UFCW Goes - 3rd Major Union to Depart AFL-CIO

See the letter from UFCW President Joe Hansen. The money quote (or from the AFL-CIO's perspective, the loss of money quote):

The UFCW, in order to pursue the most effective course of action for its members and all workers in its core industries, is terminating its affiliation with the AFL-CIO effective immediately.

Probably not the last shoe to drop either.

It Took Martin Luther 95 Theses - These Guys Are Up to 23

At the Future of Work Weblog, Charlie Grantham and Jim Ware have come up with 23 theses about the evolving nature of work. According to the introduction, they actually are a couple of years old now and the authors are finding the future is arriving "a bit slower" than they thought it might. Some of these ideas are similar to ones Tom Peters has been talking about for several years now-- think "Brand You" and each individual is a "unit of one." But with a purpose similar to Martin Luther's famous 95 theses, provoking thought and discussion, they are worth checking out, The ReFormation of Work.

Employment law gets its own theses, Number 12:

Employment law will change to recognize a new category of relationship of people to organization In the early years of the 21st century two basic forms of worker/company relationship existed in the United States and most other industrialized countries. There was either an employee/employer relationship or a contractor relationship. Both these forms have proved to be inadequate for the new, more agile and fluid kinds of social relationships required by knowledge workers (the so-called creative class). We believe the nascent form of the new relationships will be built on the concept of Limited Liability. Corporations or Partnerships pioneered in the legal, accounting, and consulting professions. Individual professionals will become in essence a "company of one" and band together for projects, which may operate as short-lived formal organizations for limited periods of time.

I am not quite sure I follow that one, since I think the relationships they are describing would end up "legally" the same or certainly similar to the current independent contractor relationship. This doesn't mean that the impact on employment law of changes reflected in the whole 23 if they come to pass will not be substantial, and it certainly seems likely that many will at least to some degree.

Maybe what they are saying is that since current law -- certainly statutory based law -- is tied to the employer/employee relationship that significant changes will have to be made. Opening up the whole body of employment law to negotiation on how to handle "a new relationship of people to organization" -- now that would be most interesting. But then most revolutions are.

Check Your EPLI Policy - When Coverage For Discrimination Doesn't Mean The Most Common Type of Discrimination Claim

Employment practices liability coverage has had a resurgence in the last few years. But as most developments in the law it takes time for issues related to that coverage to work their way through the courts. There must first be a claim, the claim has to be denied, litigated in the trial court and then appealed for appellate case law to develop. All of that takes time. Earlier this week the 5th Circuit handed down one of the first major EPLI decisions that I can remember seeing based on policies sold since EPLI became such a popular form of coverage.

Although hard to tell who will ultimately "win" this particular battle between a Louisiana School Board that bought an EPLI policy from Mid-Continent Casualty Insurance Company, the holding is significant enough for all those who are purchasers of such insurance to make sure that the scope of the coverage is what they think it is.

In simplest terms, the policy appeared to provide for coverage of discrimination claims since wrongful act was defined to include:

(1) actual or alleged discrimination, whether based upon race, sex, age, national origin, religion, disability or sexual orientation; [and] (2) actual or alleged sexual or racial harassment;...

But the policy also had an exclusion for loss resulting from any claim:

brought about or contributed to in fact by any dishonest, fraudulent or criminal Wrongful Act or by any Wrongful Act committed with actual knowledge of its wrongful nature or with intent to cause damage.

This provision was referred to by the Court as the "intentional acts" provision.

The School Board was sued for racial discrimination under a disparate treatment theory. Because disparate treatment requires a finding of intentional discrimination, what the policy appeared to cover was eliminated by the intentional acts exception according to the insurance company.

The School Board was less than happy, as the Court noted:

The Board acknowledges, as it must, the presence of the exclusion for intentional acts, but urges that the exclusion cannot be squared with the policy’s explicit coverage of racial discrimination and racial harassment as both are inherently intentional in nature. The Board argues that any attempt to reconcile the policy’s exclusion with its coverage for discrimination and harassment leads to the absurd result that coverage is available only for “unintentional” “intentional” acts.

But the money quote by the Court deciding whose view was correct was this:

We are persuaded that the exclusion for intentional acts in the School Board’s policy does not conflict with the policy’s coverage for racial discrimination and racial harassment. It is well settled that claims for racial discrimination may allege either “intentional” or “unintentional” acts. Specifically, “[i]n the context of Title VII litigation, we recognize two types of discrimination claims: disparate treatment and disparate impact.” “Disparate treatment refers to deliberate discrimination in the terms or conditions of employment,” whereas disparate impact claims “do not require proof of intent to discriminate.” As written, the policy can readily be interpreted to extend coverage for claims alleging disparate impact discrimination while excluding coverage for disparate treatment discrimination.

Coleman v. School Board of Richland (5th Cir. 7/25/05)[pdf].

Although the Court noted other cases had taken a more favorable view of the argument made by the Board, it found its holding that coverage was properly denied proper under Louisiana law for construing insurance policies and also by the position taken by the 7th Circuit in Solo Cup Co. v. Federal Insurance Co. 619 F.2d 1178 (7th Cir. 1980).

The Court looked more favorably on another argument of the Board, that other portions of the claim were covered, at least for the purposes of providing a defense.

Although this decision is based on Louisiana law, it should make clear the importance to anyone purchasing EPLI insurance, who certainly would expect that the most common variety of discrimination claims -- those based on a disparate treatment theory -- would be what it is buying protection for, should be sure to review the proposed policy in light of this decision.

STOP THE PRESSES! Law Firm Prepares for Trial!

So here's the headline: Orange County in the Hot Seat Again Only Months After Jury Awarded Former County Employee a $1.7 Million Verdict. Not too unusual you say, until you read it and find it is a PRESS RELEASE by a lawsuit that begins "[Law Firm] today announced it is preparing for trial in a suit against the County of Orange for wrongful discrimination and termination of a county employee." What? Quick let's turn on the printing press, just next week we have lawyers who "are preparing to take a deposition," "preparing requests for production," even "preparing to give a client some advice."

And in fact, this law firm has earlier this summer announced that it "filed a second amended complaint" and last summer it "retains experts for testimony." WOW! Isn't there a line of decency somewhere?

Or maybe there is a more serious side to this release since the 2nd sentence is "Opening arguments are set to begin on August 22, 2005...". The "press release" then goes on to give plaintiff's side of the story (favorably of course) and highlights a recent verdict against the defendant, Orange County, highlighting a MDV awarded against it in April of this year. There may well be another purpose, but the only thing that I can see that this release does would be to taint the jury pool. Surely that, or influencing the settlement process, is not the intent of the law firm which issued the press release.

I will be interested in seeing what the legal ethics specialists in the blogosphere have to say about this one, and what the defense counsel and the Court do. Maybe nothing, in which case the legal system may be in worse shape than I thought.

Update:For technical reasons that are beyond me, comments do not show up on the front page of the blog, but if you go to the permalink page (by hitting the time post -- in this case Posted 8:45 AM), you will see a couple of comments so far. Both seem to think I over reacted.

The comments did, as thoughtful comments should, make me think about my view and my post. For one thing, the post is not written as clearly as it could have been. Trying to be both facetious (is it newsworthy that a lawfirm is "preparing" to do something?) -- and raise a serious point (the impact of this communication on a pending trial) was not done as well as it could have been. For example, the 2nd and 3rd press releases don't strike me as problematic, just somewhat silly, so the "line of decency" really referred to the pre-trial press release which goes to the more serious point, not those two releases.

I also checked the California Rules of Professional Conduct and the most applicable rule appears to be Rule 5-120 Trial Publicity. I don't know enough about the facts or the interpretation of the California Rules to know whether or not one would "know or reasonably should know that [this release] will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter." Or, even if it did, whether or not it would fit within one of the numerous exceptions that permit comment anyway.

Of course not everything that is within the rules is necessarily the "right" thing which is often in the eye of the beholder. This one doesn't seem right to me, but one of the good things about the blogosphere is the opportunity to get multiple views. So please check out the comments (and feel free to add your own.)

Employee Loyalty Litigation - - On Steroids

It started as many such cases do. A departed employee, a state court lawsuit alleging misappropriation of trade secrets and breach of a confidentiality agreement, an ex parte motion seeking immediate discovery to prevent the destruction evidence. What took this one above the everyday was a search order executed by a policeman to enter the ex-employee's house and take his computer. When entry was initially refused, the lawyer for the employer returned to Court and got an ex parte enforcement Order allowing the police officer to use reasonable force to enter the house. All of that was ultimately accomplished and the ex-employee's computer and other evidence was taken.

Although nothing is conveyed in the opinion as to the result of the state court litigation, what did happen was a federal suit by the ex-employee under § 1983, alleging the actions of the employer, several of its employees and their attorneys who participated in obtaining and carrying out the order violated his Fourth Amendment rights to be free from unreasonable searches and seizures and his procedural and substantive due process rights under the Fifth and Fourteenth Amendments.

Unfortunately for the ex-employee, his suit foundered on the shoals of no state action, a pre-requisite for a valid § 1983 claim. Yanaki v. Iomed, Inc. (10th Cir. 7/26/05) [pdf]. But my guess is that somewhere today there was a sigh of relief at the offices of some lawyers who probably did not enjoy being on the receiving end of a lawsuit, even if it turned out successfully.

After Acquired Evidence (sort of) Defeats Prima Facie Case

In an unusual case, the 11th Circuit has affirmed a summary judgment in a sex discrimination claim because plaintiff could not establish one of the elements of the prima facie case -- that she was qualified for the position that she sought. What was unusual was that the factor that proved her unfit for the position of driver, two speeding tickets, were not known at the time she was not hired. Underwood v. Perry County Commission (11th Cir. 7/21/05) [pdf].

Although the Court referred to after acquired evidence as utilized by the Supreme Court in McKennon v. Nashville Banner Publishing Co., 513 U.S. 352 (1995), it noted that this application was really different. In McKennon the issue was damages, not the prima facie case. Rather than relying on McKennon, the Court said this was really a simple case -- either she was qualified for the position or she was not. Here, there was no dispute that if the two tickets had been known she would not have been hired, and also no dispute that even if a favorable hiring decision had been made, the tickets would have been uncovered before the hiring was completed.

The objective nature of the "after acquired evidence" was the key, as the Court noted with objective facts it was less concerned with "some of the pitfalls of the use of “after acquired” evidence, such as post hoc mining of an applicant’s file to discern nondiscriminatory reasons for a failure to hire." Although holding under this narrow set of circumstances, "after acquired evidence" could defeat the prima facie case, the 11th Circuit was by no means attempting to open a wide door.

Update: Apparently having second thoughts on the unusual use of "after acquired evidence," the 11th Circuit vacated their July opinion discussed above. The end result was the same, the plaintiff lost, but this time it was her failure to show that the position for which she applied was filled by a man that was fatal to her sex discrimination claim. The Court disavowed any need to consider the "after acquired evidence" argument, that it had used as the basis for its first decision. Underwood v. Perry County Commission (11th Cir. 12/5/05) [pdf].

Happy 15th13th Birthday to the ADA

Actually, in light of all the reports on this being the 15th birthday of the Americans with Disabilities Act, what I should have said to be more accurate was Happy 13th Effective Birthday to the ADA. Those already toiling in the labor and employment law vineyards in 1990 will remember that there was an unusual lead time between the date that the first President Bush signed the legislation on July 26, 1990 and the effective date of Title I that dealt with employment on July 26, 1992. Initially only employers with more than 25 employees were covered. It was another two years, July 26, 1994 before the threshold for coverage was lowered to the current fifteen employees. For the effective date of the various sections, see Americans with Disabilities Act, A Summary.

No telling how many forests were sacrificed to all the writing about the ADA in that two year period (not to mention the moaning and gnashing of teeth). It was primarily, although not exclusively, done by those of us on the management side, never willing to let an opportunity to "excite the troops" go by. As it turns out the ADA has ended up being interpreted in vastly different ways than at least some had predicted. What seemed the common wisdom at the time, "that any lawyer who could not prove anyone was disabled should turn in his bar card," turned out to be oh so wrong. Fortunately for some of us, blogs did not then exist so our predictions are at least not preserved for the whole world to see.

Update: Thanks to the commenter for catching that my dates were off by a decade. I have updated to the correct dates.