Texas Employment Law Blog

Texas Employment Law Blog

Employment Law and Discrimination Issues

Wilson v. Cox – DC Circuit Denies Summary Judgment and Emphasizes Importance of Jury

Posted in Age Discrimination, Trial Practice & Litigation Issues

Courts sometimes get confused about who in the court system is supposed to decide whether an adverse employment decision was taken because of the employee’s protected class (age, race, gender, etc). That decision belongs to a jury. Let’s say that again because it is something that has been increasingly forgotten by some judges: That decision belongs to a jury.

Wilson v. Cox, No. 12-5070 (D.C. Cir. June 3, 2014) shows that some courts of appeals are starting to push back on this trend.  In Wilson, the Court makes the point that even if the employer might have had a very good and non-discriminatory reason for eliminating a position, when the principal decision maker also makes a statement to the terminated employee that “you didn’t come here to work, you came here to retire,” that comment, standing alone, is enough to require a jury – not the judge – to determine whether the termination was due to age discrimination or not.  The Court explained:

“While Cox in that statement expressed a general concern about a perceived tendency of older guards to fall asleep, he testified that he had heard about only one such incident. Additionally, the chief of resident services testified that he had never heard any reports about any guard sleeping on the job. Even if Cox in fact knew of one instance in which a guard fell asleep on the job, a statement indicating a generalized concern about older guards as a group, based on one incident alone, is suggestive of impermissible, inaccurate stereotyping. A reasonable factfinder could conclude that Cox attributed sleepiness to all older guards as a class and terminated the resident employee program on that discriminatory basis.”

Does this mean the plaintiff employee will necessarily win at trial? Nope. That’s not the point. The point is that a jury needs to hear the case and decide the facts, not the judge.


The so-called “Texas Miracle” is actually a horror story for Texas Employees

Posted in Workers Compensation Discrimination

Texas politicians like to take credit for the so-called “Texas miracle”. They claim the states relatively stable economy has been made possible by their zealous opposition to “over-regulation, greedy trial lawyers and profligate government spending”. Researchers are finding, however, that this so-called “miracle” has been a horror story for many Texas Workers.

A report this week takes a look at a dismal situation that state leaders have rarely mentioned – the grim side of the workplace: The State of Teas has a record of high worker fatalities and weak benefits. In fact, Texas has led the nation in worker fatalities for seven of the last 10 years, and when Texans get hurt or killed on the job, they have some of the weakest protections and hardest-to-obtain benefits in the country. The New York Times reports:

Texas is the only state that does not require private employers to carry workers’ compensation insurance or a private equivalent, so more than 500,000 workers — about 6 percent of the work force — receive no occupational benefits if they are injured on the job. On-the-job injuries can leave them unable to work, and with little recourse.

More than a million Texans are covered by private occupational insurance from their employers. Those plans are not regulated by the state but are often written to sharply limit the benefits, legal rights and medical options of workers.

Companies that carry workers’ compensation are given immunity from employee negligence lawsuits. While employers offering private compensation insurance are not protected from such lawsuits, many limit their legal exposure through the fine print of private occupational policies that employees accept when they are hired.

“Negligence liability can be contained by mandatory arbitration,” boasts one pro-industry study, conducted by claims processing company Sedgwick.

A 1998 Texas Supreme Court ruling, The Texas Mexican Railway Co. v. Lawrence P. Bouchet, also cleared the way for employers that do not carry workers’ compensation to fire injured workers without fearing a state retaliatory firing lawsuit. The decision was written by Greg Abbott, then a justice on the court and now the Republican attorney general and a candidate for Texas governor.

It is still illegal for employers in the workers’ comp system to retaliate against a worker for pursuing an injury claim, but the Bouchet ruling removed that prohibition for employers that do not carry the state-regulated coverage.

I now see an increasingly large number of employees who come through my office who have been injured on the job and can’t get benefits or terminated for reporting an injury, or both and I simply cannot do anything for them because Texas law simply doesn’t protect them.  The message to Texas employees is clear: if you get hurt on the job in this state nobody cares and no one will help you. And it looks like it will stay that way as long as the governor, the attorney general, the commissioner of the Texas Workers Compensation Commission and many in the legislature remain in the pocket of big business.

More: You can read the entire New York Times report here.


Posted in Other Articles

Americans who have been hunting for employment for more than six months appear to be finally catching a break. According to an article in today’s San Antonio Express News:

Faced with a shrinking pool of available workers and incipient wage pressures, companies are starting to give the longer-term unemployed a second look. The number of Americans without a job for 27 weeks or more fell to 3.37 million in May from 4.35 million a year earlier, though some of that drop reflects people leaving the workforce.
Let’s hope this trend continues.

Read the entire article here.

Non-Competes Are Out of Control

Posted in HR Management, Legislation

A recent New York Times article discusses the fact that employers are feeling increasingly free to abuse non-competes and force all types of employees, from camp counselors to hairdressers, to agree to them in order to keep their jobs. The article notes:

Noncompete clauses are now appearing in far-ranging fields beyond the worlds of technology, sales and corporations with tightly held secrets, where the curbs have traditionally been used. From event planners to chefs to investment fund managers to yoga instructors, employees are increasingly required to sign agreements that prohibit them from working for a company’s rivals.

The United States has a patchwork of rules on noncompetes. Only California and North Dakota ban them, while states like Texas and Florida place few limits on them. When these cases wind up in court, judges often cut back the time restraints if they’re viewed as unreasonable, such as lasting five years or longer.

As noted in the article and by Rob Radcliff in his blog post on the subject this week, Texas employers have great leeway in how they use noncompete agreements. As a result, noncompete abuse has come to be seen as just a normal business practice in the state.  Radcliff writes:

The reason behind non-competes appearing in more industries and occupations is because there is no downside for an employer to insist on such a covenant.  First off, a Texas employer can include and insist on a non-compete or non-solicit and then choose not to enforce it.  So the employer gets the benefit of intimidating or at least making an employee think twice about moving to a competitor but then never sue.  The employer could also send the former employee and their new employer some type of demand letter letter and force some type of dialogue or resolution.  Basically, the employer can us the threat of enforcing the non-compete without having a court every construe its terms or determine whether it is actually enforceable.

Why don’t more employees challenge non-compete in court?  The reason is simple – $$$$$.  Most employees don’t want to and can’t fund litigation to find out if there non-compete is enforceable.

Unfortunately what we have seen in Texas is that noncompetes have become the tool of choice for employers to attempt to restrict fair competition and suppress employee mobility. But Texas isn’t alone in this regard and now corporate overreaching is starting to create a backlash among the public and state legislatures in many states.  California and North Dakota already ban noncompetes altogether. Reform efforts are currently underway to ban or restrict the abuse of noncompetes in several states, including Oregon, Colorado, and Massachusetts. (We recently wrote about the Massachusetts effort here.)

I, for one, support this trend and hope that all states move to ban the fundamentally un-American practice of requiring an employee to give up his or her right to work in the future in return for an at-will job. At the very least they should be scaled back to apply only to the highest level of employees or those employees who truly have access to secret recipes or true trade secrets (no your rolodex does not qualify).  Current they are (at least in Texas) out of control and damaging to both employees and to businesses’ ability to find quality employees in many fields.


Employers Respond to World Cup Employee Distraction

Posted in HR Management

Daniel Schwartz has some good thoughts on the issue of dealing with employees who are distracted by major sporting events like the world cup. He cites European employers who caution against being overly harsh with employees who are distracted by the World Cup.

One overseas company goes even further by recommending that employers adopt a “flexible” workplace policy, suggesting that employers should have agreements in place to deal with requests for time off, sickness absence or watching TV or websites. … I wouldn’t go nearly that far. You don’t need “workplace agreements” here in the U.S. Work is still work and employers can still require employees to get work done during work hours — even with the World Cup.  But if you do find your employees going a bit astray, consider counseling them before serious discipline. No need to issue a red card when a yellow one, or even a warning, will do.

Daniel Schwartz – “World Cup Fever: Workplace Considerations Before Giving Out That Red Card

Smart approach. If an employer is going to lose a certain amount of productivity to the event anyway, why lose a bunch of employee good faith at the same time. Look for a way to embrace and capitalize on the excitement of the even. Have a “Wear your favorite team colors to work” day or set up a viewing room in the office and allow employees to sign up for flex time so they can watch their favorite team but then agree to work different hours to make up the time.



Massachusetts Moves to Ban Employee Noncompetes

Posted in HR Management, Legislation

Following California, Massachusetts appears to be moving closer to banning noncompete “agreements” in the employment context. Dawn Mertineit and Erik Weibust report in the Trading Secrets blog:

As the New York Times reported on Sunday, many of those who testified at the hearing opined that employee non-competes stifle competition.  For example, several legislators spoke of constituents who they deemed “trapped” in jobs because of non-competes signed years earlier, and insinuated that many employees are “ambushed” with non-compete agreements after they have quit their former jobs and rejected other offers.  The Boston Globe and the Boston Herald have each recently published articles about the purported perils of employee non-compete agreements, both of which (as well as the New York Times article) referenced a summer camp in Wellesley, Massachusetts that makes its camp counsellors sign them.

I hope this trend continues and all states move to ban the fundamentally un-American practice of requiring an employee to give up his or her right to work in the future in return for an at-will job. At the very least they should be scaled back to apply only to the highest level of employees or those employees who truly have access to secret recipes or true trade secrets (no your rolodex does not qualify).  Current they are (at least in Texas) out of control and damaging to both employees and to businesses’ ability to find quality employees in many fields.



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

Posted in HR Management, Legislation, Trial Practice & Litigation Issues

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 earlier this spring 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.”


More: Read the Employee Rights Advocacy Institute’s  National Study of Public  Attitudes on Forced Arbitration

Supreme Court Opinion Emphasizes Importance of Jury Trials In Civil Cases

Posted in Trial Practice & Litigation Issues

The Robbie Tolan shooting incident took place in Bellaire, Texas, on December 31, 2008, when 10-year Bellaire police veteran, Jeffery Cotton, shot unarmed Robbie Tolan, son of famed baseball player, Bobby Tolan, in his parents’ driveway. Tolan sustained serious injuries in the shooting and charges were pressed against Cotton. On May 11, 2010 a jury reached a verdict of not guilty and Cotton was acquitted, much to the dismay of minority leaders and critics around the country who continue to cite the case as an example of racial profiling and institutional racism. Here is one Court’s recitation of the facts of what happened that evening:

At around 2:00 on the morning of December 31, 2008, John Edwards, a police officer, was on patrol in Bellaire, Texas, when he noticed a black Nissan sport utility vehicle turning quickly onto a residential street. The officer watched the vehicle park on the side of the street in front of a house. Two men exited: Tolan and his cousin, Anthony Cooper.

Edwards attempted to enter the license plate number of the vehicle into a computer in his squad car. But he keyed an incorrect character; instead of entering plate number 696BGK, he entered 695BGK. That incorrect number matched a stolen vehicle of the same color and make. This match caused the squad car’s computer to send an automatic message to other police units, informing them that Edwards had found a stolen vehicle.

Edwards exited his cruiser, drew his service pistol and ordered Tolan and Cooper to the ground. He accused Tolan and Cooper of having stolen the car. Cooper responded, “That’s not true.”  And Tolan explained, “That’s my car.”  Tolan then complied with the officer’s demand to lie face-down on the home’s front porch.

As it turned out, Tolan and Cooper were at the home where Tolan lived with his parents. Hearing the commotion, Tolan’s parents exited the front door in their pajamas. In an attempt to keep the misunderstanding from escalating into something more, Tolan’s father instructed Cooper to lie down, and instructed Tolan and Cooper to say nothing. Tolan and Cooper then remained facedown.

Edwards told Tolan’s parents that he believed Tolan and Cooper had stolen the vehicle. In response, Tolan’s father identified Tolan as his son, and Tolan’s mother explained that the vehicle belonged to the family and that no crime had been committed. Tolan’s father explained, with his hands in the air, “[T]his is my nephew. This is my son. We live here. This is my house.”  Tolan’s mother similarly offered, “[S]ir this is a big mistake. This car is not stolen. . . . That’s our car.”

While Tolan and Cooper continued to lie on the ground in silence, Edwards radioed for assistance. Shortly thereafter, Sergeant Jeffrey Cotton arrived on the scene and drew his pistol. Edwards told Cotton that Cooper and Tolan had exited a stolen vehicle. Tolan’s mother reiterated that she and her husband owned both the car Tolan had been driving and the home where these events were unfolding. Cotton then ordered her to stand against the family’s garage door. In response to Cotton’s order, To-lan’s mother asked, “[A]re you kidding me? We’ve lived her[e] 15 years. We’ve never had anything like this happen before.”

The parties disagree as to what happened next. Tolan’s mother and Cooper testified during Cotton’s criminal trial1 that Cotton grabbed her arm and slammed her against the garage door with such force that she fell to the ground.  Tolan similarly testified that Cotton pushed his mother against the garage door. In addition, Tolan offered testimony from his mother and photographic evidence to demonstrate that Cotton used enough force to leave bruises on her arms and back that lasted for days.  By contrast, Cotton testified in his deposition that when he was escorting the mother to the garage, she flipped her arm up and told him to get his hands off her.  He also testified that he did not know whether he left bruises but believed that he had not.

The parties also dispute the manner in which Tolan responded. Tolan testified in his deposition and during the criminal trial that upon seeing his mother being pushed, he rose to his knees. Edwards and Cotton testified that Tolan rose to his feet.

Both parties agree that Tolan then exclaimed, from roughly 15 to 20 feet away, “[G]et your fucking hands off my mom.”  The parties also agree that Cotton then drew his pistol and fired three shots at Tolan. Tolan and his mother testified that these shots came with no verbal warning. One of the bullets entered Tolan’s chest, collapsing his right lung and piercing his liver. While Tolan survived, he suffered a life-altering injury that disrupted his budding professional baseball career and causes him to experience pain on a daily basis.

A civil suit followed the criminal trial. This suit was dismissed by the court through a process called summary judgment. The Fifth Circuit Court of Appeals agreed holding that there was no evidence that the police officer violated a clearly established law (an element needed to overcome a police officers normal immunity to civil suits such as this one).

Note that in the summary judgment context, the Court is not supposed to weigh the evidence or decide who should probably win at trial. That’s the jury’s job. In the summary judgment context, the Plaintiff should win if there is any question as to an issue of fact in the case. In this case it is hard to understand how there could be no question as to the police officers possible violation of law given that his own county’s district attorney chose to criminally prosecute him for just such a violation. Nevertheless, the court found “no evidence” and dismissed the case.

Critics would argue that this is yet another instance of the court refusing to allow a case to go to the jury by usurping the legitimate role juries. Many practitioners have lamented this increasingly serious problem in the federal court system over the last few years.  This blog as discussed it recently here and here.

That’s where this case takes a surprising turn. Last week the U.S. Supreme Court vacated and effectively reversed the Fifth Circuit’s decision, sending the case back to the appellate court for reconsideration. The court’s per curium opinion (A “per curiam” decision is a decision delivered via an opinion issued in the name of the Court rather than specific judges.) stated that the lower court had failed to adhere to the fundamental principle that, at the summary judgment stage, every reasonable inference should be drawn in favor of the non-moving party (here the plaintiff).  More specifically, the Court stated:

[The] Fifth Circuit failed to adhere to the fundamental principle that, at the summary judgment stage, reasonable inferences should be drawn in favor of the non-moving party, the decision below is vacated and remanded so that the Fifth Circuit can determine whether, when the evidence offered by the petitioner — who was shot by the respondent, a police officer — is properly credited and factual inferences are reasonably drawn in his favor, the police officer’s actions violated clearly established law.


And while “this Court is not equipped to correct every perceived error coming from the lower federal courts,” Boag v. MacDougall 454 U. S. 364, 366 (1982) (O’Connor, J., concurring), we intervene here because the opinion below reflects a clear misapprehension of summary judgment standards in light of our precedents.

This is a very notable case because such action by the Supreme Court is highly unusual. The high court simply does not normally get involved to correct lower courts for simply “getting it wrong.” They reserve their opinions for cases in which a key issue of law needs to be interpreted, normally to mend a split in legal interpretation between the various lower courts.

For this reason I don’t think it is going too far out on a limb to opine that the Supreme Court was trying to make a point in this case regarding the direction of summary judgment rulings by lower courts throughout the country. For years, civil rights attorneys practicing employment law have been lamenting the practice of courts expanding the use of summary judgment rulings beyond their  intended role in the process and invading the province of the jury. More recently, academics and even federal judges have taken note of the problem, declaring that the practice is “gutting” anti-discrimination laws and quickly leading to the death of the jury trial for such cases.

So, while this decision may get little coverage in the normal or even the legal press, I think that may very well be the most important decision the Supreme Court issues this term. The importance of the jury trial in protecting individual Americans from powerful forces, whether they be government or corporate, cannot be overstated. John Adams said it this way:

The people choose a grand jury, to make inquiry and presentment of crimes. Twelve of these must agree in finding the bill. And the petit jury must try the same fact over again, and find the person guilty, before he can be punished. Innocence, therefore, is so well protected in this wise constitution, that no man can be punished till twenty-four of his neighbors have said upon oath that he is guilty. So it is also in the trial of causes between party and party [civil suits]. No man’s property or liberty can be taken from him till twelve men in his neighborhood have said upon oath, that by laws of his own making it ought to be taken away, that is, that the facts are such as to fall within such laws. What a satisfaction is it to reflect, that he can lie under the imputation of no guilt, be subjected to no punishment, lose none of his property, or the necessaries, conveniencies, or ornaments of life, which indulgent Providence has showered around him, but by the judgment of his peers, his equals, his neighbors, men who know him and to whom he is known, who have no end to serve by punishing him, who wish to find him innocent, if charged with a crime, and are indifferent on which side the truth lies, if he disputes with his neighbor!

Letter of John Adams to the Boston Evening Post.

Thomas Jefferson added “I consider trial by jury as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution.”

This opinion shows that even the U.S. Supreme Court has taken note of this issue. In my personal opinion, I fear that many federal judges have gotten so caught up in the minutia of hyper-technical summary judgment tests that they now fail to see the forest for the trees. The simple truth is that the letter of the law regarding summary judgment does not favor the granting of summary judgment motions in a high percentage of civil rights employment cases. Quite the opposite. The letter of the law states that summary judgment is a tool to be used sparingly and only to weed out the most meritless of cases. The default is always supposed to favor the resolution of factual disputes by a jury trial.

In Tolan, the country’s highest court has gone to a rather extraordinary length to make this point yet again.  Let’s hope the lower courts are listening.


White House Uses Executive Actions to Push Gender Equity Issues

Posted in Legislation, Sexual Discrimination

Faced with a Congress that seems to be determined to do little or nothing for the remainder of the year, the White House is attempting to do what it can using executive orders to push forward efforts to improve pay equity for women. This month, the President took two new executive actions to help combat pay discrimination and strengthen enforcement of equal pay laws:

First, the President is signing an Executive Order prohibiting federal contractors from retaliating against employees who choose to discuss their compensation. The Executive Order does not compel workers to discuss pay, nor does it require employers to publish or otherwise disseminate pay data – but it does provide a critical tool to encourage pay transparency, so workers have a potential way of discovering violations of equal pay laws and are able to seek appropriate remedies.

In addition, the President is signing a Presidential Memorandum instructing the Secretary of Labor to establish new regulations requiring federal contractors to submit to the Department of Labor summary data on compensation paid to their employees, including data by sex and race. The Department of Labor will use the data to encourage compliance with equal pay laws and to target enforcement more effectively by focusing efforts where there are discrepancies and reducing burdens on other employers.

This week, the Senate is considering the Paycheck Fairness Act, which, if passed, would help ensure the standards put forward by the executive order he is signing are applied to all employers covered by the Fair Labor Standards Act.

These are important steps to achieving pay fairness in this country. I encourage everyone to call your senator to voice your support for the Paycheck Fairness Act.


Case Update: New Arbitration Agreement Not Applicable to Previously-Filed Case

Posted in Overtime Law, Trial Practice & Litigation Issues

Russell v. Citigroup, Inc. (6th Cir., April 4, 2014)

In this case the company tried to retroactively apply a newly-signed arbitration agreement to a case after the case had already been filed. Not surprisingly, the court rejected this novel temporal approach:

From 2004 to 2009, Russell worked at Citicorp’s Florence, Kentucky call center. He had signed a standard contract to arbitrate any disputes with the company. The agreement covered individual claims but not class actions.

In 2012, Russell filed a class action against the company, claiming that the company did not pay employees for time spent logging into and out of their computers at the beginning and end of each workday. Citicorp did not seek arbitration.

In 2012, with the lawsuit still in progress, Russell applied to work again at Citicorp’s call center and was rehired. Citicorp had updated its arbitration contract to cover class claims as well as individual ones. Russell signed the new contract and began work in the call center. Russell did not consult with his lawyers before signing the new contract.About a month later, Citicorp’s outside attorneys learned that he had been rehired and sought to compel Russell to arbitrate the class action, which by then had begun discovery.

The district court held that the new arbitration agreement did not cover lawsuits commenced before the agreement was signed. The Sixth Circuit affirmed.  

Download the opinion here: Russell v. Citigroup, Inc.

Source: Justia.com