New Jersey Employment Law Blog - Current Information on Employment Law and Business/Civil Litigation

But the Ides of February?  Who knew that such a thing even exists?  Apparently it does, as variously explained here and here and here.

Anyway, this is also budget season, and the president's proposed 2013 budget contains plenty of funding for the Department of Labor, EEOC and NLRB to do their work without much financial constraint.  Of course, it remains to be seen whether the proposed finding levels survive consideration in Congress.

With headlines about the administration's full-bore conflict with the Catholic Church --- and other religious groups, for that matter --- dominating the news, religious discrimination issues are also prominent in the courts.  The Supreme Court's unanimous smackdown of the administration in the Hosanna-Tabor case is just the most visible recent example.  Martha Zackin provides other recent examples of courts confronting the question whether businesses are engaged in unlawful religious discrimination or just making legitimate business decisions.  The line between the two can be a fine one.

Know someone who is messing around with his Facebook page to make things look better in a lawsuit?  Not a good idea --- for either the client or his attorney --- as explained by Tom Crane on the San Antonio Employment Law Blog.

Things are seldom stagnant in employment law, but our mid-February look-around suggests that things are moving rapidly right now, and show no signs of slowing down.  We will be here to try to help you make sense out of it all.

Defense counsel in employment cases --- in any fee-shifting case, actually --- are going to be crying in their beer over yesterday's decision by the NJ Supreme Court in two consolidated cases.  The cases are Walker v. Giuffre and Humphries v. Powder Mill Shopping Plaza.  Interestingly, neither is an employment case, but their combined impact upon employment cases is undeniable.

For the past 17 years, under a case called Rendine, attorneys who represent plainitffs under contingency fee agreements in fee-shifting cases under NJ law have been permitted to seek enhancements of their fees under certain circumstances.  For instance, if the base fee is $100,000, and the court decides that a Rendine enhancement of 25% is appropriate, the attorney's fee becomes $125,000.  The theory is that allowing fee enhancements incentivizes attorneys to take on difficult cases, or ones that seek to vindicate important policies, where there is a significant risk of non-payment.

The law in NJ seemed settled.  Then enter the US Supreme Court, with its 2010 decision in Perdue v. Kenny A, a civil rights case.  The Court there held that fee ehancements are only appropriate to award superior attorney performance in extraordinary cases.  That standard is far more restrictive than the Rendine standard, and it is undeniably the law of the land in cases that are decided under federal law. 

The Perdue standard then seeped down into a couple of cases decided under NJ state law.  In the Walker and Humphries cases, panels of the NJ Appellate Division adopted the Perdue "extraordinary circumstances" test to deny fee enhancements to successful plaintiffs, who appealed.

In no uncertain terms the NJ Supreme Court reversed the Appellate Division, holding that

the mechanisms for awarding fees, including contingency enhancements, that we adopted in Rendine shall remain in full force and effect as the governing
principles for attorneys’ fee awards made pursuant to fee-shifting
provisions in our state statutes and rules.

Take that, US Supremes!

The opinion is long, but it is required reading for attorneys who handle contingency cases.  It clarifies all of the standards that are used to award fees in contingency fee cases, not just fee enhancements. Among other things, folks, there is going to be little excuse for not keeping detailed, contemporaneous time records --- if you want to get paid.

There's a good chance that we're all going to be citing to Walker and Humphries from now on.  Rendine will still be cited, but we'll be arguing the cases decided on January 25, 2012.

It has never been easy for a plaintiff to prove a claim for the tort of intention infliction of emotional distress, especially one arising out of  the workplace.  Things are not getting any easier for employees.  In Ingraham v. Ortho-McnNeill, decided by the Appellate Division of New Jersey Superior Court on August 25, 2011, the court emphaszied that IIED cases that arise in the workplace are analyzed in exactly the same way as IIED cases that arise in non-employment settings.  Click here for the full opinion.

The facts that the plaintiff presented in Ingraham were sympathetic.  The plaintiff's teenage daughter, a talented, accomplished, and popular girl, died tragically while still in high school.  Her mother, of course, was distraught.  She kept reminders of her daughter in her cubicle at work, including pictures and a pair of ballet slippers.  She talked frequently with co-workers about her daughter, so much so that a year and a half after the fact her colleagues complained to management.  While sympathetic to her situation, they felt that they had said all that they could.  The situation was affecting workplace performance.

A supervisor spoke with plaintiff.  Among other things, he instructed her to remove the pictures and ballet slippers, and (in response to plaintiff's question) to "act [as] if [her daughter] did not exist."

Plaintiff became extremely upset, went to a cardiologist for an angioplasty, and eventually quit.  After filing suit, her claim for IIED was the only one of three counts that came before the court for decision.

Among other things, the plaintiff argued that the "power dynamics of the workplace" should lessen her burden of demonstrating that plaintiff's conduct was extreme and outrageous.  The court rejected that argument.

The law provides no different standard of proof that applies in the workplace from other places where emotional distress might result. The employer-employee relationship is no more special and conducive to emotional distress than, for example, a doctor-patient relationship, the relationship of a decedent's family to a funeral home, the tense relationship of a precarious tenancy where homes might be lost, or the relationship of a husband and wife in a hostile divorce.  Indeed, the workplace has too many personal conflicts and too much behavior that might be perceived as uncivil for the courts to be used as the umpire for all but the most extreme workplace disputes. We have previously said that conduct in the workplace will rarely be so egregious as to give rise to a claim of intentional infliction of emotional distress. In Griffin, supra, we stated: "Except for the kind of aggravated discriminatory conduct involved in Taylor, 'it is extremely rare to find conduct in the employment context that will rise to the level of outrageousness necessary to provide a basis for recovery for the tort of intentional infliction of emotional distress.'

And so, as far as IIED cases are concerned, the status is quo.  The court declined to lower the plaintiff's burden of proof to account for the "power dynamics of the workplace."  This seems to have been an attempt by plaintiff to import a similar comment from sexual harassment law. 

While the risk to employers from IIED claims has not been increased, neither has it been reduced.  While rare, it is possible for an employer to lose an IIED case.  For this reason, employers are well-advised to continue to investigate complaints, document problems, and establish and follow sound HR procedures.

On April 7, 2011 I will be speaking at a seminar entitled "How to Hire and Fire Without Getting Burned."  The seminar is sponsored by the Somerset County Business Partnership and will run from 8 - 9:30 a.m. in the Partnership's main conference room.

Jim Burke from J. Burke Advisors and yours truly will be the presenters.  Jim will approach the subject of hiring good employees (and when necessary, firing them) from an HR perspective, while I will cover the legal points.

Personnel issues are a fact of life for every business.  This seminar will teach you how to make sound evaluations of job candidates, hire them properly, and, when necessary, reverse the procedure.  Even if you have been in business for a while, this seminar will be a good refresher and help you to use the hiring/firing process to move your business forward while minimizing risk.

The event is free to Partnership members and is open to non-members for a small fee.  Register at this link or contact the Partnership at (908)218-4300.

It's obviously no longer Monday morning.  Publication this week was delayed due to an unforseen technical problem.  With apologies, we proceed, belatedly.

The Yankees finished their weekend on a good note, beating the Astro's. As a result, my week is off to a good start.

Here, however, I have to confess that the time crunch last week in getting our blog and website redesigns up and running cut mightily into my time for research for "pepper" items.  Here's a quick roundup.

The "cat's paw" decision from the Supreme Court --- Staub v. Proctor Hospital --- has been the subject of extensive comment already.  The plaintiff's bar mostly thinks the decision will make proving discrimination cases much easier.  The defense bar, if I read the initial reaction correctly, is afraid that the plaintiff's bar is right.  As with most such things, however, time will tell.

For a compilation of documents important to the Staub decision, see the ScotusBlog, here.

Most plainitff lawyers usually prefer trial by jury to trial by judge.  Here's a situation in a disability case where the a judge did just fine by a plaintiff, to the tune of $583,000.

And to finish with a baseball analogy, from the 9th Circuit Court of Appeals comes an answer to the question of how many drug testing strikes a recovering drug addict gets without violating the ADA.  Answer, one strike and you're out.

From the wild world of college sports comes a story of retaliation from the Left Coast.  We like these stories because they combine two of our practice areas: employment law and sports law.

Here's the full story.  In short, though, a Los Angeles community college baseball coach complained about academic fraud and misuse of public funds, including financial aid.

The college's stated reason for the firing was an "out-of-protocol check request" and unapproved building of a batting cage.

The jury didn't buy the college's reason and awarded $1.2 million.

The basketball coach is also suing the school for age discrimination.  Sounds like a great place to work.

Here in central New Jersey, like many other places, it has been a long, cold winter.  But this morning the winds of change are blowing, or will be this afternoon.  Our forecast calls for temperatures in the 50's today, and winds gusting to 50 as well.  So while it's way too early to celebrate the early arrival of spring, we'll gladly accept a respite from the deep freeze.

Another sign of spring is upon us: pitchers and catchers have reported to Major League Baseball training camps, or will within the next few days.  Things will be in full swing in the Grapefruit League within the next week.

For those of us who played baseball growing up, the beginning of the season calls to mind "pepper," a wonderful little training game in which a batter gently hits balls to a group of fielders who stand a short distance away from him.  They fielders catch the ball and immediately pitch it back to the batter, who hits it again.  The game moves fast and helps to develop reflexes and hand-eye coordination.  It is, more importantly, a lot of fun.

So at least for the duration of spring training, the NJ Employment Law Blog will play its own version of pepper on Monday mornings.  We'll catch some of the interesting and important hits from the world of employment law, and hit them to you in rapid-fire fashion.

First up is Bar-Tur v. Arience Capital, a disability discrimination case in which a New York federal court threw out the plaintiff's complaint.  While there was no dispute that Bar-Tur had common variable immunodeficiency, the court found that she did not show that the condition substantially affected a major life activity.   Strike 3, unless an appellate court intervenes.  Details here.

Second is the news --- which shouldn't be news to anyone --- that office romance is both personally difficult and potentially dangerous to your employment.  It is regrettable that I must remind you of this on Valentine's Day, but that can't be helped.  The sad story from George's Employment Law Blog.

Third, some news about us.  We are coming down the home stretch on a long-delayed revamping of this blog and our firm's web site.  We can't tell you quite yet when the changes will go live, but we think that you'll like them, and we plan to keep improving things over time.  We will keep you informed about this.

So that's today's game of pepper.  Just an easy warmup for all concerned.  Check back next Monday for more, when the pitches will be a little faster and the grounders a little hotter.  Now if I can only find my mitt . . . ..

With money still tight, especially for small and medium sized business, there's some comfort in the fact that money is available for worker training, development, and retention.  Here are two examples that may be helpful to central NJ employers.

Training grants are available through the NJ Department of Labor and Workforce Development.  As an example, here's a recent press release.

Individual businesses or a business consortium led by educational institutions, non-profit organizations, trade associations, and labor unions are eligible to apply for grants on an on-going basis. The Department of Labor and Workforce Development will match interested applicants with a Business Representative who will provide assistance throughout the application process.

The Greater Raritan Workforce Investment Board [GRWIB, or just WIB, for short], "make[s] available a wide array of employment-related programs and services that facilitate the potential of all job seekers for self-sustaining employment at a level consistent with the standards of the community’s rapidly growing corporate sector."

The WIB is a public-private partnership that serves Somerset and Hunterdon counties.

The WIB also partners with the Somerset County Business Partnership.

So help is available.  If you're unsure where to start, give a call to the Business Partnership, which will be happy to get you pointed in the right direction.

This post's title makes no sense unless we assume that the defendant North American Stainless is in the business of making or selling stainless steel.  For the sake of expedition I will assume that it is so.

Today the US Supreme Court, through Justice Scalia, ruled on a retaliation and Title VII case, Thompson v. North American Stainless, LP.  The facts were simple.

Thompson and his fiance, Miriam Regalado, worked for NAS.  Regalado filed a charge of discrimination with the EEOC, and three weeks later NAS fired Thompson.  Thompson then sued NAS under Title VII, claiming that he was fired in retaliation for Regalado's filing of her complaint.

The trial court threw out Thompson's case, and the Sixth Circuit Court of Appeals affirmed on the theory that Title VII did not apply to Thompson since he engaged in no protected activity.  In essence, the lower courts held that a retaliation claim is not available to someone who suffers an adverse employment action because of protected activity engaged in by someone else.

The Supreme Court made short work of that argument, holding that "Title VII's antiretaliation provision must be construed to cover a broad range of employer conduct."  The Court  acknowledged that lines will have to be drawn in future cases, but that Thompson's status as Regalado's fiance was close enough to raise an inference that NAS acted against him because Regalado had complained about NAS.  The rule has limits, according to the Court.  Retaliation against a fiance triggers liability, while retaliation for action taken by a mere acquaintance of the plaintiff would not.  And there's a lot of gray area in between.  But the Court chose to remain flexible (hence the title!) and let the trial courts decide the issue on the facts of each case. 

While employers will not be happy with this decision, it is a sensible and straightforward case of statutory construction --- the Court doing what a court is supposed to do.  Employers should be able to deal with the ramifications of Thompson v. NAS with reasonable predictability if they make their personnel decisions in a similarly sensible way.

The NJ Department of Labor and Workforce Development [LDW] has announced maximum weekly Unemployment Insurance and Workers' Compensation benefits for 2011.  Details here.

In light of the economy, I suppose that it should come as no surprise that benefits have decreased for the first time in 40 years.  Surprising or not, it's still a bit of a shock.  The maximum weekly unemployment benefit, for instance, has been reduced from $600 to $598. 

And since it's Monday, how about a mini-rant just to get the week off to a good start?  Why does LDW's name have to be so darned long?  Really, folks, we knew who you were and what you did when you were just the plain old Department of Labor.

Lost in the hoopla over last night's big Republican electoral success is the fact that the biggest winner in New Jersey was not a candidate but a constitutional amendment.  For background, here's our post on the subject from Election Day.

The amendment passed 80% - 20%.  That, my friends, is a landslide.

As I was driving back from lunch yesterday a well-known New Jersey talk radio station was urging a "no" vote on the amendment, their theory being that passage would mean higher spending and thus more taxes, at least in the short run.

Now, I don't know whether it's true that the new amendment will mean higher spending.  But that, it seems to me, misses the point that the voters --- nearly all of the voters --- were sending.  The voters' point seems to be that politicians must stop playing games with public money.  No more demanding taxes to pay for one thing and diverting them to another.  No more passing spending bills without the means to pay for them.

The voters are telling the politicians in plain terms that they had better be able to justify every spending bill on its own terms, without robbing Peter to pay Paul.  If you want a good example of bipartisanship, here it is, because this amendment obviously passed with strong support from Republicans, Democrats, and Independents alike. 

A modest suggestion: perhaps in the future the politicians should follow the example of the voters.  

We just received a question from a reader that might interest many of our readers.  Susan asks whether an employee has to be paid for two weeks when she gives the traditional two weeks' notice and the company terminates her employment immediately.

Absent a contract, employees in NJ are considered to be "at will."  This means that they can leave voluntarily at any time.  Conversely, the employer can fire them at any time so long as there is no violation of anti-discrimination laws.

While some employers still ask for two weeks' notice when an employee wants to leave the company, the employee is not required to comply.  If you want to leave, you can leave immediately without any legal problem.

The converse is also true.  If the company is going to fire you, they can require you to leave today, and will often escort you off the premises immediately.

So, when an employer gets a memo informing them of an employee's intention to leave in two weeks, the employer will often expedite the process and terminate the relationship immediately. 

The employer is only obligated to pay for time actually worked.  Unless the employer has a policy that promises to pay out the two week notice period, there is no legal obligation on them to do so.

So, to answer Susan's question, the company probably does not have to pay.  All they will be obligated to pay is accrued and unused vacation time.  There is more information on that subject in this post.

If you are interested in an plain-spoken article on this subject from an HR perspective, check this from James Carlini, which goes into more detail.

This case is interesting.  Although it grows out of a medical malpractice case, part of it could affect every civil trial in NJ state court, including employment cases.

The case is Carino v. Muenzen.

During jury selection - or "voir dire" as it's known in the trade - the plaintiff's attorney began to use his laptop, which had wireless access through a court-provided connection, to gather information on the prospective jurors.  Trying to learn about possible jurors is completely acceptable and is done all the time.

In this case, however, the defense attorney did not have a laptop in court and thus could not conduct the same kind of real-time research.

The trial judge decided that plaintiff's access to online information gave him an unfair advantage and forced the attorney to stop using his laptop.  The judge believed that he had the authority to make the ruling based upon his discretionary authority to control the conduct of proceedings in his courtroom.

The court of appeals disagreed and said that the trial court was wrong and that counsel should have been allowed to continue his research.

Despite the deference we normally show a judge's discretion in controlling the courtroom, we are constrained in this case to conclude that the judge acted unreasonably in preventing use of the internet by Joseph's counsel. There was no suggestion that counsel's use of the computer was in any way disruptive. That he had the foresight to bring his laptop computer to court, and defense counsel did not, simply cannot serve as a basis for judicial intervention in the name of "fairness" or maintaining "a level playing field." The "playing field" was, in fact, already "level" because internet access was open to both counsel, even if only one of them chose to utilize it.

So if you're an attorney, don't leave the laptop at home.  And if you're a potential juror, remember that information about you is accessible and can be used in court.

The last couple of days have brought news of sexual harassment cases that yielded big dollar awards but wildly contrasting results. 

Hair Today, Gone Tomorrow

Andre Chreky apparently is the reigning king of hair stylists to the Washington, DC power elite.  Or perhaps that should be "was" the reigning king.  The recent settlement of two sexual harassment cases filed by two of his former employees will set him back, in theory, about $9.3 million.  Here's the story from the Washington Post. The story is not completely clear on the facts, but it is clear that there was actual or attempted sexual contact. 

We say "in theory" because Chreky is already in bankruptcy, so the plaintiffs may see only a small portion of the settlements.  There's no word on whether Mr. Chreky remains in business.

The Lawyer Didn't Do It!

From the left coast comes a different kind of story, involving an attorney and his paralegal employee.  Here's the story.  

In short, the parties agreed that there was a sexual relationship between the two.  After the paralegal was fired, she claimed that she was pressured into the relationship and was fired when she tried to break it off.   She also claimed that the attorney was a sexual predator.  She sued him for wrongful termination and sexual harassment.

Here's where things get interesting.  The attorney filed a counterclaim for defamation and won. 

The jury found for the attorney rejecting the paralegal's claims and awarding him $1.25 million on his counterclaim, of which $10,000 was awarded for punitive damages.  Extensive evidence of  electronic communications between the two, such as text message transcripts, had much to with with the final outcome.

The Moral of the Stories?

Well, to state the obvious, employer - employee relationships are inherently risky.  And the high dollar value of these cases demonstrates that there is potentially life-changing financial impact if the relationship goes bad and turns into a litigation.  But there has to be a recognition that the financial risk is not all on the employer's side, so spurned lovers need to think hard before deciding to use the failed relationship as a ticket to financial security.  Sometimes they may find that they are providing for someone else's financial security.

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.

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?

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.

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!

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.

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.

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.

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. 

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.

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.

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.

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.

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

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.

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!

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!)

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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?

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.

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.

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.

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.

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.

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. 

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.  

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 ...........)

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.

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.

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.

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.

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.  

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.

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.

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.

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.

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.

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.

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.

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. 

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. 

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.

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.

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.

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?

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.

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. 

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.

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.

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. 

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.

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.

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.

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.

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.

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.

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.