Suits In The WorkPlace

OWBPA Waivers--Enough is Too Much

Coming to a courtroom near you -- Family Responsibilities Discrimination

Damaging Admissions

Get It in Writing

The Seventh Circuit recently decided a case involving a situation that occurs frequently enough that it should be of concern to anyone involved in settling litigation. The dispute arose after the employee ostensibly agreed to settle his case against his employer following an exchange of oral offers and counteroffers between the lawyers. There were some fairly definite terms regarding a money payment (in the experience of your humble blogger, the money term is almost never in dispute; both sides are usually crystal clear as to how much the employee is to get), reinstatement to a particular position, an opportunity to train and retest for a new job, and initial work site location after the employee returned to work.

But then the parties exchanged a written settlement agreement. The employee found the employer's first draft of the settlement agreement to be unacceptable because of several additional items that were not discussed originally. The employee then added new terms that he demanded be incorporated, which also were not discussed between the parties.

It's not unusual to have settlement agreements containing terms that the parties did not discuss in their haste to consummate a deal cutting off further litigation expense. These are usually resolved between the lawyers and their clients, frequently as a result of additional horsetrading between the parties. In this case, the employee not only wanted the employer's horse, he wanted the saddle, blankets, bridle and a barn thrown in for good measure. The employer, of course, rejected this and the settlement stalled.

The Court noted that enforcing settlement agreements was a matter of state contract law, in this case Illinois. State law provides for the enforcement of oral contracts (thus disproving Samuel Goldwyn's famous observation that "an oral contract isn't worth the paper it's written on") and the court looked to what the parties had agreed on in their oral discussions to determine the material terms to be enforced. The court quickly disposed of the employee' s claim that a number of material terms had not been included and therefore there was no meeting of the minds to support contractual intent. Instead, the judge reviewed the parties testimony to see what he could determine (actually, what the magistrate had determined) were the terms agreed on by the parties in their oral discussions-these were the material terms that were ultimately enforced.

The lesson here-I try to make it a practice to exchange offers and counteroffers by e-mail or letter, especially as the pace of negotiations picks up when it appears we might be able to settle the case.  And at settlement conferences, somebody should have a copy of a draft settlement agreement with them so that both sides are clear about the terms of the deal.

The Don Imus of soccer coaching?

A recent case out of the Fourth Circuit involving the University of North Carolina women's soccer team demonstrates, for me, how far women's athletics have come since I was in college in the middle 70s. Or how far they have fallen.

The Jennings case was a Title IX claim brought by woman who was cut from the UNC women's soccer program. She and another teammate alleged a pervasive and apparently unending pattern of abuse from her head coach in the form of constant and routine references to sexual activities by the women on the team. Obviously, there were generic denials by the head coach and other women on the team not involved or apparently unoffended by the conduct alleged. However, it seems clear from the tenor of the discussion in the court's opinion that obscene, sometimes mercilessly obscene, banter occurred on a regular and frequent basis between the players and their coaches.

Now, the practice and game settings of a college athletic team, particularly a college athletic team playing at the elite level of Division I, are not black-tie dinner party, or even a white collar office, environments. Emotions run high, and it is not uncommon for coaches to berate and scream at players in an effort to get them to play up to their potential. But the picture that appears from the undisputed record in this case is one of a coach's willingness to participate in his players discussions of their sex lives, to the extent in some cases of asking who they were sleeping with, how frequently, and then using that information to taunt or belittle the individuals involved. I can't believe that any academic institution would find such conduct appropriate, especially under circumstances where the authority figures are male and the subordinates are female.

Certainly the Court of Appeals had difficulty with what was happening. I happen to agree with the dissent in this case that the majority lost track of what it was supposed to use to measure the problematic conduct, namely the requirement under Title IX that the plaintiff demonstrate she was denied the benefits of an educational program or activity on the basis of her gender. Notwithstanding the litany of allegations against the UNC soccer coach, it was quite clear that most of these activities did not occur in the presence of the principal plaintiff, but actually happened before she arrived at UNC's storied Chapel Hill campus. The plaintiff herself was subjected to only two episodes of this kind of banter and intrusive questioning and did not articulate how exactly this denied her the benefits of an educational program. But the fact remains that what emerges from the Court's recitation of the evidence is that the UNC team was a place where it would have been difficult to focus on soccer unless you were very comfortable talking about your sex life in the presence of someone old enough to be one of your parents. And a parent of the opposite gender, no less.

The case will proceed to trial on Jennings' claims of a hostile educational environment and on her claims that the coaches acted under color of state law to deprive her of her right to be free from sexual harassment in an educational setting. I can't imagine the university is thrilled about having this laundry hung out on the wash line.

No Good Deed Goes Unpunished, Even for Unions

I'm an NFL Players Association certified agent and, because of that fact, take a certain amount of interest in sports law situations. Most of these revolve around some type of an employee/employer relationship or even union relationship that goes awry. While these cases are often typical employee discipline cases, or hiring and firing matters, the high-profile nature of the people involved leads to some interesting results.

Case in point-in an effort to deal with instances of incredibly bad judgment by its members, along with the never-ending problem of scam artists who target professional athletes, the Players Association set up a certification process for financial planners in 2002. The idea was simple and a clear benefit to the players-the NFLPA would determine who could be recommended to handle the millions of dollars that players can earn over the course of their playing careers.

Unfortunately, a company headed up by two NFLPA certified financial planners, International Management Associates, collapsed in 2006, leaving more than 500 investors with losses totaling somewhere in the vicinity of $185 million. Among the group that lost money are several NFL players and former players. They are now suing the union, and the NFL, for gross negligence in failing to uncover the fact that the financial planners in question were not registered as financial advisors in any state or federal jurisdiction, and for failing to determine that one of the principals of IMA had several state and federal judgments and tax liens against him.

The case got past the Association's and League's motion to dismiss and is now headed into discovery, which should prove to be interesting. At least one of the players who is suing was a former employee of IMA, and the NFLPA is arguing that an arbitration clause in the collective bargaining agreement precludes any type of court action on these kinds of issues. That issue will surface again when the case goes to summary judgment, but for now there should be some notable revelations about how the financial certification process went forward and whether the NFL has a separate duty to check the credentials of people certified by the union.

But I'm sure there are people in the union asking why they are getting sued when all they were doing was trying to set up a system that would give more information to the players and their agents about the people who want to handle their money. Allow me to introduce you to the Michels' Iron Law of the Workplace--no good deed goes unpunished.

Invasion of the Pod People

     PC World contained an interesting article recently entitled "Can an iPod Bring Down Your Company?"  It seems the answer is an unequivocal "yes", because notwithstanding their sleek appearance and unparalleled functionality for listening to music, video, etc., iPods and MP3 players are very good storage devices that can remove all kinds of information from a computer system just like a thumb or a flash drive. 

     The problem, of course, is that iPods are seen as relatively innocuous -- they're for entertainment, right?  Employers who might be nervous watching people tote 80 gigabytes of flash drives into their offices apparently have little to no concern about a similarly capable iPod.  The nature of the iPod storage system, according to the article, means that people can remove huge amounts of data (40 gigs, or even 80 gigs in some of the video models) and frequently go undetected.  The article notes that such theft of corporate data using an iPod is known as "slurping." 

     Yikes!!  That'll be bad news for 7-11 and the Slurpee business for sure.  At least, I wouldn't be talking about my icy, refreshing beverage around the office in the presence of the IT department.

      The article doesn't provide much guidance on how to prevent corporate theft using these devices other than banning them from the workplace entirely.  That may not be an option in most companies.  But it might not be a bad idea to tell employees they can't place iTunes or comparable software on their own computers for downloading purposes, especially since there is now a report of an iPod virus that migrates from iTunes to an individual unit, and back out again.

     Just another little thing to worry about on Friday the 13th.

All Leaves Are Not Created Equal

    The Uniformed Services Employment and Reemployment Rights Act ("USERRA") is a statute with which I am all too familiar, given my lengthy Reserve career in the armed forces.  The statute is unique among employment discrimination statutes because, in some cases, it requires an employer to treat a protected employee better than her similarly situated peers.

    But not always.  The statute requires that an employer provide the same benefits to employees out on military service as those generally provided by the employer to employees who are on a nonmilitary related "furlough or leave of absence."  38 U.S.C. § 4316(b)(1).  The Department of Labor generally interprets this to mean that the best deal offered to an employee on furlough or leave of absence is the same deal that must be offered to a military service member who is out on military leave. 

    But not all leaves are created equal.  In a case at the Federal Circuit, a Department of Justice employee sued for 27 days of paid holiday time for which he was not compensated because he was on a 2 1/2 year active duty tour with the military.  The employee's claim was based on the employer's policy of paying holiday pay for other employees to attend jury or court proceedings.

    The Federal Circuit rejected this, noting that jury leaves are typically a short-term affair, especially when compared to the typical 12-month-to-3-year active-duty rotation for which the employee was seeking the paid holidays.  In other words, an employer is entitled to compare the nature of the leave of absence against the military service in determining whether the same benefit applies.

    A common-sense approach that is now mirrored in the USERRA regulations (20 C.F.R. § 1002.150).

Private Postings Prove Problematic for Politicos

     As the story concerning the Administration's firing of eight U.S. attorneys continues to unravel (and you thought it was only private sector employers that could bungle routine decisions this badly), an interesting side-story is developing -- the use of email accounts outside of the employer's control for the conduct of employer related business.  The Washington Post, among other major papers, is now detailing claims that White House staff used email accounts set up outside of the White House servers to conduct official business and avoid federal legal requirements to maintain accurate email records. 

     This isn't just a problem for government officials seeking to avoid public scrutiny.  Private sector employers must be aware of when and if their employees are using unapproved email accounts.  Especially with the new Federal Rules of Civil Procedure regarding electronic disclosure, an employer simply must have complete overview and control of its employees' electronic communications and records.  This is especially true in employment litigation, where there are frequently selective supervisor files, not part of the official personnel file, that are maintained on employees or created in response to particular situations.  I am aware of at least two cases in the last year in which supervisors were using Yahoo accounts that were completely unknown to their employer to store emails and other documents relating to situations at work.

     There might be several solutions to this kind of an issue, but perhaps the most obvious is a quick audit through human resources and front-line supervisors to determine if anyone is in fact using these types of accounts for storage or the conduct of company business.  Some employers require an annual certification by selected managers that they are not, and will not, store company information in anything other than company servers or on company computer systems.  In any event, it's key that legal staffs and human resources become aware if there is a practice of using non-company systems or sites to warehouse company information.

Class Action Trend -- Demotion / Promotion / Hirings / Internal Practices

    The recent settlement of Federal Express's 9th Circuit race discrimination case, for more than $53 million, points to an increasing trend in the class action arena -- suits based on claims that discriminatory internal practices permeate the entire employment decision making structure of a company and are reflected in disparate hiring, promotion, demotion or discipline actions. 

     This particular case, filed in 2003 in Northern California (what a surprise), alleged a pattern of race discrimination against blacks and Hispanics through a disproportionate assignment of minorities to part-time or so-called "casual" positions, versus full-time jobs.  The suit also alleged that minorities were provided with fewer promotions than non-minority employees, disciplined more frequently for petty offenses, and paid less over all.

     Although the settlement is gigantic, it is probably miniscule compared to the cost of defending a certified class of tens of thousands of employees in different jobs, across different stores and management teams.  In fact, once a court certifies such a class, it becomes almost cost prohibitive for an employer to backtrack through the myriad of employment decisions related to just the class representatives to try to prepare a defense.

     So the lesson to all of us now is to beware of employment practices that might impose some kind of a statistical glass ceiling on certain groups.   Some federal, and many state, judges seem more than willing to certify classes comprised of wildly disparate individual cases, as long as an over-all trend is alleged and can be supported with relatively limited evidence.  These kinds of suits also effectively discourage the kind of decentralized decision-making used by many companies given current improvements in communication.   The existence of a corporate human resources department with arguable responsibility for company policies and their implementation can be used as evidence to defeat a claim that individual store managers were responsible for the employment decisions at issue.  The message is clear -- monitor your activities companywide or face a substantial risk of multi-plaintiff or class action litigation.