Wal-Mart Employee Awarded $1.65 Million for False Theft Claim and Illegal Search of Home, May 30, 2002
An Arkansas Wal-Mart store manager became suspicious when several life jackets and fishing poles were missing from inventory. A store loss prevention officer was informed that maintenance employee David Clark and some other employees were taking tools and equipment home without authorization. The officer confronted Clark, who orally consented to a search of his home for the fishing equipment.
The officer contacted a local police detective and arrangements were made to search Clark's home. Before the police and several Wal-Mart employees proceeded with the search, Clark signed a consent-to-search form provided by two police detectives with the understanding that the search was limited in scope.
After a 7 hour search, over 400 electronic items were seized from Clark's home and placed on his front lawn. Clark protested, telling officers that he repaired items for Wal-Mart and he was also given salvage merchandise by his supervisor. He offered to show receipts for the items, but was ignored. Coincidentally, the local media also arrived and snapped photos which appeared in newspaper headlines the following few days which read, "stolen electronic equipment believed to have come from Wal-Mart." The articles listed Clark's address and pictured his home. The items were loaded into a U-haul and stored with the sheriff. Clark was terminated.
When Wal-Mart sought recovery of the items from the sheriff, Clark counterclaimed, alleging civil rights violations and various torts, including defamation, false-light invasion of privacy, and intrusion invasion of privacy. The jury found that Clark's consent for the scope of the search was involuntary. It also found sufficient evidence to support a finding of defamation when Wal-Mart intentionally communicated false statements harmful to Clark's reputation which were picked up and published by the media.
The jury awarded Clark $651,000 in compensatory damages and $1,000,00 in punitive damages. The decision was affirmed by the Arkansas Supreme Court. See Wal-Mart Stores, Inc. v. Lee, No. 01-403 (Ark., May 16, 2002).
Timing is Everything When it Comes to a Retaliation Claim, May 28, 2002
Bruce M. Luchansky
An employer in California discharged a manager who received poor performance reviews over a two-year period. The employer claimed that the manager's poor performance led to his firing. A California appeals court, however, found the timing to be suspect. The disciplinary action was taken only one month after the employee joined a wage and hour class action lawsuit against the employer claiming that the employer owed the plaintiffs overtime pay. Since the employer allowed the manager's poor performance to continue for two years without taking disciplinary action, the timing of his discharge alone was sufficient to allow the manager to maintain a new lawsuit against the employer for unlawful retaliation. Burruel v. Food 4 Less Holdings Inc., No. B152108 (Cal. Ct. App. 5/9/02)(unpublished).
To be most effective, from both a practical and a legal perspective, discipline and discharge decisions should be made as promptly as possible.
Workplace Religious Freedom Act Proposed, May 22, 2002
The number of religious discrimination charges are on the rise. So, legislation is expected to be introduced in Congress that makes it easier for employees to prove religious discrimination under Title VII of the Civil Rights Act. Currently, employers must accommodate their employees' religious beliefs, but only if it involves virtually no cost. The proposed legislation would require that accommodation to be more like the accommodation required by the Americans with Disabilities Act. Under the ADA, the reasonableness of the accommodation depends more on who the employer is than the actual accommodation required.
Project Superintendent Held Not to be Exempt Under FLSA, May 21, 2002
Bruce M. Luchansky
When a Pennsylvania construction company hired a project superintendent for $80,000 per year, it assumed that the employee was exempt from the FLSA's overtime requirements. After all, the company not only paid the superintendent a salary, but his duties were all of a supervisory nature. The company managed the construction and renovation of all types of buildings for property owners and architects, and the superintendent was responsible for providing leadership and supervision of day-to-day construction operations at assigned sites. At most of these sites, he was the highest level representative of the company present at the work site. The employee worked between 55 and 76 hours per week.
Even after the employee's salary was raised to $90,000, however, he sued the company for overtime pay. The company argued that he was exempt from overtime requirements as an "administrative" employee -- one of the three primary exemptions from the overtime requirements, along with executive and professional employees. The court disagreed, however, stating that the primary duties of an "administrative" employee must be directly related to management policies or general business operations. Since the employee was engaged primarily in making sure that the construction was performed properly, the court held that he was a "production" employee rather than an "administrative" employee. The employer, therefore, was responsible for paying the superintendent for his overtime.
Determining whether high-level employees are exempt under the FLSA often requires judgment calls. If you have any doubt about the proper classification of your employees, consult your labor attorney for guidance.
Latex Allergy - - Legitimate Reason Not to Hire Nurse, May 21, 2002
The United States District Court for the Northern District of Illinois held that a hospital's refusal to hire a nurse with a latex sensitivity due to eczema did not violate the ADA. Franklin v. Ingalls Mem'l Hosp., No. 01 C 5576 (N.D. Ill. Apr. 18, 2002). A medical condition that prevents an applicant from performing the essential functions of a job is a legitimate reason to deny employment. In this case, hospital nurses were required to wear latex gloves when rendering medical treatment to patients. Because the plaintiff was allergic, she was unable to perform her duties.
The court, as well as most medical professionals are aware that there are alternatives to latex. Although it held in favor of the hospital, it suggested that the hospital could consider the additional expense of supplying nonlatex materials in its hiring decision without running afoul of the ADA.
Vacation Counts Towards FMLA One-Year Eligibility Threshold, May 15, 2002
In what it deemed "the most natural reading" of the FMLA, the United States District Court for the District of Maine interpreted FMLA regulation 29 C.F.R. § 825.110(b) in favor of a hospital employee who took vacation just prior to starting FMLA leave. Ruder v. MaineGeneral Medical Center, No. 01-CV-220-B-S, 2002 WL 975975 (D. Me. May 10, 2002).
Robert Ruder, a former employee of MaineGeneral Medical Center, brought a complaint against the hospital for violating the FMLA. In his fifty-first week of employment, Ruder took a vacation, then subsequently took FMLA leave to treat a serious medical condition. His employer refused to reinstate Ruder, and argued that he was not eligible for FMLA protection because he took leave before he completed twelve months of employment.
In pertinent part, 29 C.F.R. § 825.110(b) provides:
If an employee is maintained on the payroll for any part of a week, including any periods of paid or unpaid leave (sick, vacation) during which other benefits or compensation are provided by the employer (e.g., workers' compensation, group health plan benefits, etc.), the week counts as a week of employment.
When Ruder took his week-long vacation, he remained on the payroll and received benefits. Therefore, when the one-year eligibility threshold of the FMLA passed during that vacation, Ruder was entitled to FMLA protections. The court denied the employer's Motion to Dismiss the complaint.
Prompt Investigation of Harassment Complaint Frees Employer From Liability, May 13, 2002
Bruce M. Luchansky
In the Quick Clip of May 10, 2002, we emphasized the risk of waiting to investigate complaints of sexual harassment. Today's Quick Clip shows the benefits of prompt action.
When a correctional officer at the New Hampshire Department of Corrections complained of sexual harassment, her employer began an investigation the very next day. The employer interviewed that day the complainant and her fiancé, also a corrections officer, and interviewed the alleged harasser the following day. When the harasser admitted his conduct, the complainant was informed of the results of the interview. The employer removed the harasser from his post later in the day and, after the investigation was completed, imposed a 48-hour disciplinary suspension. The employer also warned him that any future actions would result in termination. He resigned three weeks later.
Believe it or not, the complainant still sued her employer, claiming that the employer did not take prompt and appropriate remedial action. Even harder to believe is that the trial court agreed -- she won a $200,000 judgment at trial. Nevertheless, the decision was reversed on appeal, and the Vermont State Supreme Court affirmed that the employer's actions were timely and appropriate. New Hampshire Dep't of Corr. V. Butland, No. 2000-803 (N.H. 5/7/02).
The lesson is clear -- claims of sexual harassment must be investigated promptly and thoroughly, both for the benefit of the complainant and for the sake of the employer.
Management Drops the Ball, Fails To Investigate Harassment, May 10, 2002
by Thomas A. Bowden
The employer of an Hispanic worker paid a steep price for not investigating reports of racial harassment in the workplace.
Tony Cerros worked in a steel factory in Indiana. Co-workers and supervisors allegedly referred to him as "spic, brown boy, and wetback," and racially derogatory graffiti appeared on the walls, sometimes referring to Cerros by name. He reported these offensive activities to his supervisor and to upper management, but no investigation was done until after Cerros filed a complaint with the Equal Employment Opportunity Commission.
To be actionable, such "hostile environment" acts must be severe and pervasive, and there must be a basis to hold management responsible. Here, the appellate court held that the case could go forward to a jury trial.
Reports of workplace harassment should be promptly investigated and corrective action taken. Legal counsel can help set up the procedures or, in appropriate cases, conduct an inquiry.
Cerros v. Steel Techs. Inc.,, 7th Cir., No. 01-1293, 5/7/02.
Employee Who Did Not Work 1,250 Hours Not Eligible for FMLA Coverage, May 9, 2002
Bruce M. Luchansky
The Family and Medical Leave Act always has been a source of frustration to employers, employees, and the courts. While few disagree with the Act's laudable purpose -- to provide protected leave time for employees with serious health conditions, and for those who give birth to or adopt a child -- implementation of the Act has been a nightmare. Questions such as, what is a "serious medical condition," and "who is covered under the Act," have highlighted the difficulty of mandating a "one size fits all" benefit.
In response, the courts finally are realizing that they have no choice but to interpret the FMLA strictly. Thus, on April 25, a federal judge in the Virgin Islands denied FMLA coverage to an employee who barely failed to qualify for coverage under the Act. To be eligible, an employee must have worked at least 1,250 hours during the year preceding the leave. In Corcino v. Banco Popular de Puerto Rico, No. 1997-83 (D.V.I. 4/25/02), the Court found that an employee who had worked only 1,197 hours in the past year -- only 53 hours less than the statutory minimum -- did not qualify for coverage under the Act.
While the result seems harsh, it is the correct one. For employers to be able to comply with the FMLA without risking litigation at every decision, bright line rules must be established. Once the courts reinforce "safe harbor" interpretations of the Act, employers can begin to evaluate FMLA requests solely on their merit, without the need to evaluate litigation avoidance strategies as well.
Direct Observation of Drug Test Not Violation of 4th Amendment, May 6, 2002
The United States District Court for the District of Massachusetts upheld a federal regulation mandating direct observation of the collection of urine samples of public transit workers when there is reason to suspect tampering. The Court concluded that direct observation does not violate the worker’s 4th Amendment right of privacy.
Police officers with the Massachusetts Bay Transpiration Authority (MBTA) challenged the agency’s drug and alcohol testing policy. Specifically, 49 C.F.R. § 40.67(i) instructs sample collectors that “[a]s the observer, you must watch the employee urinate into the collection container. Specifically, you are to watch the urine go from the employee’s body into the collection container.”
The policy requires direct observation in three situations: (1) if the employee gave a previous sample that appeared to be tampered with, a second sample may be collected under observation; (2) if the employee had either the opportunity or motive to tamper with a sample as evidenced by possession of materials or conduct indicating an intent to tamper; and (3) if the employee is returning to work or providing a follow-up test after having previously failed a drug test.
The prerequisites for observed testing “are narrowly focused on preventing tampering with samples,” the court said. Moreover, the court noted, of the several thousand samples collected annually from the MBTA, only a few are collected via direct observation, and no MBTA police officer has been subjected to direct observation. See Byrne v. Massachusetts Bay Transp. Auth., No. 95-10837-GAO (D. Mass. Apr. 18, 2002).
Contract Work In Saudi Arabia – Only Young Men Need Apply, May 6, 2002
William West, a 62-year old engineer, was terminated by his American employer after working for just a couple weeks on a project in Saudi Arabia. West was hired by Bechtel Corporation to be the manager of engineering of the Jubail Project, a $40 billion industrial city for the Saudi government.
Shortly after West arrived, the leaders of the Saudi Royal Commission for Jubail and Yanbu objected to having the project managed by someone West’s age. Because the Royal Commission retained “the right in its absolute discretion to reject or require the removal or replacement of personnel at any level assigned to provide services” under the contract, Bechtel had no choice but to terminate West’s employment.
On his return to the states, West was offered other engineering work by Bechtel, both inside and outside of the United States. He declined Bechtel’s offers and filed suit in California State Court for, among other things, age discrimination. A jury awarded West $150,000 on his discrimination claim.
On appeal, the California Court of Appeals reversed the judgment. The Court found that absent any evidence that Bechtel was motivated to terminate West because of his age, the company cannot be held liable under California law. Moreover, the Court held that Bethel’s cooperation with the, albeit, biased Saudi government, which had reserved the contractual right to dictate personnel cannot be imputed to Bechtel. See West v. Bechtel Corp., No. A089492 (Cal. Ct. App. Mar. 6, 2002).
DOL To Streamline Foreign Worker Regulations, May 6, 2002
by Thomas A. Bowden
The U.S. Department of Labor wants to streamline regulations governing employment of foreign workers. Proposed new regulations published in the Federal Register on May 6 provide for:
- Less involvement of State workforce agencies in the process by which employers apply to permanently employ foreign workers;
- Implementation of an automated application process;
- Elimination of Davis Bacon and Service Contract Acts as sources for prevailing wages to be paid foreign workers. Instead, the wage component of the Bureau of Labor Statistics' expanded Occupational Employment Statistics program would be used;
- Elimination of the "business necessity standard," which permits job descriptions to be tailored to an alien's qualifications, artificially decreasing the pool of qualified U.S. applicants.
The DOL also proposes that employers be required to conduct both mandatory and alternative recruitment before filing for a permanent labor certification.
Final rules are expected in August.
Trade Secrets Must Be Treated as Confidential to be Protected, May 5, 2002
Bruce M. Luchansky
Most employers know that the law generally protects a company's "trade secrets" or "confidential information" and prohibits employees (and former employees) from disclosing such information without company authorization. Most employers do not know, however, that they can lose the protection of the trade secret laws if the company itself does not treat the information as confidential.
In Vermont, 10 employees of an optical products firm, Omega, resigned and formed a competing company. The new company acquired lots of information that would have been protectible as a trade secret. Nevertheless, when Omega sued its former employees for misappropriation of trade secrets, the Court found in favor of the employees. Why? Because Omega never treated the information as confidential. The company did not require the employees to sign confidentiality agreements, the company had "no internal policies concerning confidentiality, nondisclosure or noncompetition," the few security measures in place were not enforced or monitored, work areas were accessible to the public, and no company documents were marked "confidential." Since Omega took no steps to treat the information as confidential, the court held that the data lost its status as a legally-protected "trade secret." Omega Optical Corp. V. Chroma Tech. Corp., No. 1999-566 (Vt. 4/12/02). The employees were free to use Omega's trade secrets to compete with Omega.
The lesson to be learned is clear -- employers must take steps to protect the confidentiality of their trade secrets. Those who fail to do so are merely training their future competitors.
DOL Seeks Strong Penalties in Wage and Hour Case, May 3, 2002
When the Department of Labor conducts a wage and hour audit, it normally seeks only back pay for the employees. Most of the time, wage and hour violations are the result of inadvertent mistakes. After all, the Fair Labor Standards Act is complicated, and the DOL recognizes that.
The FLSA, however, provides for liquidated damages and attorney's fees. In private lawsuits (namely, those not brought by the DOL), employees normally seek those additional penalties.
The DOL has filed suit in New York for back pay, plus an equal amount in liquidated damages, for 175 employees allegedly denied overtime compensation. The suit further alleges that the employer knew of the violations and attempted to cover them up. The suit was also brought against the owners of the company individually. Chao v. Danmar Finishing Corp., No. 02-2586 (EDNY).
This case illustrates the dangers of noncompliance and any attempts to disguise violations.
New York City Expands Definition of Gender, May 1, 2002
On April 30, 2002, Mayor Michael Bloomberg signed a city council bill extending anti-discrimination protections to transgendered persons. Bill Intro No. 24 amends the city Human Rights Law by adding a new subdivision defining the term gender.
The amendment defines gender as "a person's gender identity, self image, appearance, behavior, or expression, whether or not that gender identity, self image, appearance, behavior, or expression is different from that traditionally associated with the legal sex assigned to that person at birth." The human rights law covers discrimination based on actual or perceived age, race, creed, color, national origin, gender, disability, marital status, sexual orientation, alienage, or citizenship status.
Kollman & Saucier, P.A., The Business Law Building, 1823 York Road, Timonium, MD 21093 Phone: 410-727-4300
Fax: 410-727-4391 © 2008 Kollman & Saucier, P.A. All rights reserved.
Website maintained by Armistead Technologies, Llc.tm
