Connecticut Supreme Court
Connecticut Supreme Court

In a decision that will be officially released next week, the Connecticut Supreme Court has, at last, ruled that punitive damages are not an available remedy for state law employment discrimination claims.

You may recall that I discussed the Appellate Court’s decision that had originally found the same thing back in 2015.  The case, Tomick v. United Parcel Services, has been one I’ve also discussed in other places too.

The decision itself is one for the lawyers to get. The court was more interested in dealing with issues of “statutory construction over which [the court] exercise[s] plenary review.”

So, the court started with the statute itself. It states that a court “may grant a complainant… such legal and equitable relief which it deems appropriate including, but not limited to, temporary or permanent injunctive relief, attorney’s fees and court costs… ”

Notably, the court says that this language could be considered ambiguous, so the court had to dig a little deeper.  Ultimately, the court says that “To construe this language as encompassing punitive damages without expressly stating as much, as the plaintiff advocates, would be inconsistent with our approach to the statutory construction in [a prior case], in which we required, at least as a default rule, express statutory authorization for statutory punitive damages as a form of relief.”

From there, it’s a fairly easy path forward for the court.  It notes that the legislature used the term “punitive damages” in other human rights statutes, so it knew how to craft such language and remedies.  For example, public accommodation discrimination has punitive damages as a possible remedy.

Ultimately, the court says it is not for it to read punitive damages into the statute.

But it suggests one final avenue: The General Assembly.  “Had the legislature intended for § 46a-104 to provide for statutory punitive damages, it could have amended the state statute to reflect the changes to its federal counterpart, and remains free to do so.”

However, given the split in the state senate and other pressing state business, it seems unlikely we’ll see this change for a while.

What does this mean for employers? Well, it means that state law discrimination claims became worth a little less than they used to — though the Appellate Court’s decision had been factored in for a while now.  It doesn’t mean that such claims are dead — but it does mean that employees bringing claims will have one more reason to try to pursue the claim in federal court, than state court.

 

hourglassOne of the rules in employment discrimination cases that seems to have blurred of late is the notion that a complaint of discrimination must be filed within 180 days after the alleged discrimination.

A new decision from Presiding Human Rights Referee at the CHRO (CHRO ex rel. Roig v. State of Conn., Department of Correction et al) suggests that the 180 day rule can still be followed — at least in some instances.

In the case, which was just released on Monday, the employee filed an original complaint against the Department of Correction on March 25, 2013.  Approximately 16 months later, the CHRO permitted the complaint to be amended to include the UConn Health Center.

That was simply too late and does not “satisfy the requirements of equitable tolling”.  Moreover, the Referee said that there was no evidence provided to suggest that the Health Center was aware that the Compalint had filed the complaint and therefore had “constructive notice”.

The referee concludes: “To deny this motion to dismiss, on the facts before me, would render the mandatory statutory filing period meaningless and flout the intent of the legislature”.

This is not insignificant. The CHRO has, of late, been very generous to Complainants in allowing them to amend their complaints — even after the 180 day filing period has expired. This decision may put a chill in that practice or, at the very least, gives employers good reason to ask to dismiss the newly-raised matters when the case goes to a hearing or court.

 

Well, so much for a slow legislative session. New proposals keep popping up with changes big and small for employers.

The latest was reported on by the CBIA in a post entitled “Double Trouble for Businesses?” and talks about Senate Bill 106, which you can download here.

The bill purports to protect immigrants, but as noted by the CBIA, a good portion of it is preempted by federal law.  It would create a new class of discrimination and retaliation complaints entitled “unfair immigration-related practice” that would allow employees to file claims for a variety of reasons, including if an employer “contacted” immigration authorities.

But perhaps most concerning relating to these new immigration-related claims is a presumption that an employer has retaliated against an employee if any action occurs within 90 days of the employee “exercising” his or her rights.  That would create a whole new class of retaliation claims far beyond what even the courts have been willing to do.

Despite its label as a immigration-related bill, the proposal would also amend the state’s wage & hour rules to remove “a judge’s discretion to award less than double damages in a civil action to collect unpaid regular and overtime wages.”

The CBIA notes:

What is gained by mandating double damages when a judge already has the power to impose the penalty on truly bad-acting employers?

Could the answer be that it is to make the penalty so harsh that employers would be forced to settle wage disputes every time, even when the employer believes they did nothing wrong?

If the business doesn’t cut its losses and settle, even when in the right, the only other option is to undergo the expense of defending themselves through costly litigation. In other words, even when the employer is right, they lose.

Hard to argue with the CBIA on this point.  Wage & hour complaints have been one of the biggest areas of growth in employment law in the last decade and are outstripping all other class actions.

Again, it seems like a solution in search of a problem. Stay tuned.

 

 

 

The short session of the Connecticut General Assembly is set to begin on February 5, 2014.

But the jockeying for items to get on the agenda is well under way. The Connecticut Commission on Human Rights and Opportunities is circulating a proposed bill that would followup on a failed bill from last year’s term.

I previously discussed this proposal in a post last May.

At the time, the proposed bill was thought to be close to passage, but time ran out in the session before it could be picked up.  Earlier versions the bill proved quite troublesome; this latest version still has issues that haven’t been addressed and it’s important for employers to speak up now before the changes are put into place.

So what are some of the changes this bill would bring?

Changes to “Mental Disability”

The bill expands the definition of a “mental disability” to not only “mental disorders, as defined in the most recent edition of the American Psychiatric Association’s ‘Diagnostic and Statistical Manual of Mental Disorders’”, but also to including having “a record of or regarding a person as having one or more such disorders”.

Put aside, for the moment whether including everything in the new DSM5 is worthwhile. The more troubling issue is that the proposed law would continue to cover “regarded as” claims for mental disabilities. The references to a “past history” of mental disability in existing law being removed by this bill are less significant because a “record” of disability would now be covered.

Why is that problematic? Becaues that the definition is inconsistent with how a “physical” disability is treated; where is the reference to being “regarded” as having a physical disability?

Rather than continue to treat mental and physical disabilities as distinct from each other, the legislature should take its cues from the ADA and match its definitions accordingly.  Otherwise, we’ll continue to have three different standards to analyze disability claims — one for ADA claims, and two for state disability-related claims.

Continue Reading Legislative Preview: Will the CHRO Bill Get Passed This Year?

Not every case can be a U.S. Supreme Court case filled with sweeping pronouncements on employment law.

Blowing the whistle on a notable court decision

Indeed, many times the law develops through under-reported cases that you’ll never hear about.  The pronouncements may not be sweeping on those cases, but those cases help clarify a point that had been left uncertain before then and may open the door to other arguments as well.

Take the case of Commissioner of Mental Health and Addiction Services v. Saeedi, a Connecticut Appellate decision (download here) that will be officially released on July 9th.

Its ostensibly a whistleblower case under Conn. Gen. Stat. Sec. 4-61dd, where — as part of the damages awarded to the whistleblower — the CHRO ordered agency personnel to undergo professional ethics training and to alter the personnel file of the employee.

But the court was asked to look at something greater: Under the state’s whistleblower statute, where the CHRO has the power to award “any other damages”, does that include equitable (or non-monetary) relief?

The Appellate Court, in reviewing the language of the statute and the legislative history, concluded “no”.  Thus, the ordering of training was improper under the statute. But notably, the court said that because the CHRO was empowered to order reinstatement, the altering of the personnel file was appropriate to achieve that result.

That conclusion is not entirely surprising.

But the Appellate Court goes on a bit further in language that employers may see again in the future and that opens the door a crack to arguments about whether the CHRO can award other relief (perhaps even emotional distress damages) in discrimination cases.  (For background, I’ve talked about the CHRO’s attempt to include emotional distress damages as part of the award of damages.)

Continue Reading Appellate Court Limits Relief for Whistleblowers But Opens the Door in Discrimination Cases

In the five plus years of this blog, it’s rare to find topics that I haven’t covered, at least minimally.

One such topic, though, is the notion of “mitigation of damages”.  It is a concept found in lots of cases, but it has particular importance in employment discrimination cases.

An employee who claims he (or she) was wrongfully terminated because of his age, for example, cannot sit by and collect damages if he wins an age discrimination lawsuit. Rather, he must try to mitigate his damages, typically by conducting a job search to find comparable work.

Put another way, if a employee is laid off on a Monday, but is hired by a new employer on Tuesday for the same salary, the employee probably hasn’t suffered any real damages.

Last week, a federal court in Connecticut was confronted with the question of whether an expert can testify about a terminated employee’s failed job search and to what extent.

In Castelluccio v. IBM (download here), the employer wanted an expert to testify that the terminated employee had “not conducted a diligent pursuit of full-time, permanent employment opportunities to find a job.”

The court ruled, in essence, not so fast.  The expert cannot testify that the employee did not conduct a “diligent” job search because that is an “ultimate question in this case which is for the jury to decide.” He is also precluded from testifying that the plaintiff should have found comparable employment within 9-18 months, because it is not “reliable.”

But the expert can testify about the job search itself, including the “nature and degree of efforts which typify an average or successful job search…and how [the plaintiff’s[ efforts compare to what are typical — or successful efforts.”

Thus, testimony that compares the plaintiff’s job search efforts to the industry standard is permissible, so long as it doesn’t go beyond that.

What is also interesting about the case is that another federal court 12 years earlier, had placed the same limits on the testimony by the same expert.

For employers, the case is a useful example of what type of evidence is required of a terminated employee to mitigate his damages, and what type of testimony can be elicited by an expert to rebut that evidence.

At a minimum, employers faced with a termination claim should consider whether mitigation of damages will be a viable defense that may cut off damages at some point.

In prior posts, I’ve talked about the fluctuating work week and how it can be a useful tool for employers in limited circumstances. 

You might need a calculator

Yesterday, a federal court in Connecticut had a very interesting ruling that addressed whether an employer — when faced with a suit for overtime by a group of convenience store employees (“clerks”, say the plaintiffs; “managers”, say the employer) —  was allowed to use a fluctuating work week method if a jury found a violation of the FLSA. You can download the case, Hasan v. GPM Investments, LLC here.

For background, the court indicated that there were two questions that were typically presented in overtime cases like this (for those who like following the legal procedure, the court ruled on the issue in addressing a motion to preclude evidence from trial).

[First, s]ometimes employers classify employees as exempt, pay them salaries, and then later learn a particular role did not qualify as an exempt position and workers should have been paid an extra premium for overtime. Such employees, however, have never been paid an hourly wage, and courts are left to reconstruct what their ―regular rate of pay should have been.  Second, the [FLSA] allows employers to pay staff in any manner they wish – for example, by salary, piece rate, or commission. 29 C.F.R. § 778.109. Congress crafted this permissive rule in order to accommodate the ―almost infinite variety of employment situations in a free market economy…. But when employers and employees argue over pay, courts must find ways to convert a less common compensation scheme into a standard hourly rate.

To answer the first question, the employer argued that the employees were paid for a fluctuating work week and that they were paid a fixed salary no matter how much time they spent on the job.  It argued that this was merely an instance of converting an “unusual pay scheme into an hourly rate”.  The court explained the different consequences in simple and stark terms if a factfinder was allowed to use a fluctuating work week to calculate damages.

By way of example, suppose an employee makes a weekly salary of 1200 dollars. A court is faced with the task of putting her in the position she might have been in absent a violation. If court divides her salary by the legal limit of 40 hours, it gets a regular rate of 30 dollars per hour. In a week when the employee worked 60 hours, she would receive time and half, or 45 dollars per hour, for that additional 20 hours of overtime. Thus, her total compensation should have totaled 2100 dollars (1200 dollars in base salary plus 900 dollars in overtime).

But what if a court is faced with a fluctuating work week, not a standard overtime violation? In that same 60-hour week, the worker’s 1200 dollar salary only compensated her at a rate of 20 dollars an hour, not 30. And, for the additional 20 hours she only wins an overtime supplement of 10 dollars – she has already gotten the base rate of 20 dollars for every hour she worked, including the extra hours, and was only deprived of the slight bump of an unpaid half- time premium. For that week, then, she would only receive two-thirds of the standard calculation or 1400 dollars (1200 dollars in base salary plus 200 dollars in an unpaid overtime premium).

The court rejected the employer’s use of a “fluctuating work week” because “in a misclassification case, the parties never agreed to an essential term of a fluctuating work week arrangement — that overtime would be paid at different rates depending on the number of hours worked per week…  To assume otherwise, coverts every salaried position into a position compensated at a fluctuating rate.” 

The court noted that there were other deficiencies with the employer’s argument as well.  “For a fluctuating work week arrangement to make sense to both parties, employees should offset their relative loss from a grueling work week far above forty hours with the benefit of full pay for weeks that clock-in at less than forty hours.”  Here, the evidence was that the employees never had a short week; indeed the job description stated that store managers “were expected to work a minimum of 52 hours per week”. 

The case is another illustration of the perils of trying to rely on a fluctuating work week.  While it can provide some benefit for employers, it must be done properly and must not be raised after the fact.  Here, the court rejected an employer’s attempt to use it where it was seen as an after-the-fact justification for the failure to pay overtime.

Over the years, I’ve openly questioned whether the CHRO has been improperly awarding emotional distress damages and attorneys fees in employment discrimination claims.  

Indeed, back in February 2009, I noted “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.”

And one of my law partners followed that up in October 2010, also discussing the disconnect between what the courts have said, and what the CHRO has been doing. 

Then in June 2011, the Connecticut Appellate Court dropped a footnote in a case that again called into question the CHRO’s practice.

Last week, the City of Shelton filed a federal lawsuit (download here) against the CHRO challenging that practice. 

The suit, which was first reported by the Connecticut Law Tribune this week (subscription needed), claims that the CHRO is improperly denying Shelton (and other defendants) their Due Process Rights because the case will also address federal damages too without a right to a jury trial. 

Interestingly, the case presents a bookend to a Second Circuit case from 2006 (Nestor v. Pratt & Whitney — of which I was involved with earlier in my career), which allowed a plaintiff to proceed in federal court on her Title VII claims after a CHRO public hearing because emotional distress damages and attorneys fees were not available at the CHRO.  

Indeed, in that case, the Second Circuit noted matter of factly that the “CCHRO was not authorized to award, including compensatory damages (presumably in addition to-and not duplicative of-the back pay already received), punitive damages, attorney’s fees, and prejudgment interest.”

The Shelton case is still very early in the process but if the case proceeds to a decision, it could help provide some more clarity to an area that has become quite unclear over the last 15 years.  Employers should certainly watch this case closely.

City of Shelton v. CHRO

Suppose you just defended against a discrimination and harassment lawsuit by two former female employees. The jury found that discrimination

Justice for all...including attorneys

and harassment had occurred. But the jury awarded one employee only $1600 in economic damages and nothing for emotional distress. For the other employee, the jury did not award any damages.

Most employers would take that result in a heartbeat after jury trial.

Are the employees’ attorneys entitled to attorneys fees? In the vast majority of cases, the answer is “yes”; an award of attorneys fees traditionally goes along with a finding of discrimination.

But how much? In one case, counsel for the employees sought fees around $160,000 (or about 100 times the actual award of damages).  The trial court disagreed and relied on the one-third contingency provision in the engagement agreement between counsel and the plaintiffs.  $533 if you’re playing at home.

However, in a decision to be officially released on December 13th, the Connecticut Appellate Court overruled that decision and instructed the lower court to recalculate the attorneys fees.  You can download the decision in Noel v. Ribbits here.

It turns out that the fee agreement between counsel and the employees had a bit more language that the trial court suggested. Specifically, the fee agreement states that:

In the event of a successful resolution of the case, I agree that my attorneys shall be compensated at the rate of one-third of the entire settlement or judgment I receive in connection with my claims or an award of reasonable attorney’s fees, whichever is greater.

The court said that the lower court goofed by not considering this additional language:

In fashioning its award, the court did not consider the provision in the agreements for a reasonable award that might be greater than one based solely on the jury’s award of damages. Because the court ignored that provision of the fee agreements, under which the plaintiffs clearly were pursuing their quests for fees, and failed to assess the reasonableness of their claim for fees, we must conclude that the court’s award was improper.

In doing so, the court rejected the defendants’ arguments that the fees should be commensurate with the nominal damages awarded.  Rather the court said that various factors — adopted from the 12-factor test in Johnson v. Georgia Highway Express — should apply.  The Appellate Court, in a footnote, refers readers to a decision a few years back (Ernest v. Deere & Co), that adopted this 12-factor test in Connecticut.  Central to this determination is a look at the “reasonableness” of the claim for fees.

Are the attorneys out of the woods yet? No. It’s hard to believe that a court will uphold fees 100 times greater than the actual damages.  But it’s a safe bet to suggest that the fees awarded will be more than $533 too.

For employers, this is yet another reminder that discrimination cases can be expensive. Even “victories” like the one above can turn into losses when attorneys fees are calculated.

Over the last 24 hours, there’s been a lot written about the Supreme Court’s decision yesterday in Wal-Mart Stores v. Dukes.  Frankly, all of them are starting to say the same thing:  The decision is going to hamper all class-action discrimination cases going forward.

But that statement tends to simplify the decision a bit too much.  In my view, what the decision stands for is that it will be increasingly unlikely that the mega-class action (the one that covers an entire company) will be able to proceed without a very specific and tangible practice or policy that the plaintiffs can point too. 

What types of things are we talking about? Well, it would be unlikely, but suppose a company had a mandatory retirement age of 60 but without a legitimate basis for doing so. In essence, it was a company-wide practice of discriminating against older workers.  That type of class action will probably survive. Continue Reading Wal-Mart v. Dukes: What The Class-Action Decision Really Means for Employers