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Wolters Kluwer News: Publication opportunity for current law students

February 2nd, 2016  |  Joy Waltemath  |  Add a Comment

The Wolters Kluwer Legal Scholar program, in its third year, allows current law students to compete for the chance to have their work published in a Wolters Kluwer publication. Wolters Kluwer will accept submissions through Friday, April 1, 2016.

One submission per category may be submitted by any student currently enrolled in an ABA-accredited law school. Categories for submission are:

  • Employment law (including wage/hour, labor, and discrimination)
  • Health law (including Medicare, Medicaid, life sciences, and health reform)
  • Cybersecurity (including banking and financial privacy, securities, health care, and insurance)
  • Products liability and consumer safety

Depending on the number of entries, one to two winners per category will be selected and published in a Wolters Kluwer publication, to be determined based on the submission’s topic.

Winners will be notified by April 22, 2016. The winning submissions will be featured in a Wolters Kluwer publication the week of April 25, 2016, along with a biographical paragraph about the author.

For information and full contest rules, visit Legal Scholars.

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No employer liability for ‘despicable’ Facebook post about customer

February 1st, 2016  |  Kathy Kapusta  |  Add a Comment

Despite the “indisputably despicable” comments about a customer that an employee posted on Facebook, which made light of violence, used a racist term, and ridiculed the customer’s sexual orientation—and a supervisor’s knowledge of a prior post by the employee—a federal district court in Hawaii tossed the customer’s lawsuit against the company asserting negligent supervision, retention, and training. Granting the employer’s motion for summary judgment, the court found the customer failed to show it foresaw or should have foreseen the danger posed by the employee and should have been more closely supervising his Facebook use or should have fired him earlier.

The posts. After the customer patronized the rental car’s Maui Airport location, the employee allegedly posted on his Facebook page: “I seen Maurice’s bougie ass walking kahului beach road . . . ni**a please!” He also stated that the customer was “a broke ass faka who act like he get planny money,” prompting a coworker to post “run that faka over!!! lol.” The employee then replied, “. . . i was tempted too, but nah, i had a white car, neva like u guys scrub da blood off.” He further posted “now he knows we got Mercedes, he’s gunna drive those. it’s too bad his CC declines all the time.” There was also a comment alluding to his sexual orientation.

Upon learning of the posts, the customer complained to the employee’s supervisor, who had previously been notified several years earlier about a comment the employee had posted on Facebook that made light of her after she almost walked into a tree. The employee and several coworkers who participated in the customer posts were all fired or resigned. Alleging that he suffered post-traumatic stress disorder as a result of the Facebook posts, that he was forced to sell his business, and that he was financially damaged prior to selling his business because he lost customers as a result of the post regarding his credit card, the customer sued for, among other things, negligent supervision, retention, and training.

Duty of care? He argued that the company owed him and other customers a duty of care to prevent the employee from posting harmful social media content at work. While he asserted that the supervisor was aware of the employee’s prior “nasty and demeaning” post about another customer, the supervisor disputed this and there was no evidence in support of his contention. Nor was it reasonable to infer that she knew about the prior post just because other employees did, said the court, noting that the coworkers were his Facebook friends and had direct access to his posts while the supervisor had no Facebook account of her own.

Also rejected was the customer’s assertion that the harm he suffered was foreseeable based on the supervisor’s knowledge of the prior post about her. Although she considered that post to be “fairly innocuous,” she counseled the employee at the time not to post anything on Facebook regarding the company. “However imprudent the prior post may have been,” its content gives no indication that the employee would later make a racist, homophobic, or threatening post about a customer, or that he would post financial nonpublic information about him, said the court.

Handbook. And while the company had a handbook that addressed safeguarding customer information, the court pointed out that the law does not impose strict liability on an employer every time an employee steps out of line. The employer’s acknowledgment of possible dangers in its handbook did not suffice by itself to establish a duty of care running from it to the customer. It is reasonable and proper for employers to warn against possibilities, said the court, finding nothing in Hawaii law that equated the recognition of possibilities, without more, with the establishment of a duty. Thus, the customer’s negligent hiring and retention claims failed.

Negligent training. Because Hawaii appellate law has not explicitly defined the contours of a negligent training claim, the court turned to other jurisdictions holding that an employer has a duty to train an employee when a particular job task poses a foreseeable risk of harm if performed without adequate training. These cases make it clear that a plaintiff may not assert that an employer has a general duty to train its employees, the court noted, finding that the customer’s claim that the company had a duty to properly train its employees to conduct themselves in a lawful manner in their interactions with their customers and the public failed to identify any specific aspect of the employee’s or supervisor’s job that posed a risk of danger to customers as a result of its failure to train.

Nor did a letter written by the company’s CEO stating that the company’s commitment to its employees was to offer periodic training so that they would better understand the handbook’s requirements establish a contractual duty to train. While the customer contended that he was a third-party beneficiary of this purported contract, thereby transforming the alleged contractual duty between employer and employee into an independent tort duty running to him, the court found that he ignored the distinction between tort and contract, which have differing purposes that give rise to differing duties. Even if he established that the company owed its employees a contractual duty to train, this did not translate into a tort duty to train that flowed to him.

Finally, even if the company was under a duty to train the employee and others to prevent the harm allegedly suffered by the customer, there was no evidence that the duty was breached. According to the supervisor, she previously told the employee not to post anything related to the company on Facebook, and he told her he understood and would not post anything in the future. The customer made no attempt to describe what additional training the company should have provided.

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CEO’s mom prompts lawsuit with overzealous matchmaking

January 29th, 2016  |  Lorene Park  |  Add a Comment

By Lorene D. Park, J.D.

I admit it, I have met a few young adults who I found charming enough to have an errant thought that they might make a good spouse for one of my adult children. But I never acted on those notions (much to my kids’ relief I’m sure). And I can’t be the only parent to have had those thoughts and to refrain from acting on them—this case is a good reason not to:

“I’m going to be your mother.” In a lawsuit that presents our “what not to do” example, the plaintiff was the director of talent relations and casting at a Maryland TV station. Among other duties, she booked talent for “TV One-on-One,” a show hosted by the station’s founder, the CEO’s mother. According to the plaintiff, the CEO’s mom subjected her to sex discrimination by repeatedly trying to get her to start a romance with the CEO. On a business trip, the mom said “I’m going to be your mother one way or another. Either you will marry [the CEO] or I will marry your father and be your stepmother.” A while later, after similar encounters, the CEO’s mom sternly asked why the employee was not yet married to the CEO and thereafter said the employee was “old and that her babies would likely be ‘retarded.’”

Personal attacks, rumors. Once the CEO’s mother realized the employee was not going to marry her son, she allegedly began to baselessly attack the employee’s job performance. She publicly berated the employee; started false rumors; and demanded the employee’s termination. Meanwhile, the workplace rumor mill spread tales that the employee was only hired because she was having sex with the CEO, and that she was still romantically involved with him. She complained directly to the CEO, who responded “[A]t least the rumor makes me look good” but otherwise did nothing. The rumors intensified when the CEO’s mom publicly declared on multiple occasions that she wanted the employee and her son to marry.

Employee fired. According to the employee, eventually, her advancement opportunities at the station dried up despite her “stellar work performance and proven success.” By July 2011, the COO warned her that the CEO’s mom was “strategizing” to get her fired. And due to the mom’s “mercurial, volatile, disruptive and abusive behavior,” the employee began to seek therapy to cope with stress and anxiety. She complained repeatedly to supervisors, the legal department, and to HR, to no avail. She was fired in June 2014, after a dispute with the CEO’s mother over the stage to which a musical group should be assigned during a festival.

Sex discrimination. Refusing to dismiss the employee’s sexual harassment claim, the court explained that she did not have to allege “sexual advances or propositions” to show harassment based on gender. It was sufficient that she claimed that the CEO’s mother persistently urged her to marry the CEO; that she was humiliated, publicly chastised, and berated; and that she was subject to workplace rumors. Put simply, “but for her status as a woman,” she would not have been subjected to the alleged harassment. Moreover, the employee plausibly claimed the harassment was “severe and pervasive” because it went on for years and she felt humiliated and degraded to the point that she sought therapy.

Retaliation. The court also refused to dismiss the employee’s retaliation claim, because her complaints to Human Resources and others constituted “protected activity” under federal anti-discrimination law and she suffered an adverse employment action. Indeed, the fact that she was fired only three days after complaining to HR suggested a causal relationship.

So take it to heart, parents and supervisors . . . Whether you call it overzealous matchmaking or “extreme” helicopter parenting, it is a BAD idea to bring those errant I-want-you-for-my-in-law thoughts to the workplace.

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Piercings ban unjustified absent proof of business harm

January 28th, 2016  |  David Stephanides  |  Add a Comment

Noting that during the 21st century, body piercings, tattoos, and long beards have come into vogue and become commonplace, and arbitrator recently sustained a grievance filed by a union member seeking to quash her employer’s written disciplinary warnings issued for her failure to remove facial piercings (Amalgamated Transit Union, Local 1070 and Indianapolis Public Transportation Corp., Nov. 18, 2015, Daniel Zeiser, Arbitrator).

In 2009, prior to being hired as a bus driver in 2013, the grievant elected to receive three micro dermal piercings in her cheek. The process involved the insertion of an anchor through a hole in the cheek created by a thin needle. The anchor included a flat base and an arm that extended through the skin, into which could be inserted a jewel or a stone. She chose to undergo this permanent process because it reminded her of something her mother wore when she was young. Her cheek, however, rejected one of the piercings, leaving two implants and a scar where the third implant failed.

The bus company that hired her had a Dress and Personal Appearance Policy that applied to employees with regular public contact, to project a professional image to riders and to the general public. The company updated its policy in 2014, which included an accessories section that limited the size of earrings that could be worn and limited earrings to one per ear, but it said nothing about face piercings. In September of 2014, however, the employer issued a notice about winter uniforms that included a ban on all facial piercings. Following the issuance of the September ban on facial piercings, the employer ordered the employee to remove her piercings. When she failed to do so, the employer issued a written warning. She failed to remove the facial implants because they could not easily be removed like other piercings, requiring instead plastic surgery at great expense. She then filed a grievance contesting the employer’s decision.

An employer is permitted to adopt rules of personal appearance as long as the rules have a reasonable relationship to (1) the employer’s image or (2) health and safety considerations. Furthermore, employers are not permitted to regulate an employee’s personal appearance away from work, unless harm is caused to the employer’s business by that appearance.

In this case, the employer had the right to institute the dress policy. The arbitrator determined, however, that the ban on facial piercings was unreasonable because the employer could not prove any harm to its business. The employer, for example, never surveyed customers about their attitudes to the piercings, never learned whether other transit systems disciplined employees for facial piercings, and never sought to find out if piercings had an impact on funding. The arbitrator noted that many riders themselves had piercings and that no complaints had been received. As a result, he sustained the grievance and ordered that the written warning be removed from her file.

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SCOTUS makes it harder to pick off plaintiffs to end class actions—or does it?

January 22nd, 2016  |  Lisa Milam-Perez  |  Add a Comment

By Lisa Milam-Perez, J.D.

In a consumer case of great interest to employers facing an ever-rising tide of class action lawsuits, a divided U.S. Supreme Court hampered the ability of defendants to head off individual and class claims by way of a settlement or offer of judgment prior to a request for Rule 23 class certification. In a 6-3 decision, the High Court held a plaintiff’s individual and class claims are not rendered moot by a rejected settlement offer extended before the plaintiff moves to certify the class. The dissenting justices characterized the holding as a narrow one, however, and suggested that a defendant eager to end a dispute (and thwart a potential class litigation) simply need tender the relief arguably due, rather than merely offer to do so (Campbell-Ewald Co. v Gomez, January 20, 2016, Ginsburg, R.).

While the decision applies to class actions of all stripes, it particularly impacts consumer class actions, “where damages for any individual plaintiff can be small and ascertainable, but also wage/hour class actions, where the named plaintiff’s individual claim may also be modest, but when aggregated in a class, substantial,” notes Jeffrey W. Brecher, who heads Jackson Lewis’ Wage & Hour Practice Group.

TCPA class action. The putative class-action suit was brought under the Telephone Consumer Protection Act (TCPA) against Campbell-Ewald Co., a national marketing firm, and it arose out of a text message sent on behalf of the U.S. Navy to recruit new sailors. The government contractor cast too wide a net in its solicitation, reaching consumers outside the Navy’s intended scope of 18- to 24-year olds. The message went to more than 100,000 recipients, including the 40-year-old plaintiff, who had never consented to receive such communications.

Offer of judgment. Before the agreed-upon deadline for the plaintiff to file a motion for class certification, Campbell-Ewald made him a settlement offer that would have provided complete monetary relief (including treble damages, as provided under the TCPA, but not attorneys’ fees, which the statute does not permit), and filed a Rule 68 offer of judgment. But the plaintiff rejected the offer. Arguing that this rejection mooted his individual claim, the defendant filed a motion to dismiss, asserting that the district court lacked standing because there was no longer a live case or controversy. And, because the plaintiff failed to move for class certification before his own claim became moot, the putative class claims were moot as well, the defendant contended.

The Supreme Court majority rejected these arguments, affirming the Ninth Circuit below on an issue that divided the circuits, and which the High Court had left unanswered in its 2013 holding in Genesis Healthcare Corp. v Symczyk, an FLSA collective action. Citing basic principles of contract law (a rationale that Justice Thomas, concurring, would eschew in favor of a “common-law history of tenders” approach) the majority reasoned that once the defendant’s offer was rejected, the offer had “no continuing efficacy.” The controversy remained live, and the court retained Article III jurisdiction.

Contract theory controls. In Genesis Healthcare, the Supreme Court did not take up the question whether an offer of judgment mooted the FLSA claim; it simply assumed so without deciding because the plaintiff did not challenge that notion below. Justice Kagan, however, had argued in dissent that the Court should address this threshold issue. “An unaccepted settlement offer—like any unaccepted contract offer—is a legal nullity, with no operative effect,” Kagan urged.

Here, the majority adopted Kagan’s reasoning, “as has every Court of Appeals ruling on the issue post Genesis HealthCare,” it noted. The settlement bid was merely a proposal, the majority held, and it had no legal effect once rejected. As a result, “the parties remained adverse; both retained the same stake in the litigation they had at the outset.” The text of Rule 68 offered no basis to the contrary.

Impact on class claims. Moreover—and, of course, the larger point: Because the named plaintiff’s individual claim retained “vitality” during the relevant timeframe for determining whether the case could proceed on a class basis, the class claims remained fertile as well. “While a class lacks independent status until certified, a would-be class representative with a live claim of her own must be accorded a fair opportunity to show that certification is warranted,” Justice Ginsburg wrote.

Dissent: no case or controversy. “When a plaintiff files suit seeking redress for an alleged injury, and the defendant agrees to fully redress that injury, there is no longer a case or controversy for purposes of Article III,” Chief Justice Roberts argued in dissent. “That is exactly what happened here.”

Unconvinced by the majority’s “Article-III-by-contract theory,” Roberts conceded that a rejected settlement offer is a legal nullity as a matter of contract. But that was irrelevant; the issue at hand was whether there was a case or controversy for purposes of Article III jurisdiction. And, since the defendant offered “to give the plaintiff everything he asks for,” there was no case or controversy here. The plaintiff may well want to continue litigating his case. However, “the issue is not what the plaintiff wants, but what the federal courts may do.”

Justice Alito joined Roberts’ dissent but wrote separately as well to point out what he saw as the real issue here: Whether the defendant, if the case were to be dismissed, would have made good on its promise to pay the money offered in its proposed settlement. Here, there was no real dispute that the relatively well-heeled defendant would pay up, but if there were doubt, the case would not be moot, in Alito’s view.

What about payment outright? “The good news is that this case is limited to its facts,” Justice Roberts noted in his dissent, because the majority did not rule on whether the actual payment of complete relief would be enough to moot a case. That issue was left for another day. In the meantime, according to Justice Alito’s dissent, the decision here would not prevent a defendant from seeking dismissal on mootness grounds by actually paying the full relief—if not directly to the plaintiff, then to “a trusted intermediary.”

With this, the High Court left open “a significant question,” notes Jackson Lewis’ Brecher. “It should be no surprise then that defendants seeking to moot a putative class action will now simply deposit the funds with the Court. Thus, the next round of this saga (which began with a sharply divided Court in Genesis Healthcare), is just around the corner: Does a case become moot when a defendant, instead of merely offering full relief, actually pays it?”

More questions left open. Additional unanswered questions, according to Brecher:

  • Whether, in addition to actually providing the plaintiff full relief in the form of a payment, the court must also enter judgment in order for the case to become moot;
  • If entry of judgment is necessary, whether a class representative must be provided an opportunity to show that certification is warranted before a court enters judgment.

“Lower courts will now have to wrestle with these questions and ‘read the tea leaves’ in today’s decision,” said Brecher. “It will not be long before decisions addressing these unresolved issues are decided, and may ultimately find their way back to the Supreme Court.”

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