New Jersey Employment Law Blog

The Americans with Disabilities Act, the federal law that seeks to ensure equal opportunity for those who live with physical and psychological disabilities, just reached its 20th birthday.  The House of Representatives celebrated by altering the Speaker's rostrum to accommodate the wheelchair of Rep. Jim Langevin (D-RI) to allow him to preside, as other members can, the first time that any disabled member has presided over the House.  Of course, Langevin is a 5-term Congressman, and one might legitimately ask what took so long.  Still, it's progress.  Here's a short report from MSNBC. 

Posted In ADA , Employment Law News | Comments (1) | Permalink |

Two recent decisions illustrate distinctly different sides of the conflicts between men and women that percolate into our courtrooms.  Neither is a New Jersey case, but there are lessons for for Garden Staters in both.

In Kirleis v. Dickey, McCamey & Chilcote, P.C., the plaintiff Alyson Kirleis sued the defendant law firm, of which she was a partner, for gender discrimination, claiming that she was paid less than her male counterparts.  She sued under Title VII, the Equal Pay Act, and a Pennsylvania discrimination statute.  The issue was whether Kirleis, as a partner in a professional services firm, was an "employee " of the firm, a status that would allow her to sue, or an "employer," which would not.  The trial court found that Kirleis was an employer and thus found in favor of the law firm.  

Kirleis appealed to the U.S. Court of Appeals for the Third Circuit.  She fared no better there.  In a four page (that's really short, kids), non-precedential opinion, the court affirmed the judgment of the trial court. The court reviewed the six factors laid out by the Supreme Court in Clackamas v. Wells, and found that Kirleis in fact was a partner in more than name only, and thus was an employer.

The Kirleis decision has implications for all professional services firms, not just law firms.  An important lesson to take from this case is that, in order to avoid discrimination claims between partners, care must be taken in setting up a corporate governance structure.  Properly done, problems can be avoided.  Do it improperly, though, and there can be big problems that could have  significant financial ramifications for the organization.

A claim of sexual harassment is the basis for a $7.3 million trial verdict in Redman v. Bernstein, Shur, recently tried in the Superior Court of Maine.  We say "basis  of" the verdict because the case was a claim for legal malpractice, not a direct claim for sexual harassment. 

The facts are contained in this opinion disposing of the parties' cross-motions for summary judgment.  In short, there was a battle between brothers for control of a family-owned business.  One brother learned that there was a plot afoot to make him look bad, and a short time later he was accused by a female employee of sexual harassment. The Bernstein Shur firm was consulted on the matter.  The jury found that they were negligent in how they handled the harassment claim and awarded $7.3 million against them, ALL of it for emotional distress.

An extreme case with an eye-popping result?  Yes, but it serves to emphasize how carefully employers and their attorneys must treat claims of sexual harassment.

Posted In Employment Law News , Gender Discrimination & Sexual Harassment | Comments (0) | Permalink |

Last week I had the privilege of participating in a panel that taped a half hour show for Steve Adubato's "Caucus New Jersey," which is broadcast on the New Jersey Network.  The topic was "Cancer in the Workplace" and focused on the legal, business, social and emotional issues that arise when an employee deals with cancer.

My co-panelists were Don DiStasio, CEO of the Eastern Division of the American Cancer Society, Ellen Levine of The Wellness Community of Central NJ, and Rochelle Shoretz, an attorney and Executive Director of Sharsheret.

It was a terrific panel and the discussion certainly opened my eyes to the human side of what I usually see presented as just a legal problem.

I have not been told when the show will air, but will keep you advised.

Posted In ADA , Employment Law News , Family & Medical Leave | Comments (0) | Permalink |

Maybe it's that I'm getting a little older and crankier, but Larry McCoy's piece (I won't call it a "rant," but could) on performance reviews really hit home with me.  One disclaimer up front.  This piece is --- shall we say --- liberal in its use of four letter words.  So if you're easily offended, don't click the link to "'Bullshit" Is One Word, 'Performance Review' Two."  If you do choose to read it you'll find it thought-provoking and even wise in a contrarian way. 

Here's how it starts: 

I had just arrived in the newsroom for my shift as a copy editor when a manager came over to my desk and declared, “We need to discuss your goals.” I was 66 years old - past retirement age, damn near old enough to be his father - and he wants to discuss my “goals.”

“Go away,” I told him

McCoy continues:

Floyd was both dense and tone deaf.  He wouldn’t go away. If only Floyd were as dogged in fleshing out a good story. The Performance Review had to be done, he said. I wasn’t going to budge either. It was a crock - something dreamed up by the morons in Human Resources who had nothing to do and, worst of all, absolutely no experience in newsrooms. They all ought to be fired, I said, several times in several ways. This back and forth continued, with the volume of each exchange rising, until the magic words came out.

     
            “Go f*** yourself,” I said.

And so it continues, running through the all-too-familiar ratings on such immeasurable subjective nonsense (OK, that's editorial) as whether someone is a "team player," has appropriate respect for co-workers, appropriately mentors staff, and on and on.

All of which came to down to one conclusion for McCoy: "You want a newsroom full of wusses. You don’t want to hear it when one of our reporters or AP butchers a story or misses the point completely."

You may find yourself cheering by the end of the article.

Now I relate this from the perspective of one who represents both management and employees.  So, like most employment lawyers, I've seen performance reviews used to reward good or correct poor performance.  I've seen them doctored to justify firing someone who was performing well (GASP!).  I've seen performance goals set with absolutely no expectation that the employee might actually meet them.  Just check out 9 of 10 "performance improvement plans" if you don't believe me.

So, yes, I'd have to say that there is a "wussification" factor involved in a lot of HR policies aimed at performance evaluation.  They're designed to force workers into a behavioral mold, and the shape of that mold ultimately is for the company.

But doesn't McCoy have a point when he asks "What were my goals outside of coming in, trying to do a good job and finding good stories and angles others may have overlooked?" 

And might it be possible that HR policies and performance reviews that don't focus on those true measures of performance  --- in the old-fashioned sense --- should themselves be reviewed?

Posted In Employment Law News | Comments (0) | Permalink |

That's what Congressional Democrats want to do the Court's 2009 decision in Gross v. FBL Financial.  Gross held that in cases brought under the Age Discrimination in Employment Act [ADEA], the plaintiff must prove that age was the "but for cause" of an adverse employment action.  If the plaintiff proves only that age was a factor in the employer's decision, but that the decision would have been the same irrespective of age, then the employer wins. 

The bill is HR 3721, the "Protecting Older Americans Against Discrimination Act."  We've previously posted on this legislation here.

Here's the latest from Law.com.

I predicted once before that POWADA will become law.  I haven't been proven right yet, but then again, I haven't been proven wrong, either.  I still think that it will happen, and plaintiffs will have the older (pun intended, I suppose), easier road to proving age discrimination restored.

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

The United States Supreme Court has asked Congress to appropriate money for increased security to respond to an increased volume of threats, as reported by The Hill.  Perhaps it's just a sign of the times that we live in, but if so, it's not a good sign. 

The law is supposed to be a civilizing and moderating influence on society.  While judging has never been free from risk, it's a cause for concern when threats are being received in such volume by the highest court in the land.  Let's hope that Congress is wise enough to give the court whatever is necessary to preserve the safety of the justices and all court personnel.  We are talking about the security of a separate branch of government, co-equal with the legislative and executive.

Posted In Employment Law News | Comments (0) | Permalink |

Here's a treat for the first Monday of April.   It will get your week off to a good start.  Other than that, no comment necessary.

Posted In Employment Law News | Comments (0) | Permalink |

Don't you find stories like this just a little depressing?  Times are tough, sure, but mightn't a little good-natured fun provide some extra zip to the office environment?  I'd be interested to know how your workplace is handling April Fools Day.

The linked article notes that fake "resignations" as an April Fools joke are a bad idea.  I second that thought.  Definitely a bad idea.  Twice recently I've seen hypothetical discussions about severance packages get twisted into "resignations" that resulted in a loss of employment!

Posted In Employment Law News | Comments (0) | Permalink |

Once the health care bill has been signed, then "fixed," then . . . well, whatever is going to happen to it next, business is going to have to figure out a way to deal with it.  At least through the next election cycle or two, and then we'll have to see where things stand.

For now, however, some of my fellow employment law bloggers have begun to look at the details with an eye to formulating strategy.  Here's some thinking from the Washington DC Employment Law Update, the Connecticut Employment Law Blog, and the Employment Law Post.

One thing's for sure: there will be more in the days to come.

Posted In Employment Law News | Comments (0) | Permalink |

One of the dangers of litigation for plaintiffs is that, once you start a fight, you can't necessarily stop it.  That could spell trouble for one former Crowell & Moring (a big law firm) employee, who sued her ex-employer for age discrimination.

This post from the Blog of Legal Times lays out the basics.  Plaintiff sued in state court; the employer removed the case to federal court and filed an answer.  Six months later the plaintiff decided that she wanted to dismiss the complaint voluntarily and filed a motion to do so.  The court denied the motion, on the procedurally correct ground that that once an answer is filed a case cannot be dismissed unilaterally by the plaintiff.  Thus, the order forced the action to continue. 

Here the story gets fuzzy.  It's not clear whether the court denied plaintiff's motion to dismiss for some deficiency in her application, or because the defendant objected to the dismissal.  If the latter, why would a defendant turn down a "get out of jail free card" in the form of a voluntary dismissal?  They might, I suppose, just be trying to make the plaintiff or her attorney sweat a bit.  But another possibility is that, because an age discrimination case is a fee-shifting case, the defendant may think that  it will prevail on the merits and can force the plaintiff to pay their attorney's fees.  It's rare for courts to award counsel fees in favor of defendants, but it does happen occasionally.  If that is what's in play (and I admit that I'm speculating), the litigation could be financially catastrophic for the plaintiff.  Few individuals --- and especially those who have lost their jobs --- have the financial resources to reimburse the hundreds of thousands of dollars that defendants routinely spend to defend discrimination cases.  Talk about shooting yourself in the foot.

So for plaintiffs and their lawyers, it's important not to start a fight precipitously.  Once you start the boulder of litigation rolling down the mountain, you may not be able to stop it without getting crushed.

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

My last post was a slightly irreverent look at the Supreme Court's recent corporate-nerve-center-as-principal-place-of-business decision in Hertz v. Friend.

Max Kennerly in his Litigation & Trial blog takes a more scholarly look at the implications of the Hertz decision.  He notes, correctly, that there was an element of "administrative simplicity" inherent in the court's decision.  And there is, I suppose, a virtue in that.  There's now undeniably one rule that should not be difficult to apply in practice.

If you believe that federal courts should have more power to decide cases, you'll look at that one way.  If you think that state courts are the preferred forum, you'll probably think differently. Whatever your belief, it's what all litigators now must deal with.  And note, too, that even though the Court's decision was made in the context of an employment litigation, it will govern all business-related cases that involve the question whether the court can assert diversity jurisdiction, directly or through removal, over a corporation.

Posted In Employment Law News | Comments (0) | Permalink |

Today the Supreme Court decided Hertz Corp. v. Friend, and thus put to rest the burning question of what constitutes a corporation's "principal place of business."  It actually is an important question for purposes of federal diversity jurisdiction.  Here's a link to the opinion, and here's one to our prior post which gives some background on the case.

The crux of the decision is that the principal place of business will usually be its "nerve center," the place where is executives and managerial functions are located.  In a word, headquarters.  Here's how Justice Breyer explained it for the unanimous Court:

We conclude that  “principal place of business” is best read as referring to the place where a corporation’s officers direct, control, and coordinate the corporation’s activities. It is the place that Courts of Appeals have called the corporation’s “nerve center.” And in practice it should normally be the place where the corporation maintains its headquarters—provided that the headquarters is the actual center of direction, control, and coordination, i.e., the “nerve center,” and not simply an office where the corporation holds its board meetings (for example, attended by directors and officers who have traveled there for the occasion).

There's more, but you get the idea.  So from now on, when you think about where a corporation's principal place of business, remember how "nervy" the Court was in making this decision.

Posted In Employment Law News | Comments (0) | Permalink |

US District Judge Joseph Greenaway,who has sat in Newark since 1996, has been elevated by the Senate to the United States Court of Appeals for the Third Circuit.  Judge Greenaway is an alumnus of  the US Attorney's office, and worked as a corporate lawyer for Johnson & Johnson in New Brunswick, before becoming a district judge.  Congratulations to Judge Greenaway.

Posted In Employment Law News | Comments (0) | Permalink |

Lurking under the snowbanks of Capitol Hill, hard by the Supreme Court building, are briefs in three yet-to-be-decided employment law cases.  We imagine that the Court will get to them around the time of the Spring thaw.  Here's a brief synopsis.  Links are to the merits briefs, to the extent that they are available online.

City of Ontario v. Quon looks to be the decision with the most blockbuster potential.  The question presented is whether employees have a reasonable expectation of privacy in personal text messages transmitted over employer-supplied devices, against a background of a formal no-privacy policy in conflict with a practice that sanctioned personal use.  Although this case involves public employees --- police officers --- it may have implications for all employers, both public and private.

New Process Steel v. NLRB raises an issue of considerable import to labor lawyers and their clients.  The National Labor Relations Board has an authorized strength of five members, and three is generally considered to be a quorum to decide cases.  For the past couple of years, however, the NLRB has had only two sitting members.  During that time they have decided around 400 cases.  The question before the court is whether those two-members decisions were valid.  It's not a clear cut question, and there are good arguments on both sides.  The three circuit courts to have considered the question have split.  If this one goes against the NLRB, it could be a logistical nightmare.

Lewis v. City of Chicago presents the Court with another firefighter qualification test case, like last year's Ricci v. DeStefano.  Lewis deals with the more abstract question of whether the 300 day limit to file a claim with the EEOC runs from the date the test results were announced or the date that hires were made based upon those test results.

Our guess is that right now the Justices are more concerned with staying warm than worrying about employment law cases.  When we have more information on their status, we will let you know.

Posted In Employment Law News | Comments (0) | Permalink |

Here's a useful article written for the small business owner about when you should call a lawyer.  It lists such things as starting a business (and developing an exit strategy), collecting debts, and resolving business disputes.  The common thread is that it makes far more sense to get legal help from the beginning, rather than wait for something to go wrong before seeking advice.  It is almost always less expensive to get help up front.  The reason is simple.  Wait until a problem develops and you're asking me to unscramble eggs.  Putting together the ingredients to make an omelet is easier, controllable, efficient, and more satisfying.

I would add to the article's list a few employment-specific reasons to get legal help at an early stage.  These include firing someone, offering severance benefits, and drafting or evaluating non-compete agreements.  My pet peeve is employee handbooks.  As I've ranted before, no matter what you may hear, no matter what "foolproof" generic forms you may find on the internet, in New Jersey drafting an employee handbook is not a game for do-it-yourselfers.  Just get help from the outset.  It's not expensive and you'll save yourself many headaches down the road.

One other point that the article makes deserves emphasis.  Law firms increasingly are moving away from hourly billing, so the days of open-ended legal expense are drawing to a close.  Most lawyers will be happy to work with you to find the most cost-effective way to solve your problem.  Most of us are interested in developing a long-term relationship with you, not maximizing our take on one project.  All kinds of alternatives to hourly billing are being used, and they will give you comfort about the price that you will pay for a service.  Don't be afraid to ask, and don't be afraid to walk away from a lawyer who won't discuss the subject with you.

Posted In Employment Law News | Comments (0) | Permalink |

We've explained from time to time why, as part of the public service that this blog provides, we report on court decisions, which you might think to be just "lawyer stuff."  In fact, they're much more than that.  Each case represents a little drama that has been enacted in real life.  Each tells the story of an unexpected problem, a risk taken, maybe a misunderstanding.  By studying the ramifications of such problems, risks and misunderstandings, we all can learn to adjust our own behavior and decision making to minimize similar problems in our own lives.  In short, it helps us to learn from others' mistakes. 

So in preparing for this, my 300th post on this blog, I was glad to run across this post from Steve Tobak at The Corner Office blog.  I had never seen Steve's blog before, but I'll be back for more.  (Among other things, anyone who admits in public that he likes to drive his wife crazy is my kind of guy!)   Written from the life experience of a non-lawyer executive, Steve emphasizes the need to understand the legal system.  He begins with this provocative statement:

If your career or business is untouched by significant legal matters, then you probably don’t have much of a career or business. We are a nation of laws, and any senior executive or business leader who’s been around will tell you: turn a blind eye to the legal system and you risk everything. Like it or not, that’s the way it is.

Steve lists a dozen broad categories of legal involvement that he's had in his career, employment law among them. 

We lawyers sometimes feel like professional nags, always warning clients about things that may not even be problems --- yet.  It's nice to be validated by someone who's sat on the other side of the desk.  But more important, it's good advice to be prepared.  As Steve said so bluntly: "turn a blind eye to the legal system and you risk everything.  Like it or not, that's the way it is."

Take a minute to read the rest of Steve's thoughts on the subject.  They're short but valuable to anyone in business. 

Posted In Employment Law News | Comments (0) | Permalink |

In reviewing the news for bloggable material we come across some strange stuff, but this is pretty unusual. 

You'd think that it wouldn't be a fair fight.  And, come to think of it, maybe it wasn't.

Posted In Employment Law News | Comments (0) | Permalink |

Law.com has this report of a $6.2 million verdict in favor of two Pennsylvania scientists formerly employed by PQ Corp.  Both had been terminated in a downsizing.  The jury found that PQ discriminated against them because of their age.

This case illustrates things that are worth remembering, whether you are an employer or employee. 

First, the jury found that PQ's discrimination against the scientists was willful.  That resulted in a doubling of the back pay that they were due.

Second, the jury apparently accepted the plaintiffs' argument that PQ "cooked the books" to make it look like they were downsized for financial reasons unrelated to their age.  Trial lawyers know that if a jury thinks that you're lying, they will come down hard on you.  That seems to have happened here. 

Third, $6.2 million is not the end of PQ's financial trouble.  Motions are pending for attorney's fees, which certainly will run into six figures, and to gross up the award so that the plaintiffs do not suffer from having all of that income taxable to them in one year.

Downsizings are difficult on many levels.  Companies need to be sure that their age-related analysis of the impact of the employees selected is done fairly and honestly, and not merely to justify management's desire to get rid of age-protected employees.

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

Hertz v. Friend, when decided by the US Supreme Court, will decide one of those issues --- where is a corporation's principal place of business for jurisdictional purposes? --- that seems almost silly from a common sense perspective.  That hasn't kept the federal courts from adopting different approaches that have led to vastly different results. 

The answer to the question has important consequences in the real world. It governs what federal courts will be available to plaintiffs in all kinds of cases.  This one happens to involve wage and hour issues, but it will apply to commercial disputes across the board.

Another problem, which (gratifyingly) a couple of Justices focused upon at oral argument, is the potential for catastrophic cost to plaintiffs, who in terms of financial resources play the role of David battling Goliath, if a simple rule to define "principal place of business" is not adopted.

Here's a report from Law.com that covers the case in more detail, and this link will take you to the transcript of yesterday's oral argument.  Justices Sotomayor and Ginsburg were particularly active in the discussion.  Justice Scalia, as usual, drew the best laughs.

How will the court decide?  My guess is that "principal place of business" will mean the corporation's headquarters, unless is can be proven that the headquarters is a sham or shell.

Posted In Employment Law News | Comments (0) | Permalink |

A revised "Equal Employment Opportunity Is the Law" poster must be used by businesses with 15 or more employees, effective November 21.  You can print the poster from the EEOC website.

The revisions add information to take account of the the Genetic Information Nondiscrimination Act of 2008 and recent changes in disability regulations.

Posted In Employment Law News | Comments (0) | Permalink |

Here's something that you don't see every day.   In fact, not since 1938, when the federal minimum wage was established  . . . . anywhere.

It won't happen in NJ, since our minimum wage is not indexed to inflation.

Posted In Employment Law News | Comments (0) | Permalink |

We have posted quite a bit about the pro's and cons of arbitration as an alternative to litigation in employment cases.  As a rule, we don't like it.  Now our federal legislators are hearing the same thing from a group of plaintiffs' employment lawyers.

This is in connection with the Arbitration Fairness Act of 2009, which is currently under consideration by Congress.  I'm betting that this becomes law in some form.

Posted In Employment Law News | Comments (0) | Permalink |

The EEOC has settled with retailing giant Sears for $6.2 million over its practices on how it deals with disabled employees.  Here's the press release of September 29.

The case involved Sears' inflexible practice of terminating employees once they had exhausted workers' compensation leave, instead of seriously considering reasonable accommodations that would enable them to return to work during the leave, or slightly extending the leave to enable them to return to work.

“The era of employers being able to inflexibly and universally apply a leave limits policy without seriously considering the reasonable accommodation requirements of the ADA are over,” [EEOC Regional Attorney] Hendrickson said. “Just as it is a truism that never having to come to work is manifestly not a reasonable accommodation, it is also true that inflexible leave policies which ignore reasonable accommodations making it possible to get employees back on the job cannot survive under federal law. Today’s consent decree is a bright line marker of that reality.”

In short, the EEOC is intentionally sending a signal with the Sears settlement that it will not tolerate employer rules that, either by design or application, work to circumvent the remedial purposes of the ADA.  The wise employer will adjust accordingly.

Posted In Employment Law News | Comments (0) | Permalink |

Yesterday we promised you a short refresher on HR basics to help you put the dog days of August to good use so you can hit the ground running in September.

Here's lesson number 1: take the time to plan so that  that you have the basics in place.  We've all heard it before.  "Those who fail to plan, plan to fail."  "You can't build a house from the top down."  There's a million of them, and they're no less true for the repetition.

I can't tell you how many times business clients have come to me for help with "a little problem."  Usually the little problem involves a summons and complaint and the prospect of the imminent expenditure of a lot of money.  Instead of asking me to help head trouble off at the pass, those clients ask me to unscramble eggs (if you'll indulge my mixing of metaphors). 

The trouble is that their problem might have been "little" if they had asked for help at the right time.  In the old Fram oil commercials the tag line was "pay me now or pay me later."  The message: an inexpensive oil filter regularly changed can save much larger repair bills that will result if basic auto maintenance is ignored.  For those of you old enough to remember those commercials, take this 30 second trip down memory lane.

The same principle applies to the law.  Most employment lawyers make a comfortable living drafting handbooks, advising on wage and hour questions, and the like.  They send their kids to college on litigation.  Which would your business rather pay for?

While you're thinking about planning, consider whether you have the right attorney.  Employment law grows more complex by the day.  Find an attorney who is knowledgeable and up-to-date.  The internet has tremendous resources and is a good place to start looking.

Once you've identified someone with the requisite knowledge, interview several to find someone you're comfortable with.  Talk about fees and the attorney's willingness to offer a cost-effective way to achieve your goals.  Also, find someone who's willing to invest the time to really understand your business: its people, systems, culture, and so forth.  You'll get a better work product, customized to your needs, more efficiently delivered.  And when lightning strikes and you find yourself defending a lawsuit, you want someone who understands how you work.  You emphatically do not want to pay to teach an attorney what he needs to know about your business under the time pressure of responding to litigation.

So that's lesson 1.  Plan, get the basics down early, and don't pay someone to unscramble eggs that you've broken unnecessarily.

Next: getting handy with your employee handbook.

Posted In Employment Law News | Comments (0) | Permalink |

August 2009.  The dog days.  It's hot, it's sticky, and the pace is slow.   Maybe it's me, but it seems slower than other years.

Somerville, NJ is a typical county seat.  A nice Main Street, attractive courthouse, good restaurants, friendly people.  During the rest of the year it bustles, if your definition of "bustles" isn't too urban.  But in August?  Why, some weekdays in August when I've gotten to the office at 8:15, it's felt like driving in on a Saturday morning at 7.

Even the weather is slow.  Saw this headline this morning.  The so-called experts have revised their Atlantic storm predictions for this year.  Even the hurricanes have decided to take it easy in August '09.

And, as Jimmy Buffett reminds us, there's no tryin' to reason with hurricane season.

So if we can't reason with the season, what can we do to put August to some productive use before things get crazy again in September?

Businesses and HR departments can use the August lull to review the basics.  Things like making sure that the employee handbook is up to date, harassment training is current, and required postings are done, among other things.  Our next few posts will try to help you make August more productive through a quick refresher course on the HR basics.

Posted In Employment Law News | Comments (0) | Permalink |

The federal minimum wage rises today to $7.25 per hour.  Same for New Jersey.

Posted In Employment Law News , Wage & Hour | Comments (0) | Permalink |

Here's an interesting post from our  northern neighbors at the New York Employment Law Blog.  French workers are trying to persuade their ex-employer to pay them severance by threatending to blow up the factory.  As the post accurately points out, lots of American companies are currently laying off workers without severance, and there usually is nothing that can be done for the terminated employees.  Even with our present economic problems, doesn't the example set by our French friends make you glad that you still live in the good old US of A?

Posted In Employment Law News , Firing Issues | Comments (0) | Permalink |

As we've noted before, mandatory arbitration provisions remain the subject of considerable controversy.  Mitch Rubenstein at the Adjunct Law Prof Blog brings us another important example, this one from the 6th Circuit. 

Mazera v. Varsity Ford is a race discrimination case that was initially filed in court.  The defendant employer moved to compel arbitration on the basis of a handbook provision.  The trial and appellate courts had no trouble finding that there was a binding agreement to arbitrate.  The problems arose over the agreement's provision that the employee had to pay $500 of the arbitration costs within 10 days. 

The 6th Circuit refused to draw a bright-line rule about the enforceability of the cost sharing provision.  Recognizing that such a provision could deter some employees from filing arbitration appeals of employment decisions, the court engaged in a detailed analysis of the particular plaintiff's ability to pay.  In this case, they concluded, the cost was a deterrent..

The accepted rationale in support of arbitration (with which we do not necessarily agree) is that it is a quicker and less costly alternative to litigation.  It seems to run counter to that rationale to require such a detailed analysis to determine whether a $500 cost is reasonable.  Surely the parties spent far more than that litigating the question, to say nothing of the cost of judicial time through two levels of federal courts. Wouldn't it be easier, and still consonant with the purpose of arbitration, to require the employer, as the party that insisted on the arbitration forum, to bear the cost of the arbitrator?  To a newly unemployed employee $500 was a lot of money.  To the employer, $500 is a pittance which was probably recouped the first week that it did not have to pay the employee's salary.

Posted In Employment Law News | Comments (0) | Permalink |

Stengart v. Loving Care Agency, Inc. is a new decision from the NJ Appellate Division that will reverberate among employment and business practitioners for a long time.  While primarily concerned with the confidentiality of employee communications made through a business-owned computer system, it also addresses the enforceability of business policies as published in employee handbooks and the attorney-client privilege.  Note that the opinion has been approved for publication, which makes it binding precedent unless reversed by the NJ Supreme Court or overturned by legislation.

The plaintiff Stengart sued Loving Care, her former employer, for discrimination in employment.  Stengart communicated with her attorneys about the case using a laptop computer that had been issued to her by Loving Care.  The e-mails went through a personal, web-based, password-protected Yahoo account.

Loving Care accessed the e-mails, which should have been protected by the attorney-client privilege,  through the laptop.  For the attorneys reading this, you will want to study the procedural details of how this happened.  For those of you in HR or other positions of management responsibility, it's enough for now that you just know what happened.

Posted In Employment Law News , Policies & Handbooks | Comments (0) | Permalink |

As we head for the festivities of the long weekend, let's all make it a point  to take a moment to remember why we celebrate.  And amid the difficult economy, partisan bickering, and cable TV shout-fests, perhaps we could focus specially on the part about pledging to each other "our lives, fortunes, and sacred honor."  There's a lot to think about in that phrase, and a good example to be followed.

And let's equally remember all who are in harm's way protecting us.

Happy 4th of July!

Posted In Employment Law News | Comments (0) | Permalink |

From Bloomberg: new DOL figures show 467,000(!) jobs lost in June.  That's 9.5% unemployment, and the consensus seems to be that any recovery in the relatively near future will not see us regain those losses.

We pointed out that May's job loss was roughly the equivalent of putting St. Louis out of work all at once.  In June we did the same to Sacramento.

According to Bloomberg, since the recession began in December 2007 the economy has lost 6.5 million jobs.  That's about the same as the total population of Los Angeles . . . . . . . . times two.  We're closing in on having the equivalent of the population of our largest city, New York, out of work.  And we're doing it at a scary rate.

Posted In Employment Law News | Comments (0) | Permalink |

The Supreme Court today handed employers a victory with its decision today in Gross v. FBL Financial.  Our prior post on the case is here, for background.

The opinion was written by Justice Thomas.  Although we have not had time to digest the opinion thoroughly, the gist of the opinion is that, in a mixed motives age discrimination case, the burden of persuasion never shifts from the plaintiff to the defendant. 

Hence, the burden of persuasion necessary to establish employer liability is the same in alleged mixed-motives cases as in any other ADEA disparate-treatment action. A plaintiff must prove by a preponderance of the evidence (which may be direct or circumstantial), that age was the “but-for” cause of the challenged employer decision.

Stripped of the legal hocus-pocus,that means that many age discrimination cases just got harder for the plaintiff to prove.

We'll have more on this decision as time allows us the opportunity to read all 29 pages more thoroughly.  (What a great way to spend Father's Day!)

Posted In Employment Law News | Comments (0) | Permalink |

The most recent jobs report, per Reuters, shows that the unemployment rate increased to 9.4% in May.  The human cost?  American families lost 345,000 jobs in one month.  To put that in perspective, it's roughly equivalent to putting the entire population of the city of Saint Louis on unemployment all at once.  Not good.

Posted In Employment Law News | Comments (0) | Permalink |

Here's an article from RGJ.com (I think that's the Reno Gazette-Journal) that deals with two of my firm's practice areas, employment law and sports law.

The short story: Terri Patraw, a soccer coach at the University of Nevada-Reno, was fired.  She sued, claiming that her termination was in retaliation for her reporting of possible Title IX and NCAA rule violations, and sexual harassment.  The university defended on the basis that Patraw was (a) an employee at will and thus subject to termination at any time, and (b) was a source of continuing turmoil in the athletic department.

Shortly before a scheduled trial the court granted the university's motion to dismiss the complaint.  This came after 4 days of oral argument.  Four days!!!!  When was the last time that you heard of four days of oral argument on anything, maybe short of a dispositive motion in a class action antitrust case?  But I digress.

After a thorough airing of the issues the court granted the defense motion and the case came to a screeching halt.  Now the university is threatening to seek from its former coach reimbursement of a half million dollars in legal fees.  I plead ignorance on the specifics of Nevada law, but in most places such a motion would go down in flames in short order.  Let's hope that it doesn't take four days of argument to get a decision.

Posted In Employment Law News , Gender Discrimination & Sexual Harassment | Comments (0) | Permalink |

We continue to see kinds of legal fallout from the subprime mortgage crisis and the economy. According to this report from Reuters, Merrill Lynch is spending $75 million to settle an ERISA action relating to the offer of its stock as an investment option in the company retirement plan.

The plaintiffs had alleged that Merrill offered its stock as a retirement plan option when it was "imprudent" to do so, given the company's growing exposure to subprime mortgages and other toxic debt.

The stock lost much of its value.

The plaintiffs'  theory was that the offer of company stock, knowing of its precarious value, ran counter to the purpose of a retirement plan.

Lessons?  If you're an employer, don't use your retirement plan to ask your employees to help finance your operations.  If you're a worker, never ever put a significant portion of your retirement money in company stock.

Posted In ERISA & Benefits , Employment Law News | Comments (0) | Permalink |

Yesterday the US Supreme Court heard oral argument in Gross v. FBL Financial Services, Inc., an age discrimination case.  Here's the transcript of the oral argument.  The issue, as simply as I can summarize it, was whether the plaintiff needed "direct evidence" of discrimination in order to prevail.  As it turns out, that question is neither simple nor direct.

Carter Phillips, the attorney for the defendant, is a respected and experienced Supreme Court advocate.  He described the case this way:

It does seem to me in some ways the Petitioner and Respondent in this case are ships passing in the night because the issues here are unbelievably complicated. I will say in 25 years of advocacy before this Court I have not seen one area of the law that seems to me as difficult to sort out as this particular one is.

Here's my suggestion.  For the lawyers who are reading this, if you have a spare half hour, read the transcript.  It's guaranteed to make your head spin.  At oral argument it made every participant's head spin, including every Justice who spoke.  (Justice Thomas, as is his practice, said nothing, which probably was wise.  Everyone else was openly and unabashedly confused.)  

For you non-lawyers, just keep monitoring our posts and we'll let you know what happens.

It's hard to predict how this case will be decided.  It will probably be in a narrow way that will interest mostly employment lawyers.  But there's a small --- very small --- chance that Gross v. FBL will produce some real fireworks in terms of how employment discrimination cases are tried.

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

Employers: if you want your arbitration agreements to hold up, two things are crucial.  First, you must be able to point to a clear and unambiguous policy to arbitrate discrimination claims. Second, you must be able to prove that the employee actually knows about it.  This formula has been recited ad nauseum by the courts, but employers still find creative ways to screw things up.

In Kirleis v. Dickey, McCamey & Chilcote, P.C., decided March 24, 2009 by the 3rd Circuit Court of Appeals, the plaintiff was a female partner (and long time employee) in the defendant law firm.  She sued for sexual harassment.  Her firm tried to force her out of court and into arbitration.  They failed. 

The arbitration "agreement" was contained in the partnership's by-laws.   Kirleis swore that she had never seen the by-laws before the litigation was started.  The firm couldn't prove otherwise, so the case stayed in court.

While I generally disagree that arbitration is the superior alternative to litigation that some attorneys claim, if you decide that you prefer arbitration, pay attention to the details so you can actually get there, for heaven's sake.  On this one there was just no excuse.  The plaintiff was an attorney, highly educated, and a long-term employee.  She was certainly capable of understanding an arbitration agreement if it had been shown to her.  The fact that it wasn't is just mind-bogglingly sloppy on the part of the firm.

Sloppy or not, many professional practices and small businesses are loosely managed.  Kirleis is a warning to all of us to pay attention to the details.

Posted In Employment Law News , Policies & Handbooks | Comments (0) | Permalink |

From time to time we've focused on the liability dangers that a company e-mail system can create for employers.  Here are two more recent examples that arose in different contexts.

 In Van Alstyne v. Electronic Scriptorium, Inc., the plaintiff was employed by a small data conversion company.  She was assigned a company e-mail account but also occasionally used her personal, password-protected AOL account to do business.  She was sexually propositioned by her president but declined his advances.  She was later fired.

In the course of litigation Van Alstyne deduced that someone at Electronic Scriptorium had broken into her personal e-mail account.  That turned out to be ES's president,  She then sued for statutory damages, punitive damages and attorneys fees under the Stored Communications Act, 18 USC 2707(a).  She won $175,000 in compensatory damages and $100,000 in punitive damages.  She was also awarded attorney's fees and costs of more than $135,000.

On appeal the story had a slightly happier ending for the employer.  The 4th Circuit vacated the award of compensatory damages since plaintiff had not proven "actual damage." 

However, the court ruled that "actual damage" is not required to entitle the plaintiff to attorney's fees or punitive damages.

I doubt whether ES's president thought that he was letting himself in for this kind of trouble when he decided to peruse the private e-mails of the object of his office affections.

The second case is Noonan v. Staples from the 1st Circuit.  Here an employee was found to have violated Staples's expense reimbursement policy.  An executive VP decided to make an example of the offender and broadcast an e-mail containing his name and offense to 1500 employees.

Despite the fact that the information was true --- the employee had violated the policy --- the court found that Staples had libeled the employee.  The ruling is confounding to the extent that it violates the first maxim of defamation law: the truth is an absolute defense.  Apparently not any more, at least not in the First Circuit.

I wonder whether the Executive VP who decided to use a broadcast e-mail to humiliate a terminated employee, and in the process teach other employees a lesson, would have done so if the ability to do so wasn't just a click of his "send" button away.  E-mail is a useful tool, but one that often seduces us to act without thinking through the possible consequences of our actions.  A little time and some careful thought might have saved the defendants in these two cases a lot of time, trouble and money.

Posted In Employment Law News | Comments (1) | Permalink |

March Madness is in full swing, complete with the obligatory first night upsets.  A couple of other favorites survived serious scares, including Villanova, which my daughter attends.  She reportedly will soon be at confession for the quality of her language in the heat of the game.  But congratulations to American, the Patriot League champion, on a terrific effort.  (Full disclosure: the Patriot League is a client of our firm.)

I'm sure that none of you bet at work, but in case you're thinking about throwing a couple of bucks into an office pool, here are a few salient thoughts from the Texas Employee Advocate.  People have gotten fired for such things, so be careful out there.

I particularly like the idea of the "boss switch" on the CBS tournament feed.  It takes me back to the 1960's, when we brought transistor radios to class to listen to the World Series and engaged in all kinds of subterfuge to hide them from the teacher. Usually unsuccessfully.  Some things never change, and shouldn't.

Posted In Employment Law News | Comments (0) | Permalink |

The employer's instinctive reaction to tough economic times is to cut costs.  Cutting costs usually means cutting employees.  Cutting employees, while providing some temporary relief, often results in cutting out parts of your company that, in the long run, you would be better off keeping. And --- if you'll allow me to stretch the analogy --- that can mean cutting off your nose to spite your face.

But thoughtful employers have found other ways.  One is counter-intuive: involving employees in strategizing how to cut workforce costs.

In that vein I suggest that two excellent posts, one from George's Employment Law Blog, the other from Gruntled Employees, are well worth your time.

Perhaps you'll find your own better way, and your business will benefit in the long run.

Posted In Employment Law News | Comments (0) | Permalink |

Layoffs, unfortunately, are no longer news.  And if you follow such things, you know that layoffs in the legal profession are no longer news. This article from Law.com caught my eye, however.  Lowenstein Sandler, a prominent NJ firm, is laying off 8% of its workforce and scaling down its incoming freshman class.   That's bad news, but not unusual in this day and age.

What was new to me was the article's link to "The Layoff List."    It's like a rolling mass obituary for employees of  "BigLaw" firms.  And it's amply populated by names familiar to all of us in the profession.

Which got me to wondering whether similar layoff problems are affecting small and mid-size firms in the same way.  Around central NJ it's clear that legal work has slowed appreciably for most firms of all sizes, but  I haven't seen evidence that attorneys are losing their jobs in the smaller shops.  Does anyone see it differently? 

If SmallLaw is weathering the storm better than BigLaw, why is that so?  Do our smaller overhead structures and more flexible management make smaller firms better adapted to brave the stormy seas than our gigantic colleagues?  I'd be interested to know what others think.

Posted In Employment Law News | Comments (0) | Permalink |

If you live in New Jersey you've probably seen the subject of a new NJ Supreme Court decision.  It's a 10 foot tall inflatable rat set up by striking union workers.  

The case is State v. DeAngelo, decided February 5, 2009.  The question for the court was whether striking workers violated a municipal ordinance by inflating the rat, allegedly in violation of a municipal ordinance that prohibited “balloon signs or other inflated signs (except grand opening signs) ... displayed for the purpose of attracting the attention of pedestrians and motorists....”

In a unanimous decision the court found that the ordinance under which the workers were charged was both content-based and overly broad, both of which are problematic in First Amendment jurisprudence.

The net result: the Rat lives!

Thanks to Professor Mitchell Rubenstein at the Adjunct Law Prof Blog for bringing this decision to our attention.

Posted In Employment Law News | Comments (0) | Permalink |

Employers and employees alike are trying to cope.  Per this AP report, 598,000 jobs were lost in January, and the unemployment rate is 7.6%.  Not good.  On the other hand,

Employers are slashing payrolls and turning to other ways to cut costs -- including trimming workers' hours, freezing wages or cutting pay -- to cope with shrinking appetites from customers in the U.S. and overseas, who are struggling with their own economic troubles.

Let's hope that these measures keep some people in jobs and the doors of business open.  Working together Americans can and will beat this problem.

Posted In Employment Law News | Comments (0) | Permalink |

The Lily Ledbetter Fair Pay Act of 2009 passed the Senate yesterday by a 61 - 36 vote.  Here's a synopsis from the Library of Congress.  It will become law when signed by President Obama.

We've blogged on this subject before, so you can review our previous posts for background.  Both the Republican and Democratic Senate Policy Committees have lengthy statements online, so you can read their dueling versions of what the bill means.

And if you're in the mood for a little laugh on a Friday, check out the video clip of primary sponsor Sen. Barbara Mikulski crowing about how her grandparents' doughnut shop served up the best doughnuts in Maryland. 

What will be less amusing to businesses is that part of the clip in which Sen. Mikulski seems to dismiss as unimportant the 180 day statute of limitations issue that was the basis of the Supreme Court's Ledbetter decision.  She says that the remedy for businesses is to "pay fair" for equal or comparable work.  Or stated another way, if I can indulge in a bit of editorial license, on this issue the Congress "don't care about no stinkin' reasons" why virtually every law on the books is subject to a statute of limitations.  The unintended (at least I think it's unintended) impact may be to extend, virtually without limit, every statute of limitations in most employment discrimination cases.

Dan Schwartz of the Connecticut Employment Law Blog has a good summary and some other interesting observations.

NJ Senators Lautenberg and Menendez co-sponsored the bill.

Posted In Employment Law News | Comments (0) | Permalink |

There's only one thing that counts in NJ today, employment-related or otherwise:

GO GIANTS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Posted In Employment Law News | Comments (0) | Permalink |

Two bills related to pay practices --- which Democrats hope will be the first laws signed when Barack Obama is inaugurated --- passed the House today.  They will be taken up by the Senate next week.  Both died in the Senate in earlier efforts to pass them, but their chances look better this time around.

HR 11 is the Lily Ledbetter Fair Pay Act.  The bill is designed to reverse the US Supreme Court's ruling in Ledbetter v. Goodyear.  See our post on the Court's Ledbetter decision here.  We did a number of followup posts as well.

HR 12 is the Paycheck Fairness Act.  It's designed to put more teeth into the Equal Pay Act and thus reduce gender-based pay inequalities.  If enacted it will allow the recovery of compensatory and punitive damages, and the filing of related class action suits.  It would also make it unlawful for employers to retaliate against employees for discussing salary information with co-workers.

We'll follow the proceedings in the Senate.

Posted In Employment Law News | Comments (0) | Permalink |

In some ways it seemed like 2008, with its crashing waves of bad economic news, would never end.  Now that we're 5 days into 2009 employers and HR professionals, still confronted with hard economic times, face the important new challenges established by Congress.  Here's a succinct summary from the Connecticut Employment Law Blog.  

It looks like the new ADA Amendments Act (get used to seeing and saying "ADAA") will be the 800 pound gorilla of employment law for the foreseeable future. John Phillips of The Word on Employment Law has an interesting post that suggests that with the ADAA Congress has intentionally undone many if not most of the restrictions placed on the old ADA by the Supreme Court.  John's theory, and if I can be allowed a bit of editorial license, his fear, is that an enormous percentage of American workers are now, as of January 1, 2009, considered to be legally disabled.  There's a lot that employers need to be prepared to deal with.  As John aptly points out, in 2008 employers could take some comfort in the fact that employees who claimed to be disabled at least had to prove their disability.  In 2009 it looks like the tables have been turned and employers will have to assume that the employee is disabled.

We won't know the full impact of the ADAA until courts start to decide cases, and that won't happen for some time.  But it looks like Congress has left the courts less wiggle room this time, so it may be unreasonable to expect significant restrictions on ADAA coverage.

Employers need to be prepared.  Period.  'Nuf said.

Posted In Employment Law News | Comments (0) | Permalink |

We close out our 2008 blogging on employment law with a post particularly appropriate for Somerville and Somerset County, NJ, the epicenter of bicycling in the Garden State.  The recently passed $700 billion bailout bill includes a tax break for businesses that reimburse their employees for commuting by bicycle.  Details at this link, for which we thank the World of Work Blog.

Posted In Employment Law News | Comments (0) | Permalink |

To note the obvious, far too many people are losing their jobs here at the tail end of 2008.  Maybe it's hopelessly naive, but my first Christmas wish for this year is that employers do all that they can to keep this the most wonderful time of the year wonderful for as many people as possible.  Save the bad news for January.  Timing matters for a whole host of reasons.  And perhaps the lucky rest of us who still have our livelihoods can take a few minutes to remember in our prayers those who are newly unemployed.

While we're on the subject of Christmas, what charitable thing can we find to say, in this most charitable of seasons, about our noble representatives in Congress?  While too many people are losing their jobs, Congress, in an act of shameless arrogance, has given itself a pay raise.  Now, we ask ourselves, how could this be?  Where have our country's "leaders" gotten the idea that this is a good  --- or even morally defensible --- idea at this particular time in our history?  Perhaps from Dickens, the great chronicler of the True Spirit of Christmas?  We've read A Christmas Carol and  know that Ebenezer Scrooge gave Bob Cratchit an unexpected raise on Christmas Day.  Could that Christmas classic have given the Congressionals the misimpression that raises at Christmas, even when self-gifted, are necessarily generous and laudable things?  Naw, not even they could have misunderstood the story that badly.

So Christmas wish number two is for Congress to do what leaders are supposed to do:  get out front and lead by example.  If you want to inspire the American people to make sacrifices for the common good, then prove by your actions that you are willing to join in the sacrifice.  Words won't do.  Only actions will.   Do the right thing.  Repeal your pay raise.

And with that we say Merry Christmas to all, and God bless us every one!

Posted In Employment Law News | Comments (0) | Permalink |

President-elect Obama's announcement of  Representative Hilda Solis as Labor Secretary has been greeted enthusiastically by unions.  Here's one view indicating that she's "100% in labor's camp." 

Our friends at The Adjunct Law Prof Blog are still learning about her, but like what  they've seen so far.

And then there's the other side.  Marverick Strategies, with which we're not previously familar but which claims to serve business and free market think tanks, calls her "a disastrous pick."

Tine will tell, but as with most things political, we suspect that a year from now the nominee's all-in labor supporters will find things in her performance to grumble about, and her virulent business opponents will be happier than they are now.

Posted In Employment Law News | Comments (0) | Permalink |

The National Football League announced this afternoon that it will lay off 14% of its staff over the next 60 days.  The linked report of the announcement does not specify how the cuts will be divided among NFL headquarters in NY, NFL Films in NJ, and NFL.com in California.

Commissioner Roger Goodell said that "I would like to be able to report that we are immune to the troubles around us, but we are not."

There's truth in that.  If any business sector is immune from the current troubles, I haven't heard of it yet.  Layoffs are never good news for anyone, especially during the holidays.

Posted In Employment Law News | Comments (0) | Permalink |

This is slightly off-topic, but our interest was piqued by a recent post from the Business Litigation Blog. Referencing another recent post in the Wall Street Journal Law Blog, the good folks at Rogers & Tartaro noted the increasing trend in pro se (do-it-yourself) legal filings that are, in the WSJ's felicitous phrase, "mucking things up" in the courts.  We'll skip the opportunity to comment on the social cost-benefit analysis of litigants who represent themselves.   What we will do is note the large number of calls that our office receives from litigants asking us to take on matters already in litigation.  They usually go something like this: "I have an existing case in [fill in the blank] court with my employer/business partner/neighbor/creditor [choose 1].  Discovery is complete/incomplete/approaching the deadline [choose up to 2].  It's a great/fantastic/life-altering case [choose 1] that will make you tons of/loads of/retirement-level [choose 1] money for almost no work. 

What this translates to is:  "Help!!!  I've started something that is way beyond me and I need help to salvage my good name, much less any money.  It's a marginal case that is about to be thrown out on summary judgment.  And just how good a chance does the defendant have of winning that counterclaim thing?"

All of this is inevitably followed by "can you do this on a contingency?"  (To which there is inevitably an easy, two-letter answer.)

The good folks at Rogers & Tartaro suggest that if you're considering going it alone in court, the best thing that you can do is invest a few hundred dollars in advance to let an attorney tell you the facts of life, or get you pointed in the right direction if you're determined to proceed.  That's a good suggestion.  While every once in a while a meritorious case gets started and then picked up by an attorney with favorable results, usually fatal damage has been done to the case long before the call for help goes out.

One of the benefits that lawyers confer upon the legal system is to weed out frivolous or marginal claims before they get to the courthouse.

Posted In Employment Law News | Comments (0) | Permalink |

The recently enacted NJ Paid Family Leave Law provides employees with up to 6 weeks of paid leave to care for a seriously ill family member, or a new (including adopted) child.  Benefits will not be available until July 1, 2009.  However, two things will happen in the next month that businesses need to know about.

The Paid Family Leave Law is entirely employee funded --- no employer contributions required.  Mandatory payroll deductions will begin on January 1, 2009.  Businesses should check with their payroll services to be sure that they comply.

By December 15, 2008 all covered businesses must comply with the Law's posting requirements.  As a practical matter, all NJ businesses and government offices are covered.  As with most things in NJ employment law (and unlike most similar federal law) there is no minimum number of employees that a business must have to qualify as a covered employer.  Pretty much it's "if you're in business, you're covered."

To help you comply with the posting requirement, here's the link for the NJ Department of Labor and Workforce Development's web site with the required notice.

Want more information?  Link here for DOL FAQ's.  Or call us; we'll be happy to help.

Posted In Employment Law News , Family & Medical Leave | Comments (0) | Permalink |

Another sign of the times: the Postal Service considering its first layoffs ever, perhaps 40,000 of them.  Here's a report from KLSA, way down south near New Orleans (actually in Shreveport, LA).

Why?  "We lost 2 billion dollars and like any other business we have to stay afloat."  The Postal Service employs about 685,000(!) people nationwide.

So who' s at risk?  According to the linked report, the first to go will be low-seniority non-union workers.  The USPS reportedly is also considering offering early retirement packages to senior workers over age 50 who have 20 years of service.

Some reports suggest that these cuts won't hit until after the traditionally profitable fourth quarter.  We'll stay on top of this and report on further developments.

Posted In Employment Law News | Comments (1) | Permalink |

The deteriorating economy continues to affect people in a real way, per this report.  The unemployment rate is now 6.5%, the worst in 14 years.  Jobs lost in October: 240,000.  Evidence that things will improve soon: scant.

Impact on businesses and employees: belt-tightening; layoffs; severance agreements.

Whichever side of the line you're on, get good advice before you take action.  It's the best way to avoid having a difficult and unpleasant situation blow up into a major problem.

Posted In Employment Law News | Comments (1) | Permalink |

With the economy uncertain, the news remains full of articles about impending terminations by major employers.  Here's an article, for instance, from Reuters reporting on comments by the CEO of Merill Lynch predicting thousands of job reductions once it  merges with Bank of America.

Along with those layoffs, and doubtless many others like them, will come severance packages.

Some of my fellow bloggers have addressed this subject from time to time, and good information is worth repeating.  Here's a recent post from Connecticut Employment Law Blog, and there are many others available.

If you've been presented with a severance agreement, here are some things to consider.

• Deadlines apply, so act promptly.  But if you're over 40 , you're entitled to at least 21 days to review a severance agreement.
• If you sign a severance agreement, you will be giving up legal claims against your employer.  Depending upon what kind of claims you do (or don't) have, it might (or might not) be a good idea to sign the agreement.
• Severance agreements often are negotiable.  Just because you have been given a "form" agreement, do not assume that  the company will not negotiate something better.  If you have negotiating leverage in the form of some potential legal claim against the employer, they often will make a better deal.
• Never try to negotiate a better deal directly with your employer before you retain an attorney.  It almost never works and In virtually every case that I have seen where this has been done, the employer has refused to go higher once an attorney is involved.  That leaves litigation as your only remaining option, and that is not a good place to be.  So if you want to argue for more, retain an attorney first and let him do the negotiating for you.

What will a lawyer cost you?  That varies by firm.  A simple severance agreement review, at which you learn about your rights, the implications of the agreement, and pick up some tips about  how to  tweak the agreement a little more in your favor, often is done for a modest flat fee.

If you have leverage and want to negotiate a better deal, other arrangements make sense.  For instance, my firm's terms involve a flat fee coupled with a contingency fee.  The contingency is keyed to the amount by which we are able to increase the employer's opening offer.  We share risk with you and you have the assurance of knowing that we will do all we can to improve the offer, since the better we do for you, the better we do for ourselves.  Incidentally, we have found that most of our clients opt for this fee arrangement.

There are other possibilities.  Just understand that you are free to negotiate a fee agreement with your lawyer that makes sense.  You're not tied, to hourly billing, for instance.  Ask around until you find the combination of lawyer and fee agreement that you want.

Posted In Employment Law News | Comments (0) | Permalink |

While speaking to a business group a few weeks ago the subject of Employment Practices Liability Insurance --- EPLI for short --- came up. EPLI covers businesses for employment-related conduct that typically is not covered by general business insurance policies.  Beyond that generalization it's difficult to talk sweepingly about EPLI since the terms and coverage of different policies vary widely.

EPLI is coverage that small and medium sized businesses need to know about, although it certainly is not appropriate for all. 

Our friends at the Pennsylvania Employment Law Blog and Connecticut Employment Law Blog recently have done good posts that explain the basics of EPLI.  Since Pennsylvania and Connecticut have done such a good job, New Jersey passes them along to you with the recommendation that a few minutes spent with them will be well worth your while.

Of course, if you have questions please get in touch with us and we'll be happy to answer them.

Posted In Employment Law News | Comments (0) | Permalink |

The 7th Circuit Court of Appeals (that's in Chicago for those of you who don't follow such things) has just issued a ruling on retaliation under Title VII for breaking off an affair with your boss.  Here's the opinion.

The facts were simple.  Tate, a man, was engaged in a consensual affair with his supervisor, a woman.  After Tate married someone else he broke off the affair in order to be true to his wife.  The supervisor objected (loudly) and had Tate fired, allegedly for refusing a work assignment and insubordination.  Tate requested but was refused the opportunity to explain his version of the facts.

A jury found that Tate was retaliated against but was not sexually harassed.  The 7th Circuit reversed the judgment for retaliation.

The court acknowledged that other courts disagree : "As a threshold matter, there is a circuit split about whether a person who rejects a supervisor’s sexual advances has engaged in a protected activity."   In essence the court held that because Tate did not know that his supervisor's conduct violated Title VII, he had not proved his claim.

So let me get this straight.  If you're fired because you break off an affair with the boss and know that the boss's conduct violates Title VII, you win.  But if you're fired because you break off an affair with the boss and don't know that the boss's conduct violates Title VII, you lose.  To borrow a maxim from another context, ignorance of the law may be no excuse, but the rule that results from this case seems a little too technical to apply fairly in the real world.  To say nothing of the fact that it yields opposite results for plaintiffs who are treated exactly the same way but have different subjective knowledge.  It just doesn't seem right.

Does anyone have a different perspective?

Posted In Employment Law News , Sexual Harassment | Comments (0) | Permalink |

In his World of Work blog Dennis Westlind has an interesting post about a new bill introduced by Senators Kerry, Kennedy, and Obama.  If enacted, it would amend the FLSA and establish severe penalties for calling (and paying) employees as if they were independent contractors.

Here's the link.

Since Obama is a sponsor, if he wins the presidency in a few weeks there's a good chance that this bill, S3648, will become law before too long.

We've posted before on the danger to employers from misclassifying employees as independent contractors.  If this bill becomes law, the stakes will get even higher. 

Posted In Employment Law News | Comments (0) | Permalink |

Yesterday the US Supreme Court heard argument in Crawford v. Metropolitan Government of Nashville.   The issue is whether Title VII protects from retaliation employees who participate in an employer's internal sexual harassment investigation, before a formal complaint is made to the EEOC (or by extension to a coordinate state agency such as the New Jersey Division on Civil Rights).  Judging from the tone of the Justices' comments, it looks like the employer is going to lose this one.  A decision will probably take months.

A copy of the transcript is linked here. It's fairly long, but if you have 15 minutes it's easy reading that will give you a nice idea of the good, the bad, and the humorous of arguing before the highest court in the land.  I've personally never argued there, but I have in the NJ Supreme Court, and it's quite an experience.

Posted In Employment Law News , Sexual Harassment | Comments (0) | Permalink |

It must be "Crawford Day" around here.

Here's a good analysis of the transcript of the argument courtesy of the Workplace Prof Blog.

Posted In Employment Law News , Policies & Handbooks , Sexual Harassment | Comments (0) | Permalink |

Here's a cautionary tale for employers from the Left Coast, and specifically the great State of Washington.  The question is whether this tale has value for New Jersey businesses.

In Danny v. Laidlaw Transit Services, Inc. the Supreme Court of Washington was asked to clarify this unsettled point of law: "Has the State of Washington established a clear mandate of public policy of protecting domestic violence survivors and their families and holding their abusers accountable?"

A thorough review of Washington's statutes and regulations led to an affirmative answer --- there is such a policy.  As a result, Laidlaw's termination of Danny's employment may have been unlawful.

I am unaware of any New Jersey precedent that has dealt with this question.  However, New Jersey too has a comprehensive statutory and regulatory scheme to address domestic violence.  It is hard to imagine a NJ court, if presented with the same issue as the Washington court, coming to a different conclusion.

The Danny scenario underscores the difficulties that confront employers when dealing with requests for employee leave.  Leave requests can disrupt the smooth flow of business, especially in small businesses that lack the staff to take up the slack when someone leaves unexpectedly.  Employers must learn to evaluate leave requests carefully, and to consider more than just the needs of their business.  More and more the courts are requiring employers to accommodate the needs of their employees, as Danny illustrates.

Posted In Employment Law News , Firing Issues | Comments (0) | Permalink |

A hat tip to Professor Mitchell Rubenstein at the Adjunct Law Prof Blog, who twice this week has blogged on important recent court decisions in our backyard, first from the 3rd Circuit, and now from the NJ Appellate Division.

The case is Cerdeira v. Martindale-Hubbell.  We'll be paying more attention to this over the next week.  For now, here's our initial impression.

The case involves four significant factors.  First, it involves harassment by a co-worker rather than a supervisor.  Second, the defendant had a "Code of Conduct" that spoke generally about the impropriety of harassing conduct but went no further.  Third, the defendant claimed that memos about harassment were circulated in the past, but plaintiff said that she did not receive them and defendant could not prove otherwise.  And fourth, plaintiff delayed for two years before reporting the harassing conduct to management.

The trial court threw out plaintiff's complaint, but the Appellate Division reversed.  Significantly, the App. Div. confirmed that plaintiff may have a valid claim based upon the notion that Martindale-Hubbell (ironic aside: a publisher of legal directories) was negligent in failing to provide its employees with a protective mechanism through an "effective" sexual harassment policy.  Although it did not decide the issue directly, it seems clear that the "Code of Conduct" did not cut it.  The case now returns to the trial court.

Employers, there's a message for you in this decision.  If you don't have an effective sexual harassment policy, you need to get one.  Now.  

What's an "effective" policy?  That's a subject for another post.  For the moment, as with most things related to employment law in NJ, we offer this advice: don't try to create a policy by yourself.  Find a NJ lawyer who knows employment law and get some help.  There's simply too much at stake for your business to run the risk of a homemade job.  And canned forms are dangerous because a good policy needs to fit the requirements of your particular business as much as it needs to fit the law.

One final caution: don't think that because you have just a few employees that you don't need this protection.  Even if you're too small to be covered by the federal anti-discrimination laws, you are subject to the New Jersey Law Against Discrimination [LAD]. 

Posted In Employment Law News , Policies & Handbooks , Sexual Harassment | Comments (0) | Permalink |

Our friends at the Adjunct Law Prof Blog bring to our attention an important employment tax decision from the US Court of Appeals for the 3rd Circuit.  The case deals with an employee's attempt to recover an alleged overpayment of FICA tax from her employer.  The case is Umland v. PLANCO Financial Services.

Here's the short version of the decision.  Umland worked for PLANCO under an "Independent Contractor Agreement."  As an IC, Umland was required to pay 15.3% of her self-employment income in SECA (self-employment) tax, the same amount as the combined employer and employee contributions to the familiar FICA tax.  PLANCO did not withhold taxes from Umland's paycheck, nor did it pay the employer's share of FICA.  This went on for about 3 years, when PLANCO made Umland a Regional Marketing Director and changed her status from IC to direct employee. 

Here's the rub.  Umland said that despite the change in title, nothing about her job changed except the way she was paid.  As a result, she was now paying the 7.65% employee share of FICA, while PLANCO paid the other 7.65%.

A year and a half later Umland's employment ended, and she filed a class action suit against PLANCO to recover one half of her SECA payments on the theory that she should have been classified as an employee throughout her relationship with PLANCO, and thus should not have been responsible for the full 15.3%. 

The court threw out Umland's complaint, holding that her state law breach of contract claims were preempted by federal law.  Where's the preempting  law?  The court found that our old friends at the IRS have a comprehensive regulatory scheme to address claims based upon misclassification of employment.  Thus, according to the court, Umland could have (and  should have) either filed a Form SS-8 to ask the IRS to determine whether she was an IC or employee, or filed an administrative claim for refund of SECA tax, or filed a tax refund suit against the federal government.  However, the law does not establish a private right of action against an employer and therefore Umland was found to have no claim against PLANCO.

For the lawyers in the crowd, there's some interesting dictum towards the end of the opinion on the sufficiency of Umland's pleading of her claim for unjust enrichment.

Posted In Employment Law News , Wage & Hour | Comments (0) | Permalink |

According to the Newark Star Ledger, NJ Governor John Corzine will sign a new pension reform bill that reduces in a small way some of the more generous benefits enjoyed by public employees in NJ.  Here's the post.  For instance, the new bill raises the retirement age from 60 to 62 (don't we private sector types wish that we could think about retiring at 60!).  It eliminates pensions for part-time employees who earn less than $7,500 per year.  It eliminates the ability of employees to tack public employment in other states (!) in order to reach the 25 years of service required to get lifetime retirement health insurance benefits.  I must confess that I didn't know that we were providing retirement health insurance to state employees who may not have spent most of their careers in NJ.

And, to add insult to injury, after current contracts expire in 2011, state workers will no longer get a paid day off for Lincoln's birthday.  I may be wrong about this, but I seem to remember that my home state has long been alone in continuing to recognize Honest Abe's birthday as a separate paid holiday.

Will all of this pension reform save beleaguered NJ taxpayers any real money?  Probably not, but at least it's a small step in the right direction, and around here we'll take what progress we can get and try to build upon it.

And if you have time for a little entertainment, the posts from readers responding to the article will give you a flavor of what political and economic life's really like in the great Garden State

Posted In Employment Law News | Comments (0) | Permalink |

We've been "off the air" for a while for reasons that involve changes of ISP's and registration of web addresses.  It's a long and boring story that best concludes with the admonition "don't try this at home." 

So Labor Day has passed, summer is unofficially over, the political season is in full swing, and we all ramp back up to top working speed.

Here's a gentle reminder as you gear back up.  Read those contracts!  Even if you can't read English.  That's the ruling of the Third Circuit Court of Appeals in a decision issued on August 28,  Morales v. Sun Constructors, Inc.

The court enforced an arbitration agreement written in English despite the fact that the affected employee did not read or speak English.  Applying traditional principles of contract analysis, the court found ruled that it was the obligation of the employee to do what was necessary to ensure that he understood the document that he was asked to sign.  So here's the lesson for employees: you will be held to the terms of the agreements that you sign, unless the employer is guilty of fraud in inducing you to sign.

The converse is true for employers.  If employees do not have the language skills and ask you to translate the agreement for them, do it thoroughly or you run the risk of having a court refuse to enforce your agreement.

Posted In Employment Law News | Comments (1) | Permalink |

About 9 months ago we posted on the legal problems of the popular tourist restaurant Tavern on the Green.  Seems that male management was accused of being a little too handy with the female wait staff. 

Now the NY Times reports that the restaurant has settled with the EEOC for $2.2 million.  Ouch.

Posted In Employment Law News , Sexual Harassment | Comments (0) | Permalink |

Yesterday President Bush signed into law the Genetic Information Nondiscrimination Act.  The new law prohibits employers from discriminating against employees or prospective employees on the basis of genetic information.  It also forbids the disclosure of genetic information, and prohibits insurance companies from making eligibility determinations and premium changes on the basis of genetic information. 

See  President Bush's remarks from yesterday's signing ceremony, and an article from Business Insurance here. 

Also, here's our prior post from last year, when the the bill had passed the House and was awaiting action by the Senate.  

We'll have more when we see the bill as signed by the President.

Posted In Employment Law News | Comments (0) | Permalink |

A federal jury in Newark reminds us that the answer is yes --- to the tune of $10.5 million --- as this report by the AP shows.

The moral of the story: if you're going to sign something, have it reviewed first by your friendly neighborhood lawyer or be prepared to live with the consequences.

Posted In Employment Law News | Comments (0) | Permalink |

We've posted before on a burgeoning issue of employment law --- so-called independent contractor litigation.  In essence, the cases claim that in some circumstances workers are treated by their employers as independent contractors are in fact employees of the company.  The issue is not just a matter of definition, but has important consequences in the real world of business.  Employees are entitled, for instance, to the overtime protections of the Fair Labor Standards Act and similar state laws.  Independent contractors are not. 

There is an obvious business reason for employers to want to classify as workers as contractors: it's cheaper and allows them to control their costs.   But it's not a low-risk strategy, as employers invite the scrutiny not only of the affected workers, but also of the IRS.

Here's a story from Lawyers USA involving such a claim against Federal Express.  We won't take your time with the facts.  They're well-explained in the story.  The important thing is that this kind of story is increasingly common, reminding employers --- all employers, large and small --- that they need to make their classification decisions carefully.  Failure to do so invites trouble. 

Posted In Employment Law News , Wage & Hour | Comments (0) | Permalink |

USA Today reports on the settlement by Xerox Corporation, for $12 million, of a race discrimination case brought by a class of its sales people.  The case was filed on behalf of a class of current and former black sales representatives. 

According to the story:

The workers said they were assigned to less profitable territories than white co-workers or were assigned to territories based on their race. They also contend they were passed over for more lucrative territories, promotions, and were denied commissions they had earned.

One plaintiff was assigned a territory in the Bronx, New York.  The position required a car.  The employee objected to the assignment on the basis of undue hardship since he did not have a car.  His manager allegedly told him he received the assignment because "blacks and the Bronx go hand in hand."

Assuming for the sake of argument that Xerox's reason for the assignment was as stated, and further assuming that assigning sales representatives to territories on the basis of perceived compatibility with the prospective customer base is a legitimate basis for a business decision, this case illustrates the danger to employers from  making decisions on the basis of the group identity of protected classes of employees.

We note that Xerox denied wrongdoing, and said that it settled the case to relieve itself of the burden of the continuation of a lengthy and expensive litigation.

Posted In Employment Law News | Comments (0) | Permalink |

The Supreme Court has upheld an EEOC rule that allows employers to coordinate retiree health benefits with Medicare for those who turn 65.  The rule, in effect, allows employers to reduce retiree benefits when they hit 65.  AARP opposed the rule on the theory that it constituted unlawful age discrimination.

Here's an LA Times article with more detail, the Supreme Court's order denying certiorari, and the EEOC rule.  

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

Yesterday the EEOC released a statement  indicating that reported job bias incidents rose 9% in 2007. 

Commenting on the increase in claims, EEOC Chair Naomi Earp warned that “[c]orporate America needs to do a better job of proactively preventing discrimination and addressing complaints promptly and effectively.”

The highest percentage increases were seen in retaliation (up 18%), age (15%), and disability (14%).

Race remains the most frequent source of complaints, but retaliation has moved into second place for the first time ever.  They are followed closely by sex, age, and disability, in that order.  Far fewer complaints charge national origin or religious discrimination.

Based upon the cases that we see in our practice in New Jersey, the most prevalent claims of discrimination involve retaliation, age, and disability.  Claims of race discrimination are relatively rare.  That, admittedly, is anecdotal evidence and may not reflect what other employment lawyers are seeing in their practices.  Does anyone else care to weigh in on this?

It remains to be seen whether the increase in filings presages a more aggressive enforcement approach by the EEOC. 

Posted In Employment Law News | Comments (2) | Permalink |

Recently we've been calling your attention to some helpful tools that the government has made available on the Internet.  Here's another one: the "Executive Pay Finder."  It can be found here on the SEC's website.

Just plug in the company whose executives you want to search, the program searches the company's filings, and in seconds you'll have the financial details of the compensation packages of the principal officers.

Or maybe you been offered the presidency of a smaller publicly traded company, but you don't know whether you've been offered a fair financial deal.  Go the to Finder, plug in your company's market capitalization or revenue (or both), and the program finds the compensation packages for all publicly traded companies that meet your search criteria.

It's interesting and it's helpful.  Try it.  (And once you do, you'll think a little harder about how you can get one of those jobs ...........)

Posted In Employment Law News | Comments (0) | Permalink |

Oh, what a day this has been, what a rare mood I'm in.

Well, it's been more like a week than a day.  And it's nothing at all like being in love.  But it has given employment law bloggers new material that will carry us through a lot of posts.

What is "it"?   Why the U.S. Supreme Court, of course.  We've been telling you that the Supremes had a lot of employment law cases teed up this Term, and now the decisions have started to fly.  We'll post on these in detail in the coming weeks, but for now let's summarize what has happened to date.  (The links are to the Court's slip opinions.)

First up was LaRue v. DeWolff Boberg, decided on February 20, 2008.   There's good news and bad news about LaRue.   Here's the bad news: it's an ERISA case, which means that neither the statute nor any decision interpreting it can be understood by mere mortals.  The good news: we're going to explain it anyway.  The justices --- all 9 of them --- agree that an individual with a 401(k) account can sue her Plan's fiduciary for a loss to that account, if the fiduciary causes the loss.  That's all you need to know.  Take our word for it. 

The second decision came in Sprint/United Management Co. v. Mendelsohn, decided on February 26.  Mendelsohn is an age discrimination case.  The question for the Court was whether the plaintiff would be allowed to present testimony from former Sprint employees that would tend to establish discriminatory conduct by supervisors different than the supervisor who terminated Mendelsohn.  The Court of Appeals (10th Circuit) had disallowed the testimony.  The Supremes reversed and returned the case to the trial court for further action.  Based on the Court's decision, which centers on Federal Rules of Evidence 401 (relevance) and 403 (undue prejudice), this kind of "me too" evidence may be used in certain circumstances.  What those circumstances are will vary by case.  The Court's ruling definitively establishes that there will be no bright-line rule allowing or disallowing this kind of evidence. 

The third decision is Federal Express Corp. v. Holowecki, decided on February 27.  At first blush this appears to be a technical decision of interest only to employment lawyers and others who are similarly deranged.  Here's the nub of the decision: the Court refused to allow a bureaucratic foul-up by the EEOC to defeat the plaintiff's substantive rights under the Age Discrimination in Employment Act. 

We will post on these decisions separately in the coming weeks for those who have a specific interest in them.

Posted In Employment Law News | Comments (0) | Permalink |

California state law allows the medical use of marijuana with a doctor's prescription.  Marijuana use is still illegal under federal law.  The California Supreme Court recently held that an employer acted lawfully when it fired an employee whose marijuana use was disclosed by a pre-employment drug test even though he was using the drug for medical reasons and under a doctor's supervision.  Here's a link to the opinion, along with thoughts from some California-based employment law bloggers here, here, and here.

NJ has no medical use of marijuana law, so this development has no applicability to companies that confine their business to this state.  Since many NJ-based companies now have operations in California, however, this decision will be important to them.

Posted In Employment Law News | Comments (3) | Permalink |

The US Supreme Court soon will hear two cases that involve important employment law issues.   The AP story appears here. 

The retaliation case, Crawford v. Metropolitan Government of Nashville, involves the question whether a witness in an internal investigation of a sexual harassment charge, who subsequently was fired (allegedly) for her participation as a witness, has a claim for retaliation under Title VII of the Civil Rights Act.  The Court of Appeals for the Sixth Circuit said no.  The Bush Administration says yes.  The Court will decide.  Our guess (and at this stage it really is just an educated guess) is that Crawford will be allowed to attempt to prove her case. 

The age discrimination case is Meacham v. Atomic Knolls Power Lab.

Posted In Employment Law News | Comments (0) | Permalink |

This week we're highlighting governmental efforts to be helpful to business by providing online employment law information.  This time it's the US Department of Labor that's updating its information resouces.  Find "Compliance Assistance" here.

Posted In Employment Law News | Comments (0) | Permalink |

Although this post is mostly about aviation, it is tangentially related to employment law.  And since I love airplanes (and flying them), I'm using the tangential relationship to justify writing about it here.

The "Fair Treatment for Experienced Pilots Act" was signed by the President on December 12.  It raises the mandatory retirement age for commercial airline pilots from 60 to 65.  Here's the FAA's press release on the new law.

Gray hair in the cockpit is a good thing.  Gray hair usually indicates experience --- and a lifetime of training --- which translates into safety.  Pilots remain subject to the usual FAA requirement that they qualify for a first class medical certificate every six months.

A hat tip to fellow employment law blogger Michael Fox for being on top of this development.

Posted In Employment Law News | Comments (0) | Permalink |

"No good deed goes unpunished."   "Sometimes you just can't win."

Those sentiments (and perhaps a few others) must be floating around the hallways at Northwest Airlines, where the company and its pilots' union, the Airline Pilots Association, have joined forces to  save a new retirement plan from an age discrimination challenge by a group of senior pilots.  Yahoo Finance has the AP story.

Northwest and the ALPA have asked a federal judge "to declare that it's not age discrimination to tilt retirement contributions to less-experienced pilots to make up for freezing their pensions."  Unlike some other airlines, a bankrupt Northwest chose not to reduce retirement benefits by terminating  its pension plan and turning its obligation over to a federal guarantor.  Instead, Northwest kept the retirement plan but froze its pensions, so that pilots received what they earned, but their pensions stopped growing.  To make up the difference, Northwest supplemented the pension plan with a 401(k) plan, which included a company match.  Ironically, however, under this arrangement the larger 401(k) matching contributions went to the higher paid, more senior pilots.

Because of that, Northwest argued that the new plan had the perverse effect of giving older pilots who lost nothing on their pension more than they would have received before their pension was frozen. Meanwhile less-experience pilots made far less.

On December 1, with the agreement of the ALPA, Northwest terminated its matching payments.  They will resume on January 1, this time with the larger matches going to less-senior pilots in order "to equalize the difference between experienced pilots who will get their full pension, and younger pilots who no longer have the opportunity to see their pension grow."  The goal is to produce similar retirement income levels for both senior and junior pilots.  And that sounds only fair.

The plan is being opposed by some senior pilots as discriminatory based upon age.  The junior pilots, without the change, would be getting the worst of both worlds.

The case serves to illustrate how difficult it can be to reconcile the demands of groups of employees with competing economic interests.  And it moves us to raise another question that employment lawyers often ponder: "Who woulda thunk it?"

Posted In Age Discrimination , ERISA & Benefits , Employment Law News | Comments (1) | Permalink |

The sexual harassment case against Madison Square Garden and New York Knicks General Manager Isaiah Thomas has been settled on the eve of the compensatory damages phase of the trial.  The terms of the settlement were not disclosed in this report from the AP.  For background, here and here are our previous posts on the case.

The settlement avoids the assessment of compensatory damages, and also the potential for a court-ordered award of attorney's fees that alone could have run into millions of dollars.

Employment discrimination cases are a species of what lawyers call "fee-shifting" cases.  That is, the loser can be ordered to pay the winner's attorney's fees.  Usually that means that losing defendants pay winning plaintiffs, and seldom the other way around.  In smaller discrimination cases, where less money may be in play in terms of compensatory and punitive damages, attorney's fees can become the "gorilla in the room."  Defendants must always be aware of the potential for an award of fees to a successful plaintiff.  It is quite possible that, depending on the cases, the fees could be greater than the damages awarded to the plaintiff.  Thus, a realistic evaluation of the likelihood of complete success should always be a part of the defense strategy and should be evaluated on a continuing basis.

This is particularly important for small and mid-sized companies, which may not have the financial resources to absorb an attorney's fees judgment.

Posted In Employment Law News , Sexual Harassment | Comments (0) | Permalink |

Today brings news of two developments featuring coaches of women's sports teams.  The first comes from California.  USA Today reports that the former coach of the Fresno State women's basketball team  has won a jury verdict of more than $19 million.  She claims that she was fired for promoting women's issues.  The university, her former employer takes a different view, claiming inappropriate conduct on the job and obtaining a prescription pain-killer from one of her players.

Local reports from the Newark Star-Ledger bring news of the criminal conviction of a former Immaculata High School girls basketball coach as a result of having what apparently was a "consensual" sexual relationship with a player.  Patricia Balogh was convicted on four of five counts, although she avoided the most serious, which charged aggravated first degree sexual assault.  A conviction on that charge could have landed her in prison for 40 years.  As it is, she's looking at 10.  There's no word whether the victim's family plans to pursue an action for civil relief against the coach or the school.

Educational employers must be vigilant.  Inappropriate relationships between players and coaches are not common, but neither are they rare.  When they occur they have the potential to cause significant liabilities and, just as important, reputational damage. 

Posted In Employment Law News , Gender Discrimination & Sexual Harassment , Sexual Harassment | Comments (0) | Permalink |

Here's Bloomberg's followup story on yesterday's argument in LaRue v. DeWolff Boberg.  Also some thoughts from the Pension Protection Act Blog.

Many who are following this story have weighed in with their predictions on how the Supremes will rule.  So I'll pick up the challenge and go where angels fear to tread.

The prevailing view seems to be that LaRue will win a split decision, with a condition.  The condition is that the Court does not avoid the merits issue by holding that the complaint was technically deficient.  I think that's unlikely.  The court will reach the merits and will rule, 8-1, that LaRue's claim can go forward.  Why?  First principles.  In the first year of law school we were taught that there should be no wrong without a remedy.  There seems to be no dispute that LaRue was wronged, and there's no disagreement that if he loses he will have no remedy.  In the upside-down, inside-out Wonderland of ERISA law there's no guarantee that common sense and simple justice will prevail.  But this one seems too clear-cut for the Court to deprive LaRue of a remedy through a technical reading of one of the few simple and clear provisions of what is, in general, a bizarrely complex statute.

The lone holdout?  Chief Justice Roberts.

One more thought.  The defendant made the all-too-predictable argument that a finding in LaRue's favor would open the "floodgates of litigation," swamping the federal courts with 401(k) investment decision cases.  Enough already.  It won't happen, but even if it does, the system can handle it.  

Posted In ERISA & Benefits , Employment Law News | Comments (0) | Permalink |

Today the Supreme Court heard oral argument in LaRue v. DeWolff Boberg.  Here's a link to a report from Bloomberg.com to give you the background.  If you're really interested, links to the briefs of the parties can be found here.  And the transcript of the argument is also available.

The LaRue case is a big deal in the world of employment law. It will affect the rights of every participant in a 401(k) plan.  There are millions of them (and you know who you are).  It presents the question whether a participant can sue a plan fiduciary for losses sustained in individual accounts due to mismanagement by the fiduciary.  Consider the facts, which are simple.  Mr. LaRue participated in his company's 401(k) plan.  DeWolff Boberg was the fiduciary.  Fearing a market decline, LaRue twice asked DeWolff to sell his riskier investments and reinvest the money in safer bond investments.  DeWolff failed to sell as requested, and LaRue sustained a loss of around $150,000.  LaRue sued, but the lower courts dismissed his complaint on the theory that he could not sue the plan fiduciary for losses to his individual account.   

The Supreme Court will now decide whether individuals who sustain losses at the hands of fiduciaries can sue to recover their money.

My fellow bloggers are weighing in on this one in force.  Here are the preliminary views of Scotusblog, Boston ERISA Law Blog, and Ross Runkel.

Posted In ERISA & Benefits , Employment Law News | Comments (0) | Permalink |

The New York Times reports that in Federal Express Corporation v. Holowecki the US Supreme Court will decide an arcane but important question: whether the filing of what is technically the wrong EEOC form when making a complaint of discrimination is enough to defeat the plaintiff's claim in court.  It's interesting in a technical kind of way, but unlikely to carry the day for Federal Express, the defendant.  Courts like to see cases decided on their merits, not technicalities.  The law abounds with examples of this policy preference.  Especially since those who complain to the EEOC usually do not have legal training, it is unlikely that the Court will deprive them of their day in court as long as they have provided enough information to the EEOC to give the employer fair notice of what they are claiming. 

We will let you know when a decision comes down.

Posted In Employment Law News | Comments (0) | Permalink |

Over time we've followed the saga of Brian Valery, the Anderson Kill paralegal who falsely told his employer --- a major law firm --- that he had gone to law school and passed the bar.  His reward was employment as an attorney.  Valery eventually got caught. 

Law.com reports that Valery has now pled guilty to grand larceny for accepting an attorney's salary under false pretenses.  He now has until January 30, 2008 --- his sentencing date --- to repay $150,000.  If he does, it's 5 years probation.  If not, it's 5 to 15 in the slammer.

Valery is an extreme case, but we can't stress enough the importance to professional services firms of checking the qualifications of new hires. 

Posted In Employment Law News | Comments (0) | Permalink |

We've posted previously on the age discrimination case that was brought by the EEOC on behalf of demoted and fired partners of legal giant Sidley Austin.  The case has been followed closely by the legal community since it had the potential to affect the mandatory retirement policies of many large firms.  Now the Wall Street Journal reports that the case has been settled, with $27.5 million dollars being divided among 32 plaintiffs.

Due to the settlement, interesting and important questions about what it means to be a "partner" in a large law firm will not be decided by the court, at least not in this case.  Francis Pileggi of the Delaware Corporate and Commercial Litigation Blog has some thoughts on the subject, as does Professor Larry Ribstein on Ideoblog.    

A somewhat similar case was decided in New Jersey in 2006, where the issue was the definition of "employer" for purposes of CEPA, New Jersey's whistleblower law.  You can follow up through our post on Feldman v. Hunterdon Radiological Associates, bearing in mind that the issues, though similar, are not identical.

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

The news has been all over the media, so we won't bother with anything detailed.  Here's a link if you're interested the details of the Knicks' latest loss, this one in the courtroom to the tune of $11 million in punitive damages. 

And the damage to the team will just get worse.  Compensatory damages still have to be decided, which could tack millions more onto the judgment.

Posted In Employment Law News , Sexual Harassment | Comments (0) | Permalink |

Two newsworthy items this morning.

Early reports are that the jury has reached a partial verdict in the sexual harassment suit against The New York Knicks and general manager Isiah Thomas.  The only thing that the jury has not yet decided is whether Thomas should pay punitive damages.  Ouch.  The defense team couldn't have slept well last night.

Reuters reports that a federal judge in San Francisco has "extended an order preventing the Department of Homeland Security from launching a controversial new program to root out illegal immigrants in the nation's workforce."   The extension is for 10 days while the court decides on the legality of the program.

More on both when available.

Posted In Employment Law News | Comments (0) | Permalink |

The Kansas City Star reports on the recent settlement of a class action alleging age discrimination against Sprint Nextel Corp.  The case involved about 1,700 former employees and settled for $57 million.   The plaintiffs  alleged that Sprint targeted for layoff employees age 40 and older.  Sprint denied the charges.

The case is noteworthy for the amount of discovery that was conducted.  Two million pages of documents were exchanged and 600 depositions were taken.

The class in this case did somewhat better financially than the plaintiffs in a similar case in Georgia that was recently resolved.  The average settlement in the Georgia case was about $6,000 per plaintiff, while in the more recent case the average was $20,330.

The court has yet to rule on the plaintiffs' attorneys' application to approve about $19 million in fees.

Age discrimination class actions continue to hold the potential for expensive and risky litigation that can cost major employers large amounts of money.  For smaller employers the prospect of defending multi-plaintiff cases can be even more dangerous since the cost of defense and the potential verdicts can easily outstrip the company's available resources.  Thus, as a general rule every termination decision, and certainly every decision to terminate multiple employees, should be made only with the assistance of experienced employment counsel. 

Posted In Employment Law News | Comments (0) | Permalink |

Employees (or more frequently, ex-employees) often harbor the impression that the threat of punitive damages will force their employers into a quick settlement of whatever complaint they have with their employer.  They need to be disabused of that notion in all but the most egregious situations.  In New Jersey punitive damages verdicts are hard to come by.

The same is true, and increasingly so, in the federal courts, especially in light of the Supreme Court's ruling that in order to meet constitutional due process requirements most punitive damages awards should be in a single digit ratio to compensatory damages, that is, not more than 9:1.  

Law.com reports that the United States Court of Appeals for the Third Circuit, the federal appellate court that covers New Jersey,  has drastically reduced an award of punitive damages to a plaintiff.  The case is not an employment dispute, so we will not go into detail here about the facts.  Suffice it to say that a jury awarded the plaintiff $109,000 in compensatory damages and $30 million in punitive damages.  The trial judge reduced the punitive damages award to $2 million, finding the jury's 275:1 ratio to be plainly excessive and unconstitutional.  The trial court's reduction brought the ratio down to about 18:1. 

The Court of Appeals further reduced the punitives award to $750,000, a ratio of about 7:1.

It is important to understand that the analysis of the constitutional viability of a punitive damages verdict is more complex than the rote application of a mathematical formula.  Nonetheless, the Third Circuit's analysis signals that increasingly careful review will be engaged in by the appellate courts, which will not hesitate to overrule the trial courts when they believe that constitutional boundaries are exceeded.  And this in turn means that plaintiff's lawyers usually should counsel their employment law clients not to pin their hopes of success on a significant punitive damages award.  Management side lawyers, conversely, now can counsel their clients with greater assurance and a better answer to the question "what's the exposure on punitives?" than "whatever the jury decides."   

Posted In Employment Law News | Comments (0) | Permalink |

After an 11 month delay and much partisan rancor, David Palmer, President Bush's nominee to chair the EEOC --- the agency that enforces the federal anti-discrimination laws --- has asked that his nomination be withdrawn.  Among the criticisms that have been leveled at Palmer while working in EEOC's litigation enforcement section: filing a disproportionate number of enforcement actions alleging racial discrimination against whites, and focusing on religious discrimination.  Here's the story from the Washington Post.

No word so far on another nominee.

Posted In Employment Law News | Comments (0) | Permalink |

The LA Times reports that the House of Representatives has passed a bill that would reverse the decision of the US Supreme Court in Ledbetter v. Goodyear, which strictly construed Title VII's 180 day requirement for filing of pay discrimination claims.  We previously posted on this decision here, wondering whether Congress would make good on its threat to overturn the decision through legislation.  The House bill, if passed by the Senate and signed into law, would return the law to where it stood before the Supreme Court ruled. 

Curiously, according to the report the veto-averse White House has threatened to veto this bill if it is passed by the Senate.  The government has no direct stake in the litigation, and the bill would merely restore the status quo.  What is it about this situation that would cause the White House to threaten the ultimate sanction of a veto?

Posted In Employment Law News , Title VII | Comments (0) | Permalink |

Here's an item from Law.com that addresses the employment law implications of Falcons QB Michael Vick's possible involvement in a dogfighting ring.  We emphasize that Vick has denied wrongdoing and has not been charged with a crime. 

If Vick is charged with participating in dogfighting, or if he's indicted by a grand jury, the standard NFL contract would allow the team to suspend Vick for at least four games *** [or] the Falcons could use a suspension as justification for terminating Vick's contract.

 If the Falcons were to decide to release Vick, he would stand to lose about $70.5 million remaining on his contract.

Posted In Employment Law News | Comments (0) | Permalink |

The Workplace Law Prof reports that the Supreme Court's Ledbetter decision, about which we posted here and here, has quickly caught the attention of Congress.  Which may just consider legislation to undo what the Court did. 

We shall see.

Posted In Employment Law News | Comments (0) | Permalink |

Here's a case that the US Supreme Court has agreed to hear in the Fall.  It's another that deals primarily with technical matters of procedure.  (It involves the validity of the plaintiffs' filing of an administrative charge with the EEOC.  Such a filing is a prerequisite to bringing a lawsuit under federal anti-discrimination laws.)

Whatever the Supreme Court eventually decides, it will have little effect in New Jersey.  Experience tells us that most discrimination cases in New Jersey are filed under the NJ Law Against Discrimination --- commonly known as the LAD --- because its remedies usually are more favorable to plaintiffs and it does not have a requirement that plaintiffs first file with an administrative agency.  Thus, the LAD usually is a better choice for plaintiffs than similar federal statutes.

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

An editorial in this morning's Newark Star-Ledger applauds "a little-noticed decision last week by the state Supreme Court that allows 72,000 current and former New Jersey employees to bring a class-action lawsuit against Wal-Mart."  The decision in Iliadis v. Wal-Mart may not have attracted much notice from the public at large, but it is just a few days old and already is attracting lots of notice from employment lawyers.  See preliminary reactions from Law.com, Bloomberg News (via Wal*Mart Watch), and New Jersey Lawyer.

We posted on this case on January 10, 2007, when the Appellate Division of NJ Superior Court affirmed a trial court's denial of class action status to a claim that could involve as many as 72,000 Wal-Mart employees.  We noted that "a lot of dollars are riding on the outcome" of the pending appeal to the Supreme Court.

The plaintiffs allege that Wal-Mart violated statutes, regulations, and its own policies about how employees should be paid.

The Court's 5-1 opinion by Chief Justice Zazzali ordered (over the dissent of Justice Rivera-Soto) that the plaintiff class be certified, so the case will go forward as a class action.  We will keep you informed as it does.

Posted In Employment Law News , Wage & Hour | Comments (0) | Permalink |

Law.com reports that litigation over allegedly excessive administrative expense charged by 401(k) plans is being filed around the country. 

The suits come amid stepped-up investigations by a congressional committee, the U.S. Department of Labor and the U.S. Securities and Exchange Commission into inadequate disclosures of administrative fees charged to employees in 401(k) and other retirement plans.

Among other things, the cases that have been filed have attacked undisclosed fees charged for mutual funds and annuities.  At least one alleges that the sponsoring employer violated its fiduciary duty to its 401(k) plan participants by engaging a mutual fund company that charged undisclosed fees.   And some cases challenge employers that engage funds that charge high fees, even where full disclosure is made to employees.

It does not appear that any of these cases have been finally decided.  However, some courts have decided motions in which they have upheld the viability of the plaintiffs' legal theories.

We will keep you advised as we follow this new area of employer liability.

Posted In Employment Law News | Comments (0) | Permalink |

AP reports that Sprint-Nextel has agreed to settle a class action suit that claims that it committed age discrimination against some 1700 plaintiffs during a downsizing that took place from late 2001 until early 2003.  The amount of the settlement is $57 million. 

This case follows closely the settlement of another case making same kinds of claims for about $5.5 million. 

Sprint-Nextel denied any wrongdoing, saying that it wanted to put the matter behind it so it could continue with business. 

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

The Houston Chronicle has an article today about the nationwide trend of an increasing number of age discrimination claims filed by baby boomers. 

"[A]ge-bias litigation is a scenario being repeated across the country as companies' streamlining efforts take a toll on baby boomers whose salaries make them targets for layoffs.  "We're seeing a ton of it," [an EEOC senior trial attorney] said."

Employment lawyers tend to agree that age discrimination cases are a bottom-up phenomenon.  Companies generally try to be fair and set appropriate policies.  Lower-level managers who implement those policies are the ones who usually create discrimination problems.

Here's a common scenario:

"[T]the bulk of age-discrimination complaints are brought by a sole plaintiff. These plaintiffs tend to have several things in common: They've worked for one employer for many years, have been stellar performers and were fired after new managers had taken over. 

"What we see over and over again is a new boss comes in and the new boss wants to reorganize and change things," said [one attorney]. "The new boss makes life miserable for the long-term, exceptional employees, and soon some or all of them begin to receive unfair scrutiny and eventually are fired, moved out or demoted."

 Demographics suggest that this trend will not change soon.  And, as the article points out, retaliation claims will probably follow the surge in pure age discrimination claims.

Posted In Age Discrimination , Employment Law News | Comments (0) | Permalink |

Law.com reports that the IRS has made sweeping changes to its deferred compensation rules that affects common business compensation practices, including stock options, bonuses, and severance policies. The new rules impose tougher standards and penalties for violations.  Compliance is due by December 31, 2007. 

Employers should review the changes with counsel to ensure that their policies meet the new standards. Don't assume that they don't apply to you.  And the penalties for non-compliance have teeth.

As one employment attorney put it:

"A lot of clients are sort of in denial of [the rules]," said Harrelson of Nashville, Tenn.'s Waller Lansden Dortch & Davis. He believes the rules will catch many employers by surprise. "They are so broad and so invasive that you can have people you never dreamed of falling under these rules."

Now you know.  Don't be one of those caught by surprise. 

Posted In ERISA & Benefits , Employment Law News | Comments (0) | Permalink |

From the Arizona Republic comes a story reminding us that sexual harassment does not always fall neatly into the usual "male harassing female" model.   An Arizona construction company agreed to pay $60,000 to settle a complaint filed by the EEOC on behalf of a male employee.  "In addition to paying $60,000 the EEOC settlement by consent decree requires T.R. Orr to provide training and other relief to educate employees about sexual harassment and their rights under Title VII of the Civil Rights Act of 1964 . . .."

The case was brought on behalf of a male construction worker who was subjected to physical harassment by a co-worker.  The co-worker had a history of such conduct, and the employer knew about it. 

The article does not specify the gender of the harasser, although it appears to have been a woman.  But it really doesn't matter.  The harasser could have been female or male and the liability would have been the same.   Since about 15% of sexual harassment claims with the EEOC are filed by men, employers need to think beyond the usual stereotype to ensure that harassing conduct is promptly addressed.  Failure to do so risks a financial wake-up call from the EEOC or a private plaintiff.

Posted In Employment Law News | Comments (0) | Permalink |

A Reuters report demonstrates how the law changes with changing times. These days that often means changing with advances in medicine and technology.  A bill that will prevent discrimination based upon a person's genetic makeup, HR 493, has overwhelmingly passed the House.  Senate consideration is next.  The White House backs the measure, while the United States Chamber of Commerce opposes it.

New York Democratic Rep. Louise Slaughter, who sponsored the bill with Illinois Republican Rep. Judy Biggert (news, bio, voting record), said it will eliminate a new form of discrimination and remove people's reluctance to take part in genetic research and testing.

Rep. Slaughter's press release is available on her web site.

The bill includes sections that govern the employment practices of employers, employment agencies, labor unions, and training programs.

The Chamber of Commerce, according to the Reuters story, says that employers do not discriminate on the basis of genetic testing.  It fears the imposition of new regulations and damages in lawsuits.

We will keep you advised as HR 493 advances through the legislative process.

Posted In Employment Law News | Comments (0) | Permalink |

The EEO-1 or "Employer Information Report"  must be filed annually with the EEOC by all employers that have at least 100 employees, and by those that have at least 50 employees and $50,000 worth of federal government contracts.  The EEO-1 requires employers to provide the government with a count of employees by job category, broken down by race, ethnicity and gender.

The EEO-1 has been around since the mid-1960's.  A revised version must be filed for reports due starting on September 30, 2007.

The EEOC's FAQ's are helpful.   Extensive filing instructions are also available.  Section D - Employment Data, is the only part of the form that has changed.

Posted In Employment Law News | Comments (0) | Permalink |

For years the NFL has treated its 70+ Drug Program Agents [DPA's], who collect urine samples for the drug testing program, as independent contractors.  The IRS recently ruled that the DPA's are league employees, not independent contractors.  Here's the story as reported by the New York Daily News.

Although the financial impact of the IRS ruling has not been established, it reportedly could cost the NFL tens of millions of dollars for employment taxes, pension contributions, and other benefits that should have been paid to the DPA's over the years.

The NFL's reaction probably is "can't we use instant replay to take another look at this?" 

The employee - independent contractor distinction continues to arise in many business contexts.  Microsoft, for instance, was rather famously impaled on the distinction a few years ago.  Many business --- of all sizes --- use independent contractors.  If your business is one of them, be sure to have your workers properly classified in case the IRS comes knocking.  You don't even have instant replay.  And few have NFL-style money to set right what was done wrong.

Posted In Employment Law News | Comments (0) | Permalink |

According to this article from Law.com, eleven states, New Jersey among them, are considering laws that would give employees the right to sue their employers for damages resulting from bullying or abuse by their bosses.  Employees usually can sue only for things like unlawful discrimination.  The new laws, if enacted, have the potential to implicate a much wider range of workplace conduct.

New Jersey already gives employees a limited common-law right to sue for workplace abuse through the tort of "intentional infliction of emotional distress."  While it is frequently invoked by plaintiffs in employment litigations, they seldom succeed because of the egregiousness of the conduct that must be proved. 

I will not comment on the wisdom of the proposed laws (at least for now).  But think about the potential impact on employers in light of the survey cited in the article.  Forty-four percent (44%)(!!!) of employees polled said that they have a supervisor or manager whom they consider to be abusive.  That's an astonishing figure, and it's hard to tell whether it says more about the bosses or the employees.

Posted In Employment Law News | Comments (1) | Permalink |

FedEx, fighting charges that it discriminated against people of color, has agreed to settle the dispute for almost $55 million, according to a report this morning.  The overnight delivery company has also agreed to overhaul its pay, discipline, and promotion policies.

The FedEx explanation for the settlement?

"We voluntarily entered into the consent decree because we believe that this action demonstrates our deep commitment to diversity and equal employment opportunities." In the consent decree, FedEx Express also continues to deny that it practiced discrimination.

The dispute involved FedEx's Basic Skills Test, used in personnel decisions, which whites passed at disproportionately higher rates than blacks and Hispanics.

Posted In Employment Law News | Comments (0) | Permalink |

A report today from Reuters, quoting the Wall Street Journal, reveals that Wal-Mart has a "sophisticated surveillance operation that included snooping not only on employees, but also on critics, stockholders and the consulting firm McKinsey & Co."

The revelations come from Bruce Gebbard, a Wal-Mart security worker who was fired in March for conducting unauthorized surveillance on behalf of the company.  Gebbard admitted intercepting telephone calls from a NY Times reporter.

"Gebbard said in the Journal that he recorded the calls on his own because he felt pressured to stop embarrassing leaks. But he said in the Journal that most of his spying activities were sanctioned by superiors."

There's more.

"The company also deployed cutting-edge monitoring systems made by a supplier to the Defense Department that allowed it to capture and record the actions of anyone connected to its global computer network, the Journal said."

Yikes. I assume that includes anyone who shops Wal-Mart online.  And you have to wonder how much information they can capture.

Wal-Mart characterizes its security operations as normal. 

We'll see.  Something tells me that we're going to hear more about this.  In the meantime, employees need to understand that these kinds of systems and programs exist and conduct themselves accordingly in the workplace.  You can bet that Wal-Mart is not alone in having this kind of program.

Posted In Employment Law News | Comments (0) | Permalink |

Cracker Barrel, the national restaurant chain, has sued two of its insurance carriers for failing to pay its defense costs against an EEOC complaint, reports nashvillecitypaper.com.  The EEOC alleged that Cracker Barrel employees engaged in repeated sexual harassment of female workers.  There were also allegations of racial discrimination. 

The case was settled when Cracker Barrel agreed to pay a collective $2 million to 51 employees. 

Its insurance carriers allegedly refused repeated requests that they defend and indemnify Cracker Barrel.

In the face of that refusal, Cracker Barrel has sued the carriers in federal court in Nashville.  The case has just been started and the carriers' defenses have not been formally stated.  Since businesses need to know if the employment-related insurance that they have purchased will actually be available when it is needed, we will follow this issue for you.

Posted In Employment Law News | Comments (0) | Permalink |

Some recent articles report on recent trends in employment litigation, and specifically the kinds of claims that are being filed by plaintiffs.  Lawyers USA, for instance, recently highlighted a 10% increase in the number of religious discrimination charges that were filed with the EEOC in 2006.  (As noted below, despite the percentage increase, religious discrimination charges constitute a very small portion of the EEOC's docket.)

On March 16 Law.com published an article on a boomlet (pardon the pun) in age discrimination claims as baby boomers approach retirement age.

These articles led me to take a look at the EEOC's statistics on the charges filed with them.  Racial discrimination charges lead the way, followed closely by sex discrimination and retaliation charges.  Age and disability discrimination complaints show up in the charges of about a fifth of the people who filed charges in 2006.  National origin charges appear in about 10% of cases, and religious discrimination in only 3%.  Equal Pay Act charges are barely a blip on EEOC's radar screen.

In my New Jersey practice the most common recent complaints are related to disability and Family and Medical Leave Act issues.  Similarly, our new Jersey Employment Law Blog statistics indicate that the largest number of recent searches involve disability and leave posts.

Has anyone seen different trends in New Jersey?  Nationally?

Posted In Employment Law News | Comments (0) | Permalink |

Here's some cheery news for a Friday: more workers than ever are dissatisfied with their jobs.  According to a story reported by Reuters, employee dissatisfaction is the highest ever measured.

In a survey of 5,000 U.S. households, more than half of all respondents said they dislike their current jobs, compared to less than 40 percent in a similar survey conducted 20 years ago.

These days, the lowest levels of job satisfaction are among younger workers, the survey found. Only 39 percent of respondents aged 25 and younger said they liked their current jobs -- the lowest level in the survey's 20-year history -- compared to 45 percent for workers between 45 and 54.

In terms of residence, the Northeast fared poorly, with workers in New Jersey, New York and Pennsylvania reporting particularly high levels of dissatisfaction.  Perhaps the crowding, commuting nightmares, and high taxes are to blame?

Posted In Employment Law News | Comments (0) | Permalink |

Cash balance plans are in the air.  Yesterday we reported on a decision by Judge Chesler of the District of New Jersey that upheld Dun & Bradstreet's cash balance plan against an age discrimination attack.  Today the Third Circuit has weighed in on the issue, holding that PNC's cash balance plan does not unlawfully discriminate against older workers.  The opinion is here and a related news article here.

The opinion is long and complicated, but it amounts to the idea that younger workers may benefit disproportionately from cash balance plans not because the employer affirmatively discriminates, but because of the time value of money.  This, the court found, is not unlawful.

The Third Circuit is the second court of appeals to weigh in on this issue, in concert with the Seventh Circuit in the IBM case.  There is still district court precedent from the Second Circuit that goes the other way and finds cash balance plans discriminatory.

Posted In ERISA & Benefits , Employment Law News | Comments (0) | Permalink |

Earlier this month we reported on a big win the the US Supreme Court for IBM, whose cash balance retirement plan was challenged by older workers as age discriminatory.  The defect, the plaintiffs argued, was that the plan treated younger workers more favorably.  The Supreme Court ruling does not settle the issue on a national level because it merely refused to hear an appeal of a lower court decision of the case.

Now the same issue has come to New Jersey.  US District Judge Stanley Chesler has ruled that Dun & Bradstreet's cash balance plan does not unlawfully discriminate against older workers.  Judge Chesler ruled that "the principle of compound interest and the passage of time produce the age differences that plaintiff complains of, but these are things that are correlated with age; they are not the effects of age discrimination."

There are cases from other jurisdictions that take an opposite view, so this is an issue that the Supreme Court will probably end up reviewing. 

Posted In ERISA & Benefits , Employment Law News | Comments (0) | Permalink |

IBM just had a good day in the US Supreme Court, which refused to review decisions favorable to the computer giant in two cases.  In the first the court refused to review a lower court decision holding that IBM's "cash balance" pension plan does not unlawfully discriminate against older workers.  That saved a potential liability of $1.4 billion (that's billion with a "b").  Not a bad result.

In the second case the high court refused to consider the appeal of an employee who claimed that he was fired in retaliation for his complaints under the Fair Labor Standards Act about IBM's allegedly unlawful failure to pay overtime to some employees.

More detail here.

Posted In Employment Law News | Comments (0) | Permalink |

Here's a story about an interesting survey recently conducted by Yahoo HotJobs, which indicates that nearly 50% of the respondents plan to change jobs in 2007.  The sample of respondents was not scientifically selected, but the results are intriguing nonetheless.

Among them:  "The Yahoo survey, which was conducted in the last two weeks of October, found the primary reason most people were looking for another job was to improve their salary and benefits, but the opportunity for more career growth was critical for about 19 percent of respondents."

It will be interesting to see if a trend toward job mobility is established in the coming year. 

Posted In Employment Law News | Comments (0) | Permalink |

2006 was our first year of blogging about employment law issues, with an emphasis on New Jersey law.   Some seven months and 67 posts later, we are on the threshold of 2007, which will be our first full calendar year of blogging.  The approach of the New Year provides us with the traditional  opportunity to look back at some of the items that caught our attention in 2006.

This was a big year for CEPA, NJ's whistleblower law, from new notice and posting requirements to cases that clarify the definition of "employees" who are protected by the law.

The impact of bad language in the workplace on eligibility for unemployment benefits was the subject of another court decision.

The importance of conducting a thorough background check on the licensure of professionals was illustrated by two cases of attorneys who belatedly were discovered not to be licensed to practice law, much to the embarrassment of their employers --- a large law firm and the federal government.

 We looked at a new NJ statute --- the tongue-twisting Worker Freedom from Employer Intimidation Act.  Which is not nearly as sweeping in scope as its title suggests.

We reviewed a number of stories that dealt with pensions and benefits.

And we had some fun with the creative --- and blessedly pragmatic --- federal judge who forced some difficult attorneys to settle a discovery dispute by playing a game of "rock, paper, scissors."

We're looking forward to bringing more to you in 2007.  In the meantime, we wish you and your families a very happy, healthy, personally fulfilling and prosperous New Year.

Posted In Employment Law News | Comments (0) | Permalink |

All of us at Steinberg Law Offices want to take this opportunity to wish our clients and friends a very Merry Christmas,  Happy New Year, and the happiest of all holiday celebrations.  The simple message of the season is Joy and Peace, and we hope that you find those things over the next weeks and into 2007.

Posted In Employment Law News | Comments (0) | Permalink |

This isn't really employment law news, just a friendly reminder.  It's office party time.  When you go, don't forget that if you're smart, your emphasis will be more on the "office" than the "party."  Check out the advice you find here and here.  It's worth reading and heeding.

Have a good time, but remember that you're at a business function.  Act appropriately and you will benefit (or at least not self-destruct).  Behave badly and you might just find yourself at someone else's holiday party next year.

Posted In Employment Law News | Comments (0) | Permalink |

Yesterday's post addressed the plight of some demoted partners of the large law firm Sidley Austin, who are caught in the middle of an age discrimination litigation between the EEOC and Sidley.  Their problem is that Sidley wants access to potentially embarrassing information about those who have moved on to new employment --- information that the attorneys want to keep private for fear that its disclosure could hurt their careers and financial situations.  Some are so concerned that they have asked the EEOC to remove them from the litigation. 

The EEOC so far has refused, noting that it --- the Government --- is the plaintiff, not the individuals.  In other words, the EEOC is going forward with the case on behalf of the attorneys whether the attorneys want them to or not.

With this fresh in my mind I came across this article by Professor Walter Williams, an economist at George Mason University.  It reminds us of the skeptical and cautious view of the Founding Fathers on governmental powers.  It's a quick read and worth the little time it will take. 

I offer it for your consideration with just this comment.  The power of government brought to bear upon a small business or individual can be extraordinarily intimidating.  Keeping the playing field level is one of the most important functions performed by lawyers.  Citizens need to know this and lawyers need to remember it.

Posted In Employment Law News | Comments (0) | Permalink |

"I'm from the Government and I'm here to help you." 

The Third Great Lie must be ringing in the ears of some 30 demoted partners of legal giant Sidley Austin.  The EEOC has sued Sidley Austin on behalf of the partners, claiming that they were demoted on the basis of age discrimination, and is seeking millions of dollars of back pay.  The case apparently has turned nasty, and some of the warfare is now intramural.

Law.com has the details.

The EEOC's suit against Sidley, filed in January 2005 after a five-year investigation, has received widespread attention in the legal profession because law firm partners have traditionally been considered employers exempt from anti-discrimination laws. The agency is taking the novel position that Sidley's highly centralized management structure, in which an unelected executive committee made almost all major decisions, rendered most partners at the firm employees.

Sidley Austin is defending, in part, by claiming that the demoted partners were deficient in performance and billing, and in one case, had a history of mental instability.   Some have moved on to new jobs, and Sidley is now attempting to obtain discovery of their performance from their employers to buttress its defense.   The EEOC has opposed the discovery requests, claiming that they are irrelevant to any issue in the case.

Some of the lawyers who are the subjects of the discovery requests have asked the EEOC to drop the case.

Several of the demoted partners have asked the EEOC to sever them from the case out of concern that such information will be publicly disclosed. The EEOC, which is seeking millions of dollars in back pay for the former partners, has refused such requests on the grounds that only the agency itself and none of the demoted partners is an actual party to the case.

So the Government is going to help whether the intended beneficiaries of governmental beneficence want the help or not.

This case will continue to make headlines, and may ultimately prove to be important to larger professional practices that are run by a small, core management group.  We'll keep you advised.

Posted In Employment Law News | Comments (0) | Permalink |

Yahoo reports today that the Supreme Court has heard oral argument in Ledbetter v. Goodyear Tire & Rubber Co.   The case raises a technical but important issue about the period of time for which a Title VII plaintiff can recover back pay.  The issue involves the application of the 180 day time limit for complaining about discriminatory employment practices.

After 19 years at a Goodyear Tire & Rubber Co. plant in Gadsden, Ala., Lilly Ledbetter was making $6,000 a year less than the lowest-paid man in the same job.

She filed a pay discrimination lawsuit in 1999, arguing the disparity existed for years and was primarily a result of her gender. A federal jury agreed and awarded Ledbetter more than $3.8 million. A judge reduced the award to $360,000.

Goodyear appealed and the 11th Circuit Court of Appeals reversed the trial court's award, holding that her time to complain had passed long ago.

Ledbetter then appealed to the Supreme Court.  She contends that each new paycheck that she receives continues the discrimination that started when she was first employed and is a new violation of her civil rights.

This is a case that contains both a serious legal issue and significant practical ramifications for business if Ledbetter wins.  It bears careful watching, and watch it we will.  A decision is expected in the summer. 

Posted In Employment Law News , Title VII | Comments (0) | Permalink |

Many employees use laptop computers issued to them by their employers. What happens when an employee is discharged and erases the computer's hard drive before returning it to the employer? That's the question that the U.S. Court of Appeals for the Ninth Circuit recently decided, and the answer was bad news for the employee.

The case is Leon v. IDX Systems, decided September 20, 2006. Here are the facts in a nutshell.

Leon, who worked for IDX in a sensitive position, complained of what he believed to be financial and reporting irregularities in a connection with a federally-funded project. IDX put Leon on unpaid leave and filed a lawsuit against him, seeking a declaratory judgment that it could fire him without violating the anti-retaliation provisions of the False Claims Act, Sarbanes-Oxley, and the Americans with Disabilities Act. Leon then filed his own action against IDX, making a variety of claims, including that IDX fired him in retaliation for complaining about the alleged financial and reporting irregularities.

After the litigations were filed, the laptop issue arose.

IDX's attorneys sent letters to Leon's attorney, requesting that Leon return the IDX-issued laptop to IDX. On May 8, 2003, Leon's attorney responded in writing by asking if Leon could keep his laptop for the duration of an audit of the SAGE project. On May 9, IDX's counsel stated that Leon could keep the laptop for the specific purpose of responding to the auditors. The April 30 and May 9 letters cautioned that Leon should take care to preserve all data; one letter specifically warned that Leon should "ensure no data on the laptop is lost or corrupted so as to avoid any possible despoliation of evidence."

Leon, however, erased all of the data on the hard drive, ostensibly for personal reasons: to remove any traces of pornography that had been viewed on the laptop. The trial court found that Leon's action in erasing the hard drive constituted spoliation, or the destruction of evidence. Relying upon its inherent supervisory power, the court concluded that Leon's actions were in bad faith and imposed a harsh sanction: the dismissal of Leon's complaint against IDX.

The court of appeals affirmed the decision, concluding that Leon knew that he had an obligation to preserve potentially relevant evidence about the pending cases. It rejected Leon's argument that he acted only to spare himself the embarrassment of having the pornography discovered.

An interesting component of the court's decision relates to the fact that Leon was so successful in destroying the contents of the hard drive. The appeals court endorsed the trial court's view that the destroyed files would have had obvious relevance to IDX's claims or defenses in the litigations, although it could not say which files would have been relevant, nor how they might have been used.

As a result, the court imposed the ultimate sanction of dismissal of Leon's claims.

What this all adds up to is the fact that terminated employees are best advised to use their company issued laptops only in ways allowed by company policy, and to return them intact. If they do anything else, they run a significant risk in any dispute with their ex-employer.

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We have written before about the Doe v. XYC Corp. case and the legal chaos that can result from employees using office computers to access child porn on the internet. Another case has come down from the Ninth Circuit Court of Appeals --- yes, the one that conservative pundits love to ridicule --- that emphasizes the risk of criminal liability to employees and the importance of the employer handling its investigation in the right way. The case is United States v. Ziegler, decided on August 8, 2006. The issue was whether the employee had a reasonable expectation of privacy in the contents of his office computer. Here the issue was not civil liability of the employer but criminal liability of the employee.

Here are the facts in a nutshell. The owner of a company found that one of his employees had accessed child porn. The owner tipped off the FBI, which began an investigation. Through the company's computer monitoring techniques, it was able to identify the specific office from which the material was viewed and identified its occupant to the FBI. The company also provided the FBI with a copy of the suspect employee's hard drive on which investigators found several images of pornography.

The employee was indicted . He struck a deal to plead to a relatively minor count, subject to his motion to suppress the evidence discovered on his computer. If he won the motion he would walk away from the plea. The employee argued, in essence, that the FBI had directed the employer to make the backup copy of the hard drive, that the employer thus acted as an agent of the government, and therefore argued that the search and seizure violated the 4th Amendment.

Cutting through the technical stuff, the case turned on the question whether the employee had an objectively reasonable expectation of privacy in the office computer. Following the trend in these cases, it found that he did not have a reasonable expectation of privacy. The evidence was not suppressed. Thus, the plea stood and the employee was convicted of the crime.

There are two lessons here. First, even the supposedly ultra-liberal 9th Circuit holds that office computers belong to the business, not the employee. Any employee who treats an office computer as his personal property is taking a risk.

Second, the employer in question had the capability to monitor the use of its computers, had policies that governed the monitoring, and made sure that its employees knew about both. When the company discovered that possibly illegal activity was taking place with its computers, its president treated the matter seriously, notified the authorities, and cooperated with the investigation. By acting responsibly, the employer avoided any potential legal entanglement of its own.

Handling these matters in the right way is crucial to New Jersey employers in particular. If you don't think so, go back to the top and review our post on the Doe v. XYC Corp. case, where the employer was held liable, not for failing to investigate, but for failing to investigate well enough.

Yes, it all happened on the left coast, but New Jersey employers and employees can take a lesson from this one.

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President Bush is expected to sign major pension reform legislation today.

While much of the bill aims at giving some airlines time to catch up on their pension funding obligations, there are benefits for other companies. There will be enhanced contribution limits for IRA's and 401(k)'s, and employers will be able to automaticlly enroll employees in 401(k)'s to encourage retirement savings.

We'll give you more on this over time as the practical ramifications of the pension bill develop.

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Governor Corzine recently signed the improbably (and inelegantly) named Worker Freedom from Employer Intimidation Act. The goal of the statute is more limited than the title suggests: to prevent employees from being strong-armed to participate in employer-sponsored political and religious events and communications. (There are limited exceptions for political and religious organizations.)

Here's a summary of the provisions of the new law.

1. As with most NJ employment statutes, size does not count. An "employer" is any business that has at least one employee.

2. The core provision:

"No employer . . . may, except as provided in section 3 of this act, require its employees to attend an employer-sponsored meeting or participate in any communications with the employer . . . to communicate the employer's opinion about religious or political matters."

3. Employers may not retaliate against workers who report suspected violations of the act.

4. A civil cause of action is specifically authorized for aggrieved employees to recover compenstaory damages, punitive damages, and attorney's fees. However, actions under the Act must be brought within a very short 90 day statute of limitations. This affords employers some protection, and makes it incumbent upon employees to know and act upon their rights without delay.

5. The legal remedy provided by the Act is in addition the employee's other legal protections, such as an action for wrongful termination.

Think what you may of the law itself, couldn't they have come up with a better name? Who's in charge of the bill-naming office in Trenton these days? Just what are we going to call this thing if we don't want to take all day to do it? The WFFEIA? Some help is needed here. Let us know if you have an idea.

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Last night a bill that would have increased the federal minimum wage to $7.25 per hour over three years --- tied to a reduction in the estate tax --- failed. Here's CNN's report of the proceedings.

So the federal minimum wage remains at $5.15 per hour, at least for the time being. Does this have any effect on New Jersey businesses and employees? No, at least not for now. The New Jersey minimum wage is $6.15 per hour and increases to $7.15 on October 1, 2006. Employers here must pay the higher rate provided by the state law.

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A recent article in Lawyers USA notes that the EEOC is falling way behind in its processing of cases. The EEOC's own numbers project a backlog of 48,000 cases in 2007. Budget reductions and a hiring freeze are the apparent culprits.

The situation has implications for the victims of discrimination, since federal anti-discrimination laws typically require that administrative remedies (that means an administrative complaint with EEOC or a coordinate state agency) be used before a complaint can be filed in federal court.

The problem is not as serious for plaintiffs in New Jersey as elsewhere since the New Jersey Law Against Discrimination does not require an initial visit to an agency before going to court. And the LAD is generally more favorable to plaintiffs than the federal laws, especially in the availability of damages, so most NJ plaintiff lawyers usually choose to file in state court under the LAD.

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Your slightly jet-lagged author has returned from 10 days of visiting Italy for the first time. I retain many wonderful memories, only one of which even remotely has to do with labor and employment law. (In Venice our bus had to make a slight detour to avoid a strike at the docks.) For now, though, it's back to blogging.

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I'll be away starting today, with little to no internet access. Which may be something to celebrate in and of itself. In any event, there will be no posts here until July 11. We wish all of our readers a happy July 4th holiday with the hope that you spend it joyfully with friends and family. And with the further hope that we all find time to think about why we celebrate.

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It's not news that traditional pension plans have been in decline, supplanted by contributory plans such as 401(k)'s. Apparently the trend continues. For a news report on the issue, click here.

The nation's biggest companies are continuing to move away from traditional pension plans, according to a new survey whose authors said Congress should rewrite laws to help stop the trend.

The report's authors warn that 401(k)'s may not be a good solution to attract and retain good employees or provide adequately for retirement.

A good thing to keep an eye on whether you run, work for, or are thinking of working for a company with a traditional defined benefit pension plan.

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About six weeks ago we noted that the United States Supreme Court had heard oral argument in Mohawk Industries v. Williams. The novel issue that the Court had agreed to decide was whether Mohawk violated the Racketeer Influenced & Corrupt Organizations Act [RICO] by employing illegal aliens to depress wages for its legal workers.

Our fearless forecast?

Reading judicial tea leaves is always an uncertain business, however. The Court's formal opinion, when released, will provide the definitive answer.

Wrong. On June 5 the Supreme Court dismissed the case and sent it back to the Court of Appeals for further consideration. In the parlance of the trade the Court held that certiorari was improvidently granted. In plain English, the justices changed their minds and decided not to decide the RICO issue, at least for now.

We will offer no further prognostication on this case --- at least for now.

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A federal judge, miffed at the inability of opposing attorneys to agree on even the slightest details of a lawsuit, ordered them to settle their latest dispute with a game of "rock, paper, scissors."

So reports the Associated Press today.

The unusual ruling arose from the inability of opposing counsel to agree on where to take the sworn statement of a witness. The judge even set the time and place for the game to be played.

Even though the ruling came in an insurance litigation, it is instructive for purposes of this blog since many employment disputes end up in court.

While I don't know what reasons the lawyers in the case may have for contesting the logistics of a routine litigation event, I do know that judges hate this stuff. And clients shouldn't have to pay for it.

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Three former mortgage brokers for Washngton Mutual, the country's third largest mortgage lender, have filed a class action lawsuit claiming that they were unlawfully denied overtime pay. Here's the link to an early report. This development follows the recent settlement of similar charges against stock brokerage companies.

Posted In Employment Law News , Wage & Hour | Comments (0) | Permalink |

On April 19, 2006 the United States Equal Employment Opportunity Commission issued new enforcement guidance on race discrimination, which, of course, is prohibited by Title VII of the Civil Rights Act of 1964. The new guidance is codified as Section 15 of the EEOC Compliance Manual.

EEOC Chair Cari M. Dominguez was quoted as saying that

This comprehensive guidance will assist employers, employees and EEOC staff in understanding how Title VII applies to a wide range of contemporary discrimination issues.

Vice Chair Naomi C. Earp said that

Although employment opportunities for people of color have improved dramatically over the years since 1964, EEOC's job, and that of our many partners, will not be completed until all of our nation's workplaces are free of unlawful discrimination.

Here's the link to Section 15 of the Compliance Manual.

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This post concerns a rather jolting case that potentially concerns every business that has at least one employee who uses a computer with internet access. Which, we suspect, includes just about all of them.

In Doe v. XYC Corp. the Appellate Division of New Jersey Superior Court held that the employer of a child pornographer can be liable to the pornographer's victims. The employer discovered that Doe was visiting a variety of pornographic web sites from his office computer. The employer conducted a limited investigation, confronted Doe, and demanded that he stop, which he apparently did for a while. But XYC's investigation failed to discover that some of the sites Doe visited featured children. Eventually Doe was criminally charged with uploading to the internet --from his office computer -- nude and semi-nude pictures of his ten year old daughter. The court said that once XYC discovered Doe's use of an office computer to visit pornographic web sites in general, it had a duty to conduct a thorough investigation and notify the authorities of possible criminal activity because of the strong public policy to protect children from sexual predators.

The irony in this unhappy situation is that the employer tried to do the right thing by investigating Doe's web surfing activities when it became suspicious of him. The court, however, said that its efforts did not go far enough. Doe v. XYC Corp. is an eyebrow-raising decision with unusual facts. Nonetheless, the e-mails that daily travel the internet suggest that many businesses have employees who are visiting the kinds of web sites that could create unforeseeable liability. New Jersey businesses should see the court's decision as a warning shot across the bow. The court is telling us just how seriously it views the responsibility of employers to protect children from abuse at the hands of their employees.

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Can corporate employers be held liable as "racketeers" under RICO, the federal Racketeer Influenced and Corrupt Organizations Act of 1970? That's a question that the U.S. Supreme Court is currently confronting. And it arises out of --- what else would you expect these days? --- the alleged employment of illegal immigrants. As reported today, Mohawk Industries allegedly used recruiters to locate and hire illegal immigrants. Current and former employees of Mohawk now are trying to sue on the basis that the company's arrangement with the recruiters unlawfully suppressed wages. So the dispute is about money. The practical question is: how much money? The legal question is: do they have a right to sue at all? If the case is allowed to proceed as a RICO action, and the plaintiffs win, they stand to recover triple damages plus their attorney's fees. So the financial stakes are high.

And if the plaintiffs succeed, the legal stakes are higher. Allowing employees to sue for alleged "racketeering" by their employers could significantly affect the employment relationship. And it would greatly increase the financial risks to employers.

The early report of the argument suggests that some of the Justices were skeptical of the plaintiffs' ability to pursue their case as a RICO claim. Reading judicial tea leaves is always an uncertain business, however. The Court's formal opinion, when released, will provide the definitive answer.

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