California is obviously not the only place where large verdicts in employment law cases occur, but it certainly has its share. The latest -- an MDV returned yesterday by a San Francisco federal jury following a three week trial over the claims of a PhD level petroleum engineer, Chevron ordered to pay $5.5 million in wrongful firing case.
The underlying claim appeared to be national origin discrimination as Kiran Pande, the plaintiff, was born in India. That angle was certainly played up in the headline from an Indian website, The Economic Times, Fired NRI engineer gets $5.5 mn over racist remarks, but even as that article points out, the claim that appeared to carry the day was her retaliation claim.
Although punitive damages were certainly a large part of the verdict ($2.5 million) the past and future economic damages were over $3 million. Although the articles don't say what Kiran Pande was making before she did not take an offered transfer to Houston, my guess is that it was pretty high. Which is another good reminder that certainly plaintiff's lawyers do not forget -- the higher the former income of the plaintiff, the more valuable the case.
Speechless by Bruce Barry - A Mini-review
Two relatively recent posts, one by Chris McKinney at HR Lawyer's Blog, Limits of Free Speech in the Workplace and Freedom of Speech in the Workplace: Think Again by Michael Moore at the Pennsylvania Employment Law Blog, reminded me how I had been meaning to mention an interesting book by Vanderbilt Professor Bruce Barry, Speechless: The Erosion of Free Expression in the American Workplace.
If Professor Barry has a law degree he has gone to great pains to hide it on his professional c.v. on his website, but nevertheless his book has one of the best explanations of state action as a pre-requisite for constitutional protection that I have seen. I only wish he had written it sooner, so I could have used it as a reference when I was testifying before a Texas House Committee several years ago and was taken to task for making the comment that in the private sector employees didn't have first amendment rights. In fact the Chair of the Committee asked where I went to law school with a sarcastic tone that indicated he didn't think much of my legal education. (Hopefully I didn't cost UT Law School anything in the way of appropriations that biennium.)
Professor Barry has a viewpoint, he is after all an academic and President of the board of directors of the American Civil Liberties Union of Tennessee, but I found his book quite balanced in its approach to the issue of free speech in the workplace. It is the type of thoughtful writing about a serious issue that one wishes many more current writers would aspire to emulate.
In addition to providing good insight into the current state of the law, he makes the argument that it would be good for society, including employers, if they could get over their basically reflexive anti-free speech reactions, while acknowledging there is little current legal basis to require them to do so, and conceding that freedom increases conflict which runs against employer's "enduring goals of employee compliance, conformity, complacency and efficiency." Perhaps a little too cynical view of modern employers.
If you wanted to quibble, and there certainly is no reason to, one might question the use of "erosion" in the sub-title, as it perhaps implies that at one time free speech rights in the workplace were more than they are now. I don't think that's right, nor does Professor Barry really attempt to make that point. A couple more examples of small flaws from my viewpoint --he buys into organized labor's argument that the NLRB's recent decisions on who are supervisors is some watershed moment, and in his critique of employment at will probably overstates the impact of Montana's statutory alteration of that standard. And there are other similar points where arguments could be raised.
But if you are at all interested in the workplace, and I assume you are or you wouldn't be reading this post, then this is a serious book that too deserves a place in your library.
If Professor Barry has a law degree he has gone to great pains to hide it on his professional c.v. on his website, but nevertheless his book has one of the best explanations of state action as a pre-requisite for constitutional protection that I have seen. I only wish he had written it sooner, so I could have used it as a reference when I was testifying before a Texas House Committee several years ago and was taken to task for making the comment that in the private sector employees didn't have first amendment rights. In fact the Chair of the Committee asked where I went to law school with a sarcastic tone that indicated he didn't think much of my legal education. (Hopefully I didn't cost UT Law School anything in the way of appropriations that biennium.)
Professor Barry has a viewpoint, he is after all an academic and President of the board of directors of the American Civil Liberties Union of Tennessee, but I found his book quite balanced in its approach to the issue of free speech in the workplace. It is the type of thoughtful writing about a serious issue that one wishes many more current writers would aspire to emulate.
In addition to providing good insight into the current state of the law, he makes the argument that it would be good for society, including employers, if they could get over their basically reflexive anti-free speech reactions, while acknowledging there is little current legal basis to require them to do so, and conceding that freedom increases conflict which runs against employer's "enduring goals of employee compliance, conformity, complacency and efficiency." Perhaps a little too cynical view of modern employers.
If you wanted to quibble, and there certainly is no reason to, one might question the use of "erosion" in the sub-title, as it perhaps implies that at one time free speech rights in the workplace were more than they are now. I don't think that's right, nor does Professor Barry really attempt to make that point. A couple more examples of small flaws from my viewpoint --he buys into organized labor's argument that the NLRB's recent decisions on who are supervisors is some watershed moment, and in his critique of employment at will probably overstates the impact of Montana's statutory alteration of that standard. And there are other similar points where arguments could be raised.
But if you are at all interested in the workplace, and I assume you are or you wouldn't be reading this post, then this is a serious book that too deserves a place in your library.
5th Circuit's Newest Judge - Leslie Southwick Confirmed
In an act of good sense, the Senate today confirmed Leslie Southwick from Mississippi to the 5th Circuit Court of Appeals. This was nearly caught up in partisan politics, but somehow survived.
Having served as a Teaching Quizmaster at UT Law School with Leslie more than 30 years ago, I am fairly confident that the individual portrayed by those trying to defeat the nomination is not who will be sworn in and serve admirably for however long he ends up sitting on the bench. Here is the NYT story, Southwick Wins Confirmation.
Having served as a Teaching Quizmaster at UT Law School with Leslie more than 30 years ago, I am fairly confident that the individual portrayed by those trying to defeat the nomination is not who will be sworn in and serve admirably for however long he ends up sitting on the bench. Here is the NYT story, Southwick Wins Confirmation.
Interesting Thought About Electronic Discovery and Arbitration
Stephen Rosenberg, who has a tremendous site, Boston Insurance and ERISA Litigation Blog, has an interesting post on the relationship between the developing law of electronic discovery and how it might actually make arbitration a better forum. Electronic Discovery and the Calculus of Arbitration. It's an interesting argument.
More notable because as a general rule, Rosenberg thinks that arbitration is not as cost effective as it could be and may not be worth the bother, particularly for complex cases. His thesis: if the federal courts don't reign in the cost and expense of e-discovery, getting arbitrators to carve out more narrow (less costly) rules might make it more appealing.
There's no question e-discovery is the "in-thing" now. One aspect that may not be getting enough attention is its scalability — should the same rules apply in a $100 million suit and a $10 million one and a $150,000 one?
More notable because as a general rule, Rosenberg thinks that arbitration is not as cost effective as it could be and may not be worth the bother, particularly for complex cases. His thesis: if the federal courts don't reign in the cost and expense of e-discovery, getting arbitrators to carve out more narrow (less costly) rules might make it more appealing.
There's no question e-discovery is the "in-thing" now. One aspect that may not be getting enough attention is its scalability — should the same rules apply in a $100 million suit and a $10 million one and a $150,000 one?
MDV for the Still Employed
Most employment law cases are brought by workers who were terminated, but occasionally a current worker brings a claim that makes its way to trial. And, amazingly enough, sometimes juries are convinced that an employer, who is still good enough to work for, has acted badly enough that the employee should be compensated with a large award. That was the case in Alameda County where a jury found for Oliver Hill on his race and retaliation claims. BART worker awarded $1.27 million for on-the-job racial harassment.
Oliver, a mechanic still works for BART, although he did transfer from the Richmond facility, where the actions occurred to Concord.
Although the SF Chronicle story doesn't make it perfectly clear, it seems as though one of the acts that he alleged was harmful was a 21 month paid psychiatric leave following a complaint by a supervisor that Hill had made threats against him and the employee who Oliver claims harassed him.
If you have been thinking million dollar verdicts don't seem to be happening quite as often based on my postings of the last six months, I am afraid you are wrong. They are there, I just haven't been as faithful a reporter. Many of them are collected as potential posts, so perhaps I will do some catch-ups in summary fashion one of these days.
For me reports of MDV's are helpful reminders of what can happen in a court room. Not that it should scare employers away from trying cases that should be tried, but it does help with a sense of urgency — there are no 100% sure winners.
Oliver, a mechanic still works for BART, although he did transfer from the Richmond facility, where the actions occurred to Concord.
Although the SF Chronicle story doesn't make it perfectly clear, it seems as though one of the acts that he alleged was harmful was a 21 month paid psychiatric leave following a complaint by a supervisor that Hill had made threats against him and the employee who Oliver claims harassed him.
If you have been thinking million dollar verdicts don't seem to be happening quite as often based on my postings of the last six months, I am afraid you are wrong. They are there, I just haven't been as faithful a reporter. Many of them are collected as potential posts, so perhaps I will do some catch-ups in summary fashion one of these days.
For me reports of MDV's are helpful reminders of what can happen in a court room. Not that it should scare employers away from trying cases that should be tried, but it does help with a sense of urgency — there are no 100% sure winners.
American Employment Law More Liberal Than Europe
At least in one small area — mandatory retirement. Unlike the ADEA which has no upper limit and bars mandatory retirement, the European Union's top court has held that country laws establishing a retirement age could be "justified to promote social policies like improving employment. Here is the Judgment of the Court from the International Court of Justice.
For more background on the dispute that was brought by Felix Palacios de la Villa after he was forced to retire from Spanish retailer Cortefiel SA when he turned 65, see the International Herald Tribune article, Court ruling upholds mandatory retirement in Europe.
One caveat of the ruling — it is necessary to also provide adequate provisions for retirees.
This ruling must be particularly painful to those remaining partners at Sidley, Austin who have recently agreed to not only give up their mandatory retirement requirement, but also kick in $27.5 million to some former partners. See the EEOC press release here.
For more background on the dispute that was brought by Felix Palacios de la Villa after he was forced to retire from Spanish retailer Cortefiel SA when he turned 65, see the International Herald Tribune article, Court ruling upholds mandatory retirement in Europe.
One caveat of the ruling — it is necessary to also provide adequate provisions for retirees.
This ruling must be particularly painful to those remaining partners at Sidley, Austin who have recently agreed to not only give up their mandatory retirement requirement, but also kick in $27.5 million to some former partners. See the EEOC press release here.
Why Employment Lawyers Worry About Defamation
Sometime ago I saw a study that 1/3 of all defamation claims arise out of the workplace. If an employer needs chilling evidence of why that is a concern, a careful reading of last week's decision in Galarneau v. Merrill Lynch (1st Cir. 10/12/07) should provide it.
I first reported on the trial court decision as one of two million dollar verdicts in March 2005, Sticks and Stones May Break Your Bones. Although the 1st Circuit did knock out the $2.1 million dollar punitive damage award, it left intact an $850,000 judgment for compensatory damages.
The defamation occurred on the U-5 form that Merrill Lynch was required to complete when it terminated Ms. Galarneau. Among the statements contained in the form were these:
When it agreed with Galarneau, Merrill Lynch had only its defense that the conditional privilege was not barred because of malice. Unfortunately, the Court found the same evidence that supported falsity, also supported malice: "Evidence that Merrill Lynch approved the trading as it was taking place and defended the trading after it came under attack supports the jury's conclusion that the firm either knew the statement was false, or recklessly disregarded its falsity."
Merrill Lynch's protestations that it took those actions without knowing the true facts, while completely understandable to anyone who knows how things work in the real world, were merely a jury argument that Merrill Lynch lost.
One of Merrill Lynch's most intriguing defenses, that the Court should have applied a heightened standard of defamation based on the 1st amendment because the issue involved a matter of public concern, was left on the cutting room floor. Not because the argument might not have been successful, but because it was raised for the first time in the appellate court.
Merrill Lynch also argued that the trial court's exclusion of correspondence between "Galarneau's counsel and counsel for Merrill Lynch regarding the opportunity to review and comment upon the language Merrill Lynch proposed to use in Galarneau's Form U-5," was erroneously excluded. But showing how hard it is to reverse a judgment on the basis of an evidentiary ruling, the 1st Circuit held it was not an abuse of discretion.
Those two rulings might be enough to get Merrill Lynch an en banc hearing, which would be appropriate, but it may be that it has to settle for the 2/3 reduction in its overall liability.
For employers and their counsel, Galarneau it is a clear warning of the continuing dangers of defamation in the workplace.
I first reported on the trial court decision as one of two million dollar verdicts in March 2005, Sticks and Stones May Break Your Bones. Although the 1st Circuit did knock out the $2.1 million dollar punitive damage award, it left intact an $850,000 judgment for compensatory damages.
The defamation occurred on the U-5 form that Merrill Lynch was required to complete when it terminated Ms. Galarneau. Among the statements contained in the form were these:
Ms. Galarneau was terminated after the firm concluded that she had (I) engaged in inappropriate bond trading in one client's account and (II) utilized time and price discretion in the accounts of three clients.When Galarneau's expert opined that the bond trading was appropriate it was left for the jury to determine the truth of the statement.
When it agreed with Galarneau, Merrill Lynch had only its defense that the conditional privilege was not barred because of malice. Unfortunately, the Court found the same evidence that supported falsity, also supported malice: "Evidence that Merrill Lynch approved the trading as it was taking place and defended the trading after it came under attack supports the jury's conclusion that the firm either knew the statement was false, or recklessly disregarded its falsity."
Merrill Lynch's protestations that it took those actions without knowing the true facts, while completely understandable to anyone who knows how things work in the real world, were merely a jury argument that Merrill Lynch lost.
One of Merrill Lynch's most intriguing defenses, that the Court should have applied a heightened standard of defamation based on the 1st amendment because the issue involved a matter of public concern, was left on the cutting room floor. Not because the argument might not have been successful, but because it was raised for the first time in the appellate court.
Merrill Lynch also argued that the trial court's exclusion of correspondence between "Galarneau's counsel and counsel for Merrill Lynch regarding the opportunity to review and comment upon the language Merrill Lynch proposed to use in Galarneau's Form U-5," was erroneously excluded. But showing how hard it is to reverse a judgment on the basis of an evidentiary ruling, the 1st Circuit held it was not an abuse of discretion.
Those two rulings might be enough to get Merrill Lynch an en banc hearing, which would be appropriate, but it may be that it has to settle for the 2/3 reduction in its overall liability.
For employers and their counsel, Galarneau it is a clear warning of the continuing dangers of defamation in the workplace.
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