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Congress legislates against gang rape

October 7th, 2009  |  Matt Pavich

>Updating an earlier blog, Sen. Al Franken (D-MN) proposed an amendment to the 2010 Defense Appropriations bill that would withhold defense contracts from companies like KBR “if they restrict their employees from taking workplace sexual assault, battery and discrimination cases to court.”

This amendment was a clear response to the legal strategy adopted by Halliburton Co, which attempted to claim that sexual assault is related to the employment of its workers. The Fifth Circuit recently rejected that argument in Jones v Halliburton, 5th Circuit, Sepember 15, 2009, ruling that tort claims stemming from a gang rape of a former Halliburton employee were not subject to the binding arbitration clause, utilized by the company, that mandates arbitration of all claims “related to employment.”

Franken said: “The constitution gives everybody the right to due process of law … And today, defense contractors are using fine print in their contracts to deny women like Jamie Leigh Jones their day in court. … The victims of rape and discrimination deserve their day in court.”

The amendment passed 68-30. Of the 40 Republicans in the Senate, 10 voted for the Franken amendment, including all four women in the Senate GOP. Jeff Sessions (R-AL) argued against it, putting the interests of corporate behemoths over individual employees, calling the amendment a political attack against Halliburton. From this perspective, it seems like a political attack against gang rape and a political stand in favor of giving employees their just day in court.

Supreme Court: 2009-10 term begins

October 5th, 2009  |  David Stephanides

>The Supreme Court opens its October 2009-10 term today, with rookie Justice Sonia Sotomayor on the bench and several labor and employment cases on the docket. First up: Mohawk Industries Inc v Carpenter (Dkt No 08-678). The Court will consider whether a party may immediately appeal a discovery order to disclose materials that are purportedly covered by the attorney-client privilege, in the case of an employee who was discharged when he refused to recant claims that the employer hired illegal aliens. The employee sought to compel information related to his interview with Mohawk’s outside counsel during an internal investigation into a separate RICO class action, as well as information related to the decision to discharge him. The district court ordered Mohawk to provide the information, concluding the company had waived attorney-client privilege when it put the attorney’s actions “in issue” in its response. The Eleventh Circuit dismissed Mohawk’s interlocutory appeal on the discovery ruling for lack of jurisdiction.

On Wednesday, October 7, the Court hears oral argument in Union Pacific Railroad v B’hood of Locomotive Engineers (Dkt No 08-604). The High Court will consider the scope of federal court review of arbitration rulings under the Railway Labor Act—specifically, whether courts can set aside NRAB arbitration awards based on alleged due process violations. In the ruling below, 156 LC ¶11,053 (2008), the Seventh Circuit held the NRAB violated a union’s due process rights when it created a new rule governing the submission of evidence.

Rounding out the docket. The Supreme Court has several other key labor and employment cases on its docket for the coming term (oral argument has not been scheduled):

  • Conkright v Frommert (Dkt No 08-810), an ERISA case in which the court will consider whether a court should give deference to a plan administrator on the availability of remedies under a covered plan, and the amount of discretion a district court has in calculating remedies based on its reasonable interpretation of the plan.
  • Granite Rock Co v Int’l B’hood of Teamsters (Dkt No 08-1214), an LMRA, Section 301 case regarding federal court jurisdiction over the question of whether a collective bargaining agreement had been formed. In the decision below, the Ninth Circuit (156 LC ¶11,110) held the question of contract formation was one for an arbitrator, unless there is a separate challenge to the arbitration provision in an underlying contract that is separate and distinct from a challenge to the contract itself.
  • Lewis v City of Chicago (Dkt No 08-974). Turning once again to employment discrimination matters involving tests used to hire and promote firefighters, the Supreme Court granted certiorari in this case last week to address when the statute of limitations period begins where employers adopt an employment practice that discriminates against African Americans in violation of Title VII’s disparate impact provision.

Another state enters the “guns at work” fray

October 2nd, 2009  |  Deborah Hammonds

>Michigan employers may soon have to add firearms ownership to their “do not ask” list of questions. A bill has been introduced by Michigan State Representative Paul Opsommer to prevent employers from asking potential employees questions about whether they own or know how to use guns. The Firearm Ownership Employee Protection Act (h.b. 5330) is designed to protect citizens exercising their Second Amendment rights, according to Opsommer.

“Unless firearm ownership is directly related to an established and bona fide occupational requirement for the job, there is no reason for an employer to ask questions about whether a potential employee owns or knows how to use a gun,” Opsommer said in a press statement. “We also need to ensure that employers cannot create over-reaching company policies that violate the Constitution and provide an excuse to terminate employees whose political views differ from those of management. People who lawfully own firearms and are following appropriate storage laws should not lose the ability to transport them in privately owned vehicles.”

“A person who legally owns a firearm needs to have a way to store it as they are going to and from work, home, hunting, or any other lawful purpose,” said Opsommer. “People shouldn’t have to feel that their cars are going to be searched just because they told their boss they are going hunting after work.”

If passed, Michigan’s Firearm Ownership Employee Protection Act will prohibit employers from asking certain questions during the hiring process and making employment decisions based on legal ownership or use of a firearm that is unrelated to employment. Employers will also be prohibited from requiring applicants or employees from waiving their rights under the Act, and deem that any agreement which an applicant or employee waives their rights under the Act as invalid and unenforceable. The bill provides for injunctive relief, damages, costs and attorney fees for prevailing plaintiffs. The bill has been referred to the Committee on Labor.

Michigan is just the latest state to take on the issue of employers with policies prohibiting firearms on their premises, including parking lots. Several other states, including Arizona, Florida, Georgia, Louisiana, and Oklahoma have passed similar “guns at work” laws in recent years. Part of the discussion surrounding the passage of these laws has been the newly created tension between an employee’s Second Amendment rights and an employer’s property rights. Do “guns at work” laws impede on employers’ property rights? Have employers been treating gun-owning employees so adversely or discriminatorily that more “guns at work” laws are needed?

Republic Windows & Doors redux: Can you spell k-a-r-m-a?

September 30th, 2009  |  Connie Eyer

>All’s well that ends well

December 5, 2008: It wasn’t supposed to work like this. Days after getting a $45 billion bailout from the U.S. government, Bank of America shut down a line of credit that kept Chicago’s Republic Windows & Doors factory operating. The bosses, who knew what was coming, had been sneaking machinery out in the middle of the night. They closed the factory and sent the workers home. Then something surprising happened: Republic’s workers occupied the factory and refused to leave.

The above quote was taken from Kari Lydersen’s new book, Revolt on Goose Island: The Chicago Factory Takeover, and What It Says About the Economic Crisis, which documents one of the nation’s largest labor sit-ins. At issue was Republic’s clear violation of the WARN Act, which requires companies to give employees at least 60 days’ notice before closing a plant or initiating mass layoffs.

After receiving widespread media attention, as well as support from the public, Chicago police, and state and national politicians, the six-day sit-in staged by 200 members of United Electrical Workers Local 1110 ended peacefully when Bank of America and JPMorgan Chase set up a fund to pay them what they were rightfully owed.

In February 2009, the company was purchased by Serious Materials, a California-based manufacturer of eco-friendly building products. Although a lot fewer workers than they had hoped by this point have been hired back, the company has a new contract with the union and has promised to respect past seniority.

But, wait—there’s more!

Money laundering, mail fraud and robbery, oh my…

If you caught the above reference to the bosses sneaking machinery out of the plant in the middle of the night, then you might have already surmised that the plot has since thickened. But, that may be an understatement because, on September 11, the other shoe dropped with a giant thud. As reported by the Chicago Tribune, prosecutors charged—in a detailed 56-page filing—that former CEO Richard Gillman and two other executives, anticipating the imminent results of Republic’s crushing debt, stole its assets, laundered the money through shell corporations, paid off luxury car leases for themselves and secretly trucked the equipment from the plant to a new, non-unionized operation in Red Oak, Iowa.

In a recent interview on democracynow.org, however, Lydersen, a Washington Post reporter, indicated that the media’s portrayal of the sit-in as a spontaneous event was not entirely accurate. The reality, she says, was much more significant. Machinery was disappearing and, since the workers sensed that something was up, they decided they needed a strategy. They were willing to do what it took, Lydersen said, noting that they had even some more radical ideas in their brainstorming sessions than the occupation. “It’s sort of a combination of the workers’ willingness to really go out there and then the UE’s kind of long-term strategy and meeting with the Canadian autoworkers, who had had some successful factory occupations just in recent years, in the past five years. So they were fully ready, you know, when this all went down.”

Here’s an interesting tidbit: unbeknownst to the workers at the time, barricaded in the executive offices with them was a PowerPoint presentation that laid out how the conspirators sought to “remove, conceal and convert collateralized manufacturing equipment without the consent of Republic’s creditors.” (Oops.)

In fact, prosecutors alleged Gillman and the others defrauded company creditors who were owed at least $10 million and stole more than $200,000 cash from the company. I’ll let the Tribune paint the picture of what happened next: “After a judge hit former company CEO Richard Gillman with a whopping $10 million bail, he was led away to Cook County Jail while wearing a pin-striped suit, white collared-shirt and a dazed expression on his face.”


Last week, though, Gillman’s bail was reduced to $5 million and he was released from jail with the condition that he be electronically monitored. But, what about the Red Oak, Iowa, window company? Gillman had taken it over at the beginning of 2009 with promises to continue the operation that had begun in 1985. Work soon slowed, however, and the company that had employed 120, including the mayor’s wife, closed only a month and a half later. Many of those employees had to leave Red Oak after the small town suffered this devastating loss and, the Tribune adds, one-fourth are still looking for work.

The Tipping Point?

September 28th, 2009  |  Matt Pavich

>The Fifth Circuit’s recent decision in Jones v Halliburton Co has attracted quite a bit of attention, as well it should, as the facts are heart-wrenching and the potential legal implications are fascinating.

Jamie Leigh Jones was a young woman working for Halliburton/KBR when, following an instance of sexual harassment, she was given the choice of either losing her job, or moving to Iraq. She chose Iraq and, prior to her departure, the company gave her a contract to sign, one in which she agreed to arbitrate any and all claims relating to her employment. Pretty standard agreement, but what happened next was anything but the standard expatriate employment agreement.

On her first day, Jones, who had allegedly been promised private quarters, found herself assigned to barracks with her male co-workers. On her third day, Jones complained of the sexually hostile situation in the barracks and asked again for a “safer” location. And, on her fourth day, after a party, Jones was allegedly drugged, beaten, and gang-raped in her own sleeping quarters. She went to Halliburton medical personnel, where her rape kit was mislaid, and was placed under armed guard, without means of communication to the outside world. Eventually, her supervisors gave her a choice of “get over it” or go home, but without a guaranteed job. Jones chose a third route, the court system, alleging a number of claims, including assault and battery, intentional infliction of emotional distress, negligent hiring and supervision and false imprisonment. Halliburton invoked the arbitration clause.

The Fifth Circuit slammed the brakes on Halliburton’s attempt to duck public scrutiny, finding that Jones could proceed to trial on the aforementioned claims. Simply put, none of the four claims were sufficiently “related to” Jones’ employment for the arbitration agreement to hold sway. Halliburton argued that the claims were related to her employment because she lived in employer-provided housing and because, in raping Jones, the perpetrators violated the same employment policies that governed Jones. But the Fifth Circuit ruled that the mere fact that the perpetrators acted in ways contrary to their employment did not mean that the plaintiff was acting in any way related to her employment. Furthermore, unlike in Jones’ workers’ compensation claim, in which she was allowed to recover because her employment created the “zone of special danger” that led to her injuries, her tort claims did not have a significant relationship to her employment.

Does this case represent the limits of arbitration agreements? One fervently hopes so, as Halliburton’s attempts to invoke the clause in connection to these claims is nothing short of shameless. Yet, other district courts, when faced with virtually the same fact pattern and the same defendant, ruled that tort claims arising from a rape were related to employment. The case law is decidedly unsettled on this point, but the hope here is that the unusually strong language employed by the Fifth Circuit represents a push back by the courts against attempts by corporations, like Halliburton, to deprive their employees of their day in court.