$500,000 Defamation Settlement for a Facebook Comment

According to a report in the ABA Journal, a woman has agreed to pay $500,000 to settle a defamation suit over a comment she made on Facebook that allegedly implied a onetime rival had caused the death of her child. 

The case reportedly resulted from a disagreement between two North Carolina women who originally were cooperating in an effort to take control of a local low-wattage radio station. They had a falling out and eventually the toxic dispute moved online. According to the report, one of the women made a comment on Facebook regarding the other that "I didn't get drunk and kill my kid", implying that the other woman had done so.

The comment was particularly harmful to the other woman because her son was killed by an accidental shooting while playing with another child in the 1970s. 

And while the comment at issue does seem pretty nasty, a $500,000 defamation settlement in a case like this is pretty remarkable. As is often the case with settlements, one wonders if there were other issues motivating the parties that did not make the news reports.

View the entire article.

Reporting Harassment or Discrimination is a Tricky Business

Mike Haberman has a post out this week titled "Who Do You Report Harassment To If the Harasser Is the CEO?".  It is a thoughtful article and it makes the excellent point that HR for every company needs to bake into their policies a method by which an employee can internally report sexual harassment being committed by the CEO or owner of a company without risk of retaliation. I think that is an excellent goal to strive for and I hope that all HR departments set that as a goal.  There is only one problem with the premise of the article. 

The effort will almost certainly fail. 

Extra Credit if you can identify the initials of the Florida "businessman" Frank and Michael are discussing in this scene.

Extra Credit if you can identify the initials of the Florida "businessman" Frank and Michael are discussing in this scene.



Michael Corleone: "C'mon Frankie... my father did business with HR, he respected HR."
Frank Pentangeli: "Your father did business with HR, he respected HR... but he never trusted HR!"





HR is, in my opinion, possibly the most challenging role for any manager to do and do well. It is arguably designed to fail. The problem is obvious: HR serves two masters. On the one hand, HR is designed to serve as a helpful ombudsman to employees. To assist employees who are being mistreated. To conduct thorough investigations and correct inappropriate behavior against employees. On the other hand, HR is required to defend management against accusations of unlawful employment practices. HR is usually directly involved in the termination decisions that lead to EEOC filings. HR is then in charge of or at least heavily involved in drafting the company's defensive statement of position filings, arguing that the company is blameless. Thus, the very department that an employee is supposed to trust with his or her career and feel comfortable making a complaint to is the same department that will be spearheading the fight against the employee when it all goes south. 

What this means in most companies is that, no, you cannot trust HR to help you. While many HR officers have their hearts in the right place when they start working in the field, they can't help but know who is responsible for signing their paychecks. Hint: it's not the employee bringing a complaint against a member of management.  

So, should you bring complaints to HR? Yes, you should. In fact, in many cases you are legally required to do so or you risk waiving any claims you may have against the company for the discrimination or harassment you are reporting. Just don't assume that HR's only role is to help you. Because it isn't. While HR may be trying to assist you they are also assessing corporate risk, documenting your complaint in a way that will assist the company in defending against your complaint, and looking for ways to satisfy the demands of management. 

Here are a couple of quick tips: 

  1. Make all reports in writing. When push comes to shove down the road, HR is liable to either not "remember" you made a complaint or to remember it substantially differently than you do. Putting your report in writing is the only way to prove you made a complaint, when you made it, and to whom the complaint was made.  
  2. You know that written report from number 1, above?  KEEP A COPY. A written complaint does you know good if you send the only copy to HR. It might...you know...get lost. 
  3. Consider going outside the organization to the EEOC. If your complaint involves EEO-based (age, sex, race, religion disability, color) discrimination or harassment then consider making a complaint to the EEOC sooner rather than later. There will be little question that a report to the EEOC is protected activity under the law. This gives you a somewhat higher level of protection from retaliation than if you merely report internally. 
  4.  Consult with an employment lawyer. If you are in a situation in which you feel you need to make a complaint against management then, make no mistake, you job IS at risk. Start looking for a qualified employment attorney who represents employees. Be warned, in many parts of the country there aren't that many who lawyers who specialize in representing employees. So start looking before you need one. And don't expect such a lawyer to visit with you for free. This is not a simple car accident case and you aren't looking for a PI lawyer who can take your case on a contingent fee basis. Employment law is very specialized and contingency fees are generally not available for consulting services. If you find a qualified lawyer to advise you, however, it is money well spent. 

Bottom line: Yes, you should report harassment or discrimination internally to your company's HR department. But that doesn't mean you should blindly trust the HR department. Understand that they serve two masters and protect yourself accordingly.  

McDonald's Settles Wage Theft Lawsuit for $3.75 Million

Nah, nah, nah, nah, nah, Not Lovin' It!

Nah, nah, nah, nah, nah, Not Lovin' It!

McDonald’s still insists it isn’t a joint employer of workers in its franchise restaurants. But despite its arguments to the contrary, the company is paying out millions to settle a lawsuit based on just such a claim. This past week, lawyers representing about 800 employees at five restaurants owned by a single franchisee announced McDonald's had agreed to pay $1.75 million in back pay and damages and $2 million in legal fees.

The lawsuit was filed in 2014. In it, the plaintiffs claimed McDonald’s and its franchisee, Smith Family LP, violated California law by failing to pay overtime, keep accurate pay records and reimburse workers for time spent cleaning uniforms. The franchisee previously settled the claims against it for $700,000.

The legal issue in these franchise vs. joint employer cases is in a word: control. The more control a franchiser like McDonald's exercises over its franchisees (the individual owners of its stores), the more likely it will be found to be a joint employer of the franchisee's employees. And in this case, it appears that McDonald's exercises a great deal of control over its individual franchise owners. So much control, the plaintiffs argued, that the corporate McDonald's should not be able to shield itself from liability when one of its franchisee owners breaks the law and steals wages from rank and file workers. 

While this case is surely a good result for the employees involved, whether it signals a trend in the law more generally is still an open question. Only time will tell. 

McDonald's Hit with Sexual Harassment Charges

The Fight for $15 group, a union-sponsored group, has found another way to pressure McDonald's. The group recently filed EEOC charges on behalf of 15 U.S. McDonald's workers who say they were sexually harassed on the job. 

The Charges were filed with the U.S. Equal Employment Opportunity Commission against McDonald's USA LLC and individual franchisees in eight states over the last month. The charges include one worker alleging a manager showed her a picture of his genitals and said he wanted to "do things" to her. Another charging party alleged a supervisor offered her $1,000 for oral sex.

A big part of this effort by Fight for $15 has to do with McDonald's claim that it does not employ any of the employees of any of its franchisee restaurants. In a case before the National Labor Relations Board, Fight for $15 claims the company is a joint employer of franchise workers who say they faced retaliation for joining in nationwide strikes organized by the group. McDonald's disclaims responsibility for any employment law violations that occur in its franchise restaurants even though all employment policies and procedures and training emanate from the McDonald's corporation.  

I'll be keeping an eye on these cases as they progress because they have the potential to dramatically change the legal landscape of employment law with regard to franchise business models.  


Read More: Reuters

The Workers' Holiday

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.

Wal-Mart Manager Sues Employer Alleging Religious Bias


A Wal-Mart store manager who is a Seventh-day Adventist sued the company on religious discrimination grounds, claiming he was demoted for his observance of the Sabbath.

"Plaintiff Gordon Fields filed his suit against Wal-Mart in the U.S. District Court for the Eastern District of Pennsylvania, alleging that his employer, which previously accommodated his inability to work Friday evenings and Saturdays, rescinded that accommodation and issued him an ultimatum.

As a Seventh-day Adventist, Gordon observes a period of rest from sundown Friday to sundown Saturday. While Gordon was originally allowed to take off on the Sabbath, according to his complaint, a new human resources manager told him that the company could no longer allow that for a manager, and he would either have to work on the Sabbath or be demoted in order to maintain his religious accommodation."

 --Read the whole Legal Intelligencier Article

 Cases like this one are surprisingly common. Those that I have recently handled had a fact pattern similar to this case: an employer refusing to honor a holy day mandated by and employee's religion despite the fact that it would be a trivial matter for the company to do so. 

Texas Civil Rights Project Announces Big Win in Texas Birth Certificate Case

The State of Texas has agreed to settle a lawsuit brought by our friends at the Texas Civil Rights project on behalf of dozens of immigrant families and the community organizing union, La Unión del Pueblo Entero (LUPE), challenging the State’s refusal to issue birth certificates to babies born in Texas to undocumented mothers. In a big win for immigrant families, Texas will adjust its rules to ensure that all Texas-born babies can receive the birth certificates they are legally owed. 

Without birth certificates, these people lived in constant fear of having their families torn apart and their American-born children deported. They also struggled to get access to basic education, health, religious and childcare services. The settlement will be life-changing for them.

With co-counsel at Texas RioGrande Legal Aid, TCRP filed suit last year after Texas began refusing to accept the two forms of IDs most commonly used by undocumented immigrants to obtain birth certificates for children born in the state. We argued that these changes were politically motivated, and effectively shut out undocumented mothers, leaving most of them unable to prove the citizenship of their American-born babies.  

Under the terms of the settlement, Texas will accept several IDs that are commonly available to undocumented immigrants living in Texas. Officials also agreed to undertake significant efforts to train local registrars on the new rules. In addition, the State will run a hotline so that anyone who is wrongly turned away by local registrars can get help. 

The settlement is a significant victory for U.S. Citizens born in Texas to undocumented parents.

Buc-ee's Sues Former Employee for... A Lot!

Story in the HoustonPress reports a former employee of the popular Buc-ee's convenience store chain is being sued for more than $60,000.00 for allegedly violating what is called a retention agreement. 

The employee in question, Kelly Rieves, was hired by the store as an assistant manager in Cypress, Texas for total compensation of about $55,000. She was hired as an at-will employee, meaning that the company could fire her for any reason at any time. But Buc-ee’s required her to sign an employment contract that is uncommon in the convenience store industry. It's called a "retention agreement". 

What is a "Retention Agreement"?

The contract Rieves signed divided her pay into two categories, regular pay and “retention pay." The amount allocated to "retention pay" accounted for approximately one-third of her total compensation. The contract allowed the store to recoup the retention pay should she fail to remain employed for a full 48-month term. The contract also required Rieves to give six months' notice before leaving. This is despite the fact that the company maintained the right to terminate Rieves prior to the end of the period. (The contract may or may not have contained notice provisions in favor of the employee that I am not privy to but it would not be required to have such provisions under Texas law.)

Three years later, Rieves decided to leave her job a year or so before her contract expired. We don't know her reasons but we do know she tried to work it out with the company first but her boss refused to let her out from under the contract. So she quit. 

In response, Buc-ee’s sued her for the full amount of the retention pay she earned during her three years with the company -- an amount over $67,000.00.

Are Retention Agreements Legal?

In a word, yes. If drafted properly, retention agreements can be enforced against employees in Texas. However, it is highly unusual to see such an agreement used with anyone other than high-level company executives. 

In the case of Ms. Rieves, a trial court ruled in favor of the company last fall. And it gets worse. The Court also ruled that, in addition to the original sum she owed under the contract, she was also responsible for the company’s legal fees plus interest on the retention pay since she left Buc-ee’s. 

The total the company is now seeking from Rieves approaches $100,000. The matter is currently on appeal. 

The Moral of the Story.

Don't sign an employment contract without having an attorney review it for you. Don't sign an arbitration agreement without having an attorney review it for you. Just don't! 

As a lawyer who primarily represents employees, I spend a fair amount of my time trying to help workers get out of contracts that they never should have signed in the first place. It is an uphill battle. 

The time to negotiate or get changes to employment-related contracts is BEFORE you sign them. Companies do not necessarily have your best interests at heart. You need to understand the implications of what you are signing BEFORE you sign it. A couple hundred dollars spent on lawyer contract review may seem like a lot when you are excited about starting a new job, but compared to the economic havoc that can be caused by signing a contract you don't understand, it's peanuts. 

Get the information you need to protect yourself and your family. It may be the best money you ever spend.


More: Read the entire story from the HoustonPress here.

Texas Files Federal Lawsuit To Block Enforcement Of Transgender Protections

In its continuing effort to turn back the clock on social progress, the State of Texas -- joined by several other states -- has filed a lawsuit in federal court seeking a nationwide injunction halting enforcement of the Obama administration policies aimed at protecting transgender people from discrimination in schools and in the workplace.

The Equal Employment Opportunity Commission decided the issue for its purposes — finding that transgender people are protected — in 2012. The Justice Department announced that the Obama administration backed that view in 2014. The Supreme Court, however, has yet to rule on the question of whether existing civil rights laws — primarily Title VII of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972 — protect transgender people from discrimination.

After the Obama administration sent guidance to school districts in May explaining the administration’s interpretation of the law, conservative states such as Texas began preparations to sue. The move is the latest of many, many lawsuits filed by the Texas Attorney General’s Office in opposition to actions taken by the Obama administration.

The lawsuit appears to make 3 main arguments: (1) The administration didn't follow the notice and comment process for legislative rules; (2) The new mandates aren't supported by Title VII and Title IX; and (3) The new mandates violate the clear notice and anti-coercion requirements controlling the federal government’s power to use spending programs to coerce behavior.

Clearly this is an issue that will need to be decided by the U.S. Supreme Court. 

View a copy of the lawsuit Complaint here.

More Eagle Ford Shale layoffs hit San Antonio Workers

The oil bust continues to hit workers in the Eagle Ford Shale.

Three oil and gas service companies recently told the Texas Workforce Commission about mass layoffs in San Antonio and Robstown — both cities outside of the South Texas shale field that have served as a base for oil field staging and services.

CalFrac Well Services in San Antonio will lay off 87 workers by May 1. Cudd Energy Services already laid off 60 workers at its Tacco Drive facility in San Antonio on March 11, although those workers will be paid and receive health insurance through May 10. And C&J Energy Services will lay off 87 employees at its facility in Robstown, according to letters filed with the Texas Workforce Commission.

The Worker Adjustment and Retraining Notification Act requires companies in many instances to provide notice 60 days in advance of plant closures or mass layoffs.

Read the entire story.

Supreme Court Issues Important Ruling On Statutes of Limitations in Constructive Discharge Cases

Last month, the U.S. Supreme Court issued a pro-employee decision resolving disagreements over the question of when a constructive discharge claim accrues for the purposes of calculating applicable statute of limitations periods. The Supreme Court's opinion resolves a split in the circuits regarding when the limitations clock should start ticking on claims by employees that they were forced to quit by an employer.

The case before the Court was styled Green v. Brennan In 2008, Green – who was then working as the postmaster for Englewood, Colorado – applied for a job as the postmaster in nearby Boulder.  Green, who had worked for the Postal Service for thirty-five years, didn’t get the job. He complained internally that he believed he was passed over because he is black. In what Green believes to be retaliation for his complaint, his supervisors accused him of criminal wrongdoing (delaying delivery of the mail).  In December 2009, Green and the Postal Service reached an agreement:  Green would leave his job in Englewood to retire and the Postal Service would not pursue criminal charges against him.

On February 9, 2010, Green submitted his resignation, to take effect on March 31.  Forty-one days later, he contacted a Equal Employment Opportunity counselor, alleging that he had been the victim of a constructive discharge — that is, he had been forced to resign because conditions in his workplace had become intolerable.

Federal regulations require that, before a federal employee can sue the government for employment discrimination under Title VII of the Civil Rights Act, he must contact a Equal Employment Opportunity at his agency “within 45 days of the date of the matter alleged to be discriminatory.”  (Note that longer limitations apply to employees of non-government employers.) 

The district court and the Tenth Circuit ruled in favor of the USPS and dismissed Green's lawsuit because he contacted the EEOC more than forty-five days from the last discriminatory act.  The court ruled that the forty-five-day period had begun to run on December 16, 2009, when Green and the Postal Service signed their agreement rather than later when Green actually resigned pursuant to that agreement.  Therefore, activating the EEO process forty-one days after his resignation was too late.

Writing for the 7-1 majority, Justice Sotomayor said that the claims of wrongful discharge and constructive discharge share two common elements (discrimination and discharge); therefore, “[w]ith claims of either constructive discharge or actual discharge, the standard rule thus yields the same result: a limitations period should not begin to run until after the discharge itself.”

Justice Sotomayor also pointed out that would-be plaintiffs cannot always resign their jobs immediately following discriminatory treatment. They may be unable to forego the income, or have other valid reasons to stay at their job—such as the committed teacher who wants to finish out the school year.

Under the Court's decision, the applicable limitations period for both a wrongful discharge or a constructive discharge claim will start running when the employee is notified—or gives notice of—termination/resignation, not necessarily the last day of work. 

IMPORTANT: The magic word is NOTICE. The clock begins to run on a discharge claim when notice has been given of the termination/resignation. While this worked in the plaintiff's failure in this case because of the facts of his particular case, the reverse situation is more often what potential plaintiffs need consider. If an employer gives an employee notice of termination that will take place at a later date (30 days notice of termination for example), the limitations clock will begin to run from the date of NOTICE and not from the employee's last day of employment. 

BOTTOM LINE: If you believe you have been wrongfully terminated or otherwise discriminated against because of your race, age, sex, etc. don't delay contacting an attorney or going to the EEOC to file a Charge of Discrimination. Applicable limitations periods are short and your claim may be lost forever if you miss the deadline.

Yelp Fires Back on Social Media at Single Mom It Fired

Earlier this week, I wrote about a former Yelp employee claims she was fired for asking for three days unpaid leave after her boyfriend was in a mountain biking accident over the weekend. Jaymee Senigaglia wrote about her experience in a blog post on a social blogging site called Medium on Monday. (Read my prior article here.)

Yesterday, Yelp fired back by posting a very detailed post on Twitter.

Yelp Tweet

Yelp Tweet

As several employment lawyers in this Inc. article covering the flap point out, posting this level of detail regarding a former employee's alleged absences from work is a little surprising. I understand that Ms. Senigaglia opened herself up to a discussion of this issue to a degree by her post but even so, I think the company might have thought twice before disclosing private information of this nature publicly as a part of its response. Frankly, I think they might have considered not responding at all.

Single Mom Alleges Yelp Fired Her For Taking Time Off to Tend to Sick Boyfriend in ICU

A former Yelp employee claims she was fired for asking for three days unpaid leave after her boyfriend was in a mountain biking accident over the weekend.

Jaymee Senigaglia wrote about her experience in a blog post on Medium published on Monday. In the post, Senigaglia says she got a call from her "manager, director, and HR who said I could either come in now or resign."

Yelp disputes the reason for Senigaglia's departure. It says she was fired for "repeated absences" after receiving multiple warnings. 

You can read more about this story at Business Insider.

While time will tell whether Ms. Senigaglia's allegations prove to be true or not, I have noted a general increase in the amount of contacts we have been receiving regarding terminations due to illness, taking FMLA, and/or refusals to accommodate disabilities or medical conditions. And I guess we are not alone. EEOC statistical data indicates that the percentage of Charges filed with the agency that are based on claims of disability have risen every year since 2007

Related Reading:

EEOC Goes After Pay Discrimination - Announces Proposed Rule Requiring Public Disclosure of Salary Information

The U.S. Equal Employment Opportunity Commission (EEOC) recently proposed a revision to the Employer Information Report (EEO-1), which would require employers to make public the salaries of their employees in order to curb the pay disparity problem between men and women in the U.S. This new data will assist the agency in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces. 

Pay disparity between men and women is a national problem in the U.S. And given women's increasingly important role as breadwinners for American families, the country's entire economy suffers when they are subject to pay discrimination.

The report at issue, called the "EEO-1" provides the federal government with workforce profiles from private sector employers by race, ethnicity, sex, and job category. This proposal would add aggregate data on pay ranges and hours worked to the information collected, beginning with the September 2017 report.

The new pay data would provide EEOC and the Office of Federal Contract Compliance Programs (OFCCP) of the Department of Labor with insight into pay disparities across industries and occupations and strengthen federal efforts to combat discrimination. This pay data would allow EEOC to compile and publish aggregated data that will help employers in conducting their own analysis of their pay practices to facilitate voluntary compliance. The agencies would use this pay data to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination.

"More than 50 years after pay discrimination became illegal it remains a persistent problem for too many Americans," said EEOC Chair Jenny R. Yang "Collecting pay data is a significant step forward in addressing discriminatory pay practices. This information will assist employers in evaluating their pay practices to prevent pay discrimination and strengthen enforcement of our federal anti-discrimination laws." 

"We can't know what we don't know. We can't deliver on the promise of equal pay unless we have the best, most comprehensive information about what people earn," said Secretary of Labor Thomas E. Perez. "We expect that reporting this data will help employers to evaluate their own pay practices to prevent pay discrimination in their workplaces. The data collection also gives the Labor Department a more powerful tool to do its enforcement work, to ensure that federal contractors comply with fair pay laws and to root out discrimination where it does exist."

EEOC's current proposal is in response to recommendations from independent studies and the Commission's work with the President's National Equal Pay Task Force, which recently proposed new data collection requirements to combat pay discrimination in the workplace.

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.