Westlaw Journal EMPLOYMENT Litigation News and Analysis • Legislation • Regulation • Expert Commentary VOLUME 29, ISSUE 14 / FEBRUARY 3, 2015

RETIREE BENEFITS WHAT’S INSIDE EEOC PROCEDURE Supreme Court remands question on duration 11 Supreme Court justices voice concern over no oversight of retiree health benefits of EEOC conciliation process Mach Mining v. EEOC (U.S.) The 6th Circuit violated “ordinary principles of contract law” when it decided that a collective bargaining agreement that did not clearly define the duration of retiree health GENDER DISCRIMINATION benefits intended those benefits to last a lifetime, the U.S. Supreme Court has ruled. 12 Wal-Mart faces 3 more regional discrimination suits M&G Polymers USA LLC et al. v. Tackett et al., Bozek v. Wal-Mart Stores (N.D. Ill.) No. 13-1010, 2015 WL 303218 (U.S. Jan. 26, 2014). “When a contract is silent as to the duration of SAME-SEX BENEFITS retiree benefits, a court may not infer that the 13 FedEx sued over denial of benefits to employee’s parties intended those benefits to vest for life,” same-sex spouse Justice Clarence Thomas wrote for the unanimous Schuett v. FedEx Corp. high court. (N.D. Cal.) The court vacated and remanded the 6th ARBITRATION AGREEMENTS U.S. Circuit Court of Appeals’ decision in a 14 Authenticity of arbitration case involving a dispute between a plastics REUTERS/Shaun Heasley agreement’s electronic manufacturer and a group of retirees over how to The U.S. Supreme Court building in Washington signature unclear, court says interpret its collective bargaining agreement. (6th Cir. 1983), which do not follow “ordinary Ruiz v. Moss Bros. Auto Group (Cal. Ct. App.) The appeals court applied presumptions it first principles of contract law,” the high court said. expressed in UAW v. Yard-Man Inc., 716 F.2d 1476 CONTINUED ON PAGE 21 INDEPENDENT CONTRACTORS 15 9th Circuit OKs removal of truckers’ state labor law class action LaCross v. Knight Transp. COMMENTARY COMMENTARY (9th Cir.)

AFFORDABLE CARE ACT Changes to California When is a resignation 16 U.S. House votes civil rights laws implicate actually a termination? to ease Obamacare employer requirements arbitration agreements: The doctrine of constructive What employers need termination and coerced WAGE AND HOUR 16 MetLife faces underwriter to know resignation overtime suit Hanis v. MetLife Ins. Co. Fatemeh S. Mashouf and Henry D. Michael J. Summerhill and Salvador A. (W.D. Mo.) Lederman of Littler Mendelson PC Carranza of Freeborn & Peters examine

WORKERS’ COMPENSATION discuss a recent California law that the doctrines of constructive termina- 17 Washington workers’ comp prevents people from having to waive tion and coerced resignations, and they law bars asbestos claim their civil rights protections as a condition use real-life examples to discuss when against brewery of entering into a contract, and they a resignation is actually a discharge for McMann v. Air & Liquid Sys. Corp. (W.D. Wash.) discuss its impact on employment law. which employer liability may arise. SEE PAGE 3 SEE PAGE 6 41737930 TABLE OF CONTENTS Westlaw Journal Employment Published since May 1986 Retiree Benefits:M&G Polymers v. Tackett Publisher: Mary Ellen Fox Supreme Court remands question on duration of retiree health benefits (U.S.)...... 1 Executive Editor: Donna M. Higgins Commentary: By Fatemeh S. Mashouf, Esq., and Henry D. Lederman, Esq., Littler Mendelson PC Managing Editor: Tricia Gorman Changes to California civil rights laws implicate arbitration agreements: What employers [email protected] need to know...... 3 Managing Desk Editor: Robert W. McSherry Commentary: By Michael J. Summerhill, Esq., and Salvador A. Carranza, Esq., Freeborn & Peters Senior Desk Editor: Jennifer McCreary When is a resignation actually a termination? The doctrine of constructive termination and coerced resignation...... 6 Desk Editor: Sydney Pendleton Graphic Designers: Nancy A. Dubin EEOC Procedure: Mach Mining v. EEOC Ramona Hunter Supreme Court justices voice concern over no oversight of EEOC conciliation process (U.S.)...... 11

Westlaw Journal Employment Gender Discrimination: Bozek v. Wal-Mart Stores Wal-Mart faces 3 more regional discrimination suits (N.D. Ill.)...... 12 (ISSN 2155-594X) is published biweekly by Thomson Reuters. Same-sex benefits:Schuett v. FedEx Corp. FedEx sued over denial of benefits to employee’s same-sex spouse (N.D. Cal.)...... 13 Thomson Reuters 175 Strafford Avenue, Suite 140 Arbitration Agreements: Ruiz v. Moss Bros. Auto Group Wayne, PA 19087 Authenticity of arbitration agreement’s electronic signature unclear, court says (Cal. Ct. App.)...... 14 877-595-0449 Fax: 800-220-1640 Independent Contractors: LaCross v. Knight Transp. www.westlaw.com 9th Circuit OKs removal of truckers’ state labor law class action (9th Cir.)...... 15 Customer service: 800-328-4880

For more information, or to subscribe, Affordable Care Act please call 800-328-9352 or visit U.S. House votes to ease Obamacare employer requirements...... 16 west.thomson.com. Wage and Hour: Hanis v. MetLife Ins. Co. For the latest news from Westlaw Journals, MetLife faces underwriter overtime suit (W.D. Mo.)...... 16 visit our blog at http://blog.thomsonreuters. com/westlawjournals. Workers’ Compensation: McMann v. Air & Liquid Sys. Corp. Washington workers’ comp law bars asbestos claim against brewery (W.D. Wash.)...... 17 Reproduction Authorization Authorization to photocopy items for internal Workers’ Compensation: Paulino v. Chartis Claims or personal use, or the internal or personal Insurer’s denial of paraplegic’s living expenses not bad faith, 8th Circuit finds (8th Cir.)...... 18 use by specific clients, is granted by Thomson Reuters for libraries or other users regis- Toxic Exposure: In re World Trade Ctr. Lower Manhattan Disaster Site Litig. tered with the Copyright Clearance Center New York law reviving 9/11 cleanup workers’ claims ruled unconstitutional (S.D.N.Y.)...... 19 (CCC) for a fee to be paid directly to the Copyright Clearance Center, 222 Rosewood Toxic Exposure: Golik v. CBS Corp. Drive, Danvers, MA 01923; 978-750-8400; Oregon jury awards $4 million to insulation worker’s estate in asbestos case (Or. Cir. Ct.)...... 20 www.copyright.com. Recently Filed Complaints from Westlaw Court Wire...... 22 How to Find Documents on Westlaw The Westlaw number of any opinion or trial Labor and Public Employment News...... 24 filing is listed at the bottom of each article available. The numbers are configured like News in Brief...... 25 this: 2015 WL 000000. Sign in to Westlaw and on the “Welcome to Westlaw” page, Case and Document Index...... 26 type the Westlaw number into the box at the top left that says “Find this document by citation” and click on “Go.”

By Fatemeh S. Mashouf, Esq., and Henry D. Lederman, Esq. Littler Mendelson PC

On Sept. 30, California Gov. Jerry Brown, D, The attorney general or any district or city contracts, must be enforced as written. Can signed into law Assembly Bill 2617, which attorney may also bring a civil action on AB 2617 avoid this mandate? forbids arbitration of claims under the state’s behalf of individuals whose rights have been California has been down this road before. civil rights laws, Cal. Civ. Code §§ 51.7, 52 violated under the Ralph and Bane statutes Inevitably, and once again, federal and state and 52.1, unless the employer can prove that to obtain injunctive and equitable relief as law will clash, and, once again, the courts will the employee entered into the agreement to well as civil penalties of up to $25,000. have the final word. arbitrate voluntarily, knowingly and not as a condition of employment. The question for the courts will be whether AB 2617 applies Section 51.7 of the state’s Civil Code, the Ralph Civil Rights Act, prohibits “any generally applicable contract law to the arbitration agreements violence, or intimidation by threat of violence, within its purview or whether it impermissibly creates obstacles committed against … persons or property” to the enforcement of agreements protected by the FAA. on account of a person’s protected category, such as his or her position in a labor dispute, sex, race, color, religion, marital status or AB 2617 prohibits employers, among others, CAN AB 2617 WITHSTAND THE sexual orientation. from requiring an individual to waive the FAA’S PREEMPTIVE REACH? In addition to the prohibitions under the right to pursue a civil action or contact Under the Supremacy Clause of the U.S. Ralph Act, Section 52.1, the Tom Bane state agencies under these statutes. It Constitution, the Federal Arbitration Act Civil Rights Act, prohibits interference and also prohibits businesses from refusing to has been held to preempt various California attempted interference with the “exercise or contract with or employ individuals who statutes that created obstacles to the enjoyment by any individual or individuals refuse to waive such rights. enforcement of arbitration agreements.1 of rights secured by” the U.S. or California The law, which applies to contracts entered This line of cases drives home a consistent constitutions or federal or state laws by into, modified or extended after Jan. 1, 2015, theme: The FAA prevents state legislatures threats, intimidation or coercion. specifically includes arbitration agreements from creating obstacles to the enforcement Individuals can sue under Section 52 of in its prohibitions. The Federal Arbitration of private agreements to arbitrate regardless the Civil Code to enforce the Ralph and Act, 9 U.S.C. § 1, requires that arbitration of the public policy supporting their Bane laws and recover damages, civil agreements be treated like any other contract enactments. However, although arbitration fines, punitive damages and attorney fees. and, absent grounds for revocation of such agreements cannot be singled out for harsher treatment than other contracts, the FAA provides that state law defenses applicable to all contracts may be applied to arbitration contracts.2 So the question for the courts will be whether AB 2617 applies generally applicable contract law to the arbitration agreements within its purview or whether it impermissibly creates obstacles to the enforcement of agreements protected by the FAA. The bill analysis of AB 2617 sets forth the Fatemeh S. Mashouf (L) is an associate in the Los Angeles office of Littler Mendelson PC, the premise that “the effectiveness of civil rights world’s largest employment and labor law practice representing management. She counsels clients on a range of single-plaintiff litigation and class-action matters, including enforcement of protections is seriously undermined” by arbitration agreements in light of California’s ever-changing standards. Mashouf can be reached arbitration agreements implemented as at [email protected]. Henry D. Lederman (R) is co-chair of Littler Mendelson’s alternative a condition of employment.3 Further, the dispute resolution practice group in Walnut Creek, Calif. He focuses his practice on employment law counseling, litigation and appeals, including those related to the drafting and enforcement of analysis reasons that cases falling under the arbitration agreements. Lederman has particular experience with the Federal Arbitration Act and Ralph and Bane laws are “best adjudicated state arbitration statutes. He can be reached at [email protected]. under the state’s civil rights statutes and enforced by the courts.”4

© 2015 Thomson Reuters FEBRUARY 3, 2015 n VOLUME 29 n ISSUE 14 | 3 The statute itself provides: agreements cannot be per se unconscionable unless Congress provides otherwise.11 Enforceability under • “The legislature finds and declares that AB 2617 it is the policy of the State of California AB 2617 creates more rigorous standards for to ensure that all persons have the the enforcement of arbitration agreements In order for an arbitration agreement full benefit of the rights, penalties, covering Bane Act and Ralph Act claims to be enforceable under AB 2617, the remedies, forums, and procedures than the standards applicable to the employer must prove: established by” the Ralph and Bane enforcement of ordinary contracts or even laws and such rights cannot be subject arbitration agreements that apply to other • There is a written agreement. to “involuntary or coerced waivers.”5 types of employment claims. Thus, the • The agreement was signed • Any such agreement as a condition Legislature appears to be treating arbitration knowingly. agreements differently from, and as being of employment is per se “involuntary, • It was signed voluntarily. unconscionable, against public policy, inferior to, other contracts. This may lead • Such agreement is explicitly not a and unenforceable.”6 to strong arguments that AB 2617, insofar as it applies to arbitration agreements, is condition of employment. • An employer seeking to enforce the preempted by the FAA. contract carries the burden of proving On which side of Iskanian does AB 2617 fall? that the “waiver was knowing and IMPLICATIONS OF ISKANIAN Is it preempted in the same way that anti– voluntary and not made as a condition” What is the impact of Iskanian v. CLS class-waiver policies are preempted, or does of employment.7 Transportation Los Angeles, LLC, 59 Cal. it apply to “dispute[s] between an employer Thus, in order for an arbitration agreement to 4th 348 (Cal. 2014) on these issues? In and the state,” which, according to the be enforceable under AB 2617, the employer Iskanian, the California Supreme Court held California Supreme Court, are not preempted must prove there is a written agreement, it that although class waivers are enforceable by federal law? was signed knowingly and voluntarily, and in mandatory pre-dispute arbitration Unlike the PAGA, the Ralph and Bane such agreement is explicitly not a condition agreements, California Private Attorneys statutes may be enforced by individual of employment. 12 General Act waivers in such agreements plaintiffs suing in their own name or by the attorney general or district or city attorneys. The Legislature’s analysis of AB 2617 says In either situation, each individual whose “the effectiveness of civil rights protections is rights have been found to have been seriously undermined” by arbitration agreements violated, not a state agency, will be awarded damages or civil penalties. Thus, if Bane implemented as a condition of employment. and Ralph claims are brought by individuals on their own behalf, Iskanian’s class-waiver analysis, rather than its PAGA- waiver The significance of AB 2617 is the develop- are not. The court held that a mandatory analysis, should control. ment of a public policy that specifically PAGA representative action waiver is not pre- undermines arbitration as an equal forum for empted by the FAA because “the FAA aims to Moreover, Iskanian’s future regarding PAGA resolution of disputes and the presumption ensure an efficient forum for the resolution of waivers is clouded, especially in the federal against voluntariness in cases in which such private disputes, whereas a PAGA action is a courts. For example, in Fardig v. Hobby contracts are a condition of employment. dispute between an employer and the [Labor Lobby Stores, Inc., No. SACV 14-00561 JVS, However justifiable the state’s expressed and Workforce Development] Agency.” 2014 WL 4782618, at *4 (C.D. Cal. Aug. 11, public policy may be, the FAA prevents a 2014), the court reviewed and rejected The court likened a PAGA claim to a qui tam state from adopting a policy that singles Iskanian’s PAGA analysis: action and held that it is “not a dispute between out arbitration agreements for treatment an employer and an employee,” but rather a [I]t remains the case that whether or not harsher than that which applies to contracts “dispute between an employer and the state.” the FAA preempts a California rule is a in general.8 Thus, “[r]epresentative actions under the question of federal law. … Even in light Indeed, the U.S. Supreme Court has PAGA, unlike class action suits for damages, of Iskanian, the court continues to hold repeatedly rejected arguments that do not displace the bilateral arbitration of that the FAA preempts the rule making mandatory arbitration is inferior and private disputes between employers and PAGA claim waivers unenforceable. suspect.9 employees over their respective rights and There is nothing in Iskanian that persuades the court otherwise, and Requirements that certain categories of obligations toward each other.” the court is not bound by the California arbitration agreements be “knowing and The court explained that the PAGA was Supreme Court’s understanding of voluntary” arguably are not consistent enacted to provide the State of California federal law. with the FAA. Indeed, Concepcion holds with a mechanism to enforce the California that adhesive arbitration agreements are Labor Code and “to augment the limited A number of other federal district courts 13 enforceable.10 Thus, for example, compulsory enforcement capability of the [Labor and have reached the same conclusion. In arbitration agreements in employment Workforce Development] Agency.” contrast, California state appellate courts

4 | WESTLAW JOURNAL n EMPLOYMENT © 2015 Thomson Reuters have followed Iskanian with respect to PAGA Keating, 465 U.S. 1, 10 (U.S. 1984) (FAA preempts Duffield v. Robertson Stephens & Co., 144 F.3d claims and denied enforcement of PAGA California Franchise Investment Law, which 1182 (9th Cir. 1998)) (“All of the other circuits 14 invalidated certain arbitration agreements); have concluded that Title VII does not bar waivers in arbitration agreements. The Perry v. Thomas, 482 U.S. 483, 491 (U.S. 1987) compulsory arbitration agreements.”). U.S. Supreme Court denied a petition for (FAA preempts Labor Code provision purporting 12 certiorari in the Iskanian case Jan. 20 without to make employee wage claims non-arbitrable); PAGA refers to the California Private Attorneys General Act of 2004 set forth under comment. CLS Transp. LLC v. Iskanian, Preston v. Ferrer, 552 U.S. 346 (U.S. 2008) (FAA preempts California Talent Agencies Act, California Labor Code § 2698. The PAGA No. 14-341, cert. denied (U.S. Jan. 20, 2015). which purported to vest Labor Commissioner authorizes individuals “on behalf of themselves with exclusive original jurisdiction over certain and others” to act in place of California’s Labor PRACTICAL IMPLICATIONS claims); Sonic-Calabasas A Inc. v. Moreno, 57 Cal. and Workforce Development Agency in seeking civil penalties for Labor Code violations. Any FOR EMPLOYERS 4th 1109 (Cal. 2013) (following AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1753 (U.S. recovery is divided, with 75 percent going to the The Ralph and Bane laws have typically 2011), and holding that the FAA preempted state and the “private attorney general” keeping 25 percent. been considered to be hate crime statutes, provisions of the Labor Code providing for but they have found their way into cases administrative adjudication of claims that were 13 E.g., Lucero v. Sears Holdings Mgmt. Corp., otherwise subject to an agreement to arbitrate). involving wrongful termination, harassment, No. 3:14-cv-01620 (S.D. Cal. Dec. 3, 2014); Mill v. 2 mart Corp., No. 14-CV-02749-KAW, 2014 WL discrimination and negligence.15 See, e.g., Pinnacle Museum Tower Ass’n v. Pinnacle Mkt. Dev., 55 Cal. 4th 223 (Cal. 2012). 6706017 (N.D. Cal. Nov. 26,); Langston v. 20/20 Most employers have never, or at most rarely, Cos., No. EDCV 14-1360 JGB SPX, 2014 WL 3 Civil Rights: Waiver of Rights: Hearing on A.B. 5335734 (C.D. Cal. Oct. 17, 2014); Chico v. Hilton had to deal with Ralph Act and Bane Act 2617 Before the Cal. S. Judiciary, 2014 Leg., 2013- Worldwide Inc., No. CV 14-5750-JFW SSX, 2014 claims. That may soon change. 2014 Reg. Sess. 5 (Cal. 2014). WL 5088240 (C.D. Cal. Oct. 7, 2014); Ortiz v. Hobby Lobby Stores, No. 2:13-CV-01619, 2014 WL 4 If AB 2617 survives the inevitable FAA Id. 4961126 (E.D. Cal. Oct. 1, 2014). preemption challenge, employers with 5 2014 Cal. Legis. Serv. 910, Sec. 1(a) (AB 2617) 14 E.g., Ramos v. Fry’s Elecs. Inc., No. B246404, arbitration agreements covering claims (WEST). 2014 WL 6269307 (Cal. Ct. App., 2d Dist. Nov. 17, arising out of or relating to the employment 6 Id. at Sec. 2(4); Civil Rights: Waiver of Rights: 2014) (unpublished); Ybarra v. Apartment Inv. & relationship may find, once again, that Hearing on A.B. 2617 Before the Cal. S. Judiciary, Mgmt. Co., B245901, 2014 WL 4980896 (Cal. Ct. their agreements to arbitrate, which are 2014 Leg., 2013-2014 Reg. Sess. 10 (Cal. 2014). App., 2d Dist. Oct. 7, 2014) (unpublished).

15 enforceable in every other way, are vulnerable 7 2014 Cal. Legis. Serv. 910, Sec. 2(5). See, e.g., In re Joshua H., 13 Cal. App. to attack. 4th 1734, 1748 (Cal. Ct. App., 6th Dist. 1993) 8 Concepcion, 131 S. Ct. at 1753. (describing the Ralph and Bane laws as More broadly, if AB 2617 is not preempted, “California’s response to this alarming increase 9 See, e.g., Am. Express Co. v. Italian Colors Rest., in hate crimes”); Stamps v. Super. Ct., 136 Cal. employers may also have to prepare 133 S. Ct. 2304, 2310 (2013); Marmet Health Care App. 4th 1441, 1459 (Cal. Ct. App., 2d Dist. themselves for amendments to other Ctr. v. Brown, 132 S. Ct. 1201, 1203-04 (2012) 2006) (an employee claimed that an employer (per curiam); Mitsubishi Motors Corp. v. Soler statutes adopting language taken from the subjected him to race-based harassment; Chrysler-Plymouth Inc., 473 U.S. 614, 626-27 AB 2617 playbook. WJ the court allowed Ralph and Bane law claims (1985); Circuit City, 532 U.S. at 122-23; Gilmer v. in addition to wrongful-termination and Interstate/Johnson Lane Corp., 500 U.S. 20, 34 n.5 employment discrimination claims); Ventura v. NOTES (1991); Shearson/Am. Express Inc. v. McMahon, ABM Indus., 212 Cal. App. 4th 258, 259 (Cal. Ct. 1 482 U.S. 220, 230 (1987). Employment arbitration contracts in App., 2d Dist. 2012) (a jury verdict for $125,000 interstate commerce (with limited exceptions) 10 Concepcion, 131 S. Ct. at 1746. See also and attorney fees in an employee suit for are covered by the FAA. Circuit City Stores Doctor’s Assocs. v. Casarotto, 517 U.S. 681, 687, negligent supervision and hiring and for violation v. Adams, 532 U.S. 105, 121-22 (2001). This n.3 (1996); Pinnacle, 55 Cal. 4th at 247-48. of the Ralph Act, on the basis of a supervisor’s article presumes that the FAA would apply to sexual harassment of the plaintiff). employment arbitration agreements placed at 11 EEOC v. Luce, Forward, Hamilton & Scripps, issue by AB 2617. See, e.g., Southland Corp. v. 345 F.3d 742, 745 (9th Cir. 2003) (overruling

By Michael J. Summerhill, Esq., and Salvador A. Carranza, Esq. Freeborn & Peters

The question of whether an employee equivalent of outright discharge.”3 Thus, if severance if he is terminated without cause was fired or resigned requires, as the an employer constructively discharges an or if he is relocated more than 45 miles away 7th U.S. Circuit Court of Appeals noted, employee or otherwise coerces a resignation, from Georgia. “distinguishing among four separate forms the employer would be subject to the same The employee’s supervisor is now in of job termination”: outright discharge, liability and obligations as if it had fired the Illinois, and the supervisor requests that voluntary resignation, coerced resignations employee outright. the employee make occasional business 1 and constructive discharge. Because This commentary examines both the trips to Illinois as part of the employee’s “outright discharge carries significant legal doctrine of constructive termination and job. Eventually, the employee’s supervisor consequences for employers, including coerced resignations so that employers will requires the employee to spend two weeks of possible liability for wrongful discharge,” the understand when a resignation is actually a every month in Illinois. The employee resigns 2 answer to the question is important. discharge for which liability may arise. A few and demands severance pursuant to the relocation provision. Is the company liable If an employer constructively discharges an employee for severance? or otherwise coerces a resignation, the employer Perhaps a more common example is a situation in which an employer has a written would be subject to the same liability and obligations personnel policy that states that employees as if it had fired the employee outright. cannot be terminated without cause. If an employee resigns but alleges that the employer constructively terminated her by Although in-house counsel and employment real life-examples demonstrate the obstacles failing to make changes to the employment attorneys can generally discern between the employers face when navigating this area of conditions, can the employer be liable for opposite ends of the spectrum — outright the law. wrongful termination? discharge and voluntary resignation — rather Imagine that an Illinois company purchases easily, the middle can be murkier. It is in the A common term in many collective- a competitor located in Georgia. The Illinois bargaining agreements that unionized middle where the doctrine of constructive company wants to keep a key Georgia termination and coerced resignations lie. employees cannot be terminated without employee and negotiates a new employment cause is similar to a personnel policy As the 7th Circuit also noted, constructive contract with him to do so. The contract guaranteeing employment unless the termination is a variant of coerced specifies that the employee is not entitled to employer has cause for termination. If an resignation, and both are treated “as the severance if he resigns, but he is entitled to employer requires a unionized employee to engage in conduct that the employee believes is illegal, and the employer threatens termination for insubordination if the employee refuses, can the employer be liable for constructive termination if the employee resigns? Finally, imagine that a publicly traded corporation begins to receive anonymous whistleblower letters alleging misconduct on the part of senior management. Taking these

Michael J. Summerhill (L), a partner in the litigation practice group at the Chicago law firm letters seriously, as any company should, the Freeborn & Peters, represents clients in a variety of industries including healthcare, software, company begins an internal investigation. aviation, medical devices, food and consumer products. He can be reached at msummerhill@ During the course of that investigation, freeborn.com or 312-360-6466. Salvador A. Carranza (R), a senior associate in the firm’s litigation practice group, has litigated significant legal claims in the areas of mass tort, commercial disputes, the company uncovers information that product liability, food industry matters, executive breach of contract actions and breaches of tends to show that one member of senior fiduciary duty, including securities-related matters. He can be reached at scarranza@freeborn. management may have violated company com or 312-360-6866. policies. As a result, the company instructs

6 | WESTLAW JOURNAL n EMPLOYMENT © 2015 Thomson Reuters that executive that she can choose to resign working conditions that the employee was football coach at a public high school was or she will be terminated for cause. required to endure). The trier of fact must reassigned to a different school within the Presented with such an option, and with be satisfied that the employer made the same school district, but he was not assigned 17 full knowledge that a termination would working conditions so intolerable as to force any coaching duties. He resigned as a potentially diminish chances of securing a reasonable employee to resign. result of the emotional distress he suffered future employment, the executive resigns. The intolerable working conditions, however, from losing his coaching responsibilities. The executive has an employment contract must be severe: The 5th Circuit found that a loss of coaching responsibility and reassignment to different that requires the company to pay severance A plaintiff proceeding under [the in the event of a termination without cause teaching responsibilities was not enough to constructive termination doctrine] must support a claim for constructive termination. or a constructive termination. Must the demonstrate a work environment that is company pay severance? even more egregious than that needed In contrast, in Parrett v. City of Connersville, for a hostile work environment [claim a detective who suffered a reduction in salary, rank and job duties and was The law presumes that all under Title VII] such that he was forced to resign because his working condition, assigned to a windowless room with zero resignations are voluntary, from the standpoint of the reasonable job responsibilities was found to have been 18 so the burden is on employee, had become unbearable.8 constructively discharged. The 7th Circuit the employee to held that by taking away the detective’s Similarly, the employee must demonstrate ability to work and forcing him to be idle after demonstrate that a that the employer knew or reasonably years of decorated service as an ambitious resignation was involuntary. should have known about the intolerable professional, the town depreciated his working conditions but permitted them professional skills and humiliated him to the to persist without remedy.9 Significantly, Each of those examples sets forth the facts point that a reasonable person in his position however, the employer’s intent to force a would have felt compelled to quit. from actual cases that were litigated in courts resignation is, although not irrelevant, not throughout the country. As one can imagine, the determinative factor. To the contrary, the answer to the questions presented in “[t]he determinative factor is not the In a constructive-termination these fact patterns is — as is frequently the employer’s intentions, but the effect of the case, the focus is on the case in this area of the law — “it depends.” conditions on a reasonable employee.”10 conditions of employment This article explores the factors upon which As the above quote makes clear, the working a constructive termination or a coerced (i.e., the working conditions conditions must be egregious. The case law that the employee was resignation depends so that in-house counsel makes clear that “[t]he working conditions and employment attorneys will better must be intolerable to a reasonable person — required to endure). understand how and when a resignation not an overly sensitive person.”11 As a result, becomes a termination for which liability may the standard is both objective and subjective. Harassment attach. It is subjective in that the working conditions must actually be the cause of the resignation In Bohen v. City of East Chicago, a female CONSTRUCTIVE TERMINATION and objective in that “an employee is fire-dispatcher resigned, alleging that sexual 19 The law presumes that all resignations are not guaranteed a working environment harassment caused her to resign. The 7th voluntary,4 but the issue of voluntariness is a completely free of stress” such that “an Circuit held that a trier of fact could conclude question of fact for the fact-finder.5 Thus, the employee may not be unreasonably sensitive that sexual harassment could create an burden is on the employee to demonstrate to his [or her] working environment.”12 unbearable workplace for women and that a resignation was involuntary.6 force them to quit, thereby creating liability Generally speaking, the outcome for constructive termination.20 It further The doctrine of constructive termination is determinative fact is the severity of the held that “a policy of never responding to one way in which an employee can meet this alleged intolerable conditions. Although complaints of sexual harassment will make burden. Because of the potentially significant the following list is by no means exhaustive, the workplace unbearable for many women, legal consequences to an employer arising these activities may lead to a finding that and force them to quit; that is constructive out of a discharge, the law recognizes that an employee who resigned was in fact termination, and is the same thing in law as employers, in an attempt to avoid that constructively discharged: repeated requests firing.” liability, may engage in conduct that causes that an employee engage in illegal conduct13; the employee to resign.7 The doctrine of harassment14; demotions and/or a significant In Thompson v. Memorial Hospital of constructive termination addresses such loss of responsibilities, salary or rank15; and Carbondale, however, the 7th Circuit held that employer-attempted “end runs” and discrimination.16 racial animus or hostility “must be so severe operates to discard form for substance to or pervasive that it alters the conditions of Demotions and loss of responsibility, the plaintiff’s employment.”21 The plaintiff, recognize that certain resignations are, in salary or rank fact, actual firings. a black paramedic, had been placed on For example, in Jett v. Dallas Independent probation ostensibly because of failing to In a constructive-termination case, the focus School District, an athletic director and head follow medical care guidelines while treating is on the conditions of employment (i.e., the

© 2015 Thomson Reuters FEBRUARY 3, 2015 n VOLUME 29 n ISSUE 14 | 7 a patient. The plaintiff filed suit, alleging that the employee allegedly committed Spreen v. Brey, a county government agency that his white colleagues, who had made the insubordination, a violation of company policy accused an employee of the county of same mistake in treatment, had not been or committed a crime; and in response, the misconduct.28 The agency investigated put on probation, and the hospital’s actions employer gives the employee the opportunity allegations of misconduct it received were due to racial animus.22 The court held to resign rather than be terminated for cause. regarding the employee, and prior to the that the racist remarks and alleged actions Because of the stigma that attaches to a completion of the investigation, the agency of the hospital were not “severe or pervasive for-cause termination, employees invariably convened a meeting and decided to give the enough conduct to be actionable.” resign and then sue, alleging that the employee the opportunity to resign in lieu of Illegal conduct resignation was actually involuntary. being terminated for cause. Finally, in Strozinsky v. School District of Brown Deer, the Wisconsin Supreme Court Cases of coerced resignation are almost always situations in made clear that criminal activity may lead to which the employer informs the employee that she can resign, intolerable conditions.23 The court analyzed a payroll clerk’s allegations of being forced but if she does not, she will be terminated for cause. to commit illegal conduct with regard to the withholding of taxes in employees’ paychecks.24 As noted above, courts presume that all The agency set a meeting with the employee resignations are voluntary. And, in a coerced- during which she was provided with a The court first held that the mere presence resignation context, court are equally clear resignation letter and a termination letter. of illegal conduct at the workplace does that merely the fact that an employee is She was not told the exact nature of her not render the environment intolerable. presented with a choice to resign or suffer a alleged wrongdoing and was specifically Intolerable conditions can arise, however, for-cause termination is not sufficient, in and told that because the investigation was when the employer requests or requires of itself, to render the resignation involuntary: not complete, the nature of the allegations an employee to engage in illegal acts. In The mere fact that an employee is forced would be withheld. The employee particular, requests that an employee requested time to meet with an attorney, participate in an unlawful enterprise, or to choose between resignation and termination does not alone establish and the request was denied. During the repeated instances of illegality, may compel approximately 30-minute meeting, the a reasonable person to resign. For instance, that a subsequent choice to resign is involuntary.25 employee opted to sign the resignation a constructive-discharge defense is viable if letter. The employee filed suit, claiming an employee who repeatedly violated federal To the contrary, courts have established a she was coerced into resigning. The District and state liquor laws at the employer’s number of factors to evaluate in a coerced- Court granted summary judgment in favor of instruction subsequently refuses to resignation context. the agency, and the 7th Circuit affirmed. participate further in the crimes and resigns. First, and foremost, the good faith of Both courts concluded that because the In the context of illegal acts, the courts turn the employer in threatening a for-cause employee could not offer any evidence to to the totality of the circumstances, taking termination is significant. Whether the support her contention that the agency could into account the frequency of the conduct, employer had a basis to threaten a for-cause not substantiate a threatened termination, 26 its severity and the remoteness of the illegal termination is the key determining factor. her resignation was — as a matter of law acts from the actual date of resignation. This question is subject to an objective — voluntary. Both courts stressed that the standard, rather than the employee’s purely employee had a choice: she could resign or 27 COERCED RESIGNATIONS: THE subjective evaluation. she could fight the charges legally. EMPLOYER’S INTENT IS THE FOCUS Simply put, the threatened for-cause Similarly, in Patterson v. Board of Regents of the Like constructive termination, courts also termination must be for good cause, but the University of Wisconsin System, the Wisconsin treat coerced resignations as outright good-cause requirement is satisfied unless Supreme Court analyzed allegations of discharges, with all the risks to employers the employee can show that the employer coerced resignation of a tenured professor.29 associated therewith. Whereas constructive- knew or believed the threatened termination The university investigated various complaints discharge cases all present with an employee could not be substantiated. In this regard, that had been filed against the professor. who resigns because of allegedly intolerable a company that believes in good faith that During the investigation, the professor working conditions, cases of coerced it has grounds for termination can seek a requested and was granted sick leave. Upon resignation are almost always situations in resignation in lieu of a for-cause termination his return, his classes were canceled because which the employer informs the employee without rendering that resignation of a lack of student enrollment, and after that she can resign, but if she does not, she involuntary. The employee then has a choice discussion by the executive committee of will be terminated for cause. to resign or force the employer to terminate the professor’s department, it was concluded The cases almost always contain the same for cause and then have the opportunity to that the professor’s job performance was less sort of facts: the employer conducts an file a wrongful-termination lawsuit. than satisfactory. investigation (whether formal or informal) For example, in Spreen v. Taylor County, Subsequently, the dean assigned the into the conduct of the employee; as a result and the subsequent 7th Circuit opinion in professor with duties outside his expertise. of the investigation, the employer learns

8 | WESTLAW JOURNAL n EMPLOYMENT © 2015 Thomson Reuters The professor refused, and after he failed asked for the application, and when one was granted by her supervisor, and she was to appear at the school to undertake his could not be located, the chairwoman had given until 5 p.m. on the same day to resign new duties, the dean concluded that the her secretary provide a substitute application or be terminated. She never denied her professor had chosen to resign. The professor that did not accurately represent the date use of illegal drugs at the meeting, and she requested a hearing to determine whether on which the chairwoman’s daughter eventually submitted a letter of resignation. he had quit or been discharged, and his began her employment at the college One week after her resignation, she filed a request was denied. However, he appealed and was never actually reviewed by the grievance under her collective bargaining each decision up through the hierarchy of the chairwoman’s daughter, even though it was agreement, asserting that she had been school and subsequently through the courts. “signed” by the daughter. forced to resign. The state appeals court eventually held that The issue was brought to the attention of She eventually filed suit against the school the professor should have been provided a the provost of the college, and eventually district, and the lower court granted the grievance hearing, and the Supreme Court the board of regents of the college school district’s motion for summary affirmed, holding that providing “a tenured investigated the matter and concluded that judgment. The appellate court affirmed, faculty member with an evidentiary hearing the chairwoman had acted inappropriately. holding that the plaintiff — as a matter of law prior to termination when the member They provided her with the option to resign — voluntarily resigned. alleges that the termination is actually a or face termination proceedings and gave It further held that in light of the facts discharge promotes the policies” of the her a week to evaluate her position. The against her, she had been given enough statute governing tenured professors and chairwoman resigned but subsequently filed time to consider her options and that she “is consistent with the purposes behind suit, claiming that she was forced to resign. clearly understood her choices because she the legislature’s establishment of a tenure The lower court denied the college’s motion requested a resignation after stating that she 30 system.” Thus, unlike the courts in Spreen, for summary judgment, and the 10th Circuit did not want to be fired. the court concluded that there was a affirmed. In so doing, in held that the The court further held that although one question of fact of whether the resignation college had adequate reasons to threaten was voluntary, and that question should day to make a decision may not have been termination and that the chairwoman an amount of time the plaintiff preferred, be answered according to the university’s was aware of the reasons the college was document procedures for tenured professors. she was not pressured to make her decision, threatening termination and had been and the school district had valid grounds to terminate her. In a coerced-resignation context, courts are clear that As the Rhoads court notes, in addition to merely the fact that an employee is presented with having grounds to support the threatened a choice to resign or suffer a for-cause termination is termination, courts look to the manner in not sufficient to render the resignation involuntary. which the employer communicates the choice to the employee to evaluate the voluntariness of any subsequent resignation. Similarly, in Parker v. Board of Regents of given adequate opportunity to evaluate her Courts make clear that employers must the Tulsa Junior College, the court found a options. actually give the employee sufficient time to evaluate the choice. resignation to be voluntary because the The case of Rhoads v. Board of Education of college had an arguable basis to support Mad River Local School District makes clear The amount of time that is legally sufficient, 31 a threatened termination. In that case, that if the employer has a good-faith basis however, depends on the circumstances. For as part of her job duties, the chairwoman to support the threatened termination, an example, in Staats v. U.S. Postal Service, the of the liberal arts division of the college employee’s resignation in the face of that Federal Circuit held that a postal worker who had responsibility for hiring part-time threat is voluntary.32 Rhoads involved a was provided months to consider alternatives instructors. During her employment, she school bus driver who failed a random drug to resignation was not coerced into hired her daughter as a part-time instructor. test as part of the school district’s standard resignation, since there was not a significant 33 However, the part-time instructors had to policies for screening all employees. She met time pressure placed on his decision. meet certain qualifications for employment, with her supervisor at 9:30 a.m. on the same The court further referenced the decision and her daughter did not meet the requisite day that her supervisor was notified of the in Latham v. U.S. Postal Service, 909 F.2d qualifications for employment until almost failed drug test, and she began the meeting 500, 502 (Fed. Cir. 1990), that “[w]hen an four years after first being employed at the by requesting that she be put on medical employee has been given a period of time, college. leave to enter drug rehabilitation treatment. such as two weeks, in which to consider his During a routine review, the dean of instruction Her supervisor refused and informed her option, time pressure has not been regarded for the college asked the chairwoman for that she would have to be terminated for the as a factor indicating involuntariness.” all applications submitted to the school failed drug test pursuant to the terms of the In contrast, in Paroczay v. Hodges, the court for all current part-time instructors. The school district policies. She indicated that ruled in favor of a plaintiff who alleged that chairwoman’s daughter’s application was she did not want to be fired and requested he was forced to resign when he was forced not included when the applications were that she be allowed to resign. Her request to make an immediate decision regarding provided to the dean. The dean subsequently

© 2015 Thomson Reuters FEBRUARY 3, 2015 n VOLUME 29 n ISSUE 14 | 9 whether to resign or face charges. The 7 Id. 15 Parrett v. City of Connersville, 737 F.2d 690 (7th Cir. 1984). court held that “[a]n essential reason why 8 Thompson v. Mem’l Hosp. of Carbondale, 625 the resignation must be held involuntary is F.3d 394, 401 (7th Cir. 2010). 16 EEOC v. Univ. of Chicago Hosps., 276 F.3d 326 (7th Cir. 2002). that the choice was one which plaintiff was 9 Tennyson v. Sch. Dist. of Menomonie Area, forced to make immediately, without time 606 N.W.2d 594, 602 (Wis. Ct. App. 1999). 17 798 F.2d 748 (5th Cir. 1986). and opportunity — which was specifically 10 Jett v. Dallas Indep. Sch. Dist., 798 F.2d 18 737 F.2d 690 (7th Cir. 1984). requested and denied — ‘for full and free 748, 755 (5th Cir. 1986). The 8th U.S. Circuit 19 investigation, deliberation and reflection.’”34 Court of Appeals held that the employer must 799 F.2d. 1180 (7th Cir. 1986). subjectively intend to force a resignation for the 20 Id. at 1192. Finally, the employee must be provided clear doctrine of constructive termination to apply. and accurate information about his or her See Sanders v. Lee County Sch. Dist. No. 1, 669 21 625 F.3d 394 (7th Cir. 2010). F.3d 888, 893 (8th Cir. 2012) (finding intent choices. The courts in Spreen v. Taylor County 22 Id. at 401. and Spreen v. Brey found an independent “through direct evidence or through evidence that the employer could have reasonably 23 Strozinsky, 614 N.W.2d at 461. cause of action for misrepresentation. The foreseen that the employee would quit as a 24 courts held that if the choices provided to the result of its actions”). The practical effect of this Id. at 464-465. employee are misleading or inaccurate, then requirement, however, is no different from the 25 Rhoads, 103 Fed. Appx. at 895. the resignation can be found to be coerced. other jurisdictions that require evidence that the employer knew or reasonably should have 26 Christie v. United States, 518 F.2d 584, 588 Also, claiming that the plaintiff should have known about the intolerable working conditions (Ct. Cl. 1975). and did nothing to correct them or prevent known that the information was inaccurate 27 them from occurring. Indeed, in Sanders, the Id. at 587. or was common knowledge is not enough. court presumed the employer’s intent to force 28 Spreen v. Taylor County, No. 90-C-51-S, An employer has a duty to provide clear and a resignation due to the employer’s knowledge 1990 WL 359813 (W.D. Wis. Nov. 14, 1990); accurate information when providing an of the intolerable working conditions and its Spreen v. Brey, 961 F.2d. 109 (7th Cir. 1992). employee with the choice of resignation or failure to improve them. (“Finally, the evidence showing the board summarily reassigned the 29 Patterson v. Bd. of Regents of the Univ. of WJ termination. only two Caucasian employees in administrative Wisconsin Sys., 350 N.W.2d 612 (Wis. 1984). positions shortly after the racial composition 30 Id. at 587. NOTES of the board changed, and then subsequently voted to eliminate the position to which [plaintiff 31 1 Patterson v. Portch, 853 F.2d 1399, 1404 Parker v. Bd. of Regents of the Tulsa Junior Sharon] Sanders had been reassigned, suffices (7th Cir. 1988). College, 981 F.2d 1159 (10th Cir. 1992). as evidence of the board’s intent to force Sanders 32 2 Strozinsky v. Sch. Dist. of Brown Deer, 614 to quit.”). Rhoads, 103 Fed. Appx. 888. N.W.2d 443 (Wis. 2000). 33 11 Lewandowski v. Two Rivers Pub. Sch. Dist., Staats v. U.S. Postal Serv., 99 F.3d 1120, 1126 3 Patterson, 853 F.2d at 1406. 711 F. Supp. 1486, 1494 (E.D. Wis. 1989). (Fed. Cir. 1996). 34 4 Rhoads v. Bd. of Educ. of Mad River Local Sch. 12 Tennyson, 606 N.W.2d at 602 (alterations in Paroczay v. Hodges, 219 F. Supp. 89, 94 Dist., 103 Fed. Appx. 888, 895 (6th Cir. 2004). original). (D.D.C. 1963), citing to Weisert v. Bramman, 216 S.W.2d 430, 434 (Mo. 1948) (for the proposition 5 Strozinsky, 614 N.W.2d at 463. 13 Turner v. Anheuser-Busch Inc., 7 Cal. 4th 1238 that “full and free investigation, deliberation (Cal. 1994). and reflection” is required). 6 Mercer v. City of Fond du Lac, 780 N.W.2d 188, 192-193 (Wis. Ct. App. 2009). 14 Tennyson, 606 N.W.2d at 594.

During oral argument Jan. 13 in a dispute over the Equal Employment Opportunity Commission’s informal pre-suit procedures for settling discrimination claims with employers, U.S. Supreme Court justices expressed concern over the agency’s stance that no judicial oversight is necessary.

Mach Mining LLC v. Equal Employment Mining LLC, No. 13-2456, 738 F.3d 171 (7th notion that the commission’s conduct ought Opportunity Commission, No. 13-1019, oral Cir. Dec. 20, 2013). to be reviewable.” argument held (U.S. Jan. 13, 2015). Seyfarth Shaw partner Gerald L. Maatman ORAL ARGUMENTS “I am very troubled by the idea that the Jr., who filed an amicus brief in the case on government can do something and we can’t behalf of the American Insurance Association Arguing for the EEOC, Assistant Solicitor even look at whether they’ve complied with in support of Mach Mining, sees the case General Nicole A. Saharsky maintained the the law,” Chief Justice John Roberts said as one of the most important on EEOC issues agency’s contention that courts have no while questioning the EEOC attorney. in years. authority under the law to review conciliation proceedings. The justices seemed to support some degree “If the Supreme Court sides with the 7th of judicial oversight. Circuit, employers will lose a powerful While she pointed to Title VII’s lack of a specific conciliation procedure as evidence “[I]n my mind … there should be judicial defense against the EEOC’s aggressive litigation tactics,” Maatman said in a June that Congress intended an informal process, review,” Justice Stephen Breyer said. “There Mach Mining attorney Thomas C. Goldstein is of everything, just about. But the issue is 2014 post on the firm’s Workplace Class Action blog. countered that although the process is how much.” informal, the agency still must fully engage After attending oral argument, Maatman employers. DISCRIMINATION SUIT wrote in a blog post, “The themes of the Justice Sonia Sotomayor noted a split among The question before the high court comes justices’ questioning … left no doubt but that most of the justices seem to ascribe to the the federal circuits over what the conciliation after the 7th U.S. Circuit Court of Appeals process is and how a court should review it. rejected a company’s challenge of EEOC conciliation procedure. “I don’t know how you make something that’s designated by Congress as informal into a Title VII of the Civil Rights Act of 1964 formal proceeding,” the justice said. mandates that the commission attempt to “There’s no indication in the statutory settle discrimination disputes with employers structure or in the legislative history that before filing a lawsuit. what Congress was trying to do is say to The EEOC sued Illinois coal operator Mach the EEOC, ‘do whatever you like,’” Goldstein Mining LLC in 2011, alleging it violated countered. Title VII by failing to hire any female miners He further suggested that the EEOC has despite receiving numerous applications. an incentive not to conciliate because such In answer to the suit, the coal company said proceedings are confidential and the agency the EEOC violated Title VII procedures by prefers to file high-profile cases. Several failing to engage in talks to settle the charges business groups made similar allegations in before filing suit in federal court. earlier amici briefs. U.S. District Judge J. Phil Gilbert of the Saharsky argued that judicial review of Southern District of Illinois agreed with the “If the Supreme Court the agency processes would encourage company and rejected the EEOC’s argu- sides with the 7th Circuit, employers to fight conciliation, leading to more litigation and delay. ment that its conciliation process was not employers will lose a subject to judicial review. EEOC v. Mach “We think that this is a matter that is Mining LLC, No. 11-cv-879, 2013 WL 319337 powerful defense against entrusted to the agency, that is not for court (S.D. Ill. Jan. 28, 2013). the EEOC’s aggressive review,” she said. The agency appealed, and the 7th Circuit litigation tactics,” attorney Several of the justices pressed Saharsky on reversed, finding that Title VII did not Gerald L. Maatman Jr. said. the idea that the EEOC could set some basic mandate judicial review. EEOC v. Mach rules to follow in the conciliation process.

© 2015 Thomson Reuters FEBRUARY 3, 2015 n VOLUME 29 n ISSUE 14 | 11 Justice Sotomayor said the court needs “to According to Justice Antonin Scalia, the Attorneys: give some teeth to judicial review” that is EEOC is unlikely to avoid any oversight to Petitioner: Thomas C. Goldstein, Goldstein & Russell, Bethesda, Md. more than what the EEOC currently suggests ensure the law is met, but he suggested the is necessary. “Give us a way to write it that agency could solve the problem with rules Respondent: Assistant Solicitor General Nicole A. Saharsky, Justice Department, Washington gives you the least intrusion but more than and standards. “The remedy for that is at what you want to do,” she said. your hands,” he told Saharsky. WJ Related Court Document: Argument transcript: 2015 WL 260354

GENDER DISCRIMINATION Wal-Mart faces 3 more regional discrimination suits

Attorneys for six women in Illinois, Georgia and Minnesota filed three suits Jan. 2 against Wal-Mart for allegedly discriminating against their clients when making wage and promotion decisions.

Bozek et al. v. Wal-Mart Stores Inc., No. 15- Kaster PLLP, who represents the women business should be permitted to operate in cv-00010, complaint filed (N.D. Ill., E. Div. in the latest suits, said in a statement. such a manner, no matter the size.” Jan. 2, 2015). “The allegations in Dukes and subsequent According to the statement, more than 2,000 New et al. v. Wal-Mart Stores Inc., No. 15- actions following the 2011 Supreme Court women have filed gender discrimination cv-00016, complaint filed (N.D. Ga., Atlanta decision are alarming to say the least; no charges against Wal-Mart with the Equal Div. Jan. 2, 2015). Catlin v. Wal-Mart Stores Inc., No. 15-cv- Suits filed after the Supreme Court rejected 00004, complaint filed (D. Minn. Jan. 2, a nationwide class action in Dukes 2015). Dukes v. Wal-Mart Stores, No. 01-2252, 2013 WL 3993000 (N.D. Cal. Aug. 2, 2013). The suits, like at least five others previously filed across the country, seek to hold the retail A San Francisco federal court judge denied certification of a smaller, statewide class of giant accountable for alleged discrimination women in the original Dukes suit, finding that the plaintiffs had not established that their after the U.S. Supreme Court rejected a claims of the company’s employment practice were linked to a class-wide policy. The suit massive nationwide gender discrimination is ongoing. class action in Wal-Mart Stores Inc. v. Dukes, Odle v. Wal-Mart Stores, No. 13-10037, 2014 WL 1282753 (5th Cir. Mar. 31, 2014). 131 S. Ct. 2541 (2011). In March 2014 a panel of the 5th U.S. Circuit Court of Appeals ruled that one of the In Dukes the Supreme Court unanimously original Dukes class members can proceed with her individual claims in Dallas federal decertified a nationwide class of more than court because the relevant statute of limitations remained “tolled,” or on hold, when she 1 million female Wal-Mart employees, finding filed her case. Trial is scheduled for this summer. that they failed to show there were questions of law or fact common to the class. Phipps et al. v. Wal-Mart Stores, No. 12-1009, 2013 WL 752152 (M.D. Tenn., Nashville Div. Feb. 20, 2013). The high court said the case involved “literally millions” of employment decisions Individual claims are proceeding in Nashville federal court after a judge in February 2013 by regional Wal-Mart managers. dismissed class claims against Wal-Mart as untimely because they were brought outside the limitations period for filing a class action following the rejected national Dukes class The subsequent suits make discrimination action. claims against the retailer on behalf of smaller, more regionalized classes. The Love et al. v. Wal-Mart Stores, No. 12-cv-61959, 2013 WL 5434565 (S.D. Fla. Sept. 23, 2013). most recent federal court filings in Chicago, A federal judge in Fort Lauderdale, Fla., dismissed another class action as untimely in Atlanta and St. Paul, Minn., involve individual September 2013. The case was later reopened as individual claims after the 11th Circuit claims by six female Wal-Mart employees rejected an appeal in April 2014. A jury trial is scheduled for June. who were part of the originally certified class in Dukes. Ladik et al. v. Wal-Mart Stores, No. 13-123, 2014 WL 4187446 (W.D. Wis. Aug. 22, 2014). “We cannot forget that more than In August 2014 a federal court in Madison, Wis., granted Wal-Mart summary judgment on 1.5 million female workers alleged four women’s individual disparate-treatment claims, finding that they failed to show that Wal-Mart discriminated against them in the pay and promotion differences between male and female workers in the state were based workplace,” attorney Jim Kaster of Nichols on discriminatory policies.

(Reuters Legal) – The widow of a long-time FedEx driver who died of cancer in 2013 is suing the company for denying her spousal pension benefits and not REUTERS/Kevork Djansezian recognizing her same-sex marriage.

Employment Opportunity Commission since Schuett v. FedEx Corp. et al., No. 15-189, “Because at the time of Lesly’s death, DOMA Dukes. complaint filed (N.D. Cal. Jan. 14, 2015). had not been struck down yet, the company The recent suits allege Wal-Mart regularly Stacy Schuett filed a lawsuit Jan. 14 in argues that she did not have a surviving passes over qualified women for promotion the U.S. District Court for the Northern spouse,” said Amy Whelan, a senior attorney to store manager positions and pays male District of California claiming she is entitled at the National Center for Lesbian Rights. employees more than women working in the to approximately $400,000 in survivor “It just shows how exposed and vulnerable same positions. benefits following the death of her wife, Lesly these families can be.” The plaintiffs seek injunctive relief and Taboada-Hall, who worked for FedEx for 26 Company spokesman Scott Fiedler called compensatory damages of more than years. Taboada-Hall a valued employee and $75,000 each for past and future lost The couple had been together since the said Schuett’s claims had been “carefully wages and benefits and for emotional 1980s and have two children. They entered reviewed.” distress. WJ into a domestic partnership in 2003 and were “While we are sympathetic to her situation, Attorneys: planning on getting married in California in we are required by federal law to apply the Plaintiffs (Bozek): James H. Kaster, Matthew H. Morgan, Kate A. Fisher and Janet M. Olawsky, 2008 before Proposition 8 passed banning pension plan rules equally to all participants,” Nichols Kaster PLLP, Minneapolis; Kristen Prinz gay marriage. Fiedler said in an emailed statement. He and Jessica Fayerman, The Prinz Law Firm, After the state’s marriage ban was struck said FedEx had not yet been served with the Chicago down, the two ultimately married when complaint. Plaintiffs (New): James H. Kaster, Matthew H. Morgan, Kate A. Fisher and Lucas J. Kaster, Taboada-Hall was on her death bed, The lawsuit claims that under the Employee Nichols Kaster PLLP, Minneapolis; John T. Sparks diagnosed with terminal cancer. Retirement Income Security Act of 1974 Sr., Austin & Sparks, Atlanta Schuett’s attorney said the case is unusual Schuett, as a spouse, has a right to her wife’s Plaintiff (Catlin): James H. Kaster, Matthew H. because of the timing of their marriage. FedEx pension payments. Whelan said that Morgan, Kate A. Fisher and Jason Hungerford, in the Windsor case, the same-sex spouse Nichols Kaster PLLP, Minneapolis Taboada-Hall died a day after the wedding — who was also a widow — was given tax Related Court Documents: ceremony and one week before the Supreme benefits even though her marriage and her Bozek complaint: 2015 WL 219035 Court in a case called United States v. wife’s death happened years before the issue New complaint: 2015 WL 55325 Windsor, 133 S. Ct. 2675 (2013), struck got to court. WJ Catlin complaint: 2015 WL 219020 down the federal Defense of Marriage Act, 110 Stat. 2419, which prevented same-sex (Reporting by Mica Rosenberg) couples from receiving the same benefits as Attorneys: Plaintiff: Nina Wasow and Julie Wilensky, Lewis, heterosexual couples. Feinberg, Lee, Renaker & Jackson, Oakland, Calif.

Related Court Document: Complaint: 2015 WL 219037

See Document Section B (P. 35) for the complaint.

REUTERS/Shannon Stapleton/Files

An auto parts company cannot enforce its agreement to arbitrate employment disputes individually because it failed to prove the authenticity of an employee’s electronic signature on the agreement, a California appeals court has ruled.

Ruiz v. Moss Bros. Auto Group Inc., In support of its motion, Moss Bros. produced employees acknowledged the agreement No. E057529, 2014 WL 7335221 (Cal. Ct. a declaration from its business manager, was insufficient given Ruiz’s contention that App., 4th Dist. Dec. 23, 2014). Mary K. Main, that said Ruiz electronically he did not remember receiving and signing it. An official of Moss Bros. Auto Group failed to signed the agreement. The employees were required to sign present sufficient evidence in her statement According to Main, each employee received the acknowledgement form of the 2011 that the employee actually signed the the agreement and had to log in to the agreement but they were free to examine it agreement, the 4th District Court of Appeal company’s computer system with their ID at their leisure while logged in to the system, said. and password to view and acknowledge the the panel observed. The appellate panel affirms a state court agreement. Main did not explain whether or how Moss decision denying Moss Bros.’ motion to Ruiz countered that he did not recall Bros. verified that only Ruiz, using his “unique compel arbitration of a wage-and-hour class signing the agreement and said Main made login ID and password,” could have placed action. “conclusory” statements and could not prove his signature on the form, the panel said. WJ Automotive service technician Ernesto Ruiz that he had signed it. Ruiz maintained that Attorneys: he would not have signed it if it had been Plaintiff-respondent: R. Rex Parris, Alexander R. filed the class action in the San Bernardino Wheeler, Kitty Szeto and John M. Bickford, R. Rex presented to him. County Superior Court in July 2012, alleging Parris Law Firm, Lancaster, Calif.; Edwin Aiwazian, Moss Bros. violates state labor laws by failing The trial court denied the company’s Lawyers for Justice, Glendale, Calif. to pay overtime and by denying employees motion, finding that it failed to show that Defendant-appellant: John P. Boggs, Fine, rest and meal breaks. an agreement existed with Ruiz. Moss Bros. Boggs & Perkins, Half Moon Bay, Calif.; David J. Reese and Ian G. Robertson, Fine, Boggs & appealed. The company moved to compel individual Perkins, Long Beach, Calif. arbitration based on an agreement it says In affirming the decision, the appeals court Related Court Document: Ruiz signed in 2011. concluded that Main’s explanation of how Opinion: 2014 WL 7335221

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A trucking company has presented sufficient evidence to show that a proposed class-action suit filed by three employees could involve enough monetary damages to meet federal jurisdiction standards, the 9th U.S. Circuit Court of Appeals has ruled.

LaCross et al. v. Knight Transportation Inc. According to the complaint, the company et al., No. 14-56780, 2015 WL 106179 (9th violated state labor laws by improperly Cir. Jan. 8, 2015). classifying the owner-operator drivers Citing standards it set in a separate opinion as independent contractors and failing released simultaneously Jan. 8, the court said to reimburse them for business-related Knight Transportation Inc. made reasonable expenses, such as fuel and leasing costs. assumptions in estimating that the suit’s The proposed class action seeks to repres- amount in controversy met the Class Action ent more than 550 drivers who have worked Fairness Act’s $5 million threshold for federal for the company in California since March jurisdiction. 2010.

While the trucking company made certain assumptions on costs and the number of affected drivers, those assumptions were reasonable, the appellate panel said.

According to the appellate court, its decision Knight removed the suit to federal court, in Ibarra v. Manheim Investments Inc., No. 14– arguing that the amount in controversy 56779, 2015 WL 321659 (9th Cir. Jan. 8, would total at least $44 million in unpaid 2015), established the level of proof a reimbursements. The company then extrapolated a lower fuel defendant must provide to show a likely U.S. District Judge Jesus G. Bernal granted cost estimate that still totaled $21 million amount in controversy. the drivers’ remand motion in July 2014, after taking into consideration that the “When the defendant relies on a chain of finding that Knight had not shown with number of drivers varied throughout any reasoning that includes assumptions to adequate proof that the $5 million threshold given year, the opinion said. satisfy its burden to prove by a preponderance had been met. Knight appealed. That extrapolation overcame the District of the evidence that the amount in The 9th Circuit panel reversed based on the Court’s conclusion that Knight’s potential controversy exceeds $5 million, the chain of reasonableness standard in Ibarra. damages calculation was too high because reasoning and its underlying assumptions it based its computation on the premise that must be reasonable,” the same three-judge The company’s calculations of the amount the proposed class members worked all year, panel said in Ibarra. that would be due the drivers if their suit succeeds met its burden of proof, the appeals the panel said. WJ The panel’s unanimous decision in favor court said. Attorneys: of removal of the truckers’ suit overturns Plaintiffs-appellees: James M. Trush, Costa Mesa, a ruling by the U.S. District Court for the While Knight made certain assumptions on Calif.; Ellen R. Serbin, Todd H. Harrison and Central District of California that had costs and the number of affected drivers, Brennan S. Kahn, Perona, Langer, Beck, Serbin, Mendoza & Harrison, Long Beach, Calif. remanded the case to the San Bernardino those assumptions were reasonable, the County Superior Court. panel said. Defendants-appellants: Richard H. Rahm, James E. Hart, Carly Nese and Thomas J. Three former drivers for Knight According to the appellate opinion, the Whiteside, Littler Mendelson PC, San Francisco Transportation, Patrick LaCross, Robert Lira plaintiffs’ clearly defined class allowed the company to calculate total fuel costs of Related Court Document: and Matthew Lofton, sued the company in Opinion: 2015 WL 106179 state court in March 2013. $36.8 million based on the amount that drivers used in gas card purchases during the See Document Section C (P. 44) for the opinion. first quarter of 2014.

(Reuters) – The Republican-led U.S. House of Representatives voted Jan. 8 to ease Obamacare’s health insurance requirements for employers by approving the first of an expected series of bills aimed at weakening the overall health care reform law.

Only 12 Democrats broke with President Barack Obama to join below the 18 lawmakers who crossed the aisle last year when the House Republicans in backing a measure that would allow companies to voted on an identical bill. Dozens of House Democrats have joined offer health coverage to fewer full-time workers by raising the full-time Republicans to pass other anti-Obamacare legislation in recent years. benchmark to 40 hours of work a week from the 30 hours currently Obamacare set the benchmark for full-time work at 30 hours a week to stipulated by the Affordable Care Act. ensure that larger numbers of workers would receive coverage under a The 252-172 vote sends the legislation to the new Republican-majority mandate that requires companies with 50 or more full-time employees Senate. There was no word on when the Senate might take up the to offer health insurance. measure, but the bill is unlikely to become law because the White Republicans railed against the rule Jan. 8, calling it a burden on House has threatened to veto it. job creators and warning that it would hurt lower-wage workers by Congressional aides and lobbyists said Republican leaders chose the giving employers an incentive to reduce their hours. Supporters of the bill as the initial salvo of a new Republican assault on Obamacare, Republican measure, including retailers and restaurant chains, say believing it would attract enough support from House and Senate most 40-hour workers already have insurance. Democrats to pressure Obama into signing it. Leading Democrats pointed to Congressional Budget Office findings Republican leaders hope to unveil a number of bills likely to attract showing that the change, if it became law, would hurt more workers some Democratic support that would repeal the law’s taxes on medical than the 30-hour standard, increase the number of uninsured devices and health insurers, and drop penalties for individuals who fail Americans and expand the federal deficit by $53 billion over 10 years in to obtain coverage. part by driving more employees to seek government-sponsored health WJ But Obama’s veto threat, issued a day ahead of the House vote, coverage. appeared to dampen Democratic support for the measure, which was (Reporting by David Morgan and David Lawder; editing by Eric Beech)

WAGE AND HOUR did not perform jobs that placed them within any FLSA exemptions from overtime MetLife faces underwriter overtime suit compensation. Hanis brings the suit as an “opt-in” collective A Metropolitan Life Insurance Co. underwriter is suing the company for action under the FLSA on behalf of all people allegedly failing to pay him and other employees overtime compensation for nationwide who were employed by MetLife working more than 40 hours per week. as insurance underwriters from Dec. 11, 2011, and who allegedly did not receive one-and- Hanis v. Metropolitan Life Insurance Co., a-half times the regular rate of pay for all No. 4:14-cv-01107, complaint filed (W.D. services performed in excess of 40 hours per Mo. Dec. 11, 2014). week. The complaint, filed in U.S. District Court He also seeks class certification under for the Western District of Missouri, alleges Missouri state law, Mo. Rev. Stat. § 290.500, the company incorrectly classifies insurance on behalf of all people who were employed by underwriters as exempt employees under the MetLife as insurance underwriters in Missouri Fair Labor Standards Act, 29 U.S.C. § 201, from Dec. 11, 2012, and who allegedly did not making them ineligible to receive overtime receive overtime, according to the complaint. compensation. REUTERS/Chip East WJ The plaintiff, John Hanis, of Riverside, Mo., week during peak months of March through Attorney: Plaintiff: Matthew L. Dameron, Williams Dirks says he was employed as a senior underwriter June and August to November. Dameron LLC, Kansas City, Mo. for MetLife from June 2006 to October 2013. According to the complaint, MetLife allegedly Related Court Document: He says he regularly worked more than 40 classified Hanis and other underwriters Complaint: 2014 WL 7204400 hour per week and upward of 60 hours per as exempt employees, but he claims they

A federal judge has rejected the asbestos-exposure claims of a Washington state man who worked as a contractor and employee at a brewery, finding that the company’s only liability is under the state’s Industrial Insurance Act.

McMann v. Air & Liquid Systems Corp. et al., Several defendants, including Pabst, moved a third-party claim against an employer No. C14-5429, 2014 WL 6809246 (W.D. for summary judgment last October. because the employer was already liable Wash. Dec. 2, 2014). Pabst argued the IIA applied to all of for the man’s asbestos-related injury U.S. District Judge Benjamin H. Settle of McMann’s work at the brewery and that he under the Longshore and Harbor Workers’ the Western District of Washington granted suffered an “indivisible injury,” meaning Compensation Act. Pabst Brewing Co.’s motion for summary it cannot be determined which of the two In opposing Pabst’s motion, McMann judgment, saying the plaintiff’s injuries were potential exposures caused the injury. contended that the company had a “dual “indivisible” because he may have been persona” as his employer and as a third- exposed to asbestos in both working roles at party property owner when he worked as the brewery. The plaintiff said he was a contractor at the brewery. Under an IIA The judge found Pabst has immunity under exposed to asbestos while exception, McMann said he could sue the the Industrial Insurance Act, Wash. Rev. working as a carpenter’s brewery as a third party for negligently Code. Title 51, and therefore has no third- apprentice at Olympia causing his injuries. party liability. Brewing Co. in 1971 and 1972. Judge Settle rejected that argument while The IIA requires employers to carry workers’ noting there was no case “on point” to compensation insurance to provide benefits support it. to injured employees. In return, employers Judge Settle said McMann admitted that “[T]he court declines to adopt such an ordinarily cannot be sued for on-the-job the asbestos-containing insulation he was unusual proposition that, when an indivisible injuries. exposed to as a brewery contractor from injury is alleged, the employer is both 1971 to 1972 was the same insulation he According to the judge’s order, Alan McMann immune under the IIA and subject to third- was exposed to as an employee in 1975. party liability under the IIA,” the judge said. and his wife, Donna, filed a suit in July 2013 As a result, a reasonable juror could not against numerous defendants, including conclude he was exposed to asbestos only as The judge also ruled on the summary Pabst as successor to the Olympia Brewing a contractor, the judge said. judgment motions of two other defendants Co., for allegedly exposing him to asbestos. that allegedly exposed him to asbestos while McMann said the exposure caused him to “The court agrees with Pabst that case law … he was in the Navy. develop mesothelioma, a fatal lung cancer. regard[s] asbestos exposure as an indivisible injury,” Judge Settle said. He granted Crane Co. summary judgment on The suit was filed in state Superior Court. It all McMann’s claims except for his potential was removed to the District Court under the “Therefore, if Mr. McMann was exposed exposure to the company’s asbestos- federal officer statute because McMann’s as both an employee and either an invitee containing Cranite product. complaint also alleged he was exposed to or worker for an independent contractor, then the McManns’ claims against Pabst The judge also granted SB Decking Inc. asbestos by other defendants while he served summary judgment on all claims except in the U.S. Navy. are barred by the IIA,” the judge said, citing a similar decision in Campbell v. Lockheed McMann’s claim of asbestos exposure McMann’s complaint against Pabst said he Shipbuilding Corp., 61 P.3d 1160 (Wash. Ct. during removal of decking aboard a Navy was exposed while working as a carpenter’s App. 2002). vessel. WJ apprentice at Olympia Brewing in 1971 and In that decision, the Washington Court of Related Court Document: 1972. He also worked as an employee of the Order: 2014 WL 6809246 brewery for six months in 1975. Appeals said a plaintiff could not pursue

A workers’ compensation carrier had a reasonable basis for denying benefits for a paraplegic claimant’s nonmedical living expenses, the 8th U.S. Circuit Court of Appeals has ruled.

Paulino v. Chartis Claims Inc., No. 13-3732, 2014 WL 7236874 (8th Cir. Dec. 19, 2014). Three rulings under Iowa Code § 85.27 The fact that the Iowa workers’ compensation The plaintiff based his case on three rulings in which the Iowa Supreme Court found certain commissioner found the insurer’s position nonmedical expenses compensable under Iowa Code § 85.27: lacked merit was not enough to establish bad faith in a court of law, the three-judge Manpower Temporary Services v. Sioson, 529 N.W.2d 259 (Iowa 1995): Affirmed decision panel said. requiring employer to pay for modified van for injured employee. According to the panel’s opinion, Modesto Quaker Oats Co. v. Ciha, 552 N.W.2d 143 (Iowa 1996): Affirmed decision requiring payment Paulino injured his spinal cord in an accident for widened doorways, ramp into home, special shower, elevator and other items required at work and was rendered a paraplegic. because of plaintiff’s wheelchair-bound status. Chartis Claims Inc. provided Paulino’s employer with workers’ compensation Stone Container Corp. v. Castle, 657 N.W.2d 485 (Iowa 2003): Affirmed decision mandating insurance and paid for Paulino’s medical payment for laptop computer and corresponding adaptations that would allow employee treatment and rehabilitative services. to use the computer with his wheelchair and prone cart. After months of treatment Paulino moved into the Center for Comprehensive Services seeking payment for his living expenses The court noted that Iowa Code § 85 for rehabilitation and discharge preparation. from Chartis. requires an insurer to pay for medical Once he had achieved basic self-care, a Ultimately, the commissioner ruled that services and supplies — not necessarily living discharge date of April 30, 2006, was set, expenses. the opinion says. Paulino’s stay at CCS was appropriate and ordered Chartis to pay for the living expenses Relying on the state court review of his Paulino was then receiving less than $400 until Paulino found suitable housing. Chartis workers’ compensation ruling, Paulino cited per week in workers’ compensation benefits filed a petition for review in state court three similar Iowa Supreme Court cases that and he did not qualify for state and federal pursuant to Iowa Code § 17A.19 and the court had interpreted the statute broadly (see box). assistance programs because he was an affirmed the commissioner’s decision. undocumented Mexican national, the But the 8th Circuit said his living expenses opinion says. Paulino sued Chartis in the U.S. District Court differed from the medical expenses listed in for the Southern District of Iowa for bad-faith the statute and held to be compensable in CCS did not discharge Paulino on April 30 denial of benefits in April 2011. He sought the three cases. because it could not locate suitable, consequential and punitive damages. affordable housing, the court document says. The state court decisions do not undermine The court granted summary judgment in the federal District Court’s grant of summary Chartis continued to pay for Paulino’s favor of Chartis on the basis that Paulino’s judgment based on the fairly debatable medical bills but informed him that it would claim was “fairly debatable,” that is, open to nature of Paulino’s bad-faith claim, the panel no longer pay for his living expenses at CCS, dispute on a logical basis. said. including rent, utilities, groceries and cable television, because his stay there was no Paulino appealed to the 8th Circuit, arguing It also found no evidence that Chartis’ denial longer medically necessary, the opinion says. that a reasonable jury could find that Chartis was motivated by Paulino’s status as an failed to make an honest and informed undocumented Mexican national. WJ Paulino filed a petition with the Iowa decision when it denied his claim. workers’ compensation commissioner, Related Court Document: The 8th Circuit disagreed. Opinion: 2014 WL 7236874

A federal judge in Manhattan has entered summary judgment for a public benefit corporation accused of failing to protect 9/11 cleanup workers from toxic substances, finding a New York state law that revived previously time-barred claims is unconstitutional.

In re World Trade Center Lower Manhattan Disaster Site Litigation, No. 21–mc–102, 2014 WL 6969547 (S.D.N.Y. Dec. 8, 2014). U.S. District Judge Alvin K. Hellerstein of the Southern District of New York said the state Legislature violated the Battery Park City Authority’s due process rights by enacting “Jimmy Nolan’s law” in 2009 to give injured ground-zero workers one more year to file suit. The statute, named for a construction worker who developed latent injuries from rescue operations after the terrorist attacks of Sept. 11, 2001, revived time-barred claims against public corporations related to World Trade Center rescue, recovery or cleanup operations for a period of one year. Judge Hellerstein said the Legislature did not have a strong enough rationale to justify the revival statute because the plaintiffs’ REUTERS/Peter Morgan Firefighters work at the scene of the World Trade Center after the twin towers collapsed in New York on Sept. 11, 2001. causes of action accrued at the time they Manhattan. The Legislature gave BPCA the The Battery Park City Authority argued there were no right to sue and be sued and authorized it to “exceptional circumstances” to justify the enactment of a state raise money through the issuance of bonds to private investors. law that revived time-barred injury claims for one year. BPCA successfully moved to dismiss the claims of Avila and four other plaintiffs in July discovered their alleged injuries, not the time Avila’s suit was added to the master docket of 2009 based on their failure to provide notice the injury occurred. latent injury claims filed by hundreds of 9/11 of their claims within 90 days pursuant to The summary judgment order effectively cleanup workers. N.Y. Gen. Mun. Law § 50-e(1)(a). terminated the Battery Park City Authority The plaintiffs alleged the Battery Park The statute requires tort plaintiffs to provide as a defendant in eight suits by 9/11 cleanup City Authority and other building owners, public corporations 90 days’ notice of their workers who alleged latent injuries from operators, managers and agents violated intent to sue, from the time the injury accrues. exposure to toxic substances at the disaster state labor laws by failing to provide workers The plaintiff then has three years to file suit. site. with appropriate equipment to protect In the case of a latent disease, accrual begins them from exposure to toxic and hazardous on the date of discovery of the injury. CASE HISTORY substances. Claims remain pending against The state Legislature enacted Jimmy Nolan’s many of these defendants, according to the One of the plaintiffs, Angel Avila, alleged law the same month Judge Hellerstein case dockets. exposure to substances including silica, granted BPCA’s motion to dismiss. Avila and lead, benzene and PCBs during cleanup and BPCA is a public benefit corporation created seven other plaintiffs with time-barred claims abatement work after the attacks caused him by the New York Legislature in 1968 to — Rodrigo Campozano, Andrzej Chojnowski, to develop chest pain, chronic headaches develop low-income housing and eliminate Mieczyslaw Dabrowski, Tadeusz Kowalewski, and respiratory problems in 2004. urban blight in the lower west side of Jerzy Muszkatel, Waldemar Ropel and Marek

© 2015 Thomson Reuters FEBRUARY 3, 2015 n VOLUME 29 n ISSUE 14 | 19 Socha — timely refiled their suits against TOXIC EXPOSURE BPCA under the new law, the opinion says. CONSTITUTIONAL CHALLENGE Oregon jury awards $4 million to insulation BPCA argued in a summary judgment motion filed June 13 that Jimmy Nolan’s law worker’s estate in asbestos case violates due process protections in Article I of the New York Constitution. An Oregon jury has awarded $3.96 million in damages to the family of an insulation worker who died of lung cancer caused by exposure to asbestos- The New York Court of Appeals, the state’s containing products at several paper mills. highest court, has previously held that revival statutes pass scrutiny under due process only Golik v. CBS Corp., No. 1308-11192, verdict “The defendants did little to dispute our in exceptional circumstances where revival returned (Or. Cir. Ct., Multnomah County evidence establishing both that when Bob is needed to correct a serious injustice, but Dec. 18, 2014). Golik was working at their facilities in 1965, Avila and co-plaintiffs suffered no injustice, the hazards of working with asbestos were BPCA said. A jury in Portland’s Multnomah County Circuit Court found Dec. 18, 2014, that three mill well known and that the defendants did The plaintiffs opposed the motion, and New owners were negligent in exposing Robert J. nothing to warn or protect workers like our York Attorney General Eric T. Schneiderman Golik to asbestos-containing insulation. client,” lead trial counsel David Bricker of intervened to defend the constitutionality It awarded $91,000 in economic damages Waters Kraus said in the statement. of the law. BPCA, as a public corporation, and $3.86 million in noneconomic damages “Just home from service to his country in the lacks the capacity to challenge the law, to his wife and three children, according to Army, Mr. Golik worked for months in those Schneiderman said in a memorandum. the jury verdict form. paper mills in clouds of amosite asbestos Judge Hellerstein said BPCA is not a political subdivision of the state because it was created to perform primarily private functions A jury in Portland’s Multnomah County Circuit Court and is funded mostly by private means. found that three mill owners were negligent in exposing The Legislature enacted Jimmy Nolan’s law Robert J. Golik to asbestos-containing insulation. to correct injustice to plaintiffs who received inaccurate information about their work Alice Golik, representing her husband’s dust — one of the deadliest types of asbestos conditions or who were initially unaware estate, sued the defendants, including paper known,” Bricker said. “Bob Golik had no of the cause of their injuries, but those are mill operators Georgia Pacific Consumer idea of the hidden risks of asbestos or that not the kind of exceptional circumstances Products LLC, Longview Fibre Paper & the paper mill’s failure to protect him would needed to support a revival statute, the judge Packaging Inc. and Weyerhaeuser Co., for cause his death decades later.” WJ said. exposing him to asbestos on the job. Attorneys: Avila and his co-plaintiffs did not suffer a Plaintiffs: David Bricker and Michael Connett, According to the complaint, Robert was an serious injustice from the application of the Waters, Kraus & Paul, Los Angeles; R. Walker insulation helper at mills run by the three notice period, as they never claimed to have Humphrey II, Waters, Kraus & Paul, Dallas companies. The defendants failed to warn been unaware of the causal connection Defendant (Georgia-Pacific):Maria Karos and or protect him from the dangers of asbestos Brian Zeringer, Sedgwick LLP, Seattle between their work conditions and alleged exposure, according to a statement from her injuries, Judge Hellerstein said. WJ Defendant (Longview Fibre): Jim Gidley and law firm, Waters, Kraus & Paul in Los Angeles. Gabrielle Richards, Perkins Coie LLP, Portland, Attorneys: Ore. Plaintiff (Avila): Christopher R. LoPalo and Golik was diagnosed with the asbestos- William J. Dubanevich, Worby Groner Edelman related lung cancer mesothelioma and died Defendant (Weyerhaeuser): Joshua Metcalf and LLP, White Plains, N.Y. Nick Giallourakis, Forman Perry Watkins Krutz & in 2011 at age 66 following lung surgery, the Tardy, Jackson, Miss. Defendant: William J. Smith, Faust Goetz release said. Schenker & Blee, New York; Allyson A. Avila Related Court Document: and John M. Flannery, Wilson Elser Moskowitz After a nine-day trial, the jury deliberated Jury verdict form: 2014 WL 747720 Edelman & Dicker, Stamford, Conn.; Eliza M. eight hours before submitting the verdict. Scheibel, Joanna M. Topping, Mathew T. Dudley The awards will be offset by other defendants’ and Peter A. Meisels, Wilson Elser Moskowitz Edelman & Dicker, White Plains settlements with the family.

Related Court Document: Order: 2014 WL 6969547

20 | WESTLAW JOURNAL n EMPLOYMENT © 2015 Thomson Reuters Supreme Court The retirees maintained the collective CONTINUED FROM PAGE 1 bargaining agreement is not truly silent on the duration of retiree benefits and contains In Yard-Man, the 6th Circuit said silence in language to indicate indefinite paid benefits. a union contract relating to retiree health benefits means they will be vested and ’THUMB ON THE SCALE’ continue indefinitely. According to the high court, the 6th According to the Supreme Court’s opinion, Circuit’s decision was influenced by its own the appellate panel failed to abide by the suppositions rather than ordinary contract traditional principle that a court should not principles, including the parties’ actual interpret ambiguous contract clauses to intentions. create provisions. The appeals court’s application of its Yard- “The ‘Yard-Man presumption’ is dead,” said Man opinion “distorts” the court’s attempt Ballard Spahr managing partner Steven to ascertain the parties’ intentions, the high Suflas, who was not involved in the case. court said. REUTERS/Jim Young Suflas had predicted after oral argument in “Yard-Man violates ordinary contract November that the high court would remand The 6th Circuit’s decision principles by placing a thumb on the scale the case. “violates ordinary contract in favor of vested retiree benefits in all While the result is not surprising, Suflas said, principles by placing a collective-bargaining agreements,” Justice “the broader significance is the court’s clear thumb on the scale in favor Thomas wrote. direction that ordinary contract principles of vested retiree benefits The Yard-Man presumptions are “too should be applied without presumptions.” in all collective-bargaining speculative” and fail to consider a contract’s context and factual evidence, the high court NEW COLLECTIVE BARGAINING agreements,” Justice said. AGREEMENT Clarence Thomas said. In a concurring opinion, the Supreme Court’s When plastics manufacturer M&G Polymers liberal judges said the 6th Circuit must USA took over operation of a West Virginia In 2012 the District Court found the retirees examine and consider the parties’ entire plastics manufacturing plant in 2000, have benefits for life and said M&G could not agreement on remand. WJ it entered into a collective bargaining require them to contribute to their health Attorneys: agreement with the United Steelworkers care benefits. Tackett et al. v. M&G Polymers Petitioners: Allyson N. Ho and John C. Sullivan, union, which represented its employees. Morgan, Lewis & Bockius, Dallas; Christopher A. USA et al., 853 F. Supp. 2d 697 (S.D. Ohio Weals, Morgan, Lewis & Bockius, Washington; R. The agreement capped the amount the 2012). Randall Tracht and Andrew Scroggins, Morgan, company would contribute to the health Lewis & Bockius, Pittsburgh The 6th Circuit affirmed, finding that since benefits of future retirees, and in 2006 M&G the collective bargaining agreement does Respondents: Julia P. Clark, Jeremiah A. Collins, applied the cap to the benefits of those Joshua B. Shiffrin and Laurence Gold, Bredhoff & not mention the duration of benefits, fully already retired, requiring the former workers Kaiser, Washington; David M. Cook and Jennie G. paid benefits are presumed to be for life. to contribute to the benefit costs, according Arnold, Cook & Logothetis, Cincinnati; Joseph P. Tackett et al. v. M&G Polymers et al., 733 F.3d Stuligross, Pittsburgh to court documents. 589 (6th Cir. 2013). Related Court Document: The union and 500 workers sued M&G In its certiorari petition, M&G asked the high Opinion: 2015 WL 303218 in 2007 in the U.S. District Court for the court to resolve a split among the circuit Southern District of Ohio, alleging the See Document Section A (P. 27) for the opinion. courts over how to interpret “contractual company’s action breached the collective silence.” bargaining agreement and violated the Labor Management Relations Act, 29 U.S.C. The company argued that despite the § 141, and the Employee Retirement Income contract’s lack of conclusive language on Security Act, 29 U.S.C. § 1001. the benefits’ durational limit, retirees cannot assume the benefits are permanent.

Filing Case Name Court Docket # Allegations Damages Sought Date

Class action. Hertz Corp. subjected Class certification; employees to a hostile work environment declaratory judgment; Ketibe v. Hertz Corp. 0:14-cv- by harassing them, making derogatory injunctive, actual, D. Minn. 12/13/14 2014 WL 7525640 05058 statements and discriminating against compensatory, treble and them for praying and based on their punitive damages; fees and national origin. costs

Class action. Paramount Pictures Peikoff v. Class certification, statutory 4:15-cv- wrongfully procured employees’ credit Paramount Pictures N.D. Cal. 1/7/15 and punitive damages, 00068 reports for the purpose of employment 2015 WL 150434 interest, fees and costs without their consent.

The failure of Chestnut Well Service to McClelland v. investigate and provide the appropriate Chestnut Well 2:15-cv- $750,000 in damages, W.D. La. 1/9/15 medical care worsened employee’s job- Service 00051 interest and costs related injury caused by an unseaworthy 2015 WL 150438 vessel.

Plaintiff’s supervisors at the Oregon Racing Commission discriminated Miller v. State against her based on her sex and age and Economic damages of Or. Cir. Ct. of Oregon 15CV00652 1/12/15 terminated her without sufficient notice of $604,266 and noneconomic (Multnomah) 2015 WL 163247 allegations against her, or of her right to damages of $100,000 an administrative hearing with respect to the adverse employment action.

The Johns Hopkins Health System Milner v. Johns retaliated against plaintiff after he Unspecified damages, Hopkins Health Md. Cir. Ct. 24-C-15- criticized its burn center by claiming that injunctive relief, 1/13/15 System Corp. (Baltimore) 000137 its negligence and the staff’s inadequate reinstatement, interest and 2015 WL 179094 training resulted in harm to six juvenile fees burn victims.

Class action. Morgan Stanley & Co. Class certification, unpaid Hix v. Morgan 1:15-cv- intentionally failed to pay employees wages, liquidated damages, Stanley & Co. S.D.N.Y. 1/13/15 00217 overtime compensation and full wages for declaratory and injunctive 2015 WL 178235 all hours worked. relief, interest, fees and costs

The city of Minneapolis violated In excess of $50,000 as Minnesota’s Veterans Preference Act by compensatory damages, Frizell v. Harteau 0:15-cv- D. Minn. 1/14/15 failing to give pre-termination hearing in excess of $50,000 as 2015 WL 196123 000078 to plaintiff regarding his demotion from punitive damages, injunctive deputy chief of patrol. relief, fees and costs

*Westlaw Court Wire is a Thomson Reuters news service that provides notice of new complaints filed in state and federal courts nationwide, sometimes within minutes of the filing.

Class action. Susquehanna Bancshares Struett v. violated the Fair Labor Standards Act Declaratory and injunctive Susquehanna 5:15-cv- by misclassifying residential mortgage E.D. Pa. 1/14/15 relief, compensatory Bancshares Inc. 00176 bankers as exempt employees and damages, interest and fees 2015 WL 170229 therefore failing to pay them overtime compensation.

Class action. Safeco Insurance Co. and Pinto v. Liberty Class certification, general Liberty Mutual Insurance Co. misclassified Mutual Insurance Cal. Super. Ct. and compensatory damages, BC570007 1/21/15 field examiners as exempt employees and Co. (Los Angeles) restitution, penalty, interest, failed to provide them with meal breaks, 2015 WL 293318 fees and costs rest periods and overtime compensation.

YP Western Directory and AT&T Inc. $15 million in monetary, Bingham v. YP Cal. Super. Ct. CGC-15- discriminated against and wrongfully compensatory and punitive Western Directory (San 1/23/15 543799 terminated employees based on their age damages; injunctive relief; 2015 WL 300723 Francisco) and gender. fees and costs

*Westlaw Court Wire is a Thomson Reuters news service that provides notice of new complaints filed in state and federal courts nationwide, sometimes within minutes of the filing.

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COURT MAJORITY RULES: SCHOOL DISTRICT NEEDN’T UNION COMMITS UNFAIR PRACTICE BY REFUSING BARGAIN SUBCONTRACTING OF CLERICAL WORK TO VOID EMPLOYEES’ DUES REVOCATION FORMS Ruling: In an unpublished decision, a majority of the Michigan Court of Ruling: The Florida Public Employees Relations Commission accepted Appeals affirmed the Michigan Employment Relations Commission’s a hearing officer’s recommended determination that a union dismissal of an unfair-practice charge. MERC rejected the union’s committed an unfair labor practice by refusing to permit two transit contention that the employer-school district violated provision of authority employees to reinstate their union memberships, after they the Public Employment Relations Act by privatizing secretarial sought to void the revocation of their union dues. The union’s actions services formerly performed by bargaining unit members. The court constituted retaliation for the charging parties’ prior filing of unfair- majority held that the employer was not required to bargain over the practice charges against the union, PERC decided. replacement of the secretaries under PERA Section 15(3)(f) because What it means: Section 447.501(2)(d) of the state labor laws expressly the secretaries provided non-instructional support services. prohibits an employee organization or its officers from discriminating What it means: Here, the appeals court majority relied on the holding against an employee because he or she has signed or filed an affidavit, of Pontiac School District v. Pontiac Education Association, 25 MPER petition or complaint or given any information or testimony in any 44 (Mich. Ct. App. 2012), that positions in which individuals impart proceedings provided for in Fla. Stat. § 447, Part II, which includes the knowledge or information to students may be subject to bargaining filing of an unfair-practice charge. under PERA Section 15(3)(f). Algeri v. Tampa Bay Area Transit Workers Union Inc.; Sansom v. Reese Public School District v. Reese Professional Support Personnel Tampa Bay Area Transit Workers Union Inc., 41 FPER 235 (Fla. Pub. Association MEA/NEA, 28 MPER 51 (Mich. Ct. App. Dec. 30, 2014). Employees Relations Comm’n Dec. 9, 2014).

UNION COMMITS NO UNFAIR PRACTICE BY SUING DESPITE STATE’S FAILURE TO INTERVIEW COMPLAINANT, TO ENFORCE CONTRACT PROVISIONS VETERAN’S PREFERENCE CLAIM IS NIXED Ruling: The Michigan Employment Relations Commission affirmed Ruling: Upon accepting the hearing officer’s recommended decision, an administrative law judge’s recommended dismissal of an unfair- the Florida Public Employees Relations Commission dismissed a practice charge. The ALJ found no merit in the employer’s contention veteran’s-preference complaint. PERC agreed with the hearing that the union violated provision of the Public Employment Relations officer’s conclusion that the state employer hired the most qualified job Act by filing a baseless lawsuit to enforce bargaining agreement terms applicant. The employer’s violation of a veteran’s-preference provision that were unenforceable under PERA Section 15(3)(k). No unfair labor — through its failure to interview the complainant — had no remedy, practice occurred, where the meaning of Section 15(3)(k) had not PERC concluded. yet become established law at the time the union took the disputed What it means: PERC explained that, pursuant to the holding in City of actions. Deland v. Landolfi, 39 FPER 66 (Fla. 1st Dist. Ct. App. 2012), a public What it means: MERC took note of National Labor Relations Board case employer does not violate Fla. Stat. §§ 295.07 or 295.085, even law holding that a completed lawsuit that was reasonably based could though it unlawfully fails to give the veteran a special consideration not constitute an unfair practice. The NLRB has decided that a lawsuit in the hiring process, when the employer establishes that it ultimately lacks a reasonable basis if no reasonable litigant could realistically hired the more qualified non-veteran. expect success on the merits of the suit. Groover v. Florida Department of Children and Families, 41 FPER 241 Pontiac Education Association, MEA/NEA and Pontiac School (Fla. Pub. Employees Relations Comm’n Dec. 19, 2014). District, 28 MPER 56 (Mich. Employment Relations Comm’n Dec. 18, 2014).

24 | WESTLAW JOURNAL n EMPLOYMENT © 2015 Thomson Reuters NEWS IN BRIEF UNCOVER S.C. METAL FACTORY SETTLES EEOC RACE DISCRIMINATION CHARGES A South Carolina metal finishing company has agreed to pay $40,000 to a black former VALUABLE employee who was allegedly fired for complaining about racial slurs from co-workers, the Equal INFORMATION Employment Opportunity Commission announced Jan. 8. The agency sued Carolina Metal Finishing LLC in federal court, alleging that two white co-workers subjected Tieron L. Parks to ABOUT YOUR slurs for seven months. The company fired Parks in May 2012 after he told management about the harassment the suit said. In addition to the monetary payment, Carolina Metal Finishing OPPOSING must notify staff of the settlement and provide training on a new anti-discrimination policy, EXPERT under a consent decree settling the case, the EEOC said. Equal Employment Opportunity Commission v. Carolina Metal Finishing LLC, No. 14-cv-3815, WITNESS settlement announced (D.S.C. Jan. 8, 2015).

LOCKHEED MARTIN TO PAY $201K TO MISCLASSIFIED WORKERS Lockheed Martin Corp. has agreed to pay $201,000 in back pay to 18 workers it misclassified at a Coast Guard station in California, the U.S. Department of Labor announced Jan. 20. The aerospace company underpaid technical instructors because their job duties were misclassified, the agency said. The misclassification violated prevailing-wage requirements for government contracts worth more than $2,500. The regulations require federal contractors to pay employees no less than the wages and benefits prevailing at the work location.

PAINT COMPANY SETTLES SUIT OVER DEADLY CALIFORNIA ACCIDENT A California paint manufacturer will pay nearly $1 million to settle allegations that improper toxic chemical use caused the death of one employee and injured another, Orange County District Attorney Tony Rackauckas announced Jan. 7. The DA’s office alleged in a state court suit that Vista Paint Corp. allowed the unsafe handling and use of methylene chloride, a paint and epoxy remover, at its facility in Fullerton. Vista Paint employee Roberto R. Magdariaga died after becoming overwhelmed by methylene chloride fumes at the facility Nov. 15, 2011, and another worker was seriously injured, according to the statement. The $950,000 settlement includes $350,000 in victim restitution and $163,000 in civil penalties, plus administrative penalties and charitable donations. Vista Paint is also permanently enjoined from violating health and safety Expert Intelligence Reports give you laws and must submit to annual audits by state regulators, the statement said. the information you need to evaluate your opposing counsel’s expert witness. People v. Vista Paint Corp., No. 30-2010-00436630, settlement announced (Cal. Super. Ct., In every Expert Intelligence Report Orange County Jan. 7, 2015). you request, you’ll find comprehensive, logically organized documentation of an expert’s background and performance as an expert witness: transcripts, depositions, challenges, resumes, publications, news stories, social media profiles – even hard-to-get expert testimony exhibits from dockets. Learn more at TRexpertwitness.com/ intelligence.

Algeri v. Tampa Bay Area Transit Workers Union Inc.; Sansom v. Tampa Bay Area Transit Workers Union Inc., 41 FPER 235 (Fla. Pub. Employees Relations Comm’n Dec. 9, 2014)...... 24

Bozek et al. v. Wal-Mart Stores Inc., No. 15-cv-00010, complaint filed (N.D. Ill., E. Div. Jan. 2, 2015)...... 12

Catlin v. Wal-Mart Stores Inc., No. 15-cv-00004, complaint filed (D. Minn. Jan. 2, 2015)...... 12

Equal Employment Opportunity Commission v. Carolina Metal Finishing LLC, No. 14-cv-3815, settlement announced (D.S.C. Jan. 8, 2015)...... 25

Golik v. CBS Corp., No. 1308-11192, verdict returned (Or. Cir. Ct., Multnomah County Dec. 18, 2014)...... 20

Groover v. Florida Department of Children and Families, 41 FPER 241 (Fla. Pub. Employees Relations Comm’n Dec. 19, 2014)...... 24

Hanis v. Metropolitan Life Insurance Co., No. 4:14-cv-01107, complaint filed (W.D. Mo. Dec. 11, 2014)...... 16

In re World Trade Center Lower Manhattan Disaster Site Litigation, No. 21–mc–102, 2014 WL 6969547 (S.D.N.Y. Dec. 8, 2014)...... 19

LaCross et al. v. Knight Transportation Inc. et al., No. 14-56780, 2015 WL 106179 (9th Cir. Jan. 8, 2015)...... 15 Document Section C...... 44

M&G Polymers USA LLC et al. v. Tackett et al., No. 13-1010, 2015 WL 303218 (U.S. Jan. 26, 2014)...... 1 Document Section A...... 27

Mach Mining LLC v. Equal Employment Opportunity Commission, No. 13-1019, oral argument held (U.S. Jan. 13, 2015)...... 11

McMann v. Air & Liquid Systems Corp. et al., No. C14-5429, 2014 WL 6809246 (W.D. Wash. Dec. 2, 2014)...... 17

New et al. v. Wal-Mart Stores Inc., No. 15-cv-00016, complaint filed (N.D. Ga., Atlanta Div. Jan. 2, 2015)...... 12

Paulino v. Chartis Claims Inc., No. 13-3732, 2014 WL 7236874 (8th Cir. Dec. 19, 2014)...... 18

People v. Vista Paint Corp., No. 30-2010-00436630, settlement announced (Cal. Super. Ct., Orange County Jan. 7, 2015)...... 25

Pontiac Education Association, MEA/NEA and Pontiac School District, 28 MPER 56 (Mich. Employment Relations Comm’n Dec. 18, 2014)...... 24

Reese Public School District v. Reese Professional Support Personnel Association MEA/NEA, 28 MPER 51 (Mich. Ct. App. Dec. 30, 2014)...... 24

Ruiz v. Moss Bros. Auto Group Inc., No. E057529, 2014 WL 7335221 (Cal. Ct. App., 4th Dist. Dec. 23, 2014)...... 14

Schuett v. FedEx Corp. et al., No. 15-189, complaint filed (N.D. Cal. Jan. 14, 2015)...... 13 Document Section B...... 35