The Progeny of Arbaugh - Coverage by Estoppel

Maybe it's just the law of unintended consequences, or perhaps more fairly for the Court, the law of unanticipated consequences, but when the Supreme Court held in Arbaugh v. Y & H Corp. that the 15 employee limit was not jurisdictional it barely got more than a ho-hum, at least from me.

Just to prove my point I quote myself from my initial post on Arbaugh:

"In a case that is of more importance to the technicalities of the legal process than to employment law, the Supreme Court yesterday held that the requirement of 15 employees for coverage of Title VII is an element of the plaintiff's case, not a jurisdictional prerequisite."

And I finished off with this —

"All in all a tidy summary of federal courts law and the principle that federal courts are courts of limited jurisdiction --- but not an employment law blockbuster."

— which could prove yet another faulty prediction on my part.

That will certainly be true if a trend that I first noted last month in Danger for the Small Employer: 'Estopping' yourself into coverage where the 6th Circuit held that there were circumstances where an employer with fewer than 20 employees could create coverage by its actions, continues.

It did continue on Friday the 13th, when Judge Mark Bennett of the Northern District of Iowa, in a 26 page opinion, based in part on Arbaugh, held it is possible that an employer with fewer than 50 employees within a 75 mile radius, could still find themselves "required" to grant FMLA leave, based on their conduct, even though not technically within the coverage of the statute. Myers v. Tursso Company Inc.

Many large companies have taken the position that they would treat all employees the same under the FMLA, even though some might not technically qualify because of the 50 employees within 75 mile requirement. Their lawyers have often gone along, thinking that in a pinch they could still use the requirement as a defense if an issue arose. That may still be viable in some cases, but the Arbaugh based estoppel decisions make clear it is not always a hands down winner.

Hat tip to the folks at Employment Law 360 for the tip to the Myers decision.

EEOC and the Press Release

For anyone who has ever done battle with the EEOC over the wording of a press release, here's some judicially sanctioned ammunition for the next battle. Although denying Serrano's Restaurant's motion for sanctions against the EEOC, Judge Frederick J. Martone of the District Court of Arizona had this to say:

Our denial of the defendant’s motion is not an expression of our view on the underlying merits or the propriety of the EEOC in using press releases as part of its approach to litigation. Lawyers have a professional obligation to avoid extrajudicial statements that may prejudice a proceeding, see ER 3.6, and an obligation to be truthful in statements to others, see ER 4.1. LRCiv 83.2(d). There is a big difference between promoting the public’s right to know through keeping proceedings public, on the one hand, see Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122 (9th Cir. 2003), and affirmatively issuing press releases, on the other. The United States, and its employees, have a special duty not to injure the reputations of its citizens. Nor should it use press releases as a bargaining tool in litigation. [my emphasis]

Hat tip to the Daily Labor Report ($)for picking up this unpublished decision entered on July 5th.

The Sandra Day O'Connor Award: MDV for Title IX Retaliation

Timing is everything and Lindy Vivas, former volleyball coach at Fresno State University and plaintiff in a trial that ended yesterday with a jury verdict in her favor awarding her almost $6 million, is the latest proof. See the article in the Seattle Post, Vivas wins suit against Fresno St.

Vivas' claim was that Fresno State retaliated against her in violation of Title IX, a federal program requiring gender equity in sports programs. When Vivas was fired on December 4, 2004, she might not have known it, but the claim that is making her so happy today was hanging in the balance.

Just four days before Vivas was terminated, the Supreme Court heard oral argument in Jackson v. Birmingham Board of Education. Four months later, the Court in a 5-4 decision written by Justice Sandra Day O'Connor extended an implied cause of action it had earlier found under Title IX to also cover retaliation. You can see my initial post on Jackson here.

Although I have just finished an article explaining my view that while the Roberts Court has been generally good for business, on decisions impacting core human resource issues, the record is not so clear, Jackson was one time where who was holding the fifth vote made a decided difference. After yesterday you might even say a 6 million dollar difference.

While Justice Sandra Day O'Connor was penning the majority decision in Jackson , then Chief Justice Rehnquist and current Justices Scalia and Kennedy were signing onto the vigorous dissent of Justice Clarence Thomas that the majority was "creating remedies out of whole cloth" and "substituting its policy judgments for the bargains struck by Congress as reflected in the statute's text."

If the case had been decided just one year later, which given the course of litigation that winds its way to the Supreme Court is really just a matter of happenstance, I don't think there is any doubt how the new Chief Justice Roberts and Justice O'Connor's replacement, Justice Alito, would have been aligned.

Yesterday's MDV for Vivas may never have to be paid as it must now start its way through post-verdict and the appeal process, but it is unlikely that you will be able to convince anyone involved in this matter that Supreme Court appointments don't matter.

A Freebie from the DOL: The New Minimum Wage Poster

Come July 24th — new minimum wage, new minimum wage poster required.

You can at least print one out (even in color) by going here. FLSA Minimum Wage Poster - Effective July 24, 2007.

Does One Lawsuit Beget Another? Sometimes it 'Smells' Like It

Whether settling one lawsuit will set off a rash of others is one of the imponderables that face employers when trying to decide whether to settle a case for less than it might cost to try, assuming (or perhaps) hoping that it won't result in other suits. This question would seem to be a tailor made dissertation topic for an enterprising want to be PhD in business. but I am not aware of any such research. I do know from my personal experience that it can happen, but it would be nice to see some serious research.

And sometimes cases reported in the press may spawn others as well. For example, this recent headline at the Detroit News website, Worker sues over co-worker's perfume, refers to the earlier well publicized suit, also in Detroit, where a female disk jockey convinced a jury that her perfume allergy was worth $10+ million dollars. See my report on that case here.

A copycat case? I would be shocked if the new plaintiff hadn't at least heard the story.

Ageism Suit Results in Houston MDV

I have been lagging in posting MDV's lately, with a slew of reports sitting in "draft stage", but one close to home always gets my attention, like today's headline in the Houston Chronicle, Ex-manufacturing manager wins ageism lawsuit. Actually, the story doesn't give the exact amount of the verdict but says it was "nearly $1 million" and with legal fees expected to push close to $1.5 million.

Some of the evidence was the kind that frequently crops up in age cases:

• termination of what the plaintifff Gaines Watkins referred to as "older and experienced workers" (although as the company pointed out over 50% of the company's workforce was laid off in a two to three year period);
• Watkins also recalled comments he heard from top company officials that seemed to indicate they preferred younger workers; and
• the jury also saw company documents describing executives as wanting "good young leadership" and detailing ways to attract employees who can "grow and change.

Having recently been involved in a couple of cases where two separate magistrates commented on the state of disarray in the 5th Circuit jurisprudence on "stray remarks, it strikes me that this is a potential candidate to provide some clarification. Although nothing mandates that the doctrine be limited to age cases, it seems that is where it comes up most frequently.

One other item mentioned in the article was the fact that plaintiff had been offered a severance package with a release. If a jury relied on that as evidence of wrong doing, then many employers could be in for rough sledding in future trials, as that is a staple in almost any reduction in force.

FMLA Feedback, Not Regulations — And Another Prediction

Information, but no proposed regulations — that seems to be the result of the DOL's request for feedback on how the FMLA is working. See the full report at Family and Medical Leave Act; information request; report.

According to the DOL the main areas of response were about three primary topics:

1. gratitude from employees who have used family and medical leave and descriptions of how it allowed them to balance their work and family care responsibilities, particularly when they had their own serious health condition or were needed to care for a family
   member;
2. a desire for expanded benefits--e.g., to provide more time off, to provide paid benefits, and to cover additional family members;
3. frustration by employers about difficulties in maintaining necessary staffing levels and controlling attendance problems in their workplaces as a result of one particular issue--
   unscheduled intermittent leave used by employees who have chronic health conditions.

The AP story as printed on the Seattle Post-Intelligencer website summarizes the report as Medical leave program generally popular, which I don't think really reflects the view of most major employers.

Senator Chris Dodd one of the original authors of FMLA is teaming with Senator Ted Stevens from Alaska to offer a proposal that would create an insurance fund to allow 8 weeks of FMLA leave to be paid. Anyone who says that paid FMLA leave would not result in considerable more use and a multiplication of current employer problems, is either not being realistic or honest, or both.

Still, the political reality is that there is not going to be any "fix" for the foreseeable future that is not accompanied by some sort of expansion in benefits — be it paid leave, more employers covered or longer unpaid leave. And to make matters even worse for employers — if I had to choose which was more likely, expansion of benefits with or without a fix for employers, I would place my money on the latter.