Beware: Failing to Report Sexual Harassment Can Kill Your Case

A recent case out of the Fourth Circuit Court of Appeals, McKinnish v. Brennan No. 14-2092 (4th Cir. Nov. 6, 2015), serves as a stark reminder of the important of utilizing employer's internal sexual harassment reporting procedures if any are available. 

In McKinnish, the employee received numerous sexually explicit text messages, photos, and videos from her supervisor over a ten-month period. She considered them to be harassing. But she never reported them to her employer as alleged harassment. McKinnish's husband eventually reported the messages to the employer after he discovered them. And the employer did the right thing and immediately terminated the supervisor.

McKinnish later sued and alleged hostile-environment sexual harassment under Title VII. The employer (the U.S. Postal Service) argued that McKinnish's claims should be dismissed because they were subject to what employment lawyers call the Faragher-Ellerth defense. The employer agreed. 

What is the Faragher-Ellerth defense?

In 1998, the U.S. Supreme Court used two cases called Faragher v. City of Boca Raton, 524 U.S. 775 (1998), and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998) to create a defense for employers against sexual harassment claims. It later expanded this defense in a case called Vance v. Ball State

The Faragher-Ellerth affirmative defense applies when: (i) the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior; and (ii) the plaintiff unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.

In other words, if the employer has an internal policy providing a process for reporting, investigating and correcting incidents of sexual harassment, and employee must make use of that policy. If she fails to do so an it is determined by the court that her refusal to utilize the internal process was unreasonable, she will lose her claim against the company. 

Often, employees don’t want to report sexual harassment internally because it is uncomfortable to talk with someone in HR about the problem, because the employee doesn’t believe HR really has her best interests at heart, or she fears retaliation.  In fact, that is exactly what Ms. McKinnish argued in her case. Sadly, the court rejected this argument, holding that an employee’s “subjective fears of confrontation, unpleasantness or retaliation” do not alleviate the employee’s duty to alert his or her employer to an allegedly hostile environment.

Bottom Line: Report Sexual Harassment

This is an area where the Supreme Court has been pretty consistent. The courts want employers and employees to try to work out employment-related problems before they resort to going to court. The law requires you to give the company a chance to do the right thing before you sue them. 

  • If you are being sexually harassed, report it.
  • Report it in writing (email is fine). 
  • Keep a copy (print the email).

Is it possible that in response to your report the company won’t take any action or might even retaliate against you? Yep. But if that happens then a lawyer will be in a much better position to help you and the court will be much more likely rule in your favor.

Another Court Follows Wallace Decision - FRCP 9(b) Fraud Pleading Standard Does Not Apply to SOX Whistleblower Cases

As previously written about here, I had the privilege this year of being a part of the team of lawyers representing the plaintiff in Wallace v. Tesoro. The opinion issued in favor of my client by the Fifth Circuit in that case created very positive law for SOX whistleblowers around the country. 

This past week I learned of a recent decision from the District of Connecticut in a Sarbanes-Oxley whistleblower retaliation case that adopted the Wallace pleading standard for SOX whistleblowers. The case serves to underscore the broad scope of protected conduct under SOX. In Wiggins v. ING, the court held that the heightened Rule 9(b) pleading standard for fraud claims does not apply to SOX retaliation claims and a whistleblower can plead that she had a reasonable belief that her employer violated one of section 1514A’s enumerated fraud provisions without specifically alleging that she believed that the employer’s conduct satisfied all of the elements of the federal statute/SEC rule that was allegedly violated.

In Wiggins, the Plaintiff worked as an operations consultant at an insurance company. She alleged that she disclosed irregularities in the processing of terminated retirement plans that reflected a lack of compliance with federal securities laws, including “frequent inaccuracies in market value assessments on retirement plans that were being terminated and sent to other providers, incorrect and inconsistent application of deferred sales charges, and deliberately failing to provide identified “problem” files for quarterly auditing procedures.” She alleged that the company terminated her employment in response to her whistleblowing.

Court Holds: Rule 9(b) Does Not Apply to SOX Whistleblower Claims

The company argued that Ms. Wiggins’ complaint should be dismissed because it alleged she had blown the whistle about fraudulent activities but did not allege said fraud with the heightened particularity required under Rule 9(b) for pleadings in which a defendant is sued for fraud.

The court rejected the company's argument and concluded that the “reasonable belief” standard set forth in the statutory text obviates any requirement for a SOX whistleblower to prove actual fraud:

ING’s argument overlooks the fact that section 1514A(a)(1) “protects an employee who `reasonably believes’ that conduct violates an enumerated statute.” Wallace v. Tesoro Corp., 796 F.3d 468, 480 (5th Cir. 2015). As such, there is room for a plaintiff to maintain a SOX whistleblower claim under Section 1514A, assuming he has satisfied the other pleading requirements, “even if the [complained of] conduct turns out not to be fraudulent.” Id.; see also Guyden v. Aetna, Inc., 544 F.3d 376, 384 (2d Cir. 2008) (“a whistleblower need not show that the corporate defendant committed fraud to prevail in her retaliation claim under § 1514A”). Because section 1514A protects the employee who acted under a reasonable belief that fraud was occurring — rather than protecting only those employees who report activity that is, in fact, fraudulent —”Federal Rule of Civil Procedure 9(b) does not apply because [Wiggins] brings a retaliation claim based on his reasonable belief of fraud rather than a claim necessitating proof of fraud.” Jin Huang v. Harman Intern. Industries Inc., Civil Action No. 3:14-cv-1263-VLB, 2015 WL 4601047, at *2 n. 3 (D. Conn. July 29, 2015); see also Wallace, 796 F.3d at 480 (“Although [the defendant] maintains that dismissal can be affirmed for failing to satisfy Rule 9(b), it is plain from the rule’s text that it does not apply to this [SOX] retaliation suit”). Thus, ING’s argument that the Amended Complaint must be dismissed because it does not meet the heightened pleading standard of Rule 9(b) is without merit, because SOX whistleblower claims do not need to be plead in accordance with this heightened standard.

The court went on to state that “a SOX whistleblower plaintiff can state that she had a reasonable belief that her employer violated one of section 1514A’s enumerated provisions, without specifically alleging that she believed that the employer’s conduct satisfied all of the elements of the federal statute/SEC rule that was allegedly violated.” In addition, the court noted that “in order for a SOX whistleblower plaintiff to allege that she reasonably believed that her employer was violating one of the enumerated provisions, the plaintiff must allege that she believed, at least approximately, that her employer’s actions satisfied the elements of the enumerated provision allegedly violated.”

Wiggins follows the Fifth Circuit's holding in Wallace, of broadly construing SOX protected whistleblowers and refusing to impose a heightened standard of objective reasonableness. This is important because it makes it much more difficult for an employer to seek dismissal of a SOX whistleblower case at the pleading stage on a motion to dismiss.

 

Hat Tip: Jason Zuckerman

 

Female Laundry Workers Receive $582,000 in Settlement of Sexual Harassment Case

Suffolk Laundry Services, Inc. will pay $582,000 to eight former employees to settle a sexual harassment lawsuit brought by the EEOC. The commercial laundry service also agreed to a four-year consent decree barring discrimination, instituting new procedures, and mandating training on sexual harassment to ensure that the kind of abuse that led to this lawsuit does not happen in the future.

EEOC charged in its suit, EEOC v. Suffolk Laundry Services, Inc. (E.D.N.Y. Case No. 12-CV-409), that Suffolk Laundry's manager physically and verbally sexually harassed multiple women who worked at the facility. Over the course of several years, the manager regularly touched them on their buttocks, hips, and backs, forcibly kissed them and made comments about their appearance and body parts. EEOC litigated the case in partnership with LatinoJustice PRLDEF and Outten & Golden, who represented seven of the women who intervened in the lawsuit. The workers were all recent immigrants from Mexico or Central America who did not speak English and were largely unaware of their rights before they were put in touch with LatinoJustice PRLDEF.

The consent decree resolving the case provides that, in addition to paying $582,000, Suffolk Laundry will adopt new procedures to prevent sexual harassment and will train its managers and staff on identifying and preventing sexual harassment and retaliation. The policies and staff training will be available in Spanish. EEOC will monitor Suffolk Laundry's compliance with these obligations and Title VII of the Civil Rights Act of 1964 for the next four years.

The High Cost of Employment Litigation

John Hyman has an article this month at the Ohio Employer's Law Blog discussing the high cost to companies of defending employment-related cases. In his article (which I commend to your reading) he sites to an insurance company report, which found that

A representative study of 446 closed claims reported by small- to medium-sized enterprises (SMEs) with fewer than 500 employees showed that 19% of employment charges resulted in defense and settlement costs averaging a total of $125,000. On average, those matters took 275 days to resolve.

Well, that does sound bad. But keep a couple of things in mind. First, the report discusses the 19% of employment charges that resulted in defense and settlement. I take that to mean that 81% of charges are resolved at the administrative level (EEOC) without the company incurring defense or settlement costs.

Secondly, this is an insurance company report. The purpose of the report is to convince employers that they need to purchase insurance against the scourge that is employment litigation. I'm not saying they are evil or anything but I would keep their motivation in mind when evaluating their report.

Still, there is no denying that employment litigation appears to cost more than other types of litigation involving the same general amounts in controversy. Why is that?? 

Sticker Shock

Sources I trust say that defending a case through discovery and a ruling on a motion for summary judgment can cost an employer between $75,000 and $125,000. If an employer loses summary judgment (which much more often than not is the case), the employer can expect to spend a total of $175,000 to $250,000 in legal fees just to take a case to a trial. (Source) Obviously this will vary somewhat based on geography but, even adjusting for that issue, this is a crazy amount of money to spend defending your average employment discrimination case.  The average employment case settles out of court for about $40,000. (Source)

Simply put, defending employment lawsuits costs too much. Why on earth are companies paying $75,000 to $250,000 to defend cases that, on average, can be settled for $40,000?

The answer is...you guessed it...complicated. From my viewpoint as an attorney who has practiced on both sides of the docket for both individuals and large corporations, the cause of this strange phenomena involves the interplay of several factors, including modern American law firm business structure, client emotional issues, and the way the courts have developed their procedures for handling employment cases. 

 1) Defense Firm Structure and Billing Pressure

Any law firm that wants to advertise itself as "full service" to its business-side clients needs to have lawyers who can defend employment-related cases. So they do. The problem is that there simply aren't enough employment-related cases to keep this many lawyers legitimately busy. In my city there are probably 3-5 times as many employment defense lawyers as there are plaintiff's side employment lawyers. As a result, defense lawyers' dockets have far fewer cases than the average plaintiff lawyer's docket.

But even though they have fewer cases to manage and the average settlement value of their cases may be relatively low (as compared to the commercial litigation partner down the hall), they still face the relentless pressure to bill fees for the firm. This results in a natural motivation for defense lawyers to be extremely thorough in the defense of such cases. File discovery motion after discovery motion, subpoena the plaintiff's employment records from 10 years ago whether there is any realistic belief they will gather relevant information or not, file a motion for summary judgment in nearly every single case, etc. You get the idea.

Is there anything unethical about thoroughly developing a case file? No, of course not. Does it make sense to advise a client to spend three times more to fight a case than it could have been settled for the week it was filed?  Perhaps not.

 2) Emotions

Employment-related cases can be very emotional for both sides of the docket. When an employment lawsuit is filed against a company, the managers who are alleged to have acted wrongfully understandably take the allegations very personally. They feel personally and professionally threatened. They often lock into a "flight or fight" emotional state that makes it nearly impossible for them to use sound business judgment in dealing with the claim.

Strong emotions are something that employment lawyers on both sides of the docket have to deal with. Getting clients to get past their emotions and to make a "business decision" about their case based on the realities of the law, the court, and the potential outcome of a trial is something about which I often commiserate with opposing counsel.

But defendants have a potential advantage in this regard. Usually, the defendant is a corporate entity. This means that often the manager who is accused of wrongdoing can be removed and protected from the decision-making process when it comes to directing the course of the litigation and settlement negotiations. Surprisingly, however, many defendants leave the manager involved. Almost without exception this makes the process longer and more expensive for all involved.

3) The Law

The law in the area of employment-related disputes has developed quite differently than the law governing say, personal injury or commercial disputes. From its inception, employment law has taken a fairly straight forward question, "Was the plaintiff terminated because of ______?" and obscured it in layer after layer of complicated abstraction. A lengthy required pre-litigation administrative process, tricky jurisdictional issues, multi-step prima facie standards, shifting burdens of proof, and the improper treatment of many fact questions as something that can be decided by a judge as a matter of law have combined to make employment law one of the most complex areas in which to practice.

The overly-complicated nature of the law applicable to employment disputes greatly increases the time and money spent litigating issues that are, fundamentally, pretty straight forward and easy to understand. This has led to a practice of Defendants filing complex and lengthy motions for summary judgment in nearly every single case. If the motion is successful and the case is dismissed then the plaintiff will likely file an appeal - a process that adds another year's worth of work and expense to the case. If the motion for summary judgment fails then, typically, the case will settle. Note that the case may settle not necessarily because the defendant believes it would certainly lose at trial but because it simply can no longer justify spending more time and expense on a case that can settle for less than has already been spent. And often the case settles for at or near an amount that it could have been settled for before the motion for summary judgment was filed.

The law applicable to employment cases (and more specifically summary judgment practice in such cases) desperately needs to be reformed to curb the wasteful and abusive overuse of dispositive motions. Summary judgment was originally designed to only be available in cases in which there is truly no genuine question of fact to be determined by a jury. Instead they are abused an filed be defendants in nearly every single case. Until this practice is reformed, both sides of the docket will spend more time and money than they should resolving employment-related disputes.

Is There a Solution?

The current system really isn't working terribly well for either plaintiffs or defendants. It doesn't serve anyone's interest to drag out these disputes for years and spend tens of thousands of dollars on attorney's fees and expenses when a very high percentage of such disputes could be resolved relatively early for far less money than most defendants end up paying in combined attorney's fees, expenses and settlement funds. I certainly don't claim to have all the answers but I do have a few thoughts from my time spent both as a plaintiff's lawyer and as a defense lawyer at a large international firm. I will discuss these ideas in an upcoming post. (And in case you were wondering -- No, binding arbitration is not the answer. It is actually more expensive and time consuming than litigation.)

 

 

What should I do if I'm being retaliated against at work?

I get a lot of questions from readers on all kinds of topics. For a myriad of reasons, it would not be appropriate for me to answer a specific individual's question or to otherwise provide legal advice online. However, I can address general areas of concern in a general way. While I hope that this information is useful, be warned that you absolutely should NOT consider any information you read here to be legal advice as to your particular situation. Legal analysis is very fact and geographically specific. If you have a legal question, my best advice is that you contact an attorney who specializes in such matters in your area. 


After reporting to HR about my manager with the company groping me, the HR representative filed no report and called the offender in the office to have him apologize to me. No other action was taken. Now I am being investigated and harassed at work and I don't understand why. What should I do?

While not every employer handles internal reports of misconduct this way, situations such as this are, sadly, something I hear about all too frequently from employees who come to see me. An employee follows the rules and does what he/she is supposed to do by reporting discrimination or harassment to HR, only to then be further harassed and retaliated against in response to his/her report. Often this retaliation comes in the form of management "keeping book" or noting every error or perceived mistake made by the reporting employee in an effort to build a record for termination. Sometimes the retaliation is much more severe. I have had cases in which employees were moved to a less desirable office location, passed over for promotions, accused falsely of misconduct, etc. Such a situation can make going to work seem almost unbearable. And in fact, this is often the goal of the employer -  to make your work life so terrible that you feel you have no choice but to quit.

So what can an employee in this type of situation do? Here are some suggestions:

  1. Document Everything in Writing - Your boss or HR representative might be saying all the right things and telling you everything is fine but those oral statements are easily forgotten once you have been fired and you are later trying to prove what was said. Your best bet: document everything in a way that is at least somewhat verifiable. If you need to report misconduct, harassment, or retaliation do it via a written letter or email. In either case, print yourself a copy of what you sent and take it home for safekeeping. If you have an important phone call or meeting with HR or your boss in which you outline the harassment and they promise to take some action, document it in a follow-up email to the HR rep in which you thank the rep for meeting with you and restate your understanding of what was said by both parties. Again, print yourself a copy and take it home. 
    • But Chris...can't the HR Rep later deny that my email correctly summarizes what was said? -- Sure, I suppose they could try to say that. But everyone (including the jury) will wonder why they didn't reply to your email back when it happened to correct your summary.
  2. Don't Make Unforced Errors - You know they are watching every move you make just hoping you screw up so they can fire you. So don't help them. Don't be late to work. Do good work. Get your reports in on time. Don't gossip and tell co-workers what a big jerk your boss is. etc. These are unforced errors and they will come back to bite you in the end. 
    • What if your boss doubles your workload to make it impossible for you to meet quota?  -- This happens a lot so don't be surprised if it happens to you. Don't let it make you so angry that you start acting out and thereby give the boss a legitimate reason to fire you. That's playing into his/her hands. Instead, do the very best job you can and document the retaliation by emailing HR to let them know what is happening (don't forget to print a copy and take it home) and then do your best to comply with the new work requirements. Keep your boss informed on your status by regularly emailing (keep a copy). Remember, in addition to actually trying to be a good employee under difficult circumstances, you are building the paper trail you and your lawyer may need later to prove you were trying to be a good employee under the circumstances. 
  3. Consider Filing a Charge with the EEOC and/or Visiting with a Lawyer - Know this: Once retaliation starts, it rarely gets better on its own. If a boss is retaliating against an employee, it signifies a type of "line in the sand". That boss has declared (perhaps only to himself or herself) that you have got to go...period. So don't beat yourself up when nothing you do to placate your boss seems to work. It may just be time to go outside for help. One choice is filing what is called a "Charge" with the Equal Employment Opportunity Commission ("EEOC"). Note that the EEOC only deals with EEO types of issues (race, sex, religion, disability, national origin) and retaliation if (and only if) you are being retaliated against due to an internal complaint that you were harassed or discriminated against based on one of those EEO categories. Another option that you really should consider is visiting with a qualified employment lawyer. If you have not been fired yet then your case might not be one that an employment lawyer can agree to take on a contingent basis. However, most employment lawyers will agree to a fee-based consultation, during which you can explain your situation and the lawyer gives you advice regarding what protections you might have under applicable law and what steps you need to take to best protect your interests. While legal fees vary greatly based on geography, you should expect to pay between $100-$500 for an hour of the attorney's time. In the grand scheme of things, this is a good value for the information you will receive. 

 

The U.S. Constitution Wasn't Always For Everyone

228 years ago yesterday the delegates to the Constitutional Convention signed the U.S Constitution. The Constitution is a document that has been revered for over two centuries as a miracle in legal drafting. It has weathered the test of time through its ability to grow and change to fit the America's evolving cultural norms through amendment and through thoughtful interpretation. Yet, despite its changes over the years, it has remained steadfast in protecting the important principals at its core.

In fact, the Constitution has changed quite a bit more than many people think. Take for example, the right to vote -- a right that surely most would agree forms the very foundation of a strong democracy. Some would be surprised to learn that most voters today would not have had the right to vote under the original Constitution. Women, African-Americans, Catholics and white men without substantial property holdings could not vote under the Constitution as it was originally drafted. Addressing this issue, Abigail Adams wrote a charming, though pointed, letter to her husband John Adams on March 31, 1776 reminding him “To Remember the Ladies.” But it was not until the 15th Amendment that the Constitution gave black men the vote, and not until the 19th Amendment did it actually “remember the Ladies.”

So, celebrate the Constitution this week. Celebrate the great men who drafted it. And celebrate the men and women who have worked for the last 228 years to nurture and help the Constitution grow so that it continues to protect an ever-evolving United States of America.

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United Airlines to Pay over $1 Million To Settle Disability Lawsuit

Supreme Court Lets Stand 7th Circuit Ruling That Reassignment Is Reasonable Accommodation

In a case that garnered nationwide attention, air transportation giant United Airlines Inc. has agreed to pay more than $1 million and implement changes to settle a federal disability lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC).

The EEOC's lawsuit charged that United's competitive transfer policy violated the Americans with Disabilities Act (ADA). The law requires an employer to provide reasonable accommodation to an employee or job applicant with a disability, unless doing so would impose an undue hardship for the employer. By requiring workers with disabilities to compete for vacant positions for which they were qualified and which they needed in order to continue working, the company's practice frequently prevented employees with disabilities from continuing employment with United, the EEOC said.

The consent decree settling the suit, signed by Hon. Judge Harry Leinenweber and entered June 11th, requires United to pay $1,000,040 to a small class of former United employees with disabilities and to make changes nationally. United will revise its ADA reassignment policy, train employees with supervisory or human resource responsibilities regarding the policy changes, and provide reports to the EEOC regarding disabled employees who were denied a position as part of the ADA reassignment process.

This resolution concludes a lengthy and complicated lawsuit. Although the EEOC originally filed the lawsuit on June 3, 2009 in U.S. District Court for the Northern District of California - San Francisco, United successfully moved for a change of venue to the Northern District of Illinois. Bound by an earlier precedent which held that a competitive transfer policy similar to United's policy did not violate the ADA, the lower court dismissed the EEOC's case in February 2011. However, in a decision reviewed by the full court, the Seventh Circuit agreed with the EEOC that EEOC v. Humiston Keeling, 227 F.3d 1024 (7th Cir. 2000) "did not survive" an intervening Supreme Court decision, U.S. Airways v. Barnett, 535 U.S. 391 (2002).  The Seventh Circuit reversed the lower court's dismissal and found that "the ADA does indeed mandate that an employer assign employees with disabilities to vacant positions for which they are qualified, provided that such accommodations would be ordinarily reasonable and would not present an undue hardship to the employer." The Supreme Court refused United's subsequent request for review.

Labor Day 2015

As we enjoy another Labor Day weekend, here are some quick facts about a holiday that is near and dear to our hearts here at the firm:

How Labor Day Came About

"Labor Day differs in every essential from the other holidays of the year in any country," said Samuel Gompers, founder and longtime president of the American Federation of Labor. "All other holidays are in a more or less degree connected with conflicts and battles of man's prowess over man, of strife and discord for greed and power, of glories achieved by one nation over another. Labor Day...is devoted to no man, living or dead, to no sect, race, or nation."

Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity and well-being of our country.

Founder of Labor Day

More than 100 years after the first Labor Day observance, there is still some doubt as to who first proposed the holiday for workers.

Some records show that Peter J. McGuire, general secretary of the Brotherhood of Carpenters and Joiners and a co-founder of the American Federation of Labor, was first in suggesting a day to honor those "who from rude nature have delved and carved all the grandeur we behold."

But Peter McGuire's place in Labor Day history has not gone unchallenged. Many believe that Matthew Maguire, a machinist, not Peter McGuire, founded the holiday. Recent research seems to support the contention that Matthew Maguire, later the secretary of Local 344 of the International Association of Machinists in Paterson, N.J., proposed the holiday in 1882 while serving as secretary of the Central Labor Union in New York. What is clear is that the Central Labor Union adopted a Labor Day proposal and appointed a committee to plan a demonstration and picnic.

The First Labor Day

The first Labor Day holiday was celebrated on Tuesday, September 5, 1882, in New York City, in accordance with the plans of the Central Labor Union. The Central Labor Union held its second Labor Day holiday just a year later, on September 5, l883.

In l884 the first Monday in September was selected as the holiday, as originally proposed, and the Central Labor Union urged similar organizations in other cities to follow the example of New York and celebrate a "workingmen's holiday" on that date. The idea spread with the growth of labor organizations, and in l885 Labor Day was celebrated in many industrial centers of the country.

Labor Day Legislation

Through the years the nation gave increasing emphasis to Labor Day. The first governmental recognition came through municipal ordinances passed during 1885 and 1886. From them developed the movement to secure state legislation. The first state bill was introduced into the New York legislature, but the first to become law was passed by Oregon on February 2l, l887. During the year four more states -- Colorado, Massachusetts, New Jersey, and New York -- created the Labor Day holiday by legislative enactment. By the end of the decade Connecticut, Nebraska, and Pennsylvania had followed suit. By 1894, 23 other states had adopted the holiday in honor of workers, and on June 28 of that year, Congress passed an act making the first Monday in September of each year a legal holiday in the District of Columbia and the territories.

Have a great Labor Day weekend everybody!

Texas Supreme Court Overturns Two Lower Courts to Take Away Workers' Compensation Benefits

I've recently written regarding what terrible shape Texas' workers' compensation system is in. Last week more bad news for comp claimants in the form of a Texas Supreme Court decision overturning the judgment of a district court judge and the lower court of appeals. Dallas Nat’l Ins. Co. v. De La Cruz (Per Curiam)

In 2004, the employee was working for her employer when she fell, injuring her left knee and back. In 2009, she filed a claim for lifetime income benefits (LIBs) pursuant to section 408.161 of the Texas Workers’ Compensation Act claiming that her 2004 injury caused the total loss of use of both her feet at or above the ankle and that the loss of use was permanent. A hearing officer with the Division of Workers’ Compensation determined that Employee was not entitled to LIBs. The district court reversed and awarded LIBs. The court of appeals affirmed. The Supreme Court reversed and rendered judgment denying employee’s claim for LIBs, concluding that the court of appeals erred in determining that the evidence was sufficient to support the trial court’s judgment.

The court's decision turns on its interpretation that LIBs are only available in the context of this case due to injury to the feet and ankles. In this case the injury was to the back and knee. While the injury may cause the feet and ankles to be unusable, there is no physical injury to those structures themselves and therefore income benefits are not proper. 

Thus, Ms. De La Cruz will not receive lifetime income benefits despite the total loss of the use of her feet. Such is the protection workers can expect to receive from the great State of Texas' workers compensation system.

 

Download the opinion.

Target in the EEOC's Crosshairs - Settles Case for $2.8 Million

The Wall Street Journal is reporting that Target Corporation has agreed to pay $2.8 million to resolve an EEOC Commissioner's charge of discrimination.  Based on the investigation, the EEOC determined hat three employment assessment tests formerly used by Target disproportionately screened out applicants for exempt-level professional positions based on race and sex.  

In addition, EEOC found that one of the assessments Target formerly used in its hiring process also violated the Americans with Disabilities Act (ADA).  The EEOC determined that this particular assessment performed by psychologists on behalf of Target was a pre-employment medical examination.  Employers are prohibited by the ADA from subjecting applicants to medical examinations prior to an offer of employment. 

The EEOC's investigation revealed that thousands were adversely affected when Target used these assessments in its hiring process.  The monetary settlement will be divided among these individuals as appropriate. Target will pay for a claims administrator to distribute the funds.   

During EEOC's investigation, Target discontinued the use of those tests that violated the law. Target has agreed that it will not use these assessments again as part of its exempt-level employment selection procedures.  In addition, Target has made changes to its applicant tracking systems to ensure that the collection of data is sufficient to assess adverse impact of any pre-employment assessments it conducts.

Read more: Wall Street Journal

 

 

Fifth Circuit Reinstates SOX Whistleblower Claim Against Tesoro Corp.

A unanimous panel of the Fifth Circuit U.S. Court of Appeals issued a decision last Friday reinstating Plaintiff Kevin Wallace’s Sarbanes-Oxley Act (SOX) whistleblower claim against Tesoro Corp. 

Wallace worked for the petroleum company Tesoro as Vice President of Pricing and Commercial Analysis. He discovered structural flaws in Tesoro’s accounting system that garbled important financial results and tax reporting used by management, the Board of Directors, and Tesoro’s public filings. Wallace confirmed his findings with company experts and reported them internally. On March 12, 2010, Wallace reported internally that he was being retaliated against by management. He was fired within hours of this report.

The district court had previously dismissed the case based on several procedural motions filed by Tesoro. Tesoro argued that the case needed to be plead pursuant to FRCP 9(b)'s strict fraud pleading requirements. Tesoro also argued that the lawsuit raised factual issues that had not been presented with particularity to OSHA (the administrative agency charged with conducting initial investigation into SOX charges).

The Fifth Circuit reversed the dismissal and remanded the case back to district court for further proceedings and discovery. In rejecting Tesoro's arguments, the Court stated:

The requirements of Rule 9(b) show how poorly it would work as a benchmark for reasonable belief that fraud is occurring. “At a minimum, Rule 9(b) requires allegations of the particulars of time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.” Benchmark Elecs., Inc. v. J.M. Huber Corp., 343 F.3d 719, 724 (5th Cir. 2003). But an employee who is providing information about potential fraud or assisting in a nascent fraud investigation might not know who is making the false representations or what that person is obtaining by the fraud; indeed, that may be the point of the investigation. Leaving those employees unprotected would have grave consequences for the statutory scheme of employee protection embodied in § 1514A and would do so in a way that appears completely unrelated to whether a belief actually is reasonable.

SOX was enacted as a reaction to a number of major corporate and accounting scandals, including Enron, and Worldcom. The law protects employees from retaliation for engaging in protected activity, which is defined as:

"any lawful act done by the employee to provide information, cause information to be provided, or otherwise assist in an investigation regarding any conduct which the employee reasonably believes constitutes a violation of section 1341 [mail fraud], 1343 [wire fraud], 1344 [bank fraud], or 1348 [securities fraud], any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders . . ." 


The undersigned is counsel for Mr. Wallace, co-counseling with San Antonio attorney Alex Katzman and Washington D.C. attorney Richard Renner. The U.S. Department of Labor, Office of the Solicitor of Labor, participated with an amicus brief asking the Fifth Circuit to reverse.


Download: Wallace v. Tesoro Corp., No. 13-51010 (5th Cir. 7-31-2015).

Texas' Workers Compensation System is Still Terribly Broken

Came across an article from the Texas Bar Journal this morning that was written a few years ago. The article did a masterful job of outlining the Texas workers compensation landscape and how it is utterly failing to help injured workers. I missed it when it was originally published but read it today and was saddened because, unfortunately, all of the terrible problems identified in the article still exist. 

From the article: 

[I]t would be hard to find [a state workers compensation system] that keeps legal fees as low, denials as high, and efforts of doctors and others to scam the system as plentiful as in Texas.

[Texas maintains a] claims system that critics charge is now wholly captive to the insurance companies that support it. It’s the result of a 20-year evolution larded with anti-tort politics. It wasn’t always so.

Here at my firm, we get calls from injured workers on a regular basis seeking help with their workers' compensation claim. We can't take those cases because changes to the law have made it virtually impossible for a lawyer to be paid anything for representing injured workers. We keep a list of the few area lawyers we know who do take such cases. More often than not the caller indicates he or she has already contacted those lawyers and they couldn't take the case either. 

In what began more than 20 years ago as an effort to curb what was seen as abuse by lawyers, doctors and claimants, the Texas workers' compensation system has become so hostile, so skewed toward delay and denial that lawyers, physicians and even legitimate claimants have been driven away.

This leaves Texas workers injured at work with literally no place to turn. Many of them can't work because they can't get any medical care. They can't get any medical care because the insurance companies paid to cover such claims can simply deny virtually all claims with impunity and keep the premiums as profit. And they can't hire a lawyer to help them because the laws have been structured in such as way as to make it impossible for their lawyer to be paid. Put simply, if you are injured at work in Texas you are pretty much on your own. 

For years, those who watch the workers compensation system in Texas have expected a public backlash to this state of affairs. It hasn't come yet. But it sure needs to. 

Read this article: Insult to Injury: Texas Workers' Comp System Denies, Delays Medical Help

 

 

Gay Marriage Ruling and Its Impact on Employees

PHOTO CREDIT: Ted Eytan

PHOTO CREDIT: Ted Eytan

The San Antonio Express News have coverage of the Supreme Court's gay marriage ruling and the impact it may have on the workplace. The good news is that employees in many larger employers will see no impact at all because their employers were already allowing for homosexual spouses in their benefit and leave plans. For others, new benefits and leave rights may be available now that every employer must consider them to be a spouse for all purposes.

Here is a clip from the story:

Texas employers not only will have to recognize their workers’ same-sex unions as a result of Friday’s landmark U.S. Supreme Court ruling legalizing gay marriage, they will have to provide those employees the same benefits that are extended to their heterosexual married workers, local lawyers say.
The state banned gay marriage in 2005 as an amendment to the Texas Constitution, so there were no requirements for companies to extend spousal benefits to gay employees. That will change now, though.
“It used to be three years ago you would grant same-sex benefits either because you felt like you had to or because you wanted to be politically correct,” said Bob Kilgore, an attorney in the San Antonio office of employment law firm Fisher & Phillips. “Now you have to do it because the law is going to require it.”
To be sure, many major local employers — including NuStar Energy LP, Rackspace Hosting Inc., Tesoro Corp., USAA and Valero Energy Corp. — already provide same-sex spousal benefits to both married and unmarried workers. Others, such as SWBC, have extended benefits to legally married same-sex partners.
About 66 percent of Fortune 500 companies extend health benefits to employees’ same-sex partners, according to CNNMoney.
So plenty of companies will have to make policy changes.
The Supreme Court’s ruling “is going to be far-reaching for employers,” said Cyndi Mergele, senior manager of human-resources consulting at Padgett Stratemann & Co. LLP, a San Antonio-based accounting and business advisory firm.
Mergele suspects some gay employees who have not disclosed they are married, perhaps because of concerns about job security, now will approach their employer.
“It’s safe to assume that for most employers, they’re going to have an immediate impact on their group health benefit plans,” Mergele said. “There may not be an impact until next enrollment session. But obviously, employees in a same-sex legal marriage will now be able to participate in group benefits that are offered to spouses.”
Chris McKinney, a San Antonio employment lawyer, said the Supreme Court ruling likely will simplify what has been a complicated issue for employers.
“Under this decision, gay couples are treated no better — but no worse, importantly — than heterosexual couples,” McKinney said. “They’ll have all the same rights and duties, but they’ll have to go get married.”

You can read the entire story here.

You can read the Supreme Court's Opinion here.

 

Texas Court Upholds New NLRB Union Election Rule

Union
Union

The NLRB's new rules designed to speed up union election cases were recently upheld by a district court judge from the U.S. District Court for the Western District of Texas. Judge Robert L. Pitman rejected the challenge to the new rules, which was filed by a collection of Texas business groups.

The new rules became effective in April of this year. They were designed to modernize the NLRB's old processes and eliminate unneeded litigation and delay in union election cases.  Among other changes, the rules:

  • Shorten the deadline for the employer to produce a voter eligibility list;
  • Shorten the deadline for conducting a hearing on any legal issues to a reasonable seven days after the Notice of Hearing is issued; and
  • Require that employee e-mail addresses and phone numbers be disclosed and electronically  transmitted to the Union to permit more efficient communication.

The business groups  challenged 10 different aspects of the new election rule.  They argued it should be invalidated because it invaded employees privacy, exceed the board's authority by restricting employers' ability to litigate, was arbitrary and capricious, etc. Basically the full-on, kitchen sink attack.

The attack failed. District Judge Robert Pitman rejected each of these arguments, citing repeatedly to the great deference that must be accorded to government agencies, as well as the flexibility and discretion that the NLRB had to make exceptions if the rules proved too burdensome in any particular instance.

The rules are being litigated in other venues as well and Judge Pitman's decision will undoubtedly be appealed.

Read More:

Communication is Key to Working With Your Employment Lawyer

Anthony Zaller over at California Employment Lawyer Blog put up a good article last week discussing some tips to make working with your employment lawyer easier and more effective. His five tips are:

  1. Ask a lot of questions.
  2. Respond quickly to your lawyer’s requests.
  3. Work with your lawyer before the need arises.
  4. Don’t kill the messenger.
  5. Be adaptable.

Click through to Anthony's blog to read his discussion of each of these points. It is an excellent article. But let me take just a moment to emphasize the importance of good communication. (See Nos. 1, 2 and 3). Communication with your attorney is probably the single most important thing you can do to make your case move more swiftly and arrive at a successful conclusion. As a client, the most important things you can do to help your lawyer are:

  • Make sure your lawyer has all relevant information - Don't hold anything back. If you have a criminal conviction, don't hide it. Got fired 20 years ago, make sure your lawyer knows. Thing there is a witness who has an axe to grind against you because of something unrelated? Tell your lawyer. Your lawyer can adjust and deal with almost anything...as long as he or she knows about it. Say it with me: Surprises kill cases!
  • Don't be difficult to contact - You are filing a lawsuit. If the matter is important enough to file suit over then it is important enough to stay involved and to be available to assist your lawyer in prosecuting. When your lawyer calls, take or return the call asap. If your lawyer requests information or documents, make it your highest priority to respond. If your lawyer needs to meet with you, take the time off from work and make the meeting. If your case isn't important enough for you to make it a high priority item then please don't waste everyone's time be hiring a lawyer in the first place.

Being available and communicating well will assist your attorney and greatly increase the chances of you getting the result you desire.

 

Mandatory Arbitration: How American Employers Opt Out of the Justice System

Mandatory forced arbitration is a nationwide problem in the employment context that needs to be addressed by lawmakers.  A recent study reported that roughly three-quarters of Americans believe they can sue an employer or company should they be seriously harmed or have a major dispute arise - even if they are bound by forced arbitration terms. And most Americans are unaware of the rights being taken away from them. Approximately two-thirds of those who have had an arbitration agreement enforced against them cannot remember seeing anything about forced arbitration in their Terms of Employment. This is because employers are not required to call arbitration language to employees' attention in any particular way or provide them with any specific information about the true meaning of the often legalistic language contained in an arbitration policy, clause, or handbook provision. So, many employers simply hide the provision in their large employment handbook that employees may or may not be given a copy of and have employees sign a written acknowledgement of having read it along with the 50 or so other documents that they rush new hires through on their first day. An excellent article came out this past week by Carmen Comsti, The Employee Rights Advocacy Institute's Paul H. Tobias Attorney Fellow, highlighting recent news stories of how employers are attempting to opt-out of complying with our nation's worker protection laws. Comsti writes:

"Forced arbitration compels workers to give up their rights to go to court and a trial by jury. It is imposed on workers by their employers requiring them to resolve workplace disputes before they arise in private arbitration rather than in a public court. Forced arbitration is anathema to our public justice system because it occurs in secret, private tribunals in the absence of accompanying legal safeguards such as a written record of the arbitration proceedings, the right to appeal the arbitrator's decision if the law is not applied correctly, or other guarantees that ensure a fair process. Workers often have no knowledge or understanding of forced arbitration provisions, but yet are required by employers to "agree" to it in order to get or keep a job. Forced arbitration reaches nearly every job sector in the country----from retail workers and restaurant employees to uniformed servicemembers and medical professionals. At least 27 percent of America's employers mandate their employees submit to forced arbitration, affecting more than 36 million people, or one-third of the non-union workforce. Despite the growing prevalence of forced arbitration, the injustices that workers suffer from it are only now being brought to the public's attention thanks to recent articles in the press. The following are some examples.

The Raiderettes Take On The Oakland Raiders

The Oakland Raiderettes filed a lawsuit last year against the Oakland Raiders alleging that it routinely violated California labor laws. This was the first in a series of lawsuits initiated by current and former National Football League (NFL) cheerleaders challenging the NFL's entrenched system of long hours, meager pay, and paternalistic work rules. In the Raiderettes' case, the Raiders paid the cheerleaders $125 per home game but required them to participate in practices, rehearsals, meetings, workouts, public events, uniform fittings, and photo shoots without compensation. Their contracts also imposed fines and discipline for minor deviations in physical appearance, such as weight gain and improper hair color.

The Raiderettes, however, may never have their day in court because their contracts force them to arbitrate their workplace disputes----believe it or not----before NFL Commissioner Roger Goodell. Commentators have cast doubt on whether the Raiderettes will receive a fair hearing under the circumstances. A California state court will decide later this year if the contract violates basic legal requirements of fairness and consent or if the Raiderettes will be forced into arbitration.

Federal Court Raises Concerns About Uber's Arbitration Clause Requiring Waiver Of Access To The Courts

In May, a federal court in California ordered Uber to change the wording of an arbitration clause in its contracts with drivers because it is potentially misleading and coercive. Uber drivers filed a lawsuit alleging the company cheated drivers out of their tips and misclassified them as independent contractors rather than employees. After Uber drivers filed similar lawsuits in Massachusetts and Illinois, but before the California case was filed, Uber surreptitiously changed its terms of service with its drivers by adding an arbitration provision requiring them to waive their right to participate in any lawsuit against the company pending in court. Recognizing Uber's unscrupulous attempt to interfere with current and potential drivers' access to the courts, the California federal court ordered Uber to send out corrective notices about the provision to Uber drivers. The federal court will consider the merits of the case once the drivers have been properly informed of their rights to participate in the lawsuit.

U.S. Servicemembers Forced To Arbitrate Workplace Claim

Forced arbitration also has been imposed on our nation's uniformed servicemembers, such as Captain Nicole Mitchell who was discriminated against in the workplace because of her military service. A U.S. Air Force Reserve Officer, Captain Mitchell was deployed for military service every few weeks with the elite "Hurricane Hunters" aircrew to track tropical storm patterns and developments. When she was not fulfilling her military duties, Captain Mitchell worked as a top rated on-air meteorologist for The Weather Channel. After The Weather Channel was purchased by NBC Universal in 2008, new management demoted and later terminated Captain Mitchell for taking time off to perform her duties as a Hurricane Hunter. Captain Mitchell filed a lawsuit against NBC Universal and The Weather Channel in federal court for violation of her rights under the Uniformed Services Employment and Reemployment Rights Act (USERRA), but discovered that her employment contract contained a forced arbitration provision. The federal court enforced the forced arbitration clause and Captain Mitchell's case was sent to arbitration in 2012. Since then, Captain Mitchell has been unable to secure employment as an on-air meteorologist and has been waiting for the arbitrator to hear her case."

Defense Lawyers Seem to Agree

Most business-side employment lawyers I speak to seem to agree, although for different reasons. They point out that research shows arbitration is neither faster nor less expensive than litigation. Couple that with the lack of appellate opportunities when something goes wrong and it really doesn't come out as a better option for companies either.

More:

Updates:

  • Originally Published 5-27-14
  • Updated:  5-20-15

It's Time for Paid Family and Medical Leave

The United States is the only developed country that doesn’t have a national requirement that workers get access to paid sick leave. The lack of a law leaves nearly 40 percent of Americans without access to leave. But progress has been made at the state and local level: three states — California, Connecticut, and Massachusetts — and 16 cities have passed paid sick leave legislation, covering millions of workers. John Oliver recently had a humorous but thoughtful piece on the subject on his show, Last Week Tonight:

[embed]https://youtu.be/zIhKAQX5izw[/embed]

President Obama has proposed the passage of the Healthy Families Act, a bill that would require most employers to give workers paid sick leave. The legislation calls for businesses with 15 or more employees to let them accrue up to seven paid sick days a year to care for themselves or a family member who falls ill. The White House estimates that it would give 43 million workers access to leave who don’t already have it. The leave could also be used by victims of domestic violence, sexual assault, or stalking to recover or seek assistance.

Unfortunately, such a bill is unlikely to make it through our current congress. Until the political gridlock in Washington changes, U.S. employees will continue to have to struggle whenever a birth or family illness occurs.

Hat Tip: Jon Hyman

 

EEOC Begins a Rollout of New Online Charge-Handling System

EEOC140822ACT Digital Pilot Program Allows Online Interaction With Employers

Last week the EEOC announced that 11 of its 53 offices will begin a pilot program called ACT Digital to digitally transmit documents between the EEOC and employers regarding discrimination charges. This is the first step in the EEOC's move toward an online charge system that will streamline the submission of documents, notices and communications in the EEOC's charge system. This system applies to private and public employers, unions and employment agencies.

The EEOC receives about 90,000 charges per year, making its charge system the agency's most common interaction with the public. The EEOC's ACT Digital initiative aims to improve customer service, ease the administrative burden on staff, and reduce the use of paper submissions and files.

The first phase of ACT Digital allows employers against whom a charge has been filed to communicate with the EEOC through a secure portal to download the charge, review and respond to an invitation to mediate, submit a position statement, and provide and verify their contact information. The newly designed EEOC notice of a charge will provide a password-protected log in for the employer to access the system in the pilot offices. Employers will also have the option of opting out of the pilot program and receiving and submitting all documents and communications in paper form.

EEOC Chair Jenny R. Yang commended ACT Digital as an innovative first step in streamlining the agency's charge system.

"The EEOC's pilot of a digital charge system is an important step forward that will benefit the public and our staff," Chair Yang noted. "This will improve our responsiveness to the public, efficiently utilize our resources, and protect the security of documents in our online system. We encourage employers to provide candid feedback and suggestions during the pilots so we can make adjustments to strengthen the system."

The pilot begins May 6, 2015 in the following EEOC offices: Charlotte, Greensboro, Greenville, Norfolk, Raleigh, Richmond and San Francisco. The EEOC offices in Denver, Detroit, Indianapolis and Phoenix will also begin their pilots by the end of May 2015.

Follow-Up Links

 

 

 

File a Charge With the EEOC Immediately Or Risk Losing Your Case

EEOC140822Some prospective clients are surprised to learn that most of wrongful termination or sexual harassment matters than an employment lawyer handles cannot be taken straight to court. This is, unfortunately, true.

Most cases having to do with discrimination or wrongful termination relating to an EEO category (age, race, sex, disability, etc) must go through a required administrative process before a lawsuit can be filed. Even more confusing is the fact that you may have more than one administrative agency to choose from when deciding where to file. Does it matter where you file? Sometimes yes. This administrative process and the choices that must be made early on in your case is one of the best reasons to consider hiring a lawyer earlier rather than later. More on why that is later. Short of that, here are some answers to some of the more basic questions regarding administrative filings:

What Types Of Cases Must Be Filed Administratively?

If your case involves potential claims for discrimination or termination based on an EEO category (age, race, sex, disability, religion, etc) then you probably need to file administratively. Claims for sexual harassment or retaliation for making a complaint or participating in an investigation of an EEO-related matter also must be filed administratively.

When Do I Need To File? Short Answer: IMMEDIATELY.

No really. The limitation periods for these types of claims vary depending on numerous factors but they are all short. In many states you will lose your right to pursue an action if you don’t file a Charge with the EEOC within 180 days of the event or occurrence you are complaining about. If you are a federal worker the deadline can be as little as 45 days. These are hard, fixed deadlines. There is no extending them because you had a good reason for delay. In many states, you only have 180 days to file a charge with the EEOC or lose your right to sue FOREVER, no matter how blatant the discrimination.

Where Do I Need To File

The default place to file your discrimination, sexual harassment or retaliation Charge is with the Equal Employment Opportunity Commission. They have offices in most metropolitan areas. Learn more here: http://eeoc.gov/employees/charge.cfm. You can also file a Charge by contacting them by phone at (800) 669–4000 (be prepared to wait an hour or more). However, depending on where you live, it might be better to file with a state or city agency that has a work-sharing agreement with the EEOC. Contact an employment lawyer near you to help you decide what is the best course of action in your area.

What Is The Process?

Filing a Charge is relatively easy once you arrive at the agency’s offices. You fill out a short form and then meet with an investigator who will complete the Charge documents for your signature. Each field office has its own procedures for appointments or walk-ins so check the website or call ahead for best results. It is always helpful if you bring with you to the meeting any information or papers that will help the investigator understand your case. For example, if you were fired because of your performance, you might bring with you the letter or notice telling you that you were fired and your performance evaluations. You might also bring with you the names of people who know about what happened and information about how to contact them.

Important: Keep in mind that the EEOC (and similar state agencies) can only investigate issues having to do with terminations and/or discrimination relating to EEO issues or retaliation for having made a complaint regarding EEO issues. They don’t investigate overtime or other pay issues and cannot help you if your termination is just because “my boss was mean.” Your issue must be EEO-related.

What Happens Next?

Once you have filed a Charge you may be invited to mediation. This is a topic for another article but the short version is that mediation is a voluntary process where the two sides of the dispute (you and your employer) sit down with an EEOC mediator for free to see if you can work out your differences and reach a pre-suit settlement. It is an excellent free service that the EEOC provides and I highly recommend it for most cases. Keep in mind, however, that you will benefit from having a lawyer with you at a mediation unless your case is so small that you wish to settle it for very little money (typically less than $15,000.00. If your case is worth more than this baseline amount, having a good lawyer will typically enhance the value of your case by more than you will end up paying your lawyer in fees up front or in a contingent fee on the back end.

How Do I Find A Good Lawyer?

This can be a difficult task but it is worth your time to find the right lawyer for your case. Geography plays a big role here. In some parts of the country there will be many qualified lawyers to choose from. In other areas there will be few. To get started, review my article on How to Hire an Employment Lawyer.

Same-Sex Spouses Enjoy FMLA Protection In All But Four States - And Yep, Texas is One of the Four

FMLA Same SexThere has been a good deal of reporting over the last month or so about the Department of Labor's recently-implemented final FMLA rule that expanded the definition of “spouse” under the FMLA to include employees in legal same-sex marriages. Both employee-side and employer-side groups praised the new rule because it brought uniformity to FMLA regulations. Although this rule took effect on March 27, 2015, a federal district court ruling in Texas left the status of the new rule in limbo.

After the DOL issued its final rule, Attorneys General in Texas, Arkansas, Louisiana, and Nebraska filed suit in a federal district court in Texas asking the court to strike down the DOL’s final rule. The court granted an injunction and halted the DOL’s enforcement of its final rule. Given this ruling, it was uncertain what the DOL would do. The agency has since announced that it will not enforce the rule in the four states of Texas, Arkansas, Louisiana and Nebraska.

In a court filing, the DOL said: “[W]hile the preliminary injunction remains in effect, the [DOL does] not intend to take any action to enforce the provisions of the Family and Medical Leave Act (FMLA) . . . against the states of Texas, Arkansas, Louisiana, or Nebraska, or officers, agencies, or employees of those states acting in their official capacity, in a manner that employs the definition of the term “spouse” contained in the February 25, 2015, final rule . . . .”

However, the DOL confirmed it will enforce the rule in the remaining 46 states.