FMLA Coverage by Estoppel - Via State Law Claims

I have posted before about the dangers of creating coverage by estoppel relying in part on the Supreme Court decision in Arbaugh v. Y & H Corp. See The Progeny of Arbaugh and Danger for the Small Employer.

Without mentioning Arbaugh, the 7th Circuit points out that there are state court theories that could result in coverage under the FMLA. In its handbook, and repeated in its letters to an employee who requested FMLA leave, the employer used the following language about eligibility:

To be eligible for FMLA benefits, an employee must have worked for a covered employer for a total of 12 months and have worked at least 1,250 hours over the previous twelve months.

What was missing was the so called 50/75 exception, that an employee is not eligible if they are at a worksite with less than 50 employees within a 75 mile area.

Unfortunately, that was exactly the situation in Peters v. Gilead Sciences Inc. (7th Cir. 7/14/08) [pdf]. Peters was at a work site where the 50/75 exception would have been applicable. When FMLA protection became an issue, Peters lost at the trial court.

Without addressing the concept of equitable estoppel, the Court found that the Indiana state law claims of contract law (based on the handbook) and promissory estoppel might be enough to create coverage and reversed the trial court's grant of summary judgment. It also said that whether equitable estoppel ( where Arbaugh might make a difference) might also be available, remained an open question under 7th Circuit law and one that they need not decide now.

Word to the wise, words matter. If you intend to rely on a 50/75 exception, you should say so.

Retaliation, Whistleblowing and Preemption - The Texas Supreme Court Chooses

Although the specific result is that the employee loses, today's Texas Supreme Court's opinion in City of Waco v. Lopez (Tx 7.11.08) (pdf) has something for both sides of the docket. The factual pattern is straight forward. Lopez, a city employee filed an internal grievance complaining a transfer was because of his age and race. He was moved back to his original position, but fired a few month later, allegedly for another offense.

Instead of pursuing a retaliation claim under the Texas Commission on Human Rights Act, Lopez chose to sue based on the general Whistleblower Act (§554.001 et seq.) (It is not clear from the case, but my guess is Lopez may have missed the shorter deadline for filing a charge under the TCHRA.)

The city moved to dismiss, claiming the TCHRA preempted his claim under the Whistleblower Act. Justice Wainwright writing for a unanimous court agreed, finding the more specific statute (the TCHRA) trumped the more general statute (the Whistleblower act). Since Lopez had not filed a charge under the TCHRA, which is a jurisdictional requirement, his claim had to be dismissed.

Although not good for Lopez, the opinion at least puts the Texas Supreme Court on record clearly in support of the "opposition" clause of the TCHRA and for extending its coverage to an internal grievance. Justice Wainwright even mentions in a footnote that the U.S. Supreme Court is currently considering a similar (although not exact) claim in Crawford v. Metro. Gov't of Nashville (Docket 06-1595).

For those who are not familiar with "opposition" and "participation" clauses as those terms are used in the context of statutory retaliation provisions, Lopez provides a good explanation.

The Court also gives some amplification on the local laws provision of §21.151 and the election of remedies provision, §21.211 that are, to be charitable, somewhat confusing:

Section 21.151 is specifically limited to local laws, and Section 21.211 limits the ability to pursue multiple grievances in multiple forums over the same alleged conduct. In the realm of employment discrimination litigation—where federal, state, and local governments individually declare their opposition to unlawful discrimination—Section 21.211 merely means a plaintiff cannot file an administrative complaint with the CHRA after having already (1) filed a lawsuit under a federal or local anti-discrimination measure covering the same conduct or (2) begun administrative proceedings with the EEOC or local enforcement entities based on the same conduct.

I can see the Court's 2nd proviso on what §21.211 means leading to some interesting issues related to the timing of the filing of TCHRA claims if they are not jointly filed with an EEOC charge.

While the Court makes clear that it is only deciding the interaction between the TCHRA and the general public whistleblower statute, the discussion of the importance of requiring compliance with the detailed procedures of the TCHRA bodes well for any other employer that has the option to argue for preemption of some other statute where there is an overlap.

One style note, in his opinion Justice Wainwright uses the acronym (CHRA) [Commision on Human Rights Act]. I have always used the longer (TCHRA) [Texas Commission on Human Rights Act). In a quick check of prior Supreme Court usage, before today's opinion it appears to have been TCHRA 8, CHRA 4.

The (Not Very Well) Hidden Cost of Litigation

There is nothing so confirming as seeing someone else quoted in print making a point that you yourself have made. Even better when that person is well known. So I was pleased to find this quote from Stanley Chesley in a Law Practice Management article, Ohio Law Firm Switches to Success-Fee Billing. Chesley formerly a plaintiffs' lawyer has been actively involved in some of the largest mass tort claims and settlements, including both breast implants, tobacco and phen-phen (the latter has resulted in some controversy and litigation against him). According to the article, Chesley is now representing corporations in antitrust and securities litigation.

His point, which I have also made over the years, is set out his comments on how he thinks cases should be handled:

"I think many cases should be settled before summary judgment because the cost of discovery is not only the lawyer fees, it’s also the corporate executives and all the department heads” who have to spend valuable time giving depositions and assisting in discovery, he says.

My only addition would be to not limit the time consumed to "corporate executives and department heads" as much of the time spent (and arguably "lost") is not done by employees at that level, but whose time is still quite valuable.

Still not included in his equation, which focuses on actual hard dollar costs, is the psychic drain that litigation places on company employees. That is particularly true in employment cases, where it is a conscious decision of the company (and thus of some individual or group of individuals) that is being defended.

I have often wondered if any enterprising academic has tried to put hard numbers to these costs. If so, I haven't been able to find it. If anyone else has, I would love to hear from you.

What's the Real Story on E-Verify?

Given that we seem to be heading towards greater use, both by executive order that all government contractors use it, and various state statutes mandating it, it is an important question.

I was curious to see this post at the NAM's blog challenging some of the promotion of E-Verify by Secretary Chertoff, see E-Verify, E-gads. I also listened to the podcast from Cato Institute,
also raising concerns about the program's efficacy. Both NAM and Cato are for the most part allies with the Bush administration, but clearly on this issue there is a difference of opinion.

As the usage increases, there will be more information, but also if some of the concerns listed by NAM and Cato continue, there will also soon be litigation. Unfortunately, it will be the employer listed as defendant.

Denver MDV Award - a "Termination Plus" Plaintiff

I nicked the phrase "termination plus" from Jeff Londa, one of my fellow shareholders, to refer to a plaintiff that presents more than the usual amount of danger because of additional circumstances. The lead to the story in The Rocky Mountain News, Jury awards $1.4 million to whistle blower, presents a perfect example:

Sandra Simmons will never forget the moment General Steel fired her.

She was driving to the intensive care unit to see her younger sister, who was dying of kidney and liver failure, when the company informed her over the telephone.

Of course the story doesn't give the company's side of the story and I am sure there is one. But obviously in this case, it didn't resonate with the jury.

A hat tip to the Daily Labor Report for the story.

A Declaration of Independence but the World Grows Smaller

I think Daniel Schwartz at The Connecticut Employment Law Blog has the right approach in his post, Happy July 4th.

But even though this is not one of those holidays that has any particular employment law tie or angle, I couldn't help think about the full circle type connection between the independence from European influences that we celebrate today and the announcement earlier this week of The First Global Union, as reported by Jeffrey Hirsch at Workplace Prof Blog.

Workers Uniting, a combination of the UK union Unite and the United Steelworkers, not only has a name, but a website. There is no question that the world is more connected and things that we have long thought of as being "local" have global aspects. So it should be no surprise that is true for the labor and employment law world as well.

Although it may not be a surprise, that does not mean it may not be revolutionary.

Keeping Data Submitted to EEOC Confidential - Easier Now?

One of the worries about submitting information to agencies investigating workplace issues is the risk that it will be released to an employer's detriment. While the worry is real, the ability to get much judicial guidance is limited as it takes a unique set of circumstances for it to happen.

But happen it did and earlier this week the D.C. Circuit addressed the issue. The opening paragraph outlined the unusual circumstances, and its holding:

Seven years ago, Venetian Casino Resort, LLC repaired to district court for an injunction to keep the Equal Employment Opportunity Commission from disclosing certain confidential information without notice. The district court dismissed the case as unripe, but we held otherwise and remanded the case for proceedings on the merits. The district court then granted the Commission’s motion for summary judgment and Venetian appealed, arguing the Commission’s disclosure policy is unlawful. We agree, reverse, and remand the case for the district court to enter an injunction prohibiting the Commission from disclosing Venetian’s confidential information pursuant to its current disclosure policy.

Venetian Casino v. EEOC (D.C.Cir. 6/27/08) [pdf]

Although not totally clear from the opinion, this seems to be concern about the garden variety turning over of information submitted by the Venetian to a lawyer (or potential one) for the plaintiff, even though the Ventian had identified the information as confidential.

Although it's a victory for Venetian for the time being, it seems likely only to force the EEOC into coming up with a better rationalization for its rules, or a rule that makes it clear that the Commission should give an employer notice and chance to respond before releasing the data.

That's the possibility offered by Professor McCormick in her analysis of the case at Workplace Prof Blog, The EEOC and Disclosure of Employer Data. Although I don't always agree with the academics at Workplace Prof Blog, even though it is clearly one of the best sources of current employment law information on the web, this is one of those occasions where I do.