Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘workplace’

More managers being sued personally

It’s not just organizations and enterprises who have to worry about these things, as the National Law Journal takes note in a trend story:

An increasing number of executives, managers and other company leaders are being sued personally for their work-related decisions….

“State laws are constantly being broadened and liberally construed by the courts to allow for potential lawsuits against individuals,” said Thomas Lewis, chairman of the employment litigation group at Stark & Stark in Lawrenceville, N.J. In the last five years, Lewis has seen a 50 percent increase in his own practice defending executives in personal lawsuits.

“[Plaintiffs’ attorneys’] desire is to strike fear into the executive to try and force a settlement,” he said.

Plaintiffs attorneys don’t see it that way. “Sometimes you’ve got to hit the executive between the eyes with a lawsuit,” said S. David Worhatch, an employee rights attorney in Stow, Ohio, who is currently handling a half-dozen employment-related lawsuits targeting individuals directly….

“Individuals will think twice before engaging in such conduct if they realize they can be personally exposed to liability.” he said….

Ginger McRae, an employment law expert who testifies in employment lawsuits and consults businesses on employment practices… noted that “[i]n the past few years, I’ve definitely seen more of a trend to this, and definitely in the state cases where there are state tort claims. That is where the plaintiffs lawyers really have the most freedom to name who they want.”

Plaintiffs attorneys note that state courts are easier venues in which to try personal lawsuits, largely because state discrimination and employment laws are looser than federal ones and allow for individuals to be held personally liable for various workplace violations.

Query: where the story reads “Plaintiffs attorneys don’t see it that way,” wouldn’t it make more sense for it to have read “Plaintiffs attorneys see it exactly the same way”? (Tresa Baldas, “Employment Litigation Gets Personal for Company Managers”, National Law Journal, Aug. 16).

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Don’t like your pay? There’s the door

You have to wonder what the legal ramifications would be if Wal-Mart itself decided to set its employees’ pay (even its high executives’) the way its courtroom nemesis is used to doing:

The $172 million Wal-Mart meal-break verdict won by The Furth Firm in 2005 ranks among the top 10 verdicts nationally, but few of the lawyers will be around to celebrate if and when the money arrives. A number of them have left the San Francisco-based firm, and none appear to have any guarantee of sharing in the eventual proceeds. Founder Frederick Furth, the sole owner of the firm, says salaries and bonuses are paid at his discretion, and no written compensation agreements exist for any cases.

(Petra Pasternak, “Small Firm’s Lawyers Not Waiting for Wal-Mart Fees”, The Recorder, Aug. 27; quoted text is Law.com summary).

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SOX Whistleblower claims

Michael Delikat in the Wall Street Journal:

Sarbox’s whistleblower provisions were intended “to prevent recurrences of the Enron debacle and similar threats to the nation’s financial markets” by protecting those who report fraudulent activity that could damage innocent investors. That was the intent, at least. The reality is something else.

About 1,000 whistleblowing claims have been filed under Sarbox. Only 17 were determined after federal investigation to have merit and only six of this group have kept their wins after full evidentiary hearings before administrative law judges.

Nevertheless, the plaintiffs bar and others have ready answers for this extremely poor batting average. Critics assert that the 90-day statute of limitation for filing whistleblower claims is too short, the burden of proof placed on complaining employees is too high, that judges are reading the law too narrowly, or even that, as one law professor testified, the whistleblower provisions have “has failed to protect the vast majority of employees who file a Sarbanes-Oxley claim” because they rarely win.

None of these criticisms measure up. Sarbox whistleblowers rarely win because most claimants are using, or some might say, misusing, the law as a club in garden-variety workplace disputes.

Larry Ribstein comments.

Update: as does Professor Bainbridge: “Clearly, the whistle blower provisions significantly raised costs and created opportunities for employees to game the system.”

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“The most expensive bill ever written”?

This Sunday’s Boston Globe magazine had a long feature piece which addressed the burning question, “Do We Really Need A Law To Protect Fat Workers?” The “law” in question would be a law which forbid “discrimination against overweight and unusually short people.” While I resemble that remark, you won’t be surprised to find me answering the question, “No,” in contrast to the politicians and activists who think it’s a great idea. The problem they face? Too many people inconveniently think that being overweight is a choice; they need to convince these skeptics that weight and race are really the same thing.

Although some people worry that the law would lead to a flood of lawsuits, the supporters of the bill pooh-pooh that notion, based on implausible statistics about disability discrimination lawsuits. Besides, their goal (nudge-nudge, wink-wink) isn’t really lawsuits at all:

Like the race laws, then, the weight-discrimination bill has a goal that extends beyond the legal system: to change the way we think. The idea is not to clog up the courts. Instead, it’s to create a society where hundreds of lawsuits aren’t needed, because there’s not as much to sue over – a society of people who have the legal right to say hurtful things and the compassion to know better than to act on them.

But if it does clog up the courts — the ADA only applies to those so obese that they can call themselves disabled, while the proposed Massachusetts law would apply to anybody who is overweight, which seems to be most of the population — it won’t be the author of the bill who suffers, but employees and business owners.

Of course, even if Massachusetts does pass this law, it wouldn’t be the worst; California already has far wackier anti-discrimination laws with its full-employment-for-lawyers Unruh Act. Unruh, despite listing the usual categories found in anti-discrimination laws (sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, and sexual orientation) actually has been interpreted by state courts to prohibit all “arbitrary” discrimination. As Cal Biz Lit explains:

In earlier cases, the courts have held the act to prohibit business discrimination based on :
• A customer’s association with a male with long hair and “unconventional” dress; 
• Having children; and
• Status as a police officer (when the ACLU tried to kick a cop out of a meeting).

If a creative lawyer hasn’t shoehorned obesity in there already, he will soon enough.

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Video resumes? No thanks

Video resumes have been achieving a certain popularity lately among some job seekers, even beyond fields such as graphics and Web work where skill in video editing and presentation itself counts as a job qualification. Novices are finding it easier to get into the act as online job bazaars such as Jobster, CareerBuilder and Vault begin to offer ways of creating and disseminating video resumes.

Many labor and employment attorneys, however, are warning employers that video resumes open up too many liability issues to be comfortably accepted:

“Just don’t even deal with them,” said Dennis Brown, an attorney in the San Jose, Calif., office of Littler Mendelson whose firm recently advised employers about the dangers of video resumés in a seminar. “My advice to my clients who have asked me about video resumes — and I have had a lot of clients ask lately — is do not accept, do not review video resumes.”

Brown’s main concern with video resumes is that they reveal information about a person’s race, sex, disability, age — all details that could wind up in a discrimination lawsuit…. “This is one of those instances where a little bit of unnecessary knowledge is dangerous.” …

Labor and employment attorney Darlene Smith can’t fathom why employers — knowing the risks of video resumes — would willingly open themselves up to lawsuits. “Actually, I’m dead set against it, to be honest,” said Smith of the Washington office of Boston’s Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. “You definitely, definitely increase your exposure…so why even put yourself in a position to be sued?”

And similarly from Cheryl Behymer of Fisher & Phillips in Atlanta: “You’re opening yourself up to a potential that someone could claim, ‘Well, the reason I didn’t get hired is because you could see my gray hair and you could see that I’m over 40.'”

As for the federal Equal Employment Opportunity Commission, it may come as a relief to learn from an EEOC staff attorney that the agency does not consider video resumes a legal violation in themselves. However, it’s “concerned” that they “could contribute to hiring discrimination”, says the attorney. Other EEOC “concerns”, per the NLJ’s Tresa Baldas: “video resumes could also lead to the exclusion of people who are not tech-savvy, or minority applicants who may not have access to broadband-equipped computers or video cameras.” (“Employers told to stay away from video resumes”, National Law Journal, Jun. 4, not online).

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In Detroit, protected road menaces

The city of Detroit’s Department of Transportation, which runs 500 buses, budgeted a whopping $16.1 million this year to cover lawsuits and injury claims arising from its operations (yes, that amounts to $32,000 per bus per year). The city is finding it unusually difficult to reduce those numbers:

Matt Allen, spokesman for Mayor Kwame Kilpatrick, explained that Detroit is self-insured, which means money is set aside annually in an account earmarked for settlements, damages and other mishaps involving city-owned vehicles and drivers.

Meanwhile, the city, particularly the Detroit Department of Transportation, is struggling with union rules and arbitration cases that make it difficult to terminate even the most accident-prone drivers.

In one case, a bus driver was involved in 30 mishaps, hit a bicyclist resulting in a $1.4 million lawsuit settlement and, in a separate incident, had her driver’s license suspended. The city tried to fire her, according to records, but an arbitrator ruled she had to be rehired.

(David Josar, “Workers’ crashes cost Detroit”, Detroit News, Jun. 11).

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Great moments in immigration law

Getting wide exposure on YouTube, and providing fodder for Lou Dobbs:

The video shows attorneys for Cohen & Grigsby, one of the largest law firms in Pittsburgh, explaining at a conference on immigration how to obey laws that require Americans be given top priority for jobs while still ensuring foreigners are hired.

“The goal here of course is to meet the requirements, number one, but also do so as inexpensively as possible, keeping in mind our goal. And our goal is clearly not to find a qualified and interested U.S. worker,” Lawrence Lebowitz, the firm’s vice president of marketing, told the audience in May.

(“Pa. law firm’s immigration talk hits YouTube; U.S. senator demands investigation”, AP/Arizona Star, Jun. 23; Sister Toldjah; Doug Ross). More: Kim’s Play Place says the lawyers were serving their clients’ legitimate interests and that if they can arrange compliance with the letter of an irrational law there’s no reason for them to show allegiance to its claimed spirit. Further: Gina Passarella, “Immigration Law Seminar Generates Unwanted Publicity for Firm”, Legal Intelligencer, Jun. 25 (& welcome Opinionator readers).

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Damned if you do, damned if you don’t files: Cynthia Haddad v. Wal-Mart

Pharmacist Cynthia Haddad, when she left the pharmacy unattended, allowed a technician to use her computer security code to issue prescriptions, including a fraudulent prescription for a painkiller, something that could have exposed Wal-Mart to enormous liability if someone had been injured by the illegally dispensed drugs. So Wal-Mart fired Haddad. Haddad sued, claiming that the real reason Wal-Mart fired her was because she had asked for a raise to a manager-level salary, though she did not perform manager-level duties such as budgeting, and that it was thus sex discrimination. (Haddad claims that Wal-Mart “never” fired a male manager for her infraction, which seems implausible at best; Wal-Mart says it did fire male pharmacists for this. Why is this even a factual dispute for decision for a jury? This seems like a matter that merits a partial summary disposition to prevent one side from out-and-out lying.) This somehow got to a jury, which awarded $2 million, including $1 million in punitive damages. Among the questionable procedures used to railroad Wal-Mart at trial was permitting Haddad to present an attorney to testify as an expert witness on human resources procedures. Wal-Mart indicated it disagrees with the jury’s decision and is studying whether an appeal is worthwhile. Massachusetts courts are not a friendly place for defendants. Wal-Mart’s attorney did not comment to the press, permitting the plaintiffs’ lawyer to generate rather one-sided press coverage. [Berkshire Eagle June 19; Berkshire Eagle June 20; Reuters/USA Today; Massachusetts Lawyers Weekly]

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On gender, L.A. fire department can’t win for losing

Like pretty much every big-city fire department, the one in Los Angeles has come under intense legal pressure to hire more female applicants, and in doing so to water down or eliminate whatever former prerequisites for hiring (such as physical tests calling for a show of upper-body strength) show “disparate impact” against women. And having been whipped up one side of the street on those grounds, it now gets whipped down the other side for having apparently responded in the most direct and practical way to the first set of legal pressures:

In the latest bizarre court case involving the Los Angeles Fire Department, a jury has awarded $3.75 million to a male fire captain who said he was retaliated against for not making training exercises easier for women.

Fire Capt. Frank Lima alleged in his lawsuit against the city that he was told by superiors that he shouldn’t hold women to the same standards as men. The reason: The Fire Department was under pressure from City Hall to increase the number of women within its ranks.

Thursday’s judgment in the 2 1/2 -week case in Los Angeles County Superior Court was notable because it involved $2.96 million in noneconomic damages — in other words, money for pain and suffering.

In his lawsuit, Lima alleged that he suffered heart problems and stress after the department tried to punish him and subsequently denied him certain assignments.

(Steve Hymon, “L.A. fire captain awarded $3.75 million”, Los Angeles Times, Jul. 9). For more on the legal pressures on fire departments to relax performance standards that women have trouble meeting, see Jan. 18. For a related set of sued-if-you-do, sued-if-you-don’t dilemmas for fire departments, see Mar. 24, 2005 (reverse discrimination suits by whites after Chicago altered rules to encourage black applicants). Finally, we covered (Dec. 5, 2006 and earlier posts) the saga of the $2.7 million settlement that the LAFD paid to a firefighter subjected to a prank in which he was tricked into eating dog food.

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