Friday, May 31, 2013

"Race Raters" Inadmissible - COTW #145

This Case of the Week goes back a few months, but it's an interesting issue so I decided to drop it in here.

The EEOC filed a disparate impact lawsuit against Kaplan Higher Learning Education Corp. for its use of credit reports in background checks. To establish a disparate impact based on race, the EEOC proffered statistics - but they didn't have the actual race of each applicant. Instead, the EEOC relied on "race raters" to identify the race of each individual using his or her driver's license photos:
In order to determine the race of a particular applicant, the EEOC subpoenaed records from the Departments of Motor Vehicles (“DMVs”) from 38 states and the District of Columbia. Fourteen states and the District of Columbia provided records that identified an applicant's race. The remaining 24 states provided copies of the driver's license photos pertaining to the applicants. In order to determine the race of applicants from these states, Dr. Murphy assembled a team of five “race raters,” who were asked to review each photograph and determine whether the individual is “African–American,” “Asian,” “Hispanic,” “White,” or “Other.” Individuals considered “multi-racial” were adjudged “Other.” Dr. Murphy required that four of the five “race raters” agree (80%) in order to consider that applicant's race. In all, the “race raters” were shown 891 photographs. In 11.7% of the photographs, the “race raters” were unable to achieve an 80% consensus with regard to the applicant's race.
Equal Opportunity Employment Comm'n v. Kaplan Higher Learning Edu. Corp., 1:10 CV 2882, 2013 WL 322116 (N.D. Ohio Jan. 28, 2013) reconsideration denied, 1:10 CV 2882, 2013 WL 1891365 (N.D. Ohio May 6, 2013).

The Court granted the defendant's motions to exclude the evidence and enter summary judgment.

An interesting sidenote: discovery revealed that the EEOC itself used credit checks for 84 of its 97 positions. Per the EEOC handbook, the EEOC uses credit checks because "overdue just debts increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations."

HT: My McQuaide Blasko colleague, Janine Gismondi.

Tuesday, May 28, 2013

Fired for What!? - Butt-Dialing Gone Bad and You Want It, You Got It!

Welcome to a two-for-one Fired for What!? double feature.
  • In Act One, we have a case of butt-dialing gone bad. A Papa John's employee accidentally (and unknowingly) called a customer to whom he had just delivered a pizza. The customer's voicemail picked up the employee's racist banter (listen to recording here) and inappropriate "opera" (let's just say Figaro does not start with an N). Papa John's fired the driver and his co-worker.

  • For Act Two, we have a case of "you want it, you go it!" An employee posted on Facebook (parental advisory - explicit lyrics coming): "I don't bite my [tongue] anymore, FUCK . . . FIRE ME . . . Make my day." You'll never guess what happened . . . he got fired! Oh, that is what you guessed? My bad. The NLRB issued this advice memorandum concluding that the employee's rant was not protected concerted activity.
For more on the NLRB's decision, check out Jon Hyman's Rolling Stones-filled post, “Fire me. … Make my day” does not equal protected concerted activity (thank god); and Eric Meyer's post, Employee posts "FIRE ME...Make my day..." on Facebook. And guess what?

Abraham Lincoln: Employment Lawyer

No, I'm not trying my hand at writing alternate history, a la Abe Lincoln: Vampire Slayer (a movie I have unsuccessfully attempted to watch twice now). No, Abraham Lincoln did in fact practice a little employment law.

I'm reading Lawyer Lincoln right now, a book about Lincoln's life as a lawyer that was published in the 1930s (and not to be confused with The Lincoln Lawyer about a guy who practices law out of his town car). He practiced a broad range of law from railroad cases to whether "fixing" the neighbor's hog constituted the tort of conversion. The book also includes a brief reference to employment law!
Thus Lincoln helped settle a leading principle of the law of contracts in a case involving only $26.75 claimed as wages by a farmhand. Eldridge v. Rowe (7 Ill. 91). Lincoln for Appellee.
I found the Court's opinion. The employee walked off of the job about four months in to an eight month contract. The employee then sought compensation for the four months on a theory of quantum meruit. The Illinois Supreme Court held:
[T]he plaintiff below had no legal right to recover for the four months' labor he had performed. He had agreed to labor on the farm of Eldridge, for the term of eight months for the sum of ninety dollars, and he has not performed his agreement; and it is no objection to say that Eldridge has received the benefit of his labor, this being a case, where, from its nature, Eldridge could not separate the products of his labor from the general concerns of his farm, and ought not, therefore, to be responsible to any extent whatever, for not doing that which was impossible.
The employee could not recover for his partial performance of the contract. Lincoln represented the employee, so I guess he lost. He did draw an opinionless dissent though.

Image: Cover of Lawyer Lincoln used in commentary on the book.

Friday, May 24, 2013

PA Judge Orders Expert Review of Facebook Page - COTW #144

Pennsylvania has had a number of Facebook discovery cases in the past couple of years. However, a recent decision out of Lancaster County took a slightly different approach.

The discovery dispute arose over Facebook photos (and video) allegedly showing a personal injury plaintiff frolicking in the snow. Per the order:
1. Within seven (7) days of the date of this order, the parties are to agree upon a neutral forensic computer expert to conduct an examination of the relevant material on Plaintiffs' computer.
2. The expert is to be given Plaintiffs' user name and password information in order to access the private portion of Plaintiffs' Facebook social networking account and to download the contents of the Facebook account to the hard drive. The expert is to copy the hard drive and isolate the data for the period January 27, 2010, through February 13, 2010.
3. For the period January 27, 2010, through February 13, 2010, the expert is to identify all photographs of snow and references to snow in any emails and any photographs of Plaintiff, Grace Perrone, engaged in any physical activity.
4. Copies of the files identified in item 3 are to be provided to counsel.
5. This discovery is to be completed within sixty (60) days of the date of this order.
6. The cost of this process including the expert's fees, is to be borne by Defendants.
In short, the Pennsylvania judge ordered third-party expert review of the contents of the Facebook page. I like the balance of allowing the opposing party to probe for relevant information, while not giving them unfettered access to the Facebook profile.

I'm a little concerned, however, about the cost. Although I guess it serves as a deterrent to avoid Facebook fishing expeditions as the discovery-seeking party (at least in this case) bears that expense.

HT to fellow Pennsylvania attorney, Dan Cummins of Tort Talk fame - Novel Facebook Discovery Order Out of Lancaster County.

Tuesday, May 21, 2013

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.

Monday, May 20, 2013

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.

Friday, May 17, 2013

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 . . . .

Wednesday, May 15, 2013

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

Tuesday, May 14, 2013

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.

Friday, May 10, 2013

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.

Wednesday, May 8, 2013

DC Circuit Strikes Down NLRB Poster Requirement

The D.C. Circuit Court of Appeals took another shot at President Obama's NLRB yesterday in Nat'l Ass'n of Mfrs. v. NLRB (opinion here). The Court vacated the NLRB's poster requirement, primarily under s 8(c) of the NLRA.

Section 8(c) did most of the heavy lifting. It provides:
The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this Act, if such expression contains no threat of reprisal or force or promise of benefit.
29 U.S.C. s 158(c). The Court essentially applied a First Amendment free speech style of analysis to the issue.

Ultimately, the Court concludes that the 8(c) right to express views without incurring an unfair labor practice charge includes a right to keep silent (framed another way, a right against compelled speech). As the NLRB's poster requirement treated failure to post as an unfair labor practice, or evidence of union animus in an unfair labor practice charge, the rule violated s 8(c).

The NLRB did have another method of enforcing the rule, which was to toll the statute of limitations. The Court held that the NLRB lacked authority to modify the statute of limitations, so that portion of the rule was vacated as well.

Could it get any worse for the NLRB's poster requirement? Well, yeah, actually it can. Although the Court's controlling (and unanimous) opinion did not reach the issue, a majority of the judges issued a concurring opinion. In it, the judges found that the NLRB would have lacked the authority to promulgate the poster requirement rule even if it had not violated s 8(c).

This may be the end of the NLRB's poster rule. They can press it in other circuits, but employers have the option to appeal NLRB rulings to their home circuit OR the D.C. Circuit. Guess where they'll be heading? The NLRB could appeal to SCOTUS . . . but this doesn't strike me as a SCOTUS-worthy case (maybe if there's a split on the issue with another circuit).

BONUS QUESTION: Since two judges, a majority of the D.C. Circuit panel, held that the NLRB lacked the authority to promulgate the rule . . . is that binding precedent in the D.C. Circuit?

Image: NLRB logo used in commentary on the NLRB. Not Official Use.

Tuesday, May 7, 2013

PA Supreme Court Upholds Employee Third-Party Injury Waiver

The Supreme Court of Pennsylvania (SCOPA?) recently issued its opinion in Bowman v. Sunoco, Inc. (copy here). As a condition of employment, the plaintiff-security guard signed a worker's compensation disclaimer that included a waiver of claims for injuries against the security company's customers.

Well, wouldn't you just know it . . . she slipped and fell on snow and ice while guarding a customer's refinery. She filed a worker's comp claim and received benefits. Then, she sued the customer. In discovery, the customer found the waiver and filed for judgment on the pleadings, which was granted.

On appeal, the Supreme Court affirmed. The employee had bargained away her right to bring a claim against the third-party, her employer's customer, for injuries covered by worker's compensation. Finally, if you're like me, you'll want to see the actual disclaimer:

I understand that state Workers’ Compensation statutes cover workrelated injuries that may be sustained by me. If I am injured on the job, I understand that I am required to notify my manager immediately. The manager will inform me of my state’s Workers’ Compensation law as it pertains to seeking medical treatment. This is to assure that reasonable medical treatment for an injury will be paid for by Allied Workers’ Compensation insurance.

As a result, and in consideration of Allied Security offering me employment, I hereby waive and forever release any and all rights I may have to:

-make a claim, or
-commence a lawsuit, or
-recover damages or losses

from or against any customer (and the employees of any customer) of Allied Security to which I may be assigned, arising from or related to injuries which are covered under the Workers’ Compensation statutes.
Image: Pennsylvania State Capitol Building, taken by me.

Friday, May 3, 2013

3d. Circuit: Shareholder Not "Employee" Under Title VII - COTW #141

Earlier this week, the Third Circuit issued its opinion in Mariotti v. Mariotti Building Products, Inc., holding that a shareholder was not an "employee" under Title VII.

The plaintiff was a shareholder-director in the family business. One day, he had a "spiritual awakening" that was not well received by his family members and fellow shareholders. They began to harass him about his newfound spiritualism (the opinion doesn't really go into what religious beliefs he discovered). The breaking point was Plaintiff's eulogy at Babe Mariotti's funeral that included references to the new religion (Babe was the founder of the business).

So, the shareholders fired their own family member and he filed a discrimination lawsuit. Can a shareholder file a Title VII claim?

In Clackamas Gastroenterology Associates, P.C. v. Wells, 538 U.S. 440 (2003), the Supreme Court adopted the EEOC's six-part test for determining who is an "employee":
1. Whether the organization can hire or fire the individual or set the rules and regulations of the individual‟s work
2.Whether and, if so, to what extent the organization supervises the individual‟s work
3. Whether the individual reports to someone higher in the organization
4. Whether and, if so, to what extent the individual is able to influence the organization
5. Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts
6. Whether the individual shares in the profits, losses, and liabilities of the organization.
The Third Circuit applied that test here, with a focus on the element of control to conclude that Plaintiff was not an "employee" and the District Court properly dismissed his case.

This case was not just a repeat of the Supreme Court case, and the Third Circuit addressed some of the differences. For example, this was a Title VII case and Clackamas was an ADA case, and this case dealt with a non-professional corporation. Also, this case dealt with whether Plaintiff was an employee for purposes of filing a lawsuit and not whether an individual was an employee for purposes of meeting the employee-threshold to determine whether the employer was covered. Ultimately, none of these differences changed the outcome.

This opinion is likely no surprise to those of you who remember Kirleis v. Dickie, McCamey, and Chilcote (Third Circuit holding that a law firm shareholder was not an employee). However, Mariotti is a precedential opinion and Kirleis was not.

Thursday, May 2, 2013

NLRB Issues Facebook Firing Decision

The NLRB recently issued a decision and order in a Facebook firing case: Design Technology Group, LLC d/b/a Betty Page Clothing and Vanessa Morris (download .pdf).

Let's cut straight to the posts:
Holli Thomas needs a new job. I’m physically and mentally sickened.
Vanessa Morris It’s pretty obvious that my manager is as immature as a person can be and she proved that this evening even more so. I’m am [sic] unbelievably stressed out and I can’t believe NO ONE is doing anything about it! The way she treats us in [sic] NOT okay but no one cares because everytime we try to solve conflicts NOTHING GETS DONE!!
Holli Thomas bettie page would roll over in her grave.
Vanessa Morris She already is girl!
Holli Thomas 800 miles away yet she’s still continues our lives miserable. Phenomenal!
Vanessa Morris And no one’s doing anything about it! Big surprise!
Brittany [Johnson] “bettie page would roll over in her grave.” I’ve been thinking the same thing for quite some time.
Vanessa Morris hey dudes it’s totally cool, tomorrow I’m bringing a California Worker’s Rights book to work. My mom works for a law firm that specializes in labor law and BOY will you be surprised by all the crap that’s going on that’s in violation 8) see you tomorrow!

Then, the employer fired them.

We know from previous advice memos and decisions that the NLRB is on a social media kick. Generally, protected concerted activity includes multiple employees interacting on social media to address terms and conditions of employment.

That's pretty clearly what happened here, right? Also, the employees had approached management earlier to address concerns about safety and the store closing later than the other stores in that neighborhood. It's tough to lay down bright line rules . . . but if the employees are discussing "Worker's Rights" books and lawyers and "labor law" . . . it's probably going to be protected activity.

How does the NLRB see it?
Thomas and Morris were engaged in protected concerted activity when they presented the concerns of the employees about working late in an unsafe neighborhood to their supervisor and to the Respondent’s owner, and . . . their Facebook postings were a continuation of that effort. But we also find that the Facebook postings would have constituted protected concerted activity in and of themselves.
I suspect social media will create a ton of tough cases regarding protected concerted activity . . . realistically, I don't think this was one of them.