According to the New York Times, Texas will consider whether to adopt a "loser pays" rules for civil cases.  The rule, similar to the English Rule, would  that require the losing party in a civil case to pay the attorney’s fees and costs of the prevailing party.  It is unclear whether this rule, if passed, would have any effect on the number of employment discrimination, retaliation or harassment suits filed against Texas employers. 

Employers shouldn’t get excited about a loser pays rule; however, because I think the likelihood of that legislation passing this session is remote.  

Federal law prohibits private employers from terminating the employment of or discriminating with respect to employment against an individual because the individual is or was a debtor under the Bankruptcy Code.  In a recent decision of the U.S. Court of Appeals for the Fifth Circuit, the appellate court held that the anti-discrimination provisions of the federal bankruptcy code do not provide an an applicant for employment a cause of action against a private employer when the applicant is denied employment solely because of a previous bankruptcy filing.  (Burnett v. Stewart Title). 

The facts of Burnett are straightforward.  Burnett applied for employment with Stewart Title in 2007.  She was offered a job conditioned on the successful completion of a drug screening and background check.  The background check revealed that, in 2006, Burnett filed a Chapter 13 bankruptcy proceeding.  As a result of this bankrupcty filing, Stewart Title rescinded its conditional employment offer.  Burnett sued claiming she was discriminated against in violation of the bankruptcy code. (11 U.S.C. 525).  Section 525(b) provides that:

No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt–

(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;

(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or

(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.

Applying canons of statutory construction, the Court of Appeals concluded that the act of hiring is not encompassed within Section 525(b)’s prohibition against "discriminating with respect to employment" and therefore, Burnett had no claim.  Consequently, the Court held that "11 U.S.C. 525(b) does not prohibit private employers from denying employment to applicants based on their bankruptcy status."

You can access the full copy of the opinion here.

One caveat, the anti-discrimination provisions of the bankruptcy code do preclude a governmental employer from refusing to hire an applicant solely because of the applicant’s prior bankruptcy filings.

The U.S. Supreme Court recently considered the circumstances when an employer may be liable for employment discrimination based on the unlawful, discriminatory animus of an employee who influenced, but did not make, an ultimate employment decision.   This theory is commonly referred to as the Cat’s Paw theory derived from fable about the monkey who convinces the cat to reach into the fire to pull out the roasting chestnuts.  The cat gets burned while the monkey makes off with the chestnuts.  In discrimination cases, the Cat’s Paw theory refers to a situation where a supervisor with a discriminatory animus who influences, but does not make, the adverse employment decision.

The facts of Staub are straight forward.  In Staub, the employee complained that several of his direct supervisor were hostile to his reserve military service that periodically required him to miss work.  The employee complained that this hostile supervisors wrote him up on several occasions that were motivated by his military service.  Specially, Staub’s direct supevisor issued him a corrective action for violating a company rule requiring him to stay in his work area when he was not working with a patient.  Several months later, a co-worker complained that Staub’s frequent availablility.  On another occasion, the hostile supervisor reported that Staub had left his workstation without permission in violation of the earlier corrective action.  A hospital executive, whom had no discriminatory animus, reviewed Staub’s file and made the decision to terminate his employment; at least in part on information contained in the file that was initiated by Staub’s direct supervisors (and whom allegedly had discriminatory intent).  Staub appealed his termination through the hospital’s grievance procedure but the decision stood.  Staub won at trial, but on appeal, the Seventh Circuit Court of Appeal reversed holding that since there was no evidence that the ultimate decisionmaker had a discriminatory animus, Staub could not hold the hospital liable for the discriminatory animus of a supervisor who was not the ulimate decisionmaker. 

The Supreme Court reversed the court of appeals.  As the Court stated, "If the employer’s investigation results in an adverse action for reasons unrelated to the supervisor’s original biased action . . . then the employer will not be liable."  However, "the employer is at fault [when] one of its agents committed an action based on discriminatory animus that was intended to cause, and did in fact cause, an adverse employment decision."  The core holding of the opinion is that "if a supervisor performs an act motivated by [discriminatory] animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under [the law]."

Staub substantially expands the scope of situations where employers can be held liable for discrimination based on the acts of nondecisionmaker supervisors. You can access a full copy of Staub v. Proctor Hospital here.

What others are saying about Staub.

Mrs. Palsgraf and the Cat’s Paw Doctrine

With a Friend Like Justice Scalia . . . Cat’s Paw Decision Not Very Employer Friendly

The Supreme Court Upholds Cat’s Paw Theory of Liability in Anti-Military Discrimination Case

 

I’ve written several posts advocating the advantages of employer’s use of waivers of jury trials to resolve employment disputes with employees.  (See posts here and here).  To recap, the mutual waiver of jury trial provides the employer and employee a fair way to resolve employment disputes without some of the disadvantages that other forms of alternative dispute resolution present.  The Fort Worth Court of Appeals recently enforced an employer’s agreement with its employee to waive the jury trial of any disputes between them.  

In In re Frank Kent Motor Company, the Court of Appeals found that the waiver of jury trial provisions contained in the employer’s handbook, and that the employee was aware of, was enforceable even though the employee argued he did not sign the acceptance of the waiver knowingly, voluntarily or intelligently.  The employee argued that his acceptance of the policy was not knowing and voluntary because he feared he would lose his job if he did not sign the agreement; he wasn’t represented by a lawyer when he signed; he refused on two prior occasions to sign the agreement; the agreement was not negotiated and the employer indicated no willingness to negotiate changes; and his supervisor told him he had no choice but to sign the agreement.  Despite these allegations, the Court of Appeals found the allegations insufficient to overcome the presumption that the agreement was knowingly and voluntarily accepted. 

You can find a copy of the full opinion in In re Frank Kent Motor Company here.

The Supreme Court of Texas has agreed to hear argument in two employment cases. 

In Prairie View A&M University v. Diljit K. Chatha, (No. 10-353) the Court agreed to consider whether the 180-day statute of limitations for a government employee’s complaint about discriminatory pay begins from the date of the first paycheck reflecting the decision or the (earlier) date on which the employee was informed of the decision.

In El Apple I, Ltd. v. Myriam Olivas, (No. 10-0490), the Court will consider the appropriate manner of calculating attorney’s fees of a prevailing party in a discrimination case.   

H/T to the Supreme Court of Texas Blog.

In another example of social media exposing an employee’s lack of judgment, the Washington Post reports that an Indiana assistant attorney general was discharged for tweeting that police should "use live ammunition" when clearing protesters outside the Wisconsin state capital.

Social media doesn’t cause employee lapses in judgment; it merely exposes them.  Perhaps the best Social Media policy is the simplest: "Use good judgment."

Molly DiBianca identifies other examples of discipline at the The Delaware Employment Law Blog:

Employee’s Fake Jury-Duty Leave Busted via Facebook

District Attorney’s Sexting Is a Lesson for Employers

Use Twitter, Get Fired (Discussing the Philadelphia Eagles’ Employee terminated for his tweet)

If I had a dollar for every time I reminded a client that "no good deed goes unpunished," my childrens’ college funds would be flush and I’d be planning to retire early.  The recent case of Terwilliger v. Howard Mem. Hosp. (W.D. Ark. 1/27/2011) reminds us that employees will often attempt to ensure that "no good deed goes unpunished" and employers are often "darned if they do and darned if they don’t."

Fellow bloggers have comprehensively covered Terwilliger (See Ohio Employer’s Law Blog, The FMLA Blog, FMLA Insights, Employment Law Matters) and so only a brief summary is necessary.  In that case, Terwilliger was out on FMLA leave for a back-related injury.  She testied (which the court was required to accept as true) that her supervisor called her weekly while on leave to inquire when she was going to return to work.  As a result, she felt pressured by these calls to return to work.  Because of this testimony, the Court denied the employer’s motion for summary judgment finding that a fact-issue existed on Plaintiff’s claims that these calls chilled her willingness to and interferred with the exercise of FMLA rights. This is probably the technically correct ruling at the summary judgment stage, but at trial I suspect a different story will be told where the jury, unlike the court, will not be required to accept the plaintiff’s version as true.

At trial, I suspect the supervisor will testify that, if she called at all, she was merely calling to check on how the plaintiff was doing and to check on her well-being.  Should that be illegal?   Imagine, if the supervisor never called to check on the employee.  The employee can then complain, "They never even bothered to call to see how I was doing."  Instead, because the supervisor called to check on the employee, she complains that her FMLA rights were interferred with.  Terwilliger teaches that employers cannot always predict how their actions will be spun by creative lawyers representing employees.  Instead, supervisors should ensure they follow the law; treat employees consistent with the employer’s policies; and in a manner in which they would want to be treated.  Leave it to the company lawyers to take the spin out of the employee’s efforts to punish good deeds.

The following employment-related bills were enrolled for consideration in the Texas Legislature over the past two weeks.

HB 1178 (Flynn) (Relating to employment protection for members of the state military forces).

HB 1219 (Miles) (Relating to the right of an employee to time off from work if the employee and/or the employee’s child is the victim of family violence or a violent felony offense).

HB 1272 (Miller) (Relating to the requiring of employees to participate in the Federal Electronic Verification of Work Authorization Program or E-Verify; establishing an unlawful employment practice and providing criminal penalties).

HB 1275 (Harless) (Relating to the suspension of certain licenses held by employers for knowing employment of persons not lawfully present in the United States).

HB 1202 (Riddle) (Relating to the creation of the offense of an employing or contracting with an unauthorized alien).

HB 1166 (Zerwas) (Relating to the tobacco sensation program for certain public employees and their dependents and to the assessment of the fee on certain public employees who use tobacco).

SB 545 (Seliger) (Relating to employment records for law enforcement officers, including procedures to correct employment termination reports; providing an administrative penalty).

HB 1057 (Anchia) (Relating to business leave time for certain municipal fire fighters and police officers).

SB 439 (Van de Putte) (Relating to the exclusion from unemployment compensation charge back for certain employers of uniform service members).

HB 954 (Lozano) (Relating to an employee’s transportation of certain firearms or ammunition while on certain property owned or controlled by employee’s employer).

HB 884 (Howard) (Relating to a limited waiver of sovereign immunity for state and local governmental entities and certain employment lawsuits filed by nurses).

HB 878 (Howard) (Relating to the participation of governmental entities and other employers in a Federal Work Authorization Verification Program; establishing an unlawful employment practice).

HB 681 (Kleinschmidt) (Relating to an employee’s transportation of certain firearms or ammunition while on certain property owned or controlled by the employee’s employer).

For the next week, the biggest story in sports will be the Super Bowl.  For the next several months, the biggest story in labor-management relations will be ongoing negotiations with the NFL Owners and the Players Association over a new contract and potentially a lock-out or strike.  The negotiations have been contentious and gives suggest that Super Bowl XLV may be the last professional football game for an extended period of time. 

The Collective Bargaining Agreement between the NFL and the Players Association expires on March 1, 2011.  Once that Agreement expires, the parties are free to engage in activities such as strikes and lockouts.  While the Players Association has not indicated an interest in striking, the owners have expressed an interest in locking the players out of training camp and off-season workouts if a new CBA is not reached.

The biggest issues between the sides include:

Owners want to increase the credit they receive for operating expenses and capital improvements from the pot of revenue the players and owners share and reduce the percentage of adjusted revenue the players receive.  Additionally, the owners want to move to an 18 rather than a 16 game schedule.  An extended schedule would presumably increase the total revenue that the players and owners share.  The owners would also like to implement a rookie pay scale that would limit compensation of new players during their first several years in the league. 

The Players want to increase the total dollars that they realize under the revenue sharing arrangement with the league.  They do not want to make concessions to the owners by providing greater operating credits or reducing their share of the revenue without the owners providing more information on the teams’ financial position.  As private entities, 31 of the 32 NFL teams do not have to make their financials available which makes the players view the owners’ claims that they are not making a commensurate amount of money for the risk they take with skepticism.  The players also want to increase the owners commitment to post-career health benefits and pension payments.  At the end of the day, it really comes down to money.

If the rhetoric is to be believed, the parties are far apart and a work stoppage of some sort is likely.  However, the NFL is so profitable and the millionaire players and billionaire owners have so much to lose, I expect an agreement to be reached without any loss of regular seasons games during the 2011-12 season.  Regardless of the outcome, the NFL labor negotiations will be the hottest story in professional football after the Steelers and Packers finish their game.

A complete copy of the CBA is accessible here.

NFL Players Association informational lockout website here.

 

Many times one competitor sues another competitor over the hiring or two or more employees (whether over allegations of a breach of contract or misappropriation of trade secrets), the Complaint will make allegations of employee "poaching".  This gives rise to the question about whether Texas recognizes a cause of action for one competitor’s poaching of another competitor’s employees.  The answer is "yes" and "no." 

While there is no recognized cause of action called "poaching" for a competitor’s targeting, soliciting and hiring groups of its competitor’s employees (remember, Texas is a right to work state and restraints of trade are highly disfavored), there are recognized causes of action, remedies and tools available to employers who find their workforce the target of a competitor’s poaching.  These include use of and enforcement of covenant not to competes; investigating and bringing claims for misappropriation of confidential information; theft of trade secrets; claims for unfair competition; breach of the duty of loyalty and fiduciary duty; tortious interference with contract; computer fraud and abuse; and conspiracy to tie together all the defendants acting in concert together.  

So while there may be no claim titled "poaching" under state law, there are recognized claims that can allow for an employer remedy against a competitor that has unlawfully targeted another competitor’s employees.