SCOTUS Grants Cert. in Sarbanes-Oxley Retaliation Case

On Monday, the Supreme Court granted certiorari (order here) in Lawson v. FMR, LLC (SCOTUSblog case page here). Per the Petition for Certiorari, the Question Presented is:

Section 806 of the Sarbanes-Oxley Act, 18 U.S.C. § 1514A, forbids a publicly traded company, a mutual fund, or “any ... contractor [or] subcontractor ... of such company [to] ... discriminate against an employee in the terms and conditions of employment because of ” certain protected activity. (Emphasis added). The First Circuit held that under section 1514A such contractors and subcontractors, if privately-held, may retaliate against their own employees, and are prohibited only from retaliating against employees of the public companies with which they work.

The question presented is:

Is an employee of a privately-held contractor or subcontractor of a public company protected from retaliation by section 1514A?

The Sarbanes-Oxley Act generally protects "whistleblowers who disclose fraud or certain other unlawful activity to company management, to federal agencies, or to Congress." (from the Petition, citing 18 U.S.C. § 1514A).

Miles on Sexual Orientation Discrimination

My latest article is available for your consumption in the Reading Eagle Business Weekly. Check out: For employers, discrimination based on sexual orientation is a legal minefield. The takeaway: Federal and Pennsylvania employment discrimination laws don't expressly prohibit sexual orientation discrimination - but there are still plenty of legal risks in that area.

Caperton v. Massey . . . Still Going

Last week, I mentioned that I was reading The Price of Justice - the true story of Caperton v. Massey. I finished it this weekend, and was shocked by the ending.

The setup is that Hugh Caperton and his smaller coal company sued coal giant Don Blankenship and Massey Energy for allegedly driving the former out of business (by tortiously interfering with contracts and committing misrepresentation). Caperton won a $50 million jury verdict, but the West Virginia Supreme court threw it out.

However, Blankenship spent millions of dollars on campaign ads, while the case was pending before the WV Supreme Court, to get a Massey-friendly judge elected. From the later U.S. Supreme Court opinion:

Blankenship’s $3 million in contributions were more than the total amount spent by all other Benjamin supporters and three times the amount spent by Benjamin’s own committee. Caperton contends that Blankenship spent $1 million more than the total amount spent by the campaign committees of both candidates combined.

Amazingly, the judge (Benjamin) refused to recuse himself and was the deciding vote in the case. So, Caperton appealed to the U.S. Supreme Court arguing that his due process rights had been violated.

The Supreme Court held that due process required recusal. Happy ending for Caperton, right? Actually, the case went back to the West Virginia Supreme Court, which once again threw Caperton's case out (holding that the action had to be filed in Virginia, effectively killing it forever in West Virginia). So, Caperton filed suit in Virginia.

Now, for the truly shocking part. Caperton got his jury verdict in 2002. The Virginia Supreme Court held that Caperton could proceed with his lawsuit in Virginia . . . last month! I couldn't believe it when I reached the end of the book and the case still hadn't been resolved!

Sidenote: The book covers several other lawsuits vs. Massey, from contaminating drinking water to questionable safety practices killing miners.

Image: Book cover used in commentary on book.

Third Circuit Holds Obama Recess Appointment Unconstitutional - COTW #143

In Noel Canning v. NLRB the D.C. Circuit held that President Obama's "recess" appointments to the NLRB were unconstitutional. For a rundown of the implications of this holding, see here. I warned you that the Third Circuit was also looking at this issue also. Well guess what?

Yesterday, the Third Circuit dropped the hammer. In New Vista Nursing v. NLRB, the Third Circuit became the second federal appellate court to hold that the Constitution's recess appointments clause allows only intersession (not intrasession) recess appointments. Therefore, President Obama's NLRB "recess" appointments were unconstitutional - and the NLRB doesn't have enough members to officially operate (see New Process Steel).

If you want to read the 102-page opinion (and 55-page dissent), knock yourself out. Volokh Conspiracy's John Elwood has a nice post on the decision, including:

The majority thought context was more helpful, particularly “the Recess Appointment Clause’s specification that recess-appointed officers’ terms ‘shall expire at the End of [the Senate’s] next session.’” It reasoned, “[t]he expiration of these officers’ terms at the end of the next session implies that their appointments were made during a period between sessions,” id. at 75, and “if recess includes intrasession breaks, then we would expect the recess-appointment term to last only until the end of that session.” The majority then addressed historical practice, Id. at 87-95, reaching essentially the same conclusion as the D.C. Circuit: the absence of Founding-era intrasession recess appointments suggests the power does not extend that far.

Employers and employees could already choose to appeal NLRB decisions to the D.C. Circuit (or their "home circuit"). For parties in the Third Circuit, both routes now lead to the same place: the NLRB is powerless.

This decision also places even more pressure on the Supreme Court to take Noel Canning and decide the scope of the president's recess appointments power. I suspect a major SCOTUS ruling next year . . . .

Angelina Jolie and Employment Law

By now, you've probably already heard about the biggest news in the world for the past day or so . . . Angelina Jolie's double masectomy. Why an apparently uneventful preventive surgery on an actress is the number one story in the world is a riddle I have yet to solve. I have, however, nailed down an employment law tie-in!

You can't spell Angelina without GINA (if you rearrange some letters)! The key here is the reason Ms. Jolie had the operation:

[T]he truth is I carry a "faulty" gene, BRCA1, which sharply increases my risk of developing breast cancer and ovarian cancer. My doctors estimated that I had an 87 percent risk of breast cancer and a 50 percent risk of ovarian cancer, although the risk is different in the case of each woman. Only a fraction of breast cancers result from an inherited gene mutation. Those with a defect in BRCA1 have a 65 percent risk of getting it, on average.

Ms. Jolie may not realize it yet, but she just became the poster-child for GINA, the Genetic Information Nondiscrimination Act!

This is a great example of the reason Congress passed GINA. Genetic testing has gotten to a point where we can predict, with farely high probability, the chances of contracting certain major diseases. That is why GINA generally prohibits employers from conducting genetic testing, requesting genetic information, and discriminating on the basis of genetic information.

An unscrupulous employer may misuse such information to only hire people who are "low risk" in terms of insurance costs and availability for work. GINA outlaws that.

In a related story, the EEOC just settled its first GINA lawsuit.

Image: Public domain clip art from wpclipart.com.

What am I Reading? - Shelfari

Once upon a time, I had my Amazon Reading List on my LinkedIn Account. Sadly, LinkedIn "upgraded" and completely killed off the Reading List. And yes, I was VERY bitter . . . especially because my Reading List completely vanished (after I spent years tracking all of my reading).

Great news! Amazon acquired Shelfari, and included an option to import old LinkedIn Reading Lists. So, the answer to the title of this post is that you can check my Shelfari "shelf" at any time to see what I've read, and what I'm reading.

I'm currently reading The Price of Justice. A book that tracks Caperton v. Massey Coal from trial through SCOTUS (opinion here). Some marketing company sent it to me out of the blue. I had absolutely no interest . . . but I took it home and left it on my dining room table, assuming it would just be clutter. One evening I picked it up, and I was immediately hooked. I absolutely love it (aside from the free copy, I received no compensation . . . I just genuinely enjoyed it).

Feel free to browse my shelf. I try to mix ideological perspectives. I read Justice Scalia's book on Constitutional interpretation, and then Justice Breyer's opposing/alternate take. I also read a lot of economics ranging from Hayek (Austrian school) to Friedman (Chicago) to Marx (communist) to Thaler and Sunstein (the latter, a former Obama advisor). I find that competing perspectives provide a fuller picture.

Record-Breaking EEOC Verdict - COTW #142

Last week, the EEOC issued a press release: Jury Awards $240 Million for Long-Term Abuse of Workers with Intellectual Disabilities. Apparently, that's the biggest verdict in the agency's history.

I wish I could tell you there were some great "lessons learned" from this case, but let's look at what led to that huge dollar figure:

Specifically, the EEOC presented evidence that for years and years the owners and staffers of Henry's Turkey subjected the workers to abusive verbal and physical harassment; restricted their freedom of movement; and imposed other harsh terms and conditions of employment such as requiring them to live in deplorable and sub-standard living conditions, and failing to provide adequate medical care when needed.

Verbal abuses included frequently referring to the workers as "retarded," "dumb ass" and "stupid." Class members reported acts of physical abuse including hitting, kicking, at least one case of handcuffing, and forcing the disabled workers to carry heavy weights as punishment. The Henry's Turkey supervisors, also the workers' purported caretakers, were often dismissive of complaints of injuries or pain.

I mean, seriously, what's the lesson here? Do you really need to be told not to kick employees with intellectual disabilities and call them "retarded"?

I guess the lesson is that if you're the deplorable type of person who engages in such behavior (or their employer), know that there are repercussions for your actions.