Tag Archives: michael homans

Arbitration Clauses, Class Action Litigation

Class Action Waiver and Arbitration Clauses in Limbo

Mandatory arbitration clauses and class action waivers have not yet ripened into the panacea that employers had hoped.  While they can sometimes eliminate or reduce the expense and exposure of legal claims and even eliminate class actions, they also can spawn their own litigation as to enforceability, as three recent decisions illustrate.

First, federal Judge Joseph F. Leeson Jr. in Allentown, Pa., last week issued a stay of a Fair Labor Standards Act lawsuit for overtime pay against U-Haul International and its subsidiaries, pending the outcome of three cases on arbitrability and class action waivers now pending before the U.S. Supreme Court.  That will delay the U-Haul case for months, as the Supreme Court won’t hear oral argument on its cases until October 2, with decisions to follow later this year or next.

Second, a state court in New Jersey rejected a mandatory arbitration clause that was sent to employees electronically, requiring them to click on a box acknowledging that they had read and understood the policy.  Held the court in Dugan v. Best Buy Co. Inc., “Plaintiff’s mouse-click on the acknowledgment box did not manifest his assent to the policy, only that he read and understood the policy.”  Instead, the mouse-click should have said something like, “I agree.”

And third, the U.S. Court of Appeals for the Third Circuit (over federal courts in Pennsylvania, New Jersey, Delaware and the U.S. Virgin Islands) ruled last month that under New Jersey law, in order for an arbitration clause to be enforceable as to statutory claims (such as employment discrimination or wage payment violations), the clause must (1) make clear that the employee is agreeing to arbitrate statutory claims, (2) make reference to the types of claims being waived, such as “workplace discrimination claims,” and (3) explain the difference between arbitration and litigation, including the waiver of the right to a jury trial.  Because the clause in Moon v. Breathless Inc. did not meet all three of these standards, the appellate court ruled it unenforceable.  And so the parties, after a year of litigation over arbitrability, can advance to litigation on the merits.  Fun.

So a word to the wise – check your arbitration clauses closely to be sure they are enforceable under both state and federal law.  Legal review is definitely recommended.  And watch for the Supreme Court’s decision soon on its arbitration trio – NLRB v. Murphy Oil USA, Epic Systems v. Lewis, and Ernst & Young v. Morris.  That could be a game changer.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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National Labor Relations Act

Robert Half ADR Case Half-Baked

Legal publications and some lawyers have touted a recent federal appeals court decision in Philadelphia as affirming the right of employers to mandate that employees both (1) waive their rights to participate in class action lawsuits, and (2) agree to arbitrate any employment issue individually, and not as part of a group of employees.

Unfortunately, this one ain’t over until the Supremes sing.

The preliminary reports about the decision by the U.S. Court of Appeals for the Third Circuit, Opalinski v. Robert Half International, Inc., ignore that the court in that case expressly noted that the plaintiffs failed to raise an argument that might have determined the case differently.

In particular, the plaintiffs – former staffing managers at personnel placement firm Robert Half – never raised arguments that their binding arbitration agreements violated the National Labor Relations Act (NLRA).  This omission is a head-scratcher, as the National Labor Relations Board and several appeals courts have held that an employee agreement that deprives an employee of the right to bring his or her claims against the employer “collectively” with other employees violates the NLRA protection of “concerted activity” with other employees relating to the terms and conditions of employment.

As we wrote previously, this issue is now before the U.S. Supreme Court and should be decided later this year.  So, the Third Circuit’s Opalinski decision, rather than staking out a reliable marker as to employee rights in the circuit states of Pennsylvania, New Jersey and Delaware, really is simply a reflection of what happens when plaintiffs’ lawyers fail to make an important legal argument.

As a result, we do not recommend that employers or employees make any decisions or changes in their employment agreements based on Opalinski.  Instead, make like Diana Ross and wait for the Supremes to chime in.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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Uncategorized

Two-thirds of Federal Contractors Violate Wage-Hour Laws

Senator Elizabeth Warren (D-Mass.) recently released a federal report showing that 66 of the federal government’s 100 largest contractors have been caught breaking federal wage and hour laws.

This data is not inconsistent with our practice experience, in which a properly focused audit can find a wage and hour violation at almost any workplace.

Don’t get caught with your overtime flank exposed.  Conduct an internal audit of your company’s workplace payroll practices before a federal or state labor audit does something far more painful.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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Uncategorized

The $51.6 Million Verdict – Putting the Fear of God in Age Discrimination

If you are having a hard time getting decision-makers to focus on a single-plaintiff employment case, you might want to make copies of the verdict sheet in Braden v. Lockheed Martin Corp., decided earlier this year in federal court in Camden, N.J.

In that age discrimination lawsuit, involving a reduction in force that impacted Robert Braden, five of 110 employees with his title were terminated, and all of them were over 50. Braden, 66, had worked at Lockheed since 1995 and was not given any reason for his selection.

The jury awarded him $520,000 in lost earnings, $520,000 in emotional distress, $520,000 in liquidated damages under the Age Discrimination in Employment Act, and – hold your hat — $50,000,000 in punitive damages, after four days of trial and four hours of deliberation.  Guess who’s going to Disneyland?

Yes, the decision is under appeal, but that is no reason not to use it to get everyone’s attention – this is serious business, and potentially very expensive.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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Age Discrimination in Employment Act

‘Apprentisaurus’ Age Claim Is Now Extinct

A court decision out of Illinois involved a slew of age-discriminatory comments from co-workers.

Several co-workers called Jeffrey Kawczynski the “apprentisaurus” and one wrote the epithet on his work helmet, Kawczynski said.  Others referred to him as “old man” and “old Jeff,” and even used crude, demeaning comments like “dog nuts” and “pig pen.” And one supervisor asked him his age.

Kawczynski claimed to be tortured to the point of depression by this treatment, and stopped work as a result.  But the comments were not enough for him to survive summary judgment on his age discrimination and hostile work environment claim against F.E. Moran, Inc., his employer.

Why not?  Let us be good students and count the ways, which help explain why every unpleasant work experience does not rise to the level of a viable lawsuit.

First, most of the comments were by co-workers and not supervisors, and stopped years before his employment ended.

Second, he never reported the comments to his union representatives or company human resources, and admits that the comments did not affect his work and eventually stopped.

Third, the supervisor who asked about his age was not a decision-maker at the time his termination ended.

Fourth, Kawczynski admittedly chose not to return to work in 2013 – he was not fired, even if he anticipated termination coming at some point in the future.  As such, he did not suffer an adverse employment action.

Fifth, and finally, many of the hostile comments did not suggest animus against him based on age – “pig pen” and “dog nuts” certainly are not desirable nicknames, but they also are not ageist.

So . . . before panicking about the next claim of outrageous language at work, think about the lessons from “Apprentisaurus,” break down the details alleged, and don’t go “dog nuts.”

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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ADA, Americans with Disabilities Act, LBGT Employees

Yes, Kate Lynn, Gender Dysphoria Can Be a Disability

The popular press has touted as “unprecedented” a decision in May by a federal judge in Pennsylvania that a transgender employee could move forward with her suit for discrimination under the Americans with Disabilities Act (ADA).

But the reality of Blatt v. Cabela’s Retail, Inc., is not quite as novel as the press would suggest.  Rather than recognize being transgendered as a disability per se, the court simply acknowledged that Kate Lynn Blatt’s claim of “Gender Dysphoria, also known as Gender Identity Disorder,” which caused her severe physical and psychological distress, could qualify as a disability under the ADA.

Judge Joseph F. Leeson, Jr. rendered the decision carefully, to avoid ruling on Blatt’s constitutional challenge to the statutory language of the ADA, which expressly excludes from the definition of covered disabilities “homosexuality and bisexuality,” “gender identity disorders not resulting from physical impairments,” and “sexual behavior disorders,” among other conditions.

Rather than determine whether such exclusions deny equal protection to individuals because of their sex, in violation of the Constitution and following the Supreme Court’s gay-marriage decision in Obergefell v. Hodges (2015), Judge Leeson focused on the specific allegations in the complaint.  He noted that Blatt did not merely allege that she was disabled because she has gender dysphoria.  Instead, she specifically pled how the condition caused her clinically significant stress and other impairments that substantially limited her major life activities, including “interacting with others, reproducing and social and occupational functioning.”

The exclusions of the ADA are to be construed narrowly, Judge Leeson ruled, while conversely, the coverage of the ADA “must be broadly construed” to effect its purpose of “eliminate[ing] discrimination against the disabled in all facets of society.”  As such, her claim of a disability of gender identity disorder was allowed to proceed, despite the statute’s express exclusion of “gender identity disorders.”

No doubt that this is a victory for the transgendered community, because some claims of gender identity disorder may now proceed, despite the exclusion.  But at its heart, the ruling simply reaffirms an ADA basic: an employee claiming disability discrimination must identify how he or she is substantially limited in a major life activity.  Merely putting a label on the condition – such as “gender dysphoria” or “diabetic” — will not be dispositive for or against the claim.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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Disability Discrimination Claims, Discrimination, Discrimination in the Workplace

Can You ‘Lead the Company from a Wheelchair?’ 

How would you cope personally, if you were suddenly injured and lost the use of your legs?  How would your company cope as a business, if a top executive suffered a debilitating accident, putting her out on disability leave for months and permanently restricting her to a wheelchair?

For United Process Controls (UPC), a furnace equipment manufacturer with plants in Ohio, Wisconsin and China, the situation became more than hypothetical in September of 2015, when Vice President of Operations Eric Boltz suffered a bicycling accident that left him a paraplegic. His physician certified him “currently unable to work at all,” but opined that he could return to office/management work in four-to-six months.

UPC initially provided Boltz with a paid leave of absence and disability benefits, but just seven weeks after the injury UPC President Paul Oleszkiewicz met with Boltz at his home and admittedly asked him “how he could lead the company from a wheelchair.”  The President – apparently unrestrained by any legal or human resources advice — further admitted saying to Boltz that he thought it would be “difficult” for him to return because “a leader has to do sales and be the face of the company.”  Boltz responded that his leadership “came from his brain, not from legs,” and that he could do the job from home and then eventually return to the office.

A series of rather unfriendly communications followed, including UPC terminating Boltz’s wife (a company vice president), and UPC refusing to allow Boltz to work from home, rejecting a November 24 partial release from Boltz’s doctor. The President – often an employer’s worst witness in employment cases – wrote Boltz that “the Company [did] not believe it [was] appropriate, or healthy” for Boltz to try to return to work, and later insisted that he must be released to work “in the office” and “full-time” in order to resume his duties.

Boltz resigned December 30, 2015, claiming he would have faced a “toxic environment” if he tried to return to work, and that due to his “life-changing injury . . . I do not believe my physical and mental health could withstand working under these conditions.”  He claimed to be constructively discharged, and filed suit for disability discrimination and retaliation.

In denying UPC’s motion for summary judgment on Boltz’s claims, a federal judge in Ohio rejected the company’s contention that it had established regular, in-office attendance as an essential function of the job. She noted that Boltz frequently worked from home before the injury, and that federal regulations specifically identify part-time or modified work schedules as potential reasonable accommodations.  As for Boltz’s constructive discharge claim, the court noted that where “the handwriting was on the wall and the axe was about to fall,” an employee who resigns before being fired can claim a constructive discharge.  She also found “most troubling” the President’s questioning of Boltz about whether he could lead from his wheelchair.

So what have we learned?

Rule 1:  Do not allow C-suite executives to have return-to-work communications with disabled colleagues without legal or human resources guidance. What may have seemed “common sense” to the powerful President (asking how Boltz could lead from his wheelchair) turned out to be the “most troubling” evidence of unlawful discrimination.

Rule 2:  The duty to accommodate disabled employees extends to high-level executives.  Although it may seem an undue hardship to permit such an executive to be out on disability leave for months, the law views such temporary leaves and part-time schedules as reasonable accommodations.  Therefore, an individualized analysis is required.

Rule 3:  On-site attendance is not a per se requirement of every job, even at the executive level.  Before the injury, Boltz often worked from home.  His job description did not expressly require in-office attendance.  And he put on evidence that his job mostly entailed managing operations and people remotely by phone and email.  If a company believes on-site attendance is essential, it needs to put that in the job description, be able to justify the requirement if challenged, and not allow the employee to frequently work from home when healthy. But beware that recent court decisions are holding employers to a higher standard in justifying the need to work from the office, as technological advances have increased mobile productivity.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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Uncategorized

Caught on Camera – Zippers, Buttons and an Invasion of Restroom Privacy

While the Update rarely has the opportunity to stoop to the level of bathroom humor, a New Jersey case is flush with facts that beg for a good airing out.

The Kushner Companies hired High Tech Installations to put surveillance cameras in two women’s rooms and two men’s rooms in their building in Fair Lawn, N.J., to deter vandalism.  Later, when employees found out that they were being secretly recorded (monitors were set up in a closet), 36 of them raised a stink – suing for invasion of privacy.

Company management claimed the cameras did not violate employee privacy because they filmed “common areas” in the bathrooms, and not employees inside the toilet stalls.  The employees countered that the captured images showed them zipping zippers, buttoning up, and adjusting garments as they emerged from toilet stalls.

Apparently the New Jersey Superior Court (Appellate Division) agreed that the company had been caught with its pants down. The court reversed an earlier dismissal, and the parties subsequently settled for $1,000,000. We understand that the paperwork is finished on this case.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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Union

Union Whacked with $5.3 Million Verdict for Campaign Lies


Unions have certain free speech rights, just like workers and management.  But a case decided this month is a startling lesson that the limits of such free speech include false and malicious allegations designed to harm the targeted employer.

A Texas jury walloped the Service Employees International Union (SEIU) with a $5.3 million verdict for spreading false and harmful statements about the company, after the business refused to recognize the union without a secret ballot election.  Lawyers for the company said the SEIU used “an intimidating campaign of extortion to try to run the janitorial service out of business,” and targeted the company’s clients with “faked tales of labor complaints,” costing the company millions of dollars in business.  The law recognizes that type of conduct as defamation and tortious interference with contract.  And when that happens, the speaker may be liable for the damages caused.  We assume the SEIU will appeal the ruling.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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Race Discrimination Cases, Uncategorized

Race Discrimination Against Corporations

Can a company have a racial identity and be the victim of race discrimination under the law? If so, will jurors protect a company from race discrimination in contracting, just as they would protect an employee from such prejudice at work?

Yes, yes, and yes, according to recent decisions in the federal district court in Philadelphia, where our client – a small, privately held business — prevailed on a race discrimination in contracting claim earlier this summer.  Under Section 1981, the first part of the Civil Rights Act of 1866, all “persons” have an equal right “to make and enforce contracts” without regard to race.  Courts across the nation, including the Eastern District of Pennsylvania, have ruled that this right protects corporations (Mitt Romney was right, “corporations are people”) from race discrimination in contracting, if they have a racial identity and were denied contract rights “because of race.”

In our case, Security and Data Technologies, Inc. v. The School District of Philadelphia, et al., a jury found that our client had indeed been denied a $7.5 million contract because of its racial identity, and awarded $2.34 million in lost profits damages.  The case was reported here.

The decision reminds us that race discrimination is not just something that we have to be concerned about in the employment context – it is also illegal in business deals with private and public entities.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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