Adjunct Law Prof Blog

Love Contracts

Office Romance is an interesting June 6, 2008 New York Law Journal article which caught my eye because we just covered this topic in my employment law class this summer at New York Law School. It is about efforts by some employers to have dating employees sign "love contracts." What these contracts really are is an acknowledgement of the relationship and of company policy.

In my view, this is largely a gimmick. Every Feb. 14, 2008 some newspaper runs an article about this. Such contracts serve the same function as an employee manuel or employee policies so long as the employee in fact is given notice of the policies.

Though these love contracts are largely untested, the goal of the employer is use them as a Faragher affirmative defense. As you will recall, in sexual harassment cases, an employer can avoid liablity if it has a sexual harassment policy where the victim can complain and the victim unreasonably refused to follow (ie use) this policy.   

This article does provide some interesting statistics. Some 59% of employees admit to having an office romance. That is huge and certainly raises public policy questions.

Mitchell H. Rubinstein

USERRA Applies To Claims of Harassment

An Alabama district court held that a National Guard member fired from his job lant has no unlawful termination claim under the Uniformed Services Employment and Reemployment Rights Act (USERRA), but that he may pursue a claim for harassment based on his military status. The case is Dees v. Hyundai Motor Mfg. Ala. LLC, (M.D. Ala. May 21, 2008)(registration required).

In partially denying summary judgment to Hyundai Motor Manufacturing, the court stated that USERRA's provision that a military service member not be denied "any benefit of employment" because of his service is broad enough to include a harassment claim. Citing cases from other courts, the court held that USERRA prohibits a hostile work environment based on military service, as analogous acts of sexual or racial harassment are prohibited by Title VII of the 1964 Civil Rights Act. The court focused on the fact that "USERRA is intended to be construed broadly for the benefit of returning veterans," and that the court's holding "is consistent with the purpose of USERRA--namely, to encourage individuals to join the military by assuring them that their jobs are not at risk. An assurance that employees cannot be fired on account of their military service is meaningless without assurance that the work environment will not be so intolerable that they will feel forced to quit."

Mitchell H. Rubinstein

9th Issues Major Decision Finding Privacy Right In Employee E-Mail

  Stop Your Snooping! Court Limits Employers’ Ability to Search Email is an important June 19, 2008 Wall Street Law Journal Blog story about Quon v. Arch Wireless, ___F.3d___(9th Cir. June 18, 2008). The court held that the 4th Amendment protected certain electronic messages. In finding a reasonable expectation of privacy, the court reasoned in part:

We do not endorse a monolithic view of text message
users’ reasonable expectation of privacy, as this is necessarily
a context-sensitive inquiry. Absent an agreement to the contrary,
Trujillo, Florio, and Jerilyn Quon had no reasonable
expectation that Jeff Quon would maintain the private nature
of their text messages, or vice versa. See United States v.
Maxwell, 45 M.J. 406, 418 (C.A.A.F. 1996) (“[T]he maker of
a telephone call has a reasonable expectation that police officials
will not intercept and listen to the conversation; however,
the conversation itself is held with the risk that one of
the participants may reveal what is said to others.” (citing
Hoffa v. United States, 385 U.S. 293, 302 (1966))). Had Jeff
Quon voluntarily permitted the Department to review his text
messages, the remaining Appellants would have no claims.
Nevertheless, the OPD surreptitiously reviewed messages that
all parties reasonably believed were free from third-party
review. As a matter of law, Trujillo, Florio, and Jerilyn Quon
had a reasonable expectation that the Department would not
review their messages absent consent from either a sender or
recipient of the text messages.

This is a major decision-particularly when one considers the importance of e-mail and text messaging today. The decision is lengthly and well researched. I am sure that this is going to spark much academic debate about privacy rights and e-mail.

Mitchell H. Rubinstein

Hat Tip:

Sachin Raval
Class of 2010
New York Law School
Zicklin School of Business at Baruch College 

Employee Who Resigned To Avoid Being Fired Is Not Eligible For Unemployment

Matter of Riley v Commissioner of Labor, ___A.D. 2d___,2008 NY Slip Op 04588,(3rd Dep't. May 22, 2008) is an important unemployment insurance case.

The Unemployment Insurance Appeal Board rejected Kristine E. Riley’s application for unemployment insurance benefits after finding that she was disqualified from receiving unemployment insurance benefits because her employment was terminated due to misconduct.

Riley worked as a typist for a school district for approximately one year when she agreed to “a stipulation of resignation” rather than face disciplinary charges.

Rejecting Riley’s challenge to the disapproval of her claim, the Appellate Division initially noted that a claimant who resigns in lieu of facing disciplinary charges may nonetheless qualify for unemployment insurance benefits as long as his or her actions did not amount to misconduct.

In this instance, however, the court found that the record establishes that underlying Riley resignation in lieu of facing disciplinary action was an episode in which she exhibited argumentative or disruptive behavior. Such behavior, said the court, may constitute misconduct, especially where, as here, the employee previously had been warned about similar behavior.

Accordingly, the Appellate Division found that substantial evidence supports the Board's finding that Riley engaged in disqualifying misconduct.

As to the question of an employer offering an employee the opportunity to resign rather than be served with disciplinary charges, such an action does constitute coercion. As the Court of Appeals ruled in Rychlick v Coughlin, 63 NY2d 643, court pointed out that threatening to do what the appointing authority had a right to do -- file disciplinary charges -- did not constitute coercion so as to make the resignation involuntary.

Source: Initially published on the Internet in New York Public Personnel Law. Reproduced with permission. Copyright© 2006, 2007, 2008, Public Employment Law Press.

Executives Are Employees Under NYS Labor Law and Employer's Cannot Make Unauthorized Deductions

State labor law is often an overlook body of employment law as Pachter v. Bernard Hodes Group, ___N.Y. 3d___(June 10, 2008), a NYS Court of Appeals decision, demonstrates. This case involves two certified questions from the 2d Circuit. After a Vice-President, who elected to be paid via sales commissions left his employ, a dispute arose as to whether certain deductions could be made from his pay check. Section 193 of the New York Labor Law prohibits unauthorized deductions. What made the decision difficult was that there was a question whether "executives" were within the definition of employee. The court holds that they are. As the Court stated:

Hodes argues that, despite the broad definition of "employee" in subdivision (2) of Labor Law § 190, the term is modified by the language in subdivisions (5), (6) and (7) that excludes individuals employed in executive capacities. We disagree. It is evident from the text and structure of article 6 of the Labor Law that executives are employees within the meaning of Labor Law § 190 (2). Although executives are removed from the definitions of certain subcategories of employees in Labor Law § 190 (5), (6) and (7), those provisions are not intended to limit the scope of who qualifies as an "employee" under subdivision (2). Rather, their purpose is to eliminate executives from particular requirements in article 6, such as the frequency of wage payments to manual workers, railroad workers, commission salespersons and clerical or other workers (see Labor Law § 191).

The second issue concerned when a commission was earned and became a wage. The court held that in the absence of a written instrument, a commission becomes a wage as determined by the parties express or implied agreement, or if no agreement exists by the default common law rule that ties the earning of a commission to the employees production of a ready, willing and able purchaser.

Mitchell H. Rubinstein

President Bush Issues Executive Order Requiring That Contractors Check The Legal Status of Their Employees

Bush orders contractors to check legal status of employees is a June 9, 2008 Associated Press news article. The article reports that President Bush signed an Executive Order requiring federal contractors to check the legal status of their employees. As the article states:

The order is aimed at cracking down on hiring of illegal immigrants. But people who overstayed visas or came to the country legally but do not have permission to work, such as some students or those awaiting work permits, also could be snagged with the system.

"It is the policy of the executive branch to enforce fully the immigration laws of the United States, including the detection and removal of illegal aliens and the imposition of legal sanctions against employers that hire illegal aliens," in the executive order says.

The order comes as a worker verification bill has essentially stalled in Congress. A Democratic immigration enforcement bill would require employers to check the citizenship and legal status of all their employees.

A copy of President Bush's Executive Order (No. 12989) is available here.

Mitchell H. Rubinstein

Rare Employee Privacy Victory, In New York No Less. Court Holds Search of Computer Suppressed

People v. Wilkinson, ___Misc. 3d___, 2008 NY Slip Op 28192 (Onondaga Co. Ct. May 22, 2008), is an unusal, but important case concerning an employee's right to privacy. It part of a rare breed of cases holding that an employee has a privacy interest in the contents of his assigned work computer.

This was actually a criminal case. The defendants were police officers and the search concerned alleged false time sheets. They were charged with crimes involving the defrauding of government because of these alleged false time sheets. Significantly, the police department  permitted its employees to use their computers for personal matters and therefore, they had a privacy interest in their assigned computers. As the court reasoned:

What makes Angevine and Slanina distinguishable from the instant case is that neither the University nor the City had a policy which gave the employees any specific expectation of privacy. To the contrary, the University specifically informed its employees that their use of the computers was monitored, that the contents of the computer were the property of the University, and that employees were forbidden from [*6]accessing obscene material defined under state or federal law. Similarly, Slanaina's employer had a specific prohibition against its employees accessing pornography.

A defendant seeking suppression of evidence has the burden of establishing standing by demonstrating a legitimate expectation of privacyin the premises or object searched .People v Ramirez-Portoreal, 88 NY2d 99, citing People v Wesley, 73 NY2d 351. This privacy evaluation has two components, "a subjective component-did defendant exhibit an expectation of privacy in the place or item searched" and an "objective [component]-does society generally recognize defendant's expectation of privacy as reasonable". People v O'Brien, 2 AD3d 1222, citing Portoreal.

In the case at bar, the North Syracuse police department had a written policy which permitted, if not encouraged, employees to utilize the computers for "personal needs at minimal or no cost to the taxpayer."

Likewise, the nature and the character of the evidence seized from the computers in Angelvine and Slanaina, i.e. child pornography, could not have led either defendant to reasonably believe that such material was permissibly downloaded and possessed under any circumstances. In the present case Defendant Casey had a spreadsheet on his computer, the nature and origin of which was unclear, and unlike child pornography, was not inherently incriminating, While the discovery of this spreadsheet led to the application for a search warrant to a member of this Court, there is little question that the decision to seek and obtain the warrant was the product of the warrantless search of Casey's computer, which the Court is unable to find was consensual.

Moreover, even if one could argue that the discovery of the spreadsheet provided sufficient probable cause to seize and search the Casey computer, nothing of a similar nature existed to justify the search and seizure of the Wilkerson computer.

In the Court's view both Defendants have demonstrated a legitimate and reasonable expectation of privacyin in the computers searched. The Court further finds that the searches were conducted without consent and that the seizures of the computers resulted solely from the warrantless search of the Casey computer prior to the issuance of a search warrant.

Accordingly, the Defendants motion to suppress the fruits of the searches is GRANTED.

Mitchell H. Rubinstein

Breaking News 5th Issues Major Decision Concerning Employer Liability For Misleading Employment References!!

  Kadlec Medical Center v. Lakeview Anesthesia Assoc., ___F.3d___(5th Cir. May 30, 2008), is a major 5th Circuit decision, applying Louisiana law, concerning employer liability for misleading references.

A physician anesthesiologist was dismissed from his position because he reported for work in an impaired condition due to the use of drugs. About 2 months after he was terminated, his former supervisor wrote a positive reference letter to "Staff Care" (the decision describes Staff Care as a staffing firm) referring to this doctor as an "excellent clinician" and "an asset to any anesthesia service." That letter was intended for future employers. Additionally, the doctor's former hospital where he had staff privileges wrote a neutral letter to the doctor's perspective new employer confirming dates of employment.

This doctor then gets a job as an anesthesiologist and almost kills a patient who wound up in a permanent vegetative state because he failed to resuscitate her. The doctor admitted to using Demerol and checked himself into a drug rehabilitation program.

The doctor's new employer settled the malpractice claim for millions and sued both his prior employer and his prior hospital because of the references they gave. The 5th Circuit held that a cause of action for intentional and negligent misrepresentation was stated against the doctor's former employer, but not his former hospital, stating:

The defendants owed a duty to Kadlec to avoid affirmative
misrepresentations in the referral letters. In Louisiana, “[a]lthough a party
may keep absolute silence and violate no rule of law or equity, . . . if he
volunteers to speak and to convey information which may influence the conduct
of the other party, he is bound to [disclose] the whole truth.”7 In negligent
misrepresentation cases, Louisiana courts have held that even when there is no
initial duty to disclose information, “once [a party] volunteer[s] information, it
assume[s] a duty to insure that the information volunteered [is] correct.”8
Consistent with these cases, the defendants had a legal duty not to make
affirmative misrepresentations in their referral letters. A party does not incur
liability every time it casually makes an incorrect statement. But if an employer
makes a misleading statement in a referral letter about the performance of its
former employee, the former employer may be liable for its statements if the
facts and circumstances warrant. Here, defendants were recommending an
anesthesiologist, who held the lives of patients in his hands every day. Policy
considerations dictate that the defendants had a duty to avoid
misrepresentations in their referral letters if they misled plaintiffs into thinking
that Dr. Berry was an “excellent” anesthesiologist, when they had information
9 Sunset Realty, 23 So. 2d at 455–56.
that he was a drug addict. Indeed, if defendants’ statements created a
misapprehension about Dr. Berry’s suitability to work as an anesthesiologist,
then by “volunteer[ing] to speak and to convey information which . . .
influence[d] the conduct of [Kadlec], [they were] bound to [disclose] the whole
truth.”9 In other words, if they created a misapprehension about Dr. Berry due
to their own statements, they incurred a duty to disclose information about his
drug use and for-cause firing to complete the whole picture.
We now review whether there is evidence that the defendants’ letters were
misleading. We start with the LAA defendants. The letter from Dr. Preau
stated that Dr. Berry was an “excellent anesthesiologist” and that he
“recommend[ed] him highly.” Dr. Dennis’s letter said that Dr. Berry was “an
excellent physician” who “he is sure will be an asset to [his future employer’s]
anesthesia service.” These letters are false on their face and materially
misleading. Notably, these letters came only sixty-eight days after Drs. Dennis
and Preau, on behalf of LAA, signed a letter terminating Dr. Berry for using
narcotics while on-duty and stating that Dr. Berry’s behavior put “patients at
significant risk.” Furthermore, because of the misleading statements in the
letters, Dr. Dennis and Dr. Preau incurred a duty to cure these misleading
statements by disclosing to Kadlec that Dr. Berry had been fired for on-the-job
drug use.
The question as to whether Lakeview Medical’s letter was misleading is
more difficult. The letter does not comment on Dr. Berry’s proficiency as an
anesthesiologist, and it does not recommend him to Kadlec. Kadlec says that the
letter is misleading because Lakeview Medical stated that it could not reply to
Kadlec’s detailed inquiry in full “[d]ue to the large volume of inquiries received.”
But whatever the real reason that Lakeview Medical did not respond in full to
Kadlec’s inquiry, Kadlec did not present evidence that this could have
affirmatively misled it into thinking that Dr. Berry had an uncheckered history
at Lakeview Medical.
Kadlec also says that the letter was misleading because it erroneously
reported that Dr. Berry was on Lakeview Medical’s active medical staff until
September 4, 2001. Kadlec presented testimony that had it known that Dr.
Berry never returned to Lakeview Medical after March 13, 2001, it would have
been suspicious about the apparently large gap in his employment. While it is
true that Dr. Berry did not return to Lakeview Medical after March 13, this did
not terminate his privileges at the hospital, or mean that he was not on “active
medical staff.” In fact, it appears that Dr. Berry submitted a formal resignation
letter on October 1, 2001, weeks after September 4. Therefore, while the
September 4 date does not accurately reflect when Dr. Berry was no longer on
Lakeview Medical’s active medical staff, it did not mislead Kadlec into thinking
that he had less of a gap in employment than he actually had.
In sum, we hold that the letters from the LAA defendants were
affirmatively misleading, but the letter from Lakeview Medical was not.
Therefore, Lakeview Medical cannot be held liable based on its alleged
affirmative misrepresentations. It can only be liable if it had an affirmative duty
to disclose information about Dr. Berry.

The court also held that the doctor's employer and former hospital did NOT have a "duty" to disclose, reasoning:

The Louisiana court in Louviere recognized that no court in Louisiana has
imposed on an employer a duty to disclose information about a former employee
to a future employer. Furthermore, we have not found a single case outside of
Louisiana where a court imposed an affirmative duty on an employer to disclose
negative information about a former employee. Some courts have held that
employers have a legal duty to disclose negative information about former
employees who later cause foreseeable physical harm in their new jobs, at least
when there are misleading statements made by the former employer.23 But each
of these cases based its conclusion on the fact that the former employer had
made affirmative misrepresentations in its referral, and none imposed a duty
based on the employer’s mere nondisclosure. These cases reinforce our
conclusion that the defendants had a duty to avoid misleading statements in
their referral letters, but they do not support plaintiffs’ duty to disclose theory.
In fact, one court explicitly held that a hospital did not have an affirmative duty
to disclose a nurse’s past sexual misconduct toward patients when asked for an
evaluation by a prospective employer, but that “[the defendant did] not challenge
the proposition that, in undertaking to provide . . . a reference, and in
volunteering information about [the employee’s] qualities as a nurse, it incurred
a duty to use reasonable care to avoid disclosing factually misleading
information.

This is a lengthly decision (24 pages) which is extremely well written and full of cites. Given the facts of this case are extreme, but extreme cases often result in important decisions. Look for this case to be cited in every Employment Law text and for courts around the country to follow it.

Mitchell H. Rubinstein

The Risk of Using Independent Contractors

The Risk of Using Independent Contractors is an interesting May 15, 2008 New York Law Journal article which discusses the risks in classifying individuals as independent contractors verses employees. As this article point out, misclassification can raise employment law as well as tax law issues. Recently, both New York and New Jersey have taken steps to address worker misclassification. Senator Obama has also introduced legislation on the federal level to address this problem As the article states:

[M]any states, including New York, embarked on their own independent worker misclassification initiatives in 2007. Former Governor Eliot Spitzer signed an Executive Order in September 2007 establishing the Joint Enforcement Task Force on Employee Misclassification. Members of the task force include the heads of the New York state departments of Labor, Taxation and Workers' Compensation as well as the New York Attorney General. The departments have been charged with sharing information among themselves about employers suspected of improperly classifying employees as independent contractors, increasing awareness of the harms inflicted by illegal worker misclassifications, creating hotlines for the public (which can be used by competitors) and referring cases to prosecuting authorities as appropriate.

The task force issued its first report on Feb. 1, 2008, and called for far-reaching proposals including legislation that would extend individual liability for worker misclassifications to corporate officers, shareholders, members of LLCs and LLPs, and corporate successors and affiliated entities.

Legislative Initiatives

In 2007, the New Jersey State Legislature passed, and Governor Jon S. Corzine signed into law, the Construction Industry Independent Contractor Act. This law is the most aggressive law in the country governing hiring practices involving the use of independent contractors. It is based on a belief by New Jersey legislators that employers in the construction industry commonly engage in unchecked misclassifications of employees as independent contractors.

Two bills have been introduced in New York that are similar to the independent contractor legislation in New Jersey: New York Assembly Bill A06643 and its companion New York Senate bill S04925.

At the federal level, Senator Barack Obama (D-Ill.) has introduced S.2044, the Independent Contractor Proper Classification Act. If enacted, this legislation would limit the availability of the "safe harbor" provisions in the Revenue Act of 1978,¹ permit workers to petition the IRS for a determination of their status as an independent contractor or employee, and mandate that employers post notices to employees and independent contractors informing them of their right to challenge their classification as an independent contractor. The legislation is being considered by the Senate Finance Committee.

Mitchell H. Rubinstein

66 Law School Professors Opposed Restatement of Employment Law

By my count, 66 law professors who teach in the area of labor and employment law have wrote a letter opposing the adoption of the Restatement of Employment Law. The reporters of the Restatement are Professors Mike Harper (Boston Univ Law School) and Professor Samuel Estreicher (NYU Law School). Workplace Prof Blog has additional details and links about the agenda of the meeting as well as a summary of what transpired, available here.

Professor McCormick describes the controversary as follows:

Now for the controversy. As Paul mentioned in his post, Matthew Finkin sent a petition to the ALI, asking it to table the entire project until the reporters consult with the Labor Law Trust Group, a group of prominent academics whose scholarship focuses on labor and employment law. That petition was discussed after extensive discussion of the substance of the first two chapters, because that discussion illuminated many of the points of contention.

Some of the concern about the draft focused on the definition of employee. Dennis Nolan (SC), for example, submitted written comments, concerned that the current definitions do not acknowledge the extent of employee dependence on employers. Lea VanderVelde (Iowa) agreed and also referred to Marc Linder's (Iowa) book, which is cited in the reporters' notes in the draft and a concurrence by Frank Easterbrook on the 7th Circuit, both of which argued that to say that a person who performs services and gets paid is either an employee or an independent contractor ignores reality, and that there is really a third category of "dependent contractor." The reporters disagreed that this was an accurate statement of the current state of the law, and also said that the language in the black letter and the commentary was an attempt to really get at the dependence issue as the test for when a person is an employee.

The other large point of contention was with the statement of the at-will rule. Opponents had two main arguments: 1. this isn't actually the default rule in most jurisdictions and to say it is will prevent the courts from acknowledging the evolution of the law in those jurisdictions while also preventing evolution in others; and 2. the current draft does not acknowledge the weight of critique, primarily by academics, of the rule. The response to these critiques was first a disagreement that at-will was not really the default rule in most jurisdictions because nearly every jurisdictions' courts say that it is. Only Montana, by statute, lacks the rule. Additionally, the reporters argued, the rule is simply a default -- that this proposed restatement is actually quite generous in the exceptions that it recognizes, which will promote evolution.

This project has been going on for a number of years and it has always been controversial. Ultimately, the dissenters prevailed as the Restatement was sent back to the reporters for further clarification and comment.

It is my hope that eventually the American Law Institute will adopt a Restatement which is so badly needed in employment law.

Mitchell H. Rubinstein

7th Holds Veterans Are Not Required To Pay Filing Fees Under USERA

The Uniform Services Employment and Reemployment Rights Act (USERRA) prohibits discrimination againist  persons because of their service in the military. It is construed liberally in favor of the veteran plaintiff. Davis v. Advocate Health Center, ___F.3d___(7th Cir. April 28, 2008), reviews these principles and holds that veterans are not even required to pay court filing fees in order to initiate a lawsuit.

I bring this case to your attention because this was a relatively novel issue and because it demonstrates how liberally this statute is interpreted.

Mitchell H. Rubinstein

Federal District Court Enjoins Enforcement of FLSA Release

Allen v. SunBank Trust, __F. Supp. 2d ___, 2008 WL 1925082 (N.D. Ga. April 30, 2008)(registration required), is an important case. The court issued a TRO enjoining the enforcement of a FLSA release given in exchange of employees receiving severance benefits. What makes this case important is that there is a significant amount of wage and hour litigation occurring these days.

The case was an FLSA "collective action" involving 21 employees who signed the release. The underlying suit was over the denial of overtime pay. The court did, however, indicate that the release may have been valid if approved by the Department of Labor.

This is an important case to watch.

Mitchell H. Rubinstein   

Burger King Employee Blogger Fired For Blog Posting

The Associated Press wrote an important employment law article dated May 14, 2008 entitled  Burger King Employees Fired Following Controversy Over Blog Posts.

A secretary secretly posted information on a blog where she reportedly slammed a farm workers advocacy group. Additionally, the president of a firm that Burger King did business with attempted to infiltrate this group. The secretary was fired and     Burger King stopped doing business with the firm in question. The article describes what happened as follows:

Following an investigation, Burger King Corporation has terminated two employees who participated in unauthorized activity on public Web sites which did not reflect the company's views and which were in violation of company policy," the company said in a statement.

The company owned by Burger King Holdings Inc. said Tuesday it hopes to meet with the Coalition of Immokalee Workers soon to find ways to ensure decent wages and working conditions for the region's harvesters.

Coalition co-founder Lucas Benitez said in a statement the group welcomed Burger King's actions but said more needed to be done "to clear the path toward a sincere partnership for more humane conditions in Burger King's tomato supply chain."

I bring this to your attention because it illustrates limitated rights many employees have who are employed at will, as presumably these individuals were. It is not even clear that the President was an employee. Employees who are employed at will can be fired without a hearing so long as their termination does not violate some other law such as Title VII. There is no First Amendment right to speak in the private sector workplace.

Workplace Prof Blog is also covering this story here.

Mitchell H. Rubinstein

[Image is from Google Imgages which picked it up from blogs.menupages.com] 

   

Handwritten 2 Page Document Held To Be A Binding Employment Contract

Jury awards $10.5 million on handwritten contract is an interesting April 21, 2008 Associated Press article. A jury awarded 10.5 million dollars for breach of a 2 page handwritten employment contract which also stated "The parties will complete formal contracts as soon as possible but this is binding." Thus far, the issue of this contract's validity has involved 6 years of litigation. As the article states:

A trial judge barred the contract claim, but West won $1.5 million from a federal jury in 2005 for his six months of work. IDT appealed, and the judge vacated the verdict in 2006.

West appealed, and the 3rd U.S. Circuit Court of Appeals said his contract claims could be considered by a jury, but did not restore the monetary award. The second trial began a month ago.

"This has been more than a six-year battle with two appeals and two trials," Pollack said.

The seven-person jury unanimously found that West proved the two pages constituted a contract, and that West met his obligations, but that IDT breached the contract.

Mitchell H. Rubinstein

The Increasing Importance of The FLSA In Employment Law

The May 27, 2008 New York Law Journal ran a special supplement on three important aspects of employment law; wage and hour law, layoffs and immigration. I write here to discuss an excellent article by Jeff B. Schlossberg and Kimberly M. Malerba entitled The Rise In Wage And Hour Suits: What's At Stake.

This article surveys this important area of the law and highlights the differences between New York law and the Federal FLSA. It serves as a reminder that litigants should remember to think about including pendent state law claims in federal cases. As the authors point out, for example, New York's statute of limitations for over-time claims is double that of the FLSA. Therefore, a prudent litigant would include both a FLSA and a pendent law claim in his complaint.

This article also reviews some basic FLSA law and common mistakes that employers may make such as not counting an employees lunch hour as compensable time if the employee worked through his lunch hour even if the employer did not approve that work.

FLSA claims are one of the "hotest" areas of employment law today.

Mitchell H. Rubinstein    

Employee Who Was Fired For Arguing With His Supervisor Is Not Eligible For Unemployment

As most readers of this blog know, an employee is not generally eligible for unemployment in most states if he was fired for misconduct. What consitutes misconduct is often litigated in unemployment. I bring Matter of Musac v. Commissioner of Labor, ___A.D.2d ___(3rd Dep't. April 24, 2008) to your attention because the court holds that an employee who is fired for arguing with his supervisor engages in disqualifying misconduct AND the employers conduct is of "no moment." As the court stated:

In any event, claimant conceded that he raised his voice to the employer on the day he was fired and characterized their discussion as "an argument." Disruptive, rude or insubordinate behavior has been held to constitute disqualifying misconduct (see Matter of Segarra [Commissioner of Labor], 45 AD3d 1146 [2007]; Matter of Mulea [Commissioner of Labor], 23 AD3d 753, 754 [2005]), particularly where, as here, a claimant has been warned regarding similar behavior in the past (see Matter of Cameron [Commissioner of Labor], 15 AD3d 722 [2005]; Matter of Williams [Sweeney], 240 AD2d 837 [1997]). Contrary to claimant's contention, the fact that the employer may have acted in a [*2]discourteous manner is of no moment (see Matter of De La Concha [Fordham Univ. Commissioner of Labor], 271 AD2d 851, 852 [2000], lv denied 95 NY2d 765 [2000]).

The court decision may be a bit extreme here. In determining whether the employee was involved in an argument, it appears that the employers actions are also relevant. The employers conduct may not excuse the employees misconduct in most cases, but to say that the employer's conduct is of no moment is going to far. I am sure that we can all envision situations where the employer's conduct itself was extreme and therefore, that should be able to factored into the equation whether the employee is disqualified for unemployment.

Mitchell H. Rubinstein   

Union Organizer Is Exempt Employee Under FLSA

Savage v. UNITE HERE, ___F.Supp.2d___(S.D.N.Y. April 17, 2008)(registration required), is an unusual case involving a union being sued as an employer for FLSA overtime violations. The union ultimately won summary judgement because the court held that the union organize was exempt as an "Adminstrative Employee" under the FLSA.  The court described the "Administrative Employee" exemption as follows:

An employee who works in a "bona fide executive, administrative or professional capacity" is exempt from the overtime requirements of the FLSA. 29 U.S.C. §213(a)(1). The FLSA grants the Secretary of Labor "broad authority to 'defin[e] and delimi[t]' the scope of the exemption for executive, administrative, and professional employees," Auer v. Robbins, 519 U.S. 452, 456 (1997), and "the Secretary's regulations have the force of law," Freeman v. National Broadcasting Co., 80 F.3d 78, 82 (2d Cir. 1996). According to the regulations promulgated by the Secretary,² an "employee employed in a bona fide administrative capacity" is defined as an employee who is "(1) [c]ompensated on a salary or fee basis at a rate of not less than $455 per weekÉexclusive of board, lodging or other facilities; (2) [w]hose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and (3) [w]hose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance." 29 C.F.R. §541.200. The parties do not dispute that Plaintiff meets the salary basis requirement. Plaintiff argues, however, that her primary duty was not "office or non-manual work," that the work she performed was not "directly related" to management or general business operations and that she did not exercise discretion and independent judgment as to matters of significance.

In a detailed opinion, the court examined these factors and concluded that plaintiff fell within this exemption.

Mitchell H. Rubinstein

7th Upholds UPS No Fraternization Policy

In Ellis v. UPS, ___F.3d___(7th Cir. April 29, 2009), the 7th Circuit upheld UPS no fraternization policy against an attack under Title VII.   

A black former manager was terminated for violating the  company's nonfraternization policy because he dated and subsequently married a white hourly employee.  In affirming the lower court's granting of summary judgement, the circuit states that plaintiff's failure to produce evidence that manager who fired him treated managers in same-race couples any differently bars his claim of racial discrimination.

The court noted that it is not endorsing the company's policy, which makes it a firing offense for a manager to date an hourly employee, even if the manager is not the worker's supervisor.As the court states: "Although UPS, for the reasons we have stated, comes out on top in this case, love and marriage are the losers," something just doesn't seem quite right about that."

This case demonstrates that employer no-dating and no fraternization policies are generally upheld unless they are some how applied in a discriminatory manner. The decision is well written and researchers and employment lawyers may want to take note.

Mitchell H. Rubinstein 

2d Issues Important FLSA Decision Defining Work

Singh v. City of New York, ___F.3d ___(2d Cir. April 29, 2008), is an important FLSA decision because the court deals with modern day commute to and from work for many city goers like me. The issue in this case was whether travel time counted for FLSA Overtime purposes. Normally, the answer would be an easy one-No. However, what made this case a bit unusual was that the employees were required to take home with them 15-20 pounds of work material so they would have it for the next day. That slowed them up and made their commute a bit more difficult as any NYC subway rider could attest to.

In a nutshell, the court ruled against the plaintiffs because it found that such work was de minimis. As the court stated:

As noted earlier, because such time occurs outside the normal working hours, it is noncompensable under the Portal-to-Portal Act unless carrying inspection materials is an integral and indispensable part of the plaintiffs’ inspecting duties. Because we conclude below that the
additional commuting time in this case is de minimis as a matter of law, we do not resolve this
issue and instead assume without deciding that carrying inspection documents is an integral and
indispensable part of the plaintiffs’ inspecting duties.
The de minimis doctrine permits employers to disregard, for purposes of the FLSA,
otherwise compensable work “[w]hen the matter in issue concerns only a few seconds or minutes
of work beyond the scheduled working hours.” Anderson v. Mt. Clemens Pottery Co., 328 U.S.
680, 692 (1946). “It is only when an employee is required to give up a substantial measure of his
time and effort that compensable working time is involved.” Id. This Court considers three
factors in determining whether otherwise compensable time should be considered de minimis: (1)the practical administrative difficulty of recording additional time; (2) the size of the claim in the aggregate; and (3) whether the claimants performed the work on a regular basis. See N.Y. City Transit Auth., 45 F.3d at 652.
Based on these factors, we conclude that any additional commuting time in this case is de
minimis as a matter of law.

Mitchell H. Rubinstein   

BlackBerry's and Overtime

BlackBerry Clicks Can Up Company Costs is an important April 28, 2008 National Law Journal article. It is about possible wage and hour over-time claims for the use of Blackberry devices. As the article states:

If you're handing out BlackBerrys like candy in the workplace, you better have a policy in place to ward off potential overtime lawsuits.

That's the advice many lawyers are shelling out to employers as the popularity of hand-held devices is booming in the workplace, allowing wired-up employees to work anywhere, anytime.

Management-side attorneys fear a new wave of wage-and-hour litigation is just around the corner, where employees will claim overtime for all the hours they've spent clicking away on their BlackBerrys or other digital communication devices.

While I am sure that someone is eventually going to make such a claim, I have several thoughts about this. First, many employees who use BlackBerry's are going to be exempt from the FLSA as professionals, administrative employees or executives. Second, case law under the FLSA recognizes a de minimus, exception so I do not think this is going to be much of a problem.

In terms of an employment policy, I am not sure how that is going to "protect" employers from such lawsuits-not that employer ever need or deserve to be protected. If in fact, the employee has to do work, the fact that a policy may say only use your Blackberry during 9-5 seems immaterial to me.

Mitchell H. Rubinstein    

ERISA Plan Not Subject To Labor Arbitration

Steelworkers v. Rohm, ___F.3d___(3rd Cir. April 14, 2008) is an important decision. The court holds that a dispute over an ERISA disablity plan is generally not subject to labor arbitration. As the court stated:

While we recognize the strong
policy considerations favoring arbitration of labor disputes,
there is no right to arbitration of ERISA benefits under a CBA
unless the ERISA benefits sought are either: (i) derived directly
from an ERISA plan established and maintained by or
incorporated into a CBA whose grievance procedure contains an
arbitration clause, or (ii) created by a separate ERISA plan and
that plan and/or the CBA provide that adverse benefit
determinations by a plan administrator are subject to the CBA’s
grievance procedure that includes arbitration. Because we hold
that the benefits sought in this case are neither created by or
incorporated into the CBA nor made subject to the CBA’s
grievance procedure, we reverse the District Court’s order
granting summary judgment to the union and those workers
seeking disability benefits and denying summary judgment to
the employer.

This was a lengthy decision that we are likely to hear more about in the future.

Mitchell H. Rubinstein

Attorney Has Absolute Immunity From Defamation Cause of Action Based Upon Letter She Wrote

Lewis v. School District No. 70, ___F.3d___ (7th Cir. April 17, 2008), is an interesting and lengthly FMLA case which contains alot of law. A bookkeeper survived summary judgement because she was able to produce several issues of material fact concerning the employer's retaliatory motive. However, that is not why I bring this case to your attention.

In the course of the litigation, the plaintiff's husband, an attorney,  was given a letter from the school district's lawyer explaining that plaintiff was terminated for poor performance. It was alleged that letter was defamatory.   However, the 7th Circuit held that a lawyer's statements during the course of litigation were "absolutely privileged." It did not matter whether the letter in question was sent to plaintiff's husband as her husband or as her attorney. As the court stated:

In Illinois, a party may be liable for defamation when
he publishes a false and defamatory statement concerning
another, with a level of fault amounting at least
to negligence. Parker v. Bank of Marion, 695 N.E.2d 1370,
1372 (Ill. Ct. App. 1998). However, certain statements,
including statements made by a lawyer during the
course of litigation, are accorded absolute privilege and
therefore cannot give rise to a defamation claim. See
Atkinson v. Affronti, 861 N.E.2d 251, 255 (Ill. Ct. App. 2006)
(“An attorney at law is absolutely privileged to publish
defamatory matter concerning another in communications
preliminary to a proposed judicial proceeding, or in
the institution of, or during the course and as part of, a
judicial proceeding in which he participates as counsel, if
it has some relation to the proceeding.”) (quoting Restatement
(Second) of Torts, § 586 (1977)). This principle
is true regardless of the attorney’s knowledge of the
statement’s falsity. Id. at 256.
On appeal, Ms. Lewis contends that Mr. Jones’ statement
was not privileged because it was made in response to
an e-mail that Mr. Lewis had sent in his capacity as her
husband, not as her attorney. However, Mr. Jones was
entitled to operate under the reasonable belief that
Mr. Lewis was acting as Ms. Lewis’ attorney. The signature
on the e-mail in question stated that the correspondence
was from David E. Lewis at “The Law Office of David
Lewis.” R.26, Ex. A. Mr. Lewis’ e-mail also referenced
the District’s potential non-compliance with the provisions
of the FMLA, which suggested that litigation was at
least being contemplated.
Additionally, even if Mr. Lewis clearly had been acting
as a husband and not as an attorney, Mr. Jones’ statement
still would be privileged under Illinois precedent. In
Atkinson, an attorney sent a letter directly to the plaintiff’s
employer, alleging that the plaintiff had engaged in
wrongful acts and notifying the employer of an intention
to hold it vicariously responsible. 861 N.E.2d at 256.
Although the attorney’s statement was made directly to
the plaintiff’s employer (not to another attorney), and no
civil litigation ever ensued, the court held that the statements
were privileged because they had been made by
an attorney in contemplation of litigation. Id. Mr. Jones’
alleged defamatory statement occurred in a context that
is even more clearly privileged: It was made by an attorney,
in response to a legal inquiry by another attorney,
concerning the subject matter of litigation that ultimately
ensued. Accordingly, we affirm the district court’s grant
of summary judgment in favor of Mr. Jones on Ms. Lewis’
defamation claim.

Mitchell H. Rubinstein

Detroit Tiger Baseball Players Tort Claims Barred By Workers Compensation Statute

Brocail v. Detroit Tigers, Inc. (Tex. App. Hous., 14th Dist. 2008)(registration required) demonstrates the exclusivity of Workers Compensation. A professional baseball players negligence and intentional tort claims against the Tigers. This was because the alleged injury occurred within the scope of the plaintiffs employment.

Mitchell H. Rubinstein

Overtime 101

Overtime 101 is an interesting March 31, 2008 law.com article about many of the misunderstood portions of the FLSA which can get employers in trouble-big trouble. As the article states:

The concept doesn't seem all that complicated -- non-exempt employees who work overtime are paid time and a half for their additional hours.

So what's the big deal?. . .

The big deal is that many employers -- including some of the nation's largest -- are improperly calculating overtime for their non-exempt employees, and it has the potential to cost them millions.

Early last year, for example, Wal-Mart agreed to pay more than $33 million to resolve alleged federal overtime calculation violations involving more than 86,000 employees over a five-year period.

You see, calculating overtime is not as straightforward as it may seem, even for big companies like Wal-Mart.

FLSA causes of action are one of the "hot areas" of employment law today. This article offers a nice primer on basic concepts.

Mitchell H. Rubinstein

Terminated Volunteer Dog Walker Awarded $50, 000 in Emotional Distress Damages

As regular readers of this blog know, I have an interest in the legal status of volunteers. There is a serious gap in the law because volunteers are not covered under our nation's labor and employment laws. Why? Because these statutes generally only apply to employees. I wrote a law review article about this in 2006, Our Nation’s Forgotten Workers: The Unprotected Volunteers, 9 U. Pa. J. Lab. & Emp.  L.  47 ( Fall 2006).

I just became aware of a very interesting and important case which is pending on appeal in the 2d Circuit, Lynch v. Town of Southampton, 492 F. Supp. 2d 197 (E.D.N.Y. 2007).  The plaintiff, a print and television journalist and author, was also a dog lover. She volunteered as a dog walker at the Town of Southampton Animal Control Shelter. While volunteering, she wrote letters criticizing certain conditions and policies and eventually filed suit about the Animal Shelter's euthanasia policies. Shortly after the plaintiff filed an Order To Show Cause in support of an application to enjoin the euthanasia policy, she was directed to leave by uniformed officers.

Plaintiff sued under a 42 U.S.C. Section 1983 and alleged that her rights under the First Amendment were violated. The jury returned a verdict in her favor in the amount of $251,000 which was reduced by Judge Spatt to $50,000. Judge Spatt also awarded counsel fees in the amount of $71, 407.35.

This is the first such case that I am aware of. I reviewed some of the papers below and it was argued brilliantly by Carle Place New York attorney Steven Morelli. This is an important case to watch. Moreover, additional law review commentary is needed on this important subject.

Note, there other important litigation issues involved in this case, including the calculation of attorneys fees and emotional distress damages.

Mitchell H. Rubinstein

Employee Conducting Personal Business While On Duty Is Not Eligible For Workers Compensation

Source: Initially published on the Internet in New York Public Personnel Law. Reproduced with permission. Copyright© 2006, 2007, 2008, Public Employment Law Press. April 1, 2008

Injury incurred on shift conducting personal business not covered by workers’ compensation
Matter of Scott M. Mills v New York State Police, 41 A.D.3d 1083, Appellate Division, Third Department

New York State Trooper Scott M. Mills appealed a ruling by the Workers’ Compensation Board holding that he had not sustained an accidental injury arising out of and in the course of his employment.

Mills, a Trooper assigned to Zone One, was acting as the general contractor in overseeing the building of his new home. The residence was being built on land that was adjacent to Zone One’s geographical area. In the course of his 12-hour shift as a Trooper, Mills stopped by his property to evaluate the progress of the builder constructing his home. While inspecting the progress that was being made, he fell and sustained injuries to his left wrist and left eye.

Although a Workers’ Compensation Law Judge determined that Mills’ injuries were work related, the Workers’ Compensation Board reversed, finding that Mills was involved in a noncompensable personal act at the time that he sustained his injuries.

The Appellate Division affirmed the Board’s ruling.

The basic rule: Injuries that arise out of and in the course of employment are compensable under the Workers’ Compensation Law. In contrast, purely personal activities are considered outside the scope of employment and are not compensable under the Workers’ Compensation Law.

Although testimony from Mill’s supervisor indicated that Mills “was not abrogating his duties by stopping by his property during his shift,” the Appellate Division said that the record, nevertheless, supports the Board’s conclusion that his accident did not arise out of, or in the course of, his employment.

Mills admitted that he had not been dispatched to the specific address where his home was being constructed or even to that particular area but, rather, that he found himself with time to stop by the house prior to taking his lunch break. Thus, said the court, the Board’s determination that he was present at that location for personal reasons unrelated to his employment is supported by substantial evidence.

Mitchell H. Rubinstein

Starbucks Ordered To Pay 100 Million For Tip Pooling

The March 21, 2008, New York Law Journal ran an interesting article entitled  Starbucks Ordered to Pay $100 Million for Tip-Pooling. The article reports that the coffee chain was liable for requiring hourly employees to share tips with supervisors.

It is sometimes easy to forget about state law as it is often not discussed in law school. However, this demonstrates, once again, the importance of state law to modern employment law. There are a whole host of state law employment statutes which require min. wages, regulate tip pooling, limit deductions from pay checks, mandate break time etc.

Mitchell H. Rubinstein

Volunteer Police Officers Do Not Have Any 1st Amendment Right To Collectively Bargain Or Any Due Process Rights

Griffith v. Lanier, ___F.3d___(D.C. Cir. April 4, 2008), is an important employment law case because it demonstrates once again that volunteers are not treated as employees under our nation's employment laws. Plaintiffs brought a First Amendment challenge to volunteer police officers enabling legislation which specifically stated that they did not have the right to engage in collective bargaining. Why? Because the First Amendment does not protect the right to engage in collective bargaining. As the court stated:

This narrower reading of the General Order leaves the
plaintiffs’ First Amendment rights intact (as they themselves
concede, see Griffith Br. 26), for while “the Constitution
guarantees workers the right individually or collectively to
voice their views to their employers, . . . [it] does not afford
such employees the right to compel employers to engage in a
dialogue or even to listen.” Babbitt v. United Farm Workers
Nat’l Union, 442 U.S. 289, 313 (1979) (citations omitted).
Thus the clause survives the plaintiffs’ facial challenge.

The plaintiffs also challenged their at will status under the Due Process Clause. That challenge also failed because plaintiffs did not have a property interest in their positions.

For those interested, I wrote a law review article on the status of volunteers. Our Nation's Forgotton Workers; The Unprotected Volunteers, 9 U. Pa. J. Lab. & Emp. L. 147 ( Fall 2006).

Mitchell H. Rubinstein