Wednesday, July 25, 2012

NLRB Settles Case Against Baked-Goods Manufacturer for More Than $58,000 for Multiple Labor Law Violations

The National Labor Relations Board (NLRB) has announced a settlement with Texas Baked-goods manufacturer Sterling Foods, LLC for more than $58,000 in back pay and interest to six employees who were discharged in the fall of 2011 following a union organizing campaign. Three of the employees have also accepted offers of reinstatement to their previous jobs.  The allegations against this employer are incredibly numerous and outrageous: 

The United Food and Commercial Workers Local Union No. 455 filed charges alleging the employer engaged in multiple unfair labor practices during and after the union’s attempt to organize about 500 employees at the San Antonio, Texas facility. An election petition was not filed.
Following an investigation by regional staff, NLRB Regional Director Martha Kinard issued a complaint alleging that, in response to the union’s campaign, Sterling Foods unlawfully discharged six employees, threatened to terminate other employees, solicited an employee to report on union activities, offered an employee a financial benefit if he reported the union activities of employees, engaged in surveillance of employee union activities, called the police on employees and union organizers engaged in union activity, prohibited employees from accepting union literature and directed employees to throw away union literature.
It's conduct like this employer's that has sparked numerous changes in educating employees on labor laws and their rights under the National Labor Relations Act (NLRA).  The matter settled just before the scheduled July 19, 2012 hearing.

Tuesday, July 24, 2012

Owner of 25 McDonald's Franchises in Wisconsin Settles Sexual Harassment Suit with EEOC for 1 Million Dollars

The Equal Employment Opportunity Commission (EEOC) has announced a substantial settlement involving the owner of 25 Wisconsin McDonald's fast food chain franchises.  The suit was a class action lawsuit filed by the EEOC alleging sexual harassment and that male employees were permitted to create a hostile work environment of sexual harassment against female co-workers, some of whom were teenagers, and by retaliating against those who complained about sexual harassment.  From the EEOC press release on the settlement: 

According to the EEOC’s complaint, since at least 2006, several male employees subjected female co-workers to sexual harassment, including sexual comments, kissing, touching of their private areas, and forcing their hands onto the men’s private parts.  Despite being notified of the situation, Missoula Mac failed and refused to take prompt and appropriate action to correct the harassment and the resulting hostile environment, forcing at least one of the harassed employees to quit.  Further, the company fired other harassed employees after they complained repeatedly about their co-workers’ behavior.  Three women previously employed at the Reedsburg McDonald’s filed discrimination charges with the EEOC that led to the lawsuit.  

Sexual harassment and retaliation for complaining about it violate Title VII of the Civil Rights Act of 1964.  The EEOC filed its suit (EEOC and Dunse, Brown, and Gay v. Missoula Mac, Inc. d/b/a McDonald’s Restaurants, .No. 3:11-cv-00267-bbc) in April 2011 after first attempting to reach an out-of-court settlement through its conciliation process.
U.S. District Judge Barbara B. Crabb entered a four-year consent decree today resolving the suit.  Under its terms, Missoula Mac will pay out $1 million in compensatory damages to 10 former employees who experienced sexual harassment and retaliation during their employment at the Reedsburg McDonald’s.  The company will also (1) create an ombudsperson position responsible for monitoring, soliciting and resolving complaints of sexual harassment or retaliation; (2) establish telephone and e-mail hotlines for employees to report sexual harassment or retaliation; (3) evaluate its managers’ and supervisors’ performance based in part on whether their restaurants comply with anti-harassment and anti-retaliation laws and policies; (4) track and maintain records of all sexual harassment and retaliation complaints; (5) implement a comprehensive training program to enable its employees to identify sexual harassment and properly investigate internal complaints; (6) post notices at all its restaurants informing employees that it has settled a sexual harassment and retaliation lawsuit with the EEOC and publicizing some settlement terms; and (7) provide periodic reports to the EEOC showing it is complying with the terms of the decree.
This is a tremendous victory for the EEOC and the plaintiffs involved in this suit as it shows that even employees in workplaces such as McDonald's who are often ignored and treated less than they deserve merely because it's the fast food industry have rights and employers will be punished severely for not enforcing those rights.   

Wednesday, July 18, 2012

July Edition of Employment Law Blog Carnival

The July Edition of the Employment Law Blog Carnival, "Curiouser and Curiouser" - Wonderland Edition, hosted by Heather Bussing and, is live and available here.  Enjoy!

Tuesday, July 17, 2012

2nd Circuit Holds Pattern-of-Practice Theory of Discrimination Not Applicable to Private Nonclass Plaintiffs

--Chin v The Port Authority of New York & New Jersey, Nos. 10-1904-cv(L), 10-2031-cv(XAP), (2nd Cir., July 10, 2012): Court of Appeals for the Second Circuit, in reversing district court, held that the pattern-or- practice method of proving liability was not available to plaintiffs in this private, nonclass action, as it was submitted to the jury which awarded plaintiffs back pay, compensatory damages, and equitable relief after filing suit under Title VII claiming they were passed up for promotion based on their race.  The 2nd Circuit also reversed the district court with respect to the district court’s determinationthat pursuant to the plaintiffs’ disparate impact theory, the “continuing violation” doctrine permitted the award of damages and equitable relief in connection with conduct predating the statute of limitations.

In declining to allow plaintiffs to use the pattern-or-practice method of proving discrimination, the Court stated:
Permitting private plaintiffs to use the pattern-or-practice method of proof outside the class action context would require us to extend this method beyond its current application. This we decline to do. Such an extension would allow nonclass private plaintiffs who have shown a pattern or practice of discrimination (but have not made out a disparate impact claim) to shift the burden to employers to prove that they did not discriminate against a particular individual. But this would conflict with the Supreme Court’s oft-repeated holding in the context of disparate-treatment, private nonclass litigation that “[t]he ultimate burden of pursuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff.” Tex. Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 253 (1981). To be sure, proof that an employer engaged in a pattern or practice of discrimination may be of substantial help in demonstrating an employer’s liability in the individual case. But such proof cannot relieve the plaintiff of the need to establish each element of his or her claim.
However, the Court did state that the pattern-or-practice theory of liability may be highly relevant to an individual disparate treatment or to a disparate impact claim. Outside the class context, however, private plaintiffs may not invoke the Teamsters method of proof as an independent and distinct method of establishing liability. 

The Court also held that the continuing-violation doctrine does not apply to disparate impact theories of discrimination because of the Supreme Court’s decision in National Railroad Passenger Corp. v. Morgan, 536 U.S. 101 (2002), which held that failures to promote are “discrete acts” of discrimination and thus do not implicate the continuing-violation doctrine. 

The 2nd Circuit remanded the case back to the district court for a new trial on damages which is heart-aching considering the previous jury awarded more than $1.6 million in total to those seven plaintiffs.

Monday, July 9, 2012

Wisconsin Court of Appeals Finds Employee Not Entitled to Severance Pay Under Purchase Agreement

I was really looking forward to this decision because it had the potential for the Wisconsin Court of Appeals to address the issue of employee handbooks creating contracts and severance agreements but the Court of Appeals was able to uphold the circuit court's grant of summary judgment in favor of the employer on the one, less-interesting issue.

The plaintiff-appellant, Bill K. Edwards, was employed by InSTEP, Inc. as a product manager in Mendota Heights, Minnesota. In March 2003, Pacific Cycle of Madison, Wisconsin, acquired InSTEP. Edwards remained as a product manager for Pacific Cycle after the acquisition. After he left Pacific Cycle in November 2003, Edwards learned that the Pacific Cycle-InSTEP Purchase Agreement contained a clause addressing employee severance rights. Paragraph 4.1.d. stated:

(d) Employee Severance Matters. In the event that at any time during the one year period from the Closing Date until the first anniversary of the Closing Date (the "Covered Period") the Company terminates the employment (other than a termination for Cause) of an employee of the Company who was an employee of the Company as of the Closing Date, or in the event any such employee resigns for Good Reason during such one year following the Closing, then the Company shall pay to such employee a lump sum amount (subject to applicable tax withholding requirements) equal to the amount set forth for such employee in Schedule 4.1(d) hereto.

"Good Reason" is defined in the Purchase Agreement as follows:

"Good Reason" means any of the following: (i) a reduction in the cash compensation of the employee; (ii) a material reduction in the benefits provided to the employee (other than pursuant to an organization wide change in benefit programs by Pacific); (iii) a material demotion in responsibilities or duties of the employee; or (iv) a required relocation to a place other than a location within 50 miles of the location at which the employee performed substantially all of his or her duties immediately before the required relocation.

Edwards ended up landing a new job in Arizona after not receiving a "promotion" he thought he was promised but claimed he was entitled to severance pay under the quitting for "good reason" clause of the handbook.  When Pacific Cycle refused to pay Edwards a severance, he sued in St. Croix County Court and the employer moved for summary judgment claiming, inter alia, that Edwards did not quit for "good reason" as the facts surrounding his departure were undisputed.  The circuit court agreed and granted the motion for summary judgment and the Court of Appeals agreed with the circuit court's findings and decision, thus avoiding the need to delve into the other issues on appeal ( (1) he is a third-party beneficiary of the Purchase Agreement's severance provisions, (2) he satisfied the conditions to receive severance from Pacific Cycle, (3) the circuit court should not have dismissed his unjust enrichment and quantum meruit claims that he had a right to receive severance benefits, and (4) the circuit court should not have dismissed his claim that Pacific Cycle defrauded him of his right to severance benefits.)

Wisconsin Court of Appeals Upholds Denial of Unemployment Benefits, Employee Puts Foot in Mouth

I opened up the weekly Wisconsin CaseLaw Express issued by the State Bar and came across a Court of Appeals case for an unemployment compensation appeal hearing I handled two years ago, to my surprise.  The Administrative Law Judge sided with my client (occasionally I represent employers) in denying benefits, LIRC affirmed and the circuit court also affirmed.  Now the Court of Appeals has affirmed.

The case involved an employee at Stein Optical who was also a student at Alverno College.  The employee, Lalita A. Sallis, was confronted with a problem not uncommon to students with full and part-time jobs in that she had an exam that conflicted with her work schedule.  Stuck between a rock and a hard place, Sallis was unable to get off work so she falsified the optometrist's appointment book so that she could leave early and make it to her exam.  While one may be sympathetic with what Sallis did, the ALJ found misconduct and Sallis appealed based on evidence presented at the hearing.

Sallis appealed claiming the Commission erred because: (1) she contends that there was no evidence, other than hearsay, to support a finding of misconduct; and (2) it did not credit her undisputed testimony that she had created false appointments previously for a Stein Optical doctor who needed to leave early.

Sallis ultimately lost because she ADMITTED to the conduct she was terminated for but tried to defend her actions by claiming that she had falsified the appointment book previously without discipline but the ALJ simply did not find this testimony credible, in part, because of testimony from the employer's sole witness, the new store manager (who did not work with Sallis or terminate her), and because in her application for unemployment insurance she said she "had never done this before."  Thus it was fairly obvious Sallis was not too credible.