the last few months, rules that being "smacked around" (in the words of the Wait A Second! blog) is not an adverse employment action.  The case, Mathirampuzha v. Potter (download here), also strictly enforces the administrative exhaustion requirements found in Title VII. 
• Studs Terkel, a prolific author who wrote some memorable books on workers, died last week. This post recaps the impact he had on the workplace. One of my high school teachers loved him and made us read "Working"; the images of the workers he described in that book still remain with me today.
• Law.com had a notable piece of what to do when a witness is a former employee.  For employers, it has some good tips including one that should be obvious: Talk with that person because the other side certainly will when they find out about him or her.
• Michael Moore (and probably not the one you're thinking of) asks the provocative question of whether the ADA Amendments will open the door to nicotine-addiction claims.
• For employers who conduct drug testing under Department of Transportation guidelines, the changes effective this month are recapped by the Employer Law Report.
• World of Work reports on the issuance of a final supplemental "No-Match" Rule by the Department of Homeland Security.  (A "no match" letter indicates that the social security number provided by an employee at the time of hire may be invalid.)
• Ohio Employer's Law Blog reminds us that cost-cutting does not necessarily equate to age discrimination.  It's another example of the importance of understanding the role statistics can play in reviewing reductions in force.
• Although this post suggests that garden leave policies are an "increasing trend" among employers, these types of clauses have been around awhile. Caution should be used though in Connecticut to make sure that the clauses comply with theories on restrictive covenants in the workplace.

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Have you ever wondered about the fluctuating workweek method for calculating the regular hourly rate or the overtime premium rate for employees who are paid a weekly salary? Most have probably not. But if you are one of the few employers who do use it, have we got a Connecticut Supreme Court case for you. 

In a decision officially released next week, the Connecticut Supreme Court in Stokes v. Norwich Taxi, LLC (download the advanced release opinion here), looks to the federal laws and regulations to determine the parameters of the fluctuating workweek method as applied in Connecticut.

For background, on the fluctuating workweek, The Wage & Hour blog had this good summary:

Employees who are compensated on a salaried basis and whose hours of work fluctuate from week to week may be paid a salary such that the fixed amount covers all straight time pay for whatever hours are worked in a given week. The following conditions must be met: 1) Hours must fluctuate from week to week; and, 2) There must be a clear and mutual understanding between the employee and employer that the fixed salary is compensation for the hours worked each work week, whatever the number; 3) The amount of salary must be sufficient to provide compensation to the employee at a rate not less than the applicable minimum wage rate for every hour worked; and, 4) The agreed-upon salary must be paid even though the workweek is one in which a full schedule of hours is not worked.

This four-part test has formed the basis of several circuit court decisions.  The federal regulations on the subject are also helpful.  29 C.F.R. 778.114 can be found here.

So what did the court decide in Stokes? Well, first that the employer bears the burden of proving that the fluctuating workweek method applies under the facts of the case, not the employee.  The court then concluded that the employer failed to establish the second element of the four-part test (similar to the one above). 

The court also ruled on a number of other procedural issues, but those have minimal relevance for employers.

What's the takeaway from this case for employers? Understand the fluctuating workweek method.  It is not used all that frequently and if it is used, it is not the easiest to follow. Getting legal counsel involved at the outset to structure the position appropriately may be the easiest way to avoid problems in the future.

Final word of warning: earlier this year, new regulations were proposed that would modify the regulations on the fluctuating workweek. So this may be the first and last time the Connecticut Supreme Court looks at this issue in this fashion. Stay tuned.

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The Mashantucket Pequot Gaming Enterprise (more widely known as Foxwoods) and the UAW at Foxwoods have issued a joint press release moments ago that they have "reached a historic agreement to negotiate a union contract under Tribal Law, without either party waiving their rights under federal law."

The agreement comes after the parties agreed earlier this month to discuss the matter without waiving rights under federal law.  (For additional background, click here.)

As I indicated in an earlier post, an agreement by the UAW to negotiate under tribal law represents a major victory for Foxwoods in their quest to maintain tribal sovereignty and to have tribal law apply instead of federal law.  However, the agreement to negotiate a union contract still represents a solid victory for UAW because it will effectively end years of potential litigation (with no assurance of a victory at the end either).

According to the joint press release:

 

In resolutions passed Tuesday, the Mashantucket Pequot Tribal Council certified the UAW as the exclusive representative of a unit of table games, poker and dual-rate dealers and addressed other concerns raised by the union.

Both parties recognize the historic significance of this agreement and appreciate the fact that it could not have been accomplished without mutual respect for the legitimate concerns of all affected parties.

While today’s agreement is not a collective bargaining agreement, it permits the negotiations to start. Both parties are optimistic that it will result in a constructive dialogue leading to successful negotiations.

If the parties are unable to reach an agreement within five months, either of the parties has the right to have unresolved issues submitted to binding arbitration under the tribal system which provides for a final decision by a neutral party agreed to by the employer and the union.

I'll have more details soon as they become available, including expected press comment by Senators Dodd and Lieberman, Attorney General Blumenthal and the NLRB. 

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The Connecticut Appellate Court today ruled that an employer did not wrongfully discharge an employee who refused to participate in a return to work medical examination.  The Court held that the Americans with Disabilities Act (ADA) allows for medical examinations in certain situations and that the employer was justified in asking for one in this case. 

In Joyner v. Simkins Industries, Inc., (officially released November 4, 2008) (download here), the discharged employee claimed that the employer violated the public policy underlying the ADA by requiring her to undergo a return to work medical examination.  Under the "wrongful discharge" theory, she contended, she should not only be allowed to proceed with her claim but prevail on it as well.

(Notably, the Appellate Court doesn't explain why the wrongful discharge claim -- which is a narrow exception to the employment-at-will doctrine -- is the proper vehicle for such a claim when the employee might have explored a direct ADA claim.  I'll followup on that issue in a future blog post.)

The Appellate Court found that under the ADA (42 U.S.C. 12112(d)), employers must show that the medical examination is job-related and consistent with business necessity.  The Court said that federal circuit court decisions that have held that "business necessities may include ensuring that the workplace is safe and secure or cutting down on egregious absenteeism."  Here, the Court said that the employer had a legitimate interest in following up due to the vagueness of various notes and the employee's refusal to discuss the matter with her employer.

What was helpful for the employer in this situation was a policy in the employee handbook that provided for medical examinations -- at the employer expense -- in certain situation.

Thus, the takeaway for employers from this case is three-fold:

• Use this case as an opportunity to review your existing policies and procedures on return to work medical examinations;
• When employees refuse to return to work from absences or provide only scant documentation, consider using medical examinations to force the issue;
• Understand what is -- and is not -- allowed under the ADA regarding issues of return to work and medical examinations.

As always, the specific facts of the situation are important so consult with an attorney if you have any questions that arise.

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Continuing a theme this week of followups to older posts, back in February the U.S. Supreme Court, in Larue v. DeWolff, ruled that the Employee Retirement Income Security Act (ERISA) allows an employee to sue his employer because of a fiduciary breach that resulted in individual losses to his 401(k) plan.

Some predicted that the "Court’s ruling will result in a slew of meritless litigation from employees whose 401(k) plans aren’t doing as well in a shaky economy."

Yet, I was a bit skeptical of that prediction. 

Count me in the group as "not yet convinced" and still puzzled whether this will truly impact 401(k) administration.

Why? Because while the court did open the door to more lawsuits -- probably on a breach of fiduciary duty claim -- on an individual basis, the standard for proving such lawsuits remains the same and still high. Without being too technical, a participant in a breach of fiduciary duty case needs to show, for example, that the plan did not discharge its duties with the same "care, skill, prudence, and diligence" that a prudent person would use under similar circumstances.

So what's happened since then? The Workplace Law Prof blog reports that there hasn't been a rush of new cases.  Even the named plaintiff, Mr. Larue, decided to drop his case after determining it was not "financially feasible" to proceed:

You may recall that after the Supreme Court in LaRue v. DeWolff, Boberg, and Associates found that individuals could bring breach of fiduciary claims against their plans for mismanagement of their 401(k) accounts, there were many who predicted that such 401(k) suits would overwhelm the courts and generally spell disaster for the judiciary of this country (I didn't predict that, but I thought the principle of the holding was an important one).

Now, that coming avalanche of litigation might still happen in some world where the sky is green, but interestingly I just received word from DeWolff, Boberg's Supreme Court advocate, Tom Gies of Crowell and Moring, that Mr. LaRue has voluntary dismissed his claim in the action recognizing that it was too expensive to proceed.  Yup, that's right. These claims are now so easy that Mr. LaRue decided he couldn't proceed.

So, perhaps the next time you hear prognosticators predict that a Supreme Court decision will have a massive impact, view it with a healthy bit of skepticism. Sometimes, it takes some time to determine the real impact of a Supreme Court decision.

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About a year ago, I recapped a lawsuit brought by two former employees at the CHRO who claimed their employment was terminated improperly.  

At the time, I said that the complaint, brought by Valerie Kennedy and Paula Ross, "paints a picture of an organization run-a-muck with those who are charged with protecting against discrimination, as being those who allegedly did the discrimination."  The CHRO denied the allegations and the case was scheduled to be done with discovery by June 2008.

So, what's happened since then?

Publicly, not a lot.  The parties filed a status update with the court in June 2008 indicating that discovery was proceeding but that further extensions of time may be needed.  The case was then set down for a settlement conference with Magistrate Judge Garfinkel; that conference is now scheduled for November 12, 2008.  In light of that settlement conference schedule, the parties extended the discovery dates further and it is now scheduled to be complete in mid-December 2008.

(The papers reveal that further extensions may be needed to some some complications, so don't hold your breath on this date).  

So, if nothing significant (at least publicly) as occurred in a year, why is this matter still significant? Because it is a prime example at the relative speed that discrimination cases proceed in federal court.  For employers looking for quick resolution of such cases, that resolution is more likely to be found in a early settlement or mediation of a dispute.  

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In this blog, I often focus on the substantive law prohibiting discrimination cases, such as those under ADEA.  But a case decided late last week demonstrates the importance of making sure that employees follow the procedural requirements required by law under anti-discrimination provisions..

In Cassotto v. Potter (D.Conn, Oct. 21, 2008) (Hall, J.) (download here), a terminated employee sued for his employer (the U.S. Postal Service) for age discrimination under ADEA without having filed with the Equal Employment Opportunity Commission (EEOC).  The employer moved for summary judgment arguing that the employee never exhausted his administrative remedies.

What does that mean? Well, according the Court, ADEA has two options for employees to sue: Either exhaust the EEOC administrative procedures and, if not satisfied with the outcome, bring suit in federal court; or, bypass the administrative procedures by giving the EEOC a "notice of intent" to sue and waiting 30 days.

Here, the court said, the employee did neither and instead tried to rely on other discrimination claims that he filed in the past with the EEOC. The court rejected that argument and said that Second Circuit law puts the burden squarely on the employee to show that he or she has complied.  

For employers, the case is a simple reminder that defending cases of discrimination is often a two-front battle.  Ensuring that employees meet both the procedural requirements and substantive requirements to prove their case may increase the employer's likelihood of successfully defending such claims. 

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Sometimes I feel like a broken record (though in today's world, perhaps that should be updated to "corrupted music file").  For a while now, it's been apparent to most of us that employees continue to do silly things with e-mail and their social networking pages. 

Add a recent case in Connecticut to the list of cases where individuals are fired for inappropriate conduct on MySpace or social networking page.  (For a post on the use of social networking sites for background screening, click here.)

In Spanierman v. Hughes, 2008 U.S. Dist. LEXIS 69569 (D. Conn. Sept. 16, 2008) (download here), a teacher at an Ansonia, Connecticut high school created a MySpace page, ostensibly "to communicate with students about homework, to learn more about the students so he could relate to them better, and to conduct casual, non-school related discussions."

A full description of the case can be found at MediaShift, a PBS production: 

One of Spanierman's school colleagues became concerned about the page, which she said contained, among other things, pictures of naked men with "inappropriate comments" underneath them. She was also concerned about the nature of the personal conversations that the teacher was having with the students, and she convinced Spanierman to remove the page, which she considered "disruptive to students." Spanierman subsequently created a new MySpace page, however, that included similar content and similar personal communications with students. When the colleague learned of the new page, she reported it to the school administration, which placed Spanierman on administrative leave and ultimately declined to renew his teaching contract for the following year. After hearings that he attended with his union representative and later with his attorneys, he received a letter stating that he had "exercised poor judgment as a teacher."

While the discipline of a teacher for conduct outside the classroom raised a number of legal issues, the District Court squarely came down on the side of the school  and the 41-page decision is certainly not lacking in notable (if unusual) details, such as a "poem" and a title of "Mr. Spiderman" on the MySpace page. 

The court also found that the online exchanges "with students show a potentially unprofessional rapport with students, and the court can see how a school’s administration would disapprove of, and find disruptive, a teacher’s discussion with a student about “getting any” (presumably sex), or a threat made to a student (albeit a facetious one) about detention."

As an aside, however, footnote 13 of the decision is a must-read for its straight-face approach to online etiquette indicating that the court was taking "judicial" notice that spelling and grammar are not always followed online: 

The court has not altered the contents of this or any other exchange taken from the Plaintiff’s MySpace profile page. The court takes notice that spelling and grammatical rules are not always closely followed in such casual or informal online exchanges, and that oftentimes certain phrases are abbreviated or expressed in a form of shorthand (e.g., “LOL” can mean “laughing out loud,” and “LMAO” can mean “laughing my ass off”). Furthermore, such exchanges often contain so-called “emoticons,” which are symbols used to convey emotional content in written or message form (e.g., “:)” indicates “smile” or “happy,” and “:(” indicates “frown” or “sad”). 

Ultimately, the case reinforces the fact that online forums, blogs and social networking sites remain a viable way for employers to discipline.  For employees, the lesson is clear: be careful what you write. And for employers, while you should be mindful that employees may have some rights on their right to publish materials online, there is still a role to be played when that conduct interferes with work. 

(After posting, I discovered a helpful post from the Delaware Employment Law Blog discussing this case as well.)

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Last Friday, I reported on a late-breaking agreement to discuss labor matters between the UAW and Foxwoods. Since that time, media reports have been wide with editorials discussing the matter as well.

The Day has been leading the way with a few reports/editorials:

• In an editorial, The Day indicates that this discussion is a "critical first step" between the parties.
• In an article discussing the developments, The Day reports that Attorney General Blumenthal "lauded" the impending talks.

So what's going on now? Don't expect to hear anything from the parties for at least 30 days, if not longer. Richard Hankins, a Kilpatrick Stockton attorney representing the Mashantucket Pequot Gaming Enterprise states:

The parties are contemplating a framework that could constitute a win for everyone involved. It is important, however, that the discussions continue without external pressures at this point. When it is constructive to report on specifics, the parties will do so.

In thinking about this matter over the weekend, I've been convinced more than ever that the UAW's willingness to apply tribal law is a very big deal -- a view shared by my fellow bloggers at Workplace Prof Blog. 

But don't expect to hear a lot of that from Foxwoods. Despite the concession, Foxwoods still has to deal with UAW and there's no good reason to embarass the UAW by claiming a victory in the application of tribal law. (And to Foxwoods' credit, Foxwoods has not been particularly hostile to the UAW through this process instead focusing on issues like tribal sovereignty to make their case.)

So if an agreement is ultimately reached, expect to hear lots about how the agreement is a win-win for Foxwoods AND the UAW.  It may be that terms of a labor agreement are a win-win but make no mistake: applying tribal law to the union would just be a win for Foxwoods. 

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The Connecticut Supreme Court in a 4-3 decision today overturned the state's ban on same-sex marriages.  The ruling in Kerrigan v. Commissioner of Public Health (download majority opinion here) is ground-breaking, breathtaking and warrants all employers' full attention. 

All the major media outlets such as the New York Times and the Hartford Courant already have good coverage of the case, which has been years in the making.  Blog coverage is picking up with a post from A Connecticut Law Blog and Workplace Prof Blog, among those analyzing the case.

Because I'm traveling today, I'll post a further update early next week after I've had a chance to digest the full decision (85 pages) and all of the dissents but I've been trying to determine the immediate impact for employers in the state.

The short answer is that I'm not yet convinced that the decision is going to have a big impact for employers in the state. (Its impact in other areas is a different question.)

Many employers are already prohibited from discriminating on the basis of sexual orientation and have had to provide benefits to those who are involved in civil unions (to the same extent as married couples), so I don't think the decision is going to have as big an effect in the workplace as it will in other facets.  In fact, in the court's decision, it cites to the anti-discrimination state law provisions as support for its believe that being gay or lesbian is a protected class deserving of equal protection.

Given the "so what" nature that civil unions have had in the state for employers, it'll be interesting to see the real effect for employers. Obviously, same-sex spouses will now be eligible for certain employment benefits but there hasn't been a huge uproar from employers from the civil union law passage. So I suspect for many employers, the true impact is likely to less than in other areas of the law.

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The Connecticut Supreme Court today, in a per curiam decision, affirmed an appellate court decision that held that the time period for filing an employment discrimination complaint under state law (not federal) begins on the date the employee's employment actually ends, not the date that the employee received notice that his or her employment would end.

The court's decision in Vollemans v. Wallingford (available here), is devoid of any analysis concluding that the Appellate Court's decision was thorough and that any "further discussion by this court would serve no useful purpose."  (I should note that the decision will not "officially" be released until October 21, 2008.)

The Appellate Court decision, available here, essentially declined to file the 1980 landmark Supreme Court case of Delaware State College v. Ricks, which held that the notice date given to employees started the running of the statute of limitations period.  The appellate court decision here said that the remedial purpose behind the state's ant-discrimination laws differs from the federal laws.

For employers, this decision is yet another reminder of the split in interpretations arising between federal and state anti-discrimination laws. Despite some of the restrictions placed on litigants in federal court, state courts have been -- in general -- much more lenient in some of their interpretations.  Expect more state discrimination claims to be followed where the laws interpreting federal and state laws contrast.

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My post on the WWE lawsuit involving three former wrestlers known as Raven, Kanyon and Mike Sanders has drawn extraordinary interest. (Although I used to follow things when I was younger -- Jimmy "Superfly" Snuka was among my favorites -- I must say I haven't followed it closely lately.)

But along with the interest, I've seen rampant speculation about what the lawsuit is about and what the WWE's motion means. So here's a quick guide to some FAQs:

1) WWE Filed a Motion to Dismiss That Sounds Pretty Good. Is It Likely that WWE Will Win?

No.  Lawyers file these motions routinely and their job is to be an advocate, not necessarily spell out the other side's arguments. Wait until the wrestlers file something before making that determination.

 In fact, winning a motion to dismiss is pretty tough this early in the case. The courts have a fairly high standard that parties need to reach in order for cases to be dismissed this early.  Courts typically like to allow parties to develop the facts about a case, than dismiss it this early. 

2) If WWE Loses Its Motion to Dismiss, Does That Mean that the Wrestlers Win?

No. In fact, the issues that the court will decide now won't really go to the underlying facts; it'll rest more on what the law is.  Again, the standard to defeat a motion to dismiss is pretty low so don't be surprised to see the WWE's motion fail.  All that means, however, is that the parties will engage in discovery (taking depositions, exchanging documents), etc. Then WWE can file a "motion for summary judgment" that will say there is no dispute on certain facts and based on those facts, we should win.  Even if WWE loses that motion, the case will still just proceed to a trial.

3) What Is the Difference Between an Independent Contractor and an Employee? And Why Does This Matter?

There are a variety of tests that courts use to look at the issue, but the IRS has set forth a variety of factors to look at to make that determination.  But it's pretty much fact specific (which tends to mean that courts frown upon motions to dismiss). The IRS' general rule is that "an individual is an independent contractor if you, the person for whom the services are performed, have the right to control or direct only the result of the work and not the means and methods of accomplishing the result." (You can read all of the factors here.)

It matters because employees are typically entitled to certain terms and conditions of employment, such as benefits, vacation days, etc.  It's unclear from the papers filed on behalf of the wrestlers exactly what they are seeking.  Because the wrestlers are asking to represent a class of other wrestlers, a court ruling court affect ALL of WWE's wrestlers under booking contract. But it's much too early to predict whether that will be the case.

4) Can You Tell Me More About the Attorneys and Judge Involved?

The main attorney for WWE is Jerry McDevitt, from the lawfirm of K&L Gates in Pittsburgh, PA.  He's well-respected in the field and the firm has over 1700 attorneys world-wide.  (I should note that the local attorneys in the case are from Day Pitney, a prior employer of mine and well-respected in the Connecticut area as well.) 

The wrestlers are represented by David Golub and Jonathan Levine of Silver, Golub and Teitell LLP.  They are hardly slouches either and many Connecticut readers will remember that they brought suit on behalf of thousands of state workers earlier this decade affected by state layoffs.  They've handled sophisticated before and this case is certainly not out of their league. 

The judge is United States District Court judge Peter Dorsey, his bio is available here. Judge Dorsey was appointed United States District Judge for the District of Connecticut on July 29, 1983 and became Chief Judge in August 1994. (He has since moved on to Senior Judge status.)  He received a Bachelor of Arts degree in 1953 from Yale University and an LL.B. (law) degree in 1959 from Harvard University School of Law.  Although he's handled thousands of cases, he may be best known for his handling of various criminal cases, including the corruption charges against former Connecticut governor John Rowland. As for the timing of deciding motions, he has indicated in his chambers practices that he does not have any internal guidelines regarding the time for disposing of motions.

5) What's Likely to Happen Next?

The wrestlers will likely file their papers opposing WWE's motion by mid-November.  WWE will then have the opportunity to respond to that brief as well. A court decision on the motion to dismiss may take weeks or months to decide. Anyone anticipating a quick outcome on this will likely be disappointed.

6) Why Is This Case Important to Other Employers?

There are plenty of other companies (in the sports/entertainment industry and elsewhere) that rely on booking contractors or similar contracts to try to keep individuals from attaining employment status.  An end result of this case (and this might be a LONG way away) might be that the court says that the booking contracts notwithstanding, the individuals should've received employment benefits and the other privileges associated with employment.  This could send a message to other employers to review the relationships that they have with various individuals.

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UPDATE 10/8/08 - I have posted a FAQ on the lawsuit this morning due to the extraordinary interest in this subject. You can find it here. 

UPDATE 10/7/08 - Welcome various wrestling fans (who are visiting by the thousands this morning)!  The links to the contracts are below. 

One note to clarify some of the reports on this: These contracts were not "leaked". They were filed by WWE in federal court in Connecticut and are publicly available on the court's website.  I have merely downloaded them and have them available here since many people don't know how to access the court system.  If you have any questions or comments, please feel free to use the comment box.

As expected, WWE filed its motion to dismiss (download here) the lawsuit brought by three wrestlers who claimed that they were improperly classified as "independent contractors" and not employees.  (For prior blog coverage, see prior posts here and here.)

The argument is lengthy but fortunately the WWE has prepared a "summary of argument".  The gist of the argument is that the wrestlers don't have a a legal claim and that even if they did, those claims are barred by statute of limitations.  But reading it, one is also left with the impression that WWE's arguments have been developed over time and nuanced to withstand judicial scrutiny. 

First, ... the plain and unambiguous language of the Booking Contracts does not obligate WWE to pay plaintiffs’ taxes or make withholdings to pay such taxes, nor obligate WWE to provide plaintiffs with the “rights, incidents and benefits of employment.” Second, plaintiffs’ unjust enrichment claims fail as a matter of law because all aspects of plaintiffs’ relationships with WWE are governed by their Booking Contracts, including specifically those aspects of the relationship at issue in the present litigation. Third, plaintiffs’ breach of contract and unjust enrichment claims are barred by the applicable statutes of limitation. Fourth, plaintiffs’ state law claims are disguised attempts to create a private cause of action based upon the application of federal and/or state tax law and to circumvent the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq. ...

Fifth, even if plaintiffs sought leave to amend their state law claims as direct claims under ERISA, such an amendment would be futile since their claims must be dismissed for failure to file their Complaint within the applicable limitations period, for failure to allege exhaustion of administrative remedies, and for failure to allege any facts to support standing to bring direct claims under ERISA. Finally, because plaintiffs’ individual claims against WWE fail, plaintiffs cannot, as a matter of constitutional standing, continue to assert putative class claims on behalf of absent class members.

The wrestlers will now have several weeks to respond, though don't be surprised to see them ask for an extension of time of at least 30 days to respond further to it. 

While the legal brief may be of interest to in-house counsel and others in the entertainment industry, the exhibits to the motion will be of much greater interest to most.  Why? Because the exhibits contain the booking contracts of each of the wrestlers.

Wrestler Scott Levy's contract in 2000 (download here) appears to be the richest with guarantee minimums of $75,000, $150,000 and $200,000 for the first three years.  By comparison, wrestler Michael Sanders' contract in 2001 (download here), called for guarantees of $52,000 and $75,000 in the first two years.  And Chris Klucsarits' contract in 2002 (download here) called for a guarantee of $100,000 in each contract year.   

Wrestling fans may enjoy reading about their favorite wrestlers but for human resource professionals and others, the contracts are useful to read because they show a serious attempt by WWE to keep the wrestlers as independent contractors and not employees. 

In fact, paragraph 13.1 of the agreement specifically addresses this issue. That provision states "WRESTLER is an independent contractor" and "Nothing in this Agreement shall be construed to constitute WRESTLER as an employee..."  Will this be dispositive?  Probably not since parties cannot avoid legal obligations just by language of a contract, but it will be an obstacle for the wrestlers to overcome. 

Who will ultimately prevail? It's too early to tell, particularly without seeing the wrestlers' response.  But one thing is certain -- even WWE can't script the outcome to this fight.

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At a conference of the American Bar Association this morning, UC Irvine Law Dean Erwin Chemerinsky reviewed the last term of the U.S. Supreme Court and gave a sneak preview of the 2008-2009 term that starts on Monday.  Besides being an official law school dean (opening fall of 2009), this Constitutional Law guru is not shy about sharing his views of the current Court. 

Among his observations from the last term:

• The Supreme Court is definitely turning into a "pro-business" court.  He noted that issues like preemption of state laws were not falling along some ideological lines, but rather reflected a overall view that tends to remove restrictions on businesses.We''re likely to see this theme repeated this year.
• The Supreme Court's caseload continues to decline noting that the court decided less than 70 cases.  As a result, he said, the decisions are becoming wordier and longer.  He did note, however, that the Court is likely to increase its caseload this year based on the numbers of cases it has already agreed to hear.
• He said that although court eras are typically named after the Chief Justice, he said he viewed the current court as the "Kennedy" Court.  He noted that in virtually all of the 5-4 decisions decided by the Court, Justice Kennedy was in the majority.
• Despite the number of employment law cases decided last term, Professor Chemerinsky didn't highlight those cases has having particular significance, pointing rather to the Court's decisions in the gun-rights case or the Guantanamo Bay detainees, for example, as noteworthy.  

As for the upcoming term, he indicated that there were a few cases that would be interesting, but nothing as ground-breaking as last term.  He noted that a case involving FDA-approved warning labels and an FCC cases involved "fleeting expletives" were likely to receive the most press. 

Lastly, he highlighted the fact that the upcoming Presidential election may decide whether the Court becomes conservative or remains split among ideological lines.  He noted the obvious: that two of the oldest justices (Stevens and Ginsburg) are likely to retire soon.  If McCain is elected President, he may have the opportunity to appoint two conservative justices to serve on the court for years -- if not, decades -- to come. 

The Workplace Prof blog has a noteworthy post this afternoon as well about the upcoming Supreme Court term.  They predict that it may very well be a "blockbuster" year.  But as with box-office predictions, the best bet is to wait and see how the Supreme Court decides.

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The sword fight (rather, word fight) between a Connecticut Law Tribune columnist and the CHRO shows no signs of abating (for the previous rounds see my earlier post here). 

Round Three comes in today's paper with a further response from Karen Lee Torre to the letter posted by CHRO Acting Executive Director Robert Brothers.  Let's just say that she shows no sign of backing down from her earlier criticisms:

...I irked an agency over-populated by people invested in imaginary discrimination and stirred an agency stakeholder to employ an overused smear tactic against critics of his taxpayer-funded widget factory -- the canard of bigotry. Brothers asserts that I made “generalizations about persons of a different race or ethnicity.” Rubbish. I did no such thing. I cited the numerous frivolous complaints filed with CHRO, an agency that wastefully duplicates the federal Equal Employment Opportunity Commission. Brothers further interpolates into my column an attack on the “intellectual” gifts of his staff. More garbage. I said many were unproductive, not stupid.

Brothers insists my comments had “ugly overtones” that show his agency is still needed. Having already dispensed with Brothers’ bigot-baiting and redirected it to the trash heap where it belongs, let us consider what is truly ugly -- judicial records and CHRO’s annual report.

Then, Attorney Torre cites to this blog for support referring to a prior post where I note that the CHRO's human rights referees issued just six decisions over the last year.  While I'm flattered for the reference, the point I was making was not to show that the hearing officers were unproductive or incompetent -- only that it did not seem like an effective use of taxpower dollars to have so many.  

How can the back and forth stop?

Here's an novel idea: Attorney Torre and like-minded individuals should be appointed immediately to a task force or working group helping to improve the CHRO.

Will this ever happen? Probably not.  The CHRO and Ms. Torre will probably scoff and laugh at the idea for one reason or another.

But, if both could move beyond the rhetoric, they would realize that Connecticut's too small to have experienced practitioners like Ms. Torre stand on the sidelines, when a state agency can use help and advice on how to improve.  

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The Jewish holidays starting tonight encourage reflection. So, it seems particularly appropriate to do some quick updates on earlier posts:

• The lawsuit against WWE by three wrestlers continues to move very slowly.  Early press reports by another source suggested that WWE would be moving quickly to respond to the claims; they aren't.  WWE asked for an extension of time until today to file an answer to the complaint.  As of this morning, there was no answer filed.
   
• In two earlier posts (here and here) about a transgender discrimination claim decided in Connecticut, I noted that the case of Schroer v. Library of Congress was worth watching as well because it too involved a claim of transgender discrimination.  Earlier this month, a federal judge ruled in favor of the employee following a bench trial. Numerous blogs have posted on it, including Workplace Horizons, Laconic Law Blog, and the ABA Journal. 
   
• Last month, I posted about a NY Times story that suggested that Plaintiffs who reject settlement offers often do worse at trial.  Now a new study suggests that employment discrimination verdicts are on the rise. Manpower reports that the median award increased nearly 70 percent from 2006 to 2007. 
   
• This summer, I posted that the EEOC released new guidance on religious discrimination. Delaware Employment Law blog had an interesting post on what this means for employees who want to pray at work.  The Jewish holiday of Rosh Hashanah has led to some lawsuits as well so employers may want to refresh themselves on the appropriate rules when they have some employees absent over the next day or two for observances.
   
• And with all the financial collapses over the last two weeks, what does this do for the "Masters of the Universe"? According to Tom Wolfe, it means living in Greenwich, Connecticut. 

• And lastly, special thanks need to go to Susan Carter-Liebel for her post on a "Great Lawyer - Great Charity" and my work with the March of Dimes Signature Chef Auction. The night was a great success and the work we did will directly benefit those in Connecticut addressing the issue of prematurity. 

Wishing all a happy and healthy new year. 

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Nearly six months ago, a landmark ruling by the Connecticut Supreme Court held that Connecticut's anti-discrimination laws required employers to provide a reasonable accommodation to disabled workers, much like the federal counterpart, the ADA.

As I noted in an earlier post about the case, Curry v. Allen S. Goodman, Inc., the Court suggested that the employer had a duty to accommodate an employee even after firing.  In the Curry case, a fired warehouse worker's attorney raised issues about the employee's disability; the Connecticut Supreme Court suggested that the post-termination letter formed the basis of an employee's request for a reasonable accommodation.  In doing so, the Court relied on the ADA to provide some further guidance on what the state anti-discrimination law meant.

Now, six months later, the EEOC has released new guidance on the ADA  and performance-related issues that suggests that the Connecticut Supreme Court's interpretation of the ADA may be inconsistent with the EEOC's own interpretation. 

How so?  Well, take a look at question 10 of the EEOC's guidance.  Question 10 poses the hypothetical question: 

What should an employer do if an employee mentions a disability and/or the need for an accommodation for the first time in response to counseling or discipline for unacceptable conduct?

In response, the EEOC says:

If an employee states that her disability is the cause of the conduct problem or requests accommodation, the employer may still discipline the employee for the misconduct. If the appropriate disciplinary action is termination, the ADA would not require further discussion about the employee’s disability or request for reasonable accommodation.

The EEOC guidance adds that "the timing of a request for reasonable accommodation is important because an employer does not have to rescind discipline (including termination) warranted by misconduct."  The EEOC also cites to several federal appellate cases in further support of its interpretation.

This guidance seems to contradict the Curry decision because in Curry the duty to accommodate arose after the employee was terminated.

Where does this leave employers in Connecticut? Perhaps with a split in authorities -- at least until this issue is litigated more fully in Connecticut courts.

Until the courts analyze this issue further, employers need to be aware that Connecticut's anti-discrimination rules may be more stringent than what is required at the federal level.

Ultimately, the legislature should consider some straightforward fixes to these issues. With the ADA about to be amended significantly, having two sets of rules for employers to follow (and for employees to figure out as well) doesn't serve the public good. It only serves to create confusion and more litigation.  Making state anti-discrimination laws more consistent with federal law will help provide for stability and predictability.

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For companies involved in employment discrimination litigation, there is always a question of how far to push on discovery issues. 

A new case decided this week in U.S. District Court in Connecticut allows employers to push pretty hard to get an employee's medical and therapist records. In order for that to happen, the employee needs to put their medical condition "at issue" in the case.  Here, the court found that separate causes of action for "Intentional Infliction of Emotional Distress" and "Negligent Infliction of Emotional Distress" were enough to trigger the production of the underlying medical records.

In Green v. St. Vincent's Medical Center (download here), Magistrate Judge Thomas P. Smith was asked to decide whether a former employee who claimed that she had been sexually harassed in 2004 and suffered emotional distress was entitled to have her medical and therapist records remain private. 

The Court ultimately ruled that the claims in this case waived a privilege that she would have had if she had not filed such claims.

Magistrate Judge Smith recognized that in cases with "garden-variety" emotional distress claims, discovery has been denied. He observed that while there was "broad disagreement" as to what was "garden variety", this case was not one of them. 

This court agrees with the view that the plaintiff has placed her mental or emotional state in issue by asserting claims for both negligent and intentional infliction of emotional distress, and by seeking damages for severe emotional distress.

In the Green case, the records that the employer sought were from 1996-1999 -- several years before the employee ever worked for the employer and well before the alleged harassment occurred either. The employer wanted these records to determine if there were other "causes" to her alleged emotional distress.  Ultimately, the court agreed with the employer that this was a valid request.

Sometimes the information elicited will be helpful to an employers' case. But many times, it is not.  Trying to link events that are remote in time is always a stretch and, at trial, an employer runs the risk of being overbearing if it brings up these past matters.

Nevertheless, employers have another arrow in their quiver, so to way, to use if they want to during litigation.

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In employment discrimination litigation, it often falls to various supervisors, manager and human resources employees to represent the company and, if necessary, testify at a deposition or trial.

In nearly all cases, those managers and supervisors will be prepped by a company attorney before their testimony.  Manpower Employment Blog shares a few of the tried and true instructions that are often relayed to supervisors before testifying at a deposition.

Among the highlights:

• Be honest.
• Listen to all questions carefully.
• Keep answers as brief as possible.
• Don’t guess or speculate.
• “Yes,” “no” and “I don’t recall” are perfectly acceptable answers. 

None of this is terribly groundbreaking, but it is vitally important. All the strategy in the world won't mean a thing if your employees present terribly at a deposition or trial. Case settlement values may be affected or, quite simply, you can lose the case based on the witnesses.

There are lots of resources out there, including this outline or this article, on preparing to testify and preparing witnesses to testify. 

Have your employees prepare for the deposition much like they would for an important business meeting.  The attorneys who are handling the case are likely to be prepared -- there are lots of articles about the top ten "killer deposition questions" --, so  your employees should be too.

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As I've mentioned before, sometimes cases hit the headlines for a day only to disappear into oblivion. But thanks to some followup reporting, there's one story that we can give an update on.

Readers may recall a post from May of this year about a state attorney, Maureen Duggan, who wrote an anonymous letter about the state's Ethics Chief, allegedly purporting to be a parking lot attendant.  Above the Law also ran a post about it as well. 

So what's happened to that attorney since then? Over the last week or so, two events related to the attorney have hit the headlines.

First, state officials indicated that they planned no disciplinary action against the employee.  According to the Hartford Courant:

An investigator concluded in an Aug. 7 report, released Wednesday, that use of the phony identity by Duggan — who was a State Ethics Commission staff lawyer in 2004, and is now an attorney at the state's child-protection agency — was not reason to discipline her under state personnel rules.

Her conduct "may be construed to be wrong, improper or even deceitful," but doesn't add up to "sufficient evidence" to discipline her, wrote personnel administrator Stephen Caliendo of the Department of Administrative Services.

But that doesn't mean that the lawyer has escaped without punishment. In fact, her current job is dependent on her law license; that license is now in jeopardy after it was also announced that a state grievance panel filed a complaint against her that could lead to discipline or disbarment.  A hearing will likely be scheduled in November or December 2008, according to the Hartford Courant and the employee has retained Hope Seeley to represent her. 

And what's happened to the underlying employment claim by former state ethics chief? Well, the state filed its reply brief in support of its summary judgment motion in June (download here).   Notably, when the state filed its reply brief, it attached some additional exhibits as well including the full deposition of Maureen Duggan (available here).  Thus, readers can get a full picture of her deposition and not just the portions excerpted before.   

A decision on the motion for summary judgment is expected later this year.

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With lots of little things going up, it's time to followup on a few topics we've covered in the last few days and some other notable posts from around the web.

• First up, my post on the WWE Wrestlers was picked up by Above The Law editors yesterday. Today, the American Lawyer does a little story of their own on the lawsuit with a quote from K&L Gates attorney who notes that his strategy will be revealed later this week in a motion to dismiss.
   
• Today, my guest blogging at Overlawyered continues with a post on one individual's lawsuit against Amtrak for jumping from a train. You can read the court decision related to it here. 
   
• California Labor & Employment Blog discusses whether social networking site are good or bad for the workplace. As I've said before, policies should be tailored to the workplace.
   
• The Greater Hartford Real Estate Blog asks a question that lots of employers in the Hartford, Connecticut area ask: Can we attract young professionals to the area? The answer to that question dictates how well the whole area does.  Interesting how much "power" Generation Y is going to have on the economy and local area.
   
• And lastly, with the Democratic National Convention going on this week, the Workplace Prof blog reminds us to catch up with the "Plum Book" -- your list of jobs potentially available in a new presidential administration.

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Last week, I posted about a new decision from the federal court in Connecticut that threw out a transgender litigation claim. 

The Connecticut Law Tribune has some additional feedback on that case from the employee's counsel in today's paper.  I'm also quoted in the article; in it, I explain that transgender litigation -- while perhaps getting headlines -- remains a very small percentage of employment claims out there.

The employee's counsel told the Trib that the case was just a bit ahead of its time:

Bridgeport attorney V. Michael Simko handled the case pro bono and attributed the loss to a lack of witnesses to back his client's claims and the state's failure to approve a transgender discrimination law in the past three legislative sessions.

When filing the case in 2006, "I took a risk that the legislature would be farther along," Simko said. "I was a couple of years too early. The lack of law doomed my risky endeavor."

Interestingly, there is another transgender litigation case in Washington, DC worth watching; the bench trial in Schroer v. Library of Congress began last week. Workplace Horizons has the details on that case. 

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As I've cross-posted over at Overlawyered.com today, three wrestlers have sued Connecticut-based World Wrestling Entertainment, Inc. (WWE) claiming that they have been improperly classified as "independent contractors" and not employees.

On Friday, WWE removed the lawsuit to federal court from state court claiming that federal questions are implicated in what would otherwise seem to be a "breach of contract" claim.  (You can read the removal papers here.) What federal questions? Well, federal employment tax questions for one.

But the interesting part of the case is not the removal papers, but the underlying lawsuit itself. (You can download the complaint here.) The wrestlers -- who are seeking class-action status -- claim that they were required to sign a "booking contract" that specified the terms of their engagement such as their training regiment, costumes, and -- to the surprise of no one -- the "outcome of each match".  They claim that they were akin to "employees" and should have been paid as such.  WWE denied the allegations in a 10-Q filing late last month.

While the employees are seeking damages, typically, the penalty for employers is to pay the employment taxes of the employees with some penalties.  It's unclear here what else the wrestlers are actually seeking.  The case has been assigned to Senior Judge Peter Dorsey.

The proper classification of workers has been a thorny issue for employers, going back to the days of the landmark Microsoft lawsuit from the late '90s.    As an employer, you can get a headstart on the issue by going to the IRS website which has lots of commentary and resources on the subject. 

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Earlier this year, proponents of a bill to make transgender (or gender identity and expression) a protected category  failed in their efforts to get that category covered under the state's anti-discrimination laws. 

A new United States District Court case this week may provide proponents with an example of a case that, in their view, may have come out differently if "transgender" was a protected category.  (For a glossary of such terms, check out this post.)

In Yvonne Morales f/k/a Javier Morales v. ATP Health & Beauty Care, Inc. , Judge Thompson granted the employer's motion for summary judgment this week.  In the case, because Title VII does not protect "transgender" employees, the employee claimed that she was harassed because of her gender.  According to the court, she used a rarely invoked theory that she was being discriminated against for failure to comply with socially accepted gender roles.

(Admittedly, there is some dispute over the proper pronoun to use; the court uses "she", while the employer uses "he" in its papers.) 

Morales made several allegations (caution to readers: these are only allegations not facts):  Morales claimed that a shift supervisor regularly screamed at her for “the smallest reasons” and made several inappropriate comments to her.

The Court goes on to summarize some of the other allegations:

Morales states that [the shift supervisor] (1) told her that she had “a big p***y” on a day when she wore tight jeans to work; (2) asked her which of the men with whom the supervisor was standing was most attractive to her; (3) asked her if her ovaries hurt as she was holding her stomach while walking to the restroom; (4) told Morales that “[his] d**is curved” and “if [he sticks] it up [Morales' a**, [he] will take sh** out of it”; and (5) told Morales that she would not “fool around” with Morales as a female but probably would have done so when she was a boy.

While the court found that some of the above described acts could make Morales fit within the protected category, the court also found she did not produce sufficient evidence "as to whether the harassment she suffered solely on account of her failure to conform to gender stereotypes was sufficiently severe or pervasive to alter the conditions of her employment and create an abusive working environment."

The court's 34-page decision is obviously more detailed than this and is worth a read for any employer dealing with these issues.  Notably, for instance, the court found that the employee had significant attendance issues which eventually warranted her termination. You can also view the employer's motion for summary judgment papers here, and the brief filed in opposition here.

For employers, this case reminds us that well-documented termination decisions are more likely to be upheld by the court, even in the face of other allegations.  But the facts as alleged (and, if believed) portray a work environment that may not have been welcoming to all employees.  And so, while the employer has won the case and while the employer's conduct may not be illegal, it has no doubt spent a significant amount on attorneys fees, time and effort. 

Having effective human resource personnel involved and useful supervisor training can help reduce the risk of such suits in the future.   And certainly having a better understanding of transgender issues -- such as the program described in Nolo's Employment Law Blog -- will help reduce potential issues in the future as well.

Would the outcome in this case be different if gender identity were a protected category? Tough to say because the employer presented a strong case that the employee's attendance issues were significant.  But if the legislature acts next year on such a bill, there will certainly be more cases like this to follow.

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Is a trend forming in First Amendment free-speech cases in Connecticut? It certainly seems that way. 

Last week, a jury returned a verdict in favor of Andrea Charron in her lawsuit against the Town of Griswold.  The jury awarded damages in excess of $800,000 (not including punitive damages and attorneys fees). 

This is at least the fourth significant verdict in favor of employees in Connecticut just this calendar year.

The Day has the details as does the Connecticut Law Tribune,  According to the Trib:

At trial, Superior Court Judge M. Susan Peck had to balance the city’s interest in having an efficient workplace with Charron’s right to speak out on a matter of public importance. Griswold contended that Charron was legally dismissed in order to preserve tranquility and efficiency in town hall because Charron was not getting along with [the First Selectman].

What's interesting about this case as well is that the town voted to reject a $50,000 settlement proposal last month on the eve of trial by a vote of 9-8.  It's a perfect example of what I mentioned last week: when employers lose cases after rejecting settlement demands, the verdicts can be quite large.

For employers with free-speech claims under Conn. Gen. Stat. 31-51q or federal First Amendment claims, these recent verdicts show the risky nature of such claims.

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Returning from the ABA Meeting today, there were two stories over the last couple of days that have received some press. Taken together, they show the difficulties that companies and individuals have in predicting both the outcome of lawsuits and the costs of them.

First, the stories:

• The Financial Accounting Standards Board (FASB) is proposing new rules that would require companies to disclose the estimated cost of all continuing litigation.  Currently, companies only need to disclose estimated costs when they believe it's probable that they will lose the case.  On Tuesday, the WSJ reported several companies, including Connecticut-based Pfizer, told FASB that that estimating the costs of continuing litigation is “highly subjective, subject to huge swings as underlying assumptions change, and unlikely to provide financial statement users with meaningful or reliable information.”
   
• On Monday,the New York Times reported on a new study that showed that most Plaintiffs who reject settlement do worse at trial.  And while Defendants were wrong in just 24 percent of the cases, the cost of the decision was much more.  The ABA Journal has a brief recap:

The gamble of going to trial doesn’t pay off for most plaintiffs, according to a study of more than 2,000 civil suits from 2002 to 2005.

Sixty-one percent of plaintiffs who turned down settlement offers ended up faring worse at trial, according to a New York Times story on the study. The average settlement offer was $48,700 and the average award at trial was $43,000, a difference of $5,700.

Defendants were wrong in just 24 percent of the cases, but for them the cost of a bad gamble was must larger. The average plaintiff’s settlement demand in those cases was $770,900 and the average verdict was $1.9 million, a difference of more than $1.1 million.

The conclusion to draw from both these stories is that litigation is tough.  It's tough on plaintiffs and tough on defendants as well. Each side may have difficulty understanding the value of a case and have difficulty predicting what will happen. 

I'm sometimes asked at the very beginning of a case to present a "budget" and a estimated settlement value.  While it's not an impossible task, the fact is there are so many variables to a typical employment case. Will discovery be intensive? Will witnesses be cooperative? Will there be lots of motions filed? And is the Plaintiff a "rational" player? In other words, will the plaintiff actually take a reasonable settlement offer? Each of these factors play an important rule in predicting the outcome and determining the best settlement "value".

Quite simply: Employment litigation is unpredictable.  And for both employees and companies, settling a case on their own terms may be the best way to avoid uncertain costs and guarantee the best outcome.

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While a generic post today about sick leave might be more appropriate today given my absence for a few days, there are some actual updates in the labor and employment law arena that need telling.

One such story is the ongoing saga in between the UAW and the Mashantucket Pequot Trial Nation, which runs the Foxwoods Resort Casino in Connecticut.

As readers will recall, in mid-July the NLRB issued a new Complaint against Foxwoods for its alleged refusal to bargain with the UAW over a new labor contract.

On late Friday, August 1st, Foxwoods issued its formal answer to the complaint, along with a press release. 

But as longtime readers should know, there really is nothing new in either.  Foxwoods continues to insist that it is willing to bargain with the workers under tribal law, just not under federal law.  Foxwoods continues to insist, as it has from the outset, that tribal sovereignty must apply to it.  And so, its answer was really a mere formality.

Both sides show no sign of deviating from the projected path; the next obvious step will be an appeal in the federal courts of appeal later this year.  Until then, both sides will likely to continue issuing press releases touting one occurrence or another. None of it matters much at this point until the appeal is decided. 

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Earlier this week, I posted on a $4M verdict in federal court in a retaliation case, Tucker v. Journal Register Co.

But did you ever wonder what the verdict form actually looks like? In other words, when the jurors fill out the form and then hand it to the judge, what does that verdict form contain and what sorts of questions are the jurors really being asked about?

I was able to download the verdict form for the case and it can be accessed here.  This is the actual verdict form that the jurors are provided when they go back to deliberations and the only document they need to fill out to make their decision.   As you will see, the verdict form lumps the damages together for both claims that were raised, but addresses the underlying legal claims separately. 

Even more illuminating, however, is the instructions that the judge provided to the jury before their deliberations (available here) .   Despite cases running several years, the instructions on the case will be boiled down to judge a few instructions specific to the claims.  It's worth remembering when a lawsuit starts that the questions that the jury will consider are not as complex as we sometimes perceive the law to be.

And if the answers to the questions that the jurors will be asked aren't clear to the employer at the start of the case, the answers are not likely to change all that much through litigation. 

Photo Courtesy Library of Congress - c.1910, first all-woman jury in Los Angeles

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Suppose you, as an employer, have union-backed employees. The union files a grievance on behalf of three employees alleging that they did not receive "premium" pay on three holidays.  Because the dipsute cannot be resolved, the matter is sent to arbitration. 

For some employers, defining the issue to be sent to arbitration may not seem that important; after all, the arbitrator will just hear evidence relating to the supposed issue and issue a decision consistent with that issue.

The Court Decision

But a case released by the Connecticut Supreme Court today (to be officially released August 5, 2008) demonstrates the importance of crafting language that specifies what the exact issue is and what remedies the arbitrator will have available to it.

In Office of Labor Relations v. New England Health Care Employees Union, District 1199 (download here), the parties submitted the above factual scenario to an arbitrator with the following issues listed:

Did the [s]tate violate [a]rticle [twenty-one] of the [agreement] in the [s]tate’s application of holiday designation and payment of holiday pay to the [g]rievants? If so, what shall be the appropriate remedy, consistent with the [agreement]?

The arbtirator rendered an award in favor of the union finding that the state did indeed violate the portion of the collective bargaining agreement.  In doing so, the arbtrator issued an decision that ordered that the employer had to change its holiday policy to give premium pay to all employees under the collective bargaining agreement on a going forward basis. 

The state appealed, first to the trial court, and then ultimately to the Connecticut Supreme Court, on the grounds that the arbtirator exceeded his authority when issuing the "remedy" because the arbitrator's decision applied to all employees, not the three employees on whose behalf the issue was grieved.

The Connecticut Supreme Court agreed with the state, finding that the question presented should be interpreted like any contract:

As we have stated previously herein, it is well settled that we read contracts of this nature in a way that will give effect to every provision and apply a common sense construction of the words used. Thus, the language of the submission and its internal structure indicate that the question of relief was intended to address the harm to the three individual grievants named in the first question.

In essence, the Supreme Court stated that it was common sense that the remedy could only address the three employees at issue; otherwise, the parties would have structured the request differently.

The Takeaway

So what's the takeaway from this case from an employer perspective (and indeed from a union perspective)? Take time to craft the issues for arbitration in as specific a fashion as possible.  While the Connecticut Supreme Court upheld the langauge that was used in this situation, the question presented to the arbitrator could have been more specific and the issue could have been avoided entirely.