Second Circuit
Knight v. SUNY Stony Brook,___ F.3d ___, 2018 WL 576703 (2d Cir. Jan. 29, 2018).
Plaintiff, an electrician who worked at the college, reported racist graffiti in a bathroom at his worksite. Shortly thereafter, Plaintiff was fired. At trial, the judge asked the jury to determine if Plaintiff was an independent contractor. The jury answered in the affirmative. Since Title VII protects employees but not independent contractors, Plaintiff did not prevail at trial. The Court of Appeals identifies the following factors in determining whether the Plaintiff is an independent contractor and not an employee.
Courts consider: the hiring party’s right to control the manner and means by which the product is accomplished[;] . . . the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over when and how long to work; the method of payment; the hired party’s role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party.
These are the Reid factors, named after Cmty. for Creative Non-Violence v. Reid, 490 US 730 (1989). The Court of Appeals holds that the trial court may ask the jury to resolve the Reid factors under Kirsch. v. Fleet Street, 148 F.3d 149 (2d Cir. 1998), the jury can resolve these issues. On authority of Kirsch, the Second Circuit holds that “a trial court does not commit error by submitting the question of whether the plaintiff was the defendant’s employee to the jury, whether by general verdict or by special question.”
Hardaway v. Hartford Police Department, 708 Fed. Appx. 45 (2d Cir. 2018).
Plaintiff claims management subjected him to racial discrimination in employment. To bring a claim under Title VII, plaintiffs have to file an administrative charge of discrimination with the EEOC or the state human rights office within 300 days of the discriminatory act. We call this “Title VII exhaustion.” Since this is not a jurisdictional requirement, the Defendant can waive its objection to an untimely Title VII action. Also, the Title VII exhaustion requirement is “subject to equitable defenses.”
In the past, the Second Circuit has said compliance with the Title VII filing deadlines operate as an affirmative defense. It has also said the failure to exhaust administrative remedies “can be asserted by the government as an affirmative defense” in Title VII cases bought by federal employees, whose cases are governed separate statutory provisions and regulations.
In this case, the Court of Appeals adopts the view taken by most of the other Circuits, holding that “the burden of pleading and proving Title VII exhaustion lies with defendants and operates as an affirmative defense.” This decision “follows from other areas where administrative exhaustion is an affirmative defense,” such as in prisoner litigation under the Prison Litigation Reform Act.
Submitted by:
Stephen Bergstein, Esq.
Bergstein & Ullrich, LLP
5 Paradies Lane
New Paltz, New York 12561
(845) 419-2250
www.TBULaw.com
www.secondcircuitcivilrights.blogspot.com
Fourth Circuit
Balbed v. Eden Park Guest House, LLC, ___F. 3d___, 2018 WL 542351 (4th Cir. Jan. 25, 2018).
An innkeeper sued the owner of the inn under the Fair Labor Standards Act for failure to pay her minimum wage and overtime. Per an employment contract, the owner paid the innkeeper a wage and provided her with room and board at the inn. The innkeeper argued that she worked in excess of 100 hours per week, and was not appropriately compensated for that time. The innkeeper further argued that the owner was not entitled to receive any credit for the cost of the innkeeper’s room and board because the owner failed to keep proper records. The district court granted summary judgment for the owner, and the innkeeper appealed.
The FLSA requires employers to pay an hourly minimum wage and overtime pay for all hours worked over forty per week. Section 203(m) provides that “wages” may include the reasonable cost to the employer of furnishing lodging or other in-kind benefits to the employee so long as certain factors are met, including maintaining accurate records of the cost of the benefits. Section 207 further provides that because it is difficult to determine the hours actually worked by an employee who lives on the employer’s premises, the parties may reach a reasonable agreement regarding the number of hours presumptively worked.
The Fourth Circuit reversed the district court’s entry of summary judgment for the owner and remanded for further proceedings. The Court first rejected the owner’s argument that the record-keeping requirements of Section 203(m) did not apply. The Court ruled that although the owner did not produce records meeting the requirements of Section 203(m), if the owner could reconstruct those records to show the reasonable cost of the lodging and other benefits, the district court could use those records to assess whether the owner paid the required wages. With regard to the reasonableness of the employment contract, the Court ruled that the district court should consider how many hours the innkeeper presumptively worked each day by examining the number of hours the innkeeper was “engaged to wait,” for which she should be compensated, or “waiting to be engaged,” for which she need not be compensated.
W. Virginia CWP Fund v. Dir., Office of Workers’ Comp. Programs, United States Dep’t of Labor., 880 F.3d 691 (4th Cir. 2018).
A coal miner who worked more than thirty years in the mines sought benefits under the Black Lung Benefits Act. The ALJ found that the miner was entitled to benefits under the Act’s “fifteen-year presumption.” The employer petitioned the Fourth Circuit for review, and the Court denied the petition.
The Act provides benefits to coal miners who are totally disabled due to pneumoconiosis. A miner who has worked underground for at least fifteen years and suffers from a totally disabling respiratory or pulmonary impairment may rely on the presumption that he or she has pneumoconiosis arising from coal mine employment and that the disease is a substantially contributing cause of the disability. The employer may rebut that presumption by establishing that the miner does not have pneumoconiosis arising out of coal mine employment.
The miner in this case retired due to shortness of breath that impaired his ability to work. Two doctors submitted reports to the ALJ on behalf of the employer stating that the miner did not have pneumoconiosis. A third doctor concluded that the miner suffered from pneumoconiosis. That doctor later softened his opinion to say that he could not state affirmatively that the miner had pneumoconiosis, but could not rule out coal dust as a significant contributor to the miner’s ailment. The ALJ credited the third doctor’s original findings and awarded the miner benefits under the fifteen-year presumption, concluding that the employer did not rebut the presumption. ,p> The employer argued before the Fourth Circuit that the miner was not entitled to benefits under the Act because no doctor affirmatively diagnosed the miner with pneumoconiosis. The Fourth Circuit found that, in so arguing, the employer got the presumption backwards. The Fourth Circuit noted that the fifteen-year presumption is intended to relieve miners of the “often insurmountable burden” of proving pneumoconiosis and shift the burden to the employer. Applying the deferential standard of review, the Fourth Circuit ruled that the ALJ’s finding that the employer could not meet its burden was supported by substantial evidence.
Submitted by:
Paul Sun
Emily Erixson
ELLIS & WINTERS LLP
Paul.sun@elliswinters.com
Post Office Box 33550
Raleigh, North Carolina 27636
Telephone: 919.865-7000
www.elliswinters.com
Fifth Circuit
Calderone v. Sonic Houston, JLR, L.P., 879 F.3d 577 (5th Cir. 2018).
An automobile dealership, predominately engaged in the sale, leasing, or servicing of motor vehicles, is exempt from CFPB jurisdiction, even if that dealership’s employee is allegedly terminated for reporting that dealership’s refusal to sell cars to racial minorities.
Submitted by:
Susan Cone Kilgore
200 Concord Plaza, Suite 425
San Antonio, Texas 78216
Desk: 210-547-7470 / Mobile: 210-778-2663
Fax: 210-547-7410
skilgore@kingsommer.com
www.kingsommer.com
Sixth Circuit
Allied Constr. Indus. v. City of Cincinnati, 879 F.3d 215 (6th Cir. 2018).
In Allied Construction Industries, a trade association filed a lawsuit challenging a city ordinance that required bidders to certify that they contributed to healthcare plans and retirement plans on behalf of its employees. Addressing a matter of first impression, the Sixth Circuit applied the market-participant doctrine to ERISA preemption. Specifically, it held that where a state or municipality acts as a proprietor rather than a regulator, it is not subject to ERISA preemption. It adopted a two-step framework. At step one, if the ordinance “essentially reflects the City’s own interest in the efficient procurement of goods and services, as compared to the typical behavior of private parties, we infer that the conduct was proprietary rather than regulatory, and qualifies for the market-participant doctrine.” If the ordinance does not reflect the City’s own interest in efficient procurement, then the court moves to step two to consider whether its “narrow scope nonetheless defeats the inference that the conduct was regulatory.” Applying this framework, the Sixth Circuit concluded that the ordinance reflected the City’s interest in the efficient procurement of goods and services.
Heimer v. Companion Life Ins. Co., 879 F.3d 172 (6th Cir. 2018).
In Heimer, an insured of legal drinking age crashed his motorbike. The insurance company denied coverage relying on an exclusion for services incurred “as a result of a Covered Person’s illegal use of alcohol.” After the insurance company denied coverage, the insured filed suit. The district court held that the plan exclusion did not encompass the injuries, finding that there was a difference between illegal use of alcohol and illegal post-consumption conduct. The Sixth Circuit affirmed, concluding that the ordinary meaning of “use of alcohol” refers to the consumption of alcohol and not the post-consumption conduct. Alternatively, it held that any ambiguity in the exclusion should be construed against the drafter.
Pittington v. Great Smoky Mountain Lumberjack Feud, 880 F.3d 791 (6th Cir. 2018).
In Pittington, an employee filed a lawsuit under Title VII and state law alleging that he was fired in retaliation for supporting his wife’s sexual harassment lawsuit. After the jury returned a verdict in favor of the employee, it only awarded him one quarter of the back pay requested. The district court then denied a motion to increase the back pay award or to hold a new trial as to damages, and to award prejudgment interest at the maximum amount allowed under the Tennessee Human Rights Act (as opposed to the post judgment interest rate in federal cases under 28 U.S.C. §1961(a)).
On appeal, the Sixth Circuit concluded that the district court abused its discretion in denying a new trial on the issue of damages. It noted that Title VII plaintiffs are presumptively entitled to back pay and that that plaintiffs bear the burden of proving damages with reasonable certainty. It further explained that while plaintiffs have the burden of establishing a prima facie case on the issue of damages, the defendant has the subsequent burden of establishing the amount of interim earnings or lack of diligence. Applying these principles, the Sixth Circuit concluded that the employer did not provide evidence that substantially equivalent positions were available and that the plaintiff failed to use reasonable care and diligence in seeking such positions. Thus, the district court erred in faulting the employee from failing to provide evidence in support of his mitigation. The Sixth Circuit also found that the district court abused its discretion when it upheld the jury’s award of back pay because the $10,000 award was substantially less than the lowest amount of damages “unquestionably proved by the plaintiff’s uncontradicted and uncontroverted evidence.”
Addressing the employee’s request for additur, the Sixth Circuit concluded that the district court did not abuse its discretion, finding that the constitutional right to have a jury resolve factual issues generally precludes district courts from granting additur in the event of inadequate damages. None of the narrow exceptions to this rule applied. Finally, the Sixth Circuit determined that the district court abused its discretion when it relied upon the low federal postjugment interest without considering case-specific factors to determine whether using that rate satisfied Title VII’s remedial purposes.
Submitted by:
Brain M. Schwartz
Miller, Canfield, Paddock & Stone, P.L.C.
150 W. Jefferson, Suite 2500
Detroit, Michigan 48226
schwartzb@millercanfield.com
http://www.millercanfield.com/BrianSchwartz
Eighth Circuit
Boswell v. Panera Bread Co., 879 F.3d 296 (8th Cir. 2018).
Panera Bread Company (“Panera”) created a bonus program to aid recruitment and retention of general managers for its restaurants. The program would provide qualifying managers with a large, one-time bonus. A few years later, Panera asked its managers to each sign an employment agreement that included a provision relating to this program, which stated that the one-time bonus would be paid five-years after the manager signed the agreement, the amount of the bonus would depend on the profitability of the manager’s restaurant in the final two years of that five-year period, and the manager had to still be a manager on the date when the bonus was to be paid. In 2010, Panera decided that the bonuses would be too costly, and decided to set a $100,000 cap on the bonus payment. Panera informed its managers that this cap would become effective in January 2012. Panera did not receive any complaints regarding this cap, but then in 2014, a general manager, Mark Boswell, raised concerns right before he was to receive his bonus.
Boswell sued Panera for a breach of contract on behalf of himself and a similarly situated class of managers alleging that Panera violated the employment agreements by imposing the cap. Panera asserted multiple defenses and an affirmative defense, novation. The district court granted summary judgment to the class of managers, however, the court rejected the Class’s argument that the employment agreements were a bilateral contract. The district court instead held that this was a unilateral contract which was irrevocable because all the class members had already rendered substantial performance by working at least a year after they signed their agreements. The district court found, in the alternative, that even if the agreement was a bilateral contract, Panera’s novation defense would fail, because this supposed new contract was not supported by consideration since Panera had not promised anything more than the obligation that already existed.
On appeal, the Eighth Circuit upheld the judgment of the district court holding that the employment agreements were unilateral contracts under Missouri law and that the unilateral contracts were irrevocable for managers who had already begun to perform. The court’s reasoning was that the managers were at-will employees before and after signing their agreements, and under Missouri law, a promise to continue at-will employment cannot be consideration for an enforceable contract. Instead, at-will employment is more of a unilateral contract since there is a promise that the employer will pay if the employee will work. Regarding whether the employer could modify terms of its offer by adding a cap on the bonus, the Eighth Circuit found that the Supreme Court of Missouri would likely conclude, if confronted with the issue, that the employee must merely begin performance to make the offer irrevocable, rather than substantially perform. The court found that the class managers had begun performing under the offering, and therefore, Panera could not modify the terms.
Panera asserted novation, waiver, estoppel, and commercial frustration defenses. First, the Eighth Circuit affirmed the district court in finding that continued at-will employment cannot be consideration, and therefore, Panera’s novation defense failed as a matter of law. Second, the court found that Panera’s imposed cap was a repudiation of its offer and a repudiation may become a breach at the other party’s election, and thus, the class of managers did not have to treat it as an immediate breach. Therefore, continuing to work did not mean that the class of managers had waived or missed the opportunity to treat the repudiation as a breach altogether. Third, the court found that commercial frustration is only available as a defense if the event was unforeseeable, but here, the court found that Panera imposed the cap due to a general business decline which it should have been able to foresee since markets are undependable.
Rooney v. Rock-Tenn Converting Co., 878 F.3d 1111 (8th Cir. 2018).
Plaintiff, Aaron Rooney, was hired by Defendant as an Account Executive in March of 2010. Plaintiff’s duties included developing and selling in-store displays, and his primary responsibility was the Alcon account. In November 2013, Plaintiff received a performance evaluation of “met expectations” with an overall rating of 3 out of 5, with additional comments regarding his attendance and communication. His superiors, Dean Metter (“Metter”) and Nancy Collom (“Collom”), often talked to Plaintiff about informing them of his schedule changes and staying on top of the Alcon account. In a June 2014 customer survey, Alcon indicated general satisfaction with Defendant’s performance, however, it complained about Defendant’s manager at Alcon’s site, Jake Kramer (“Kramer”). There had been many errors involving the Alcon account. After months more of these issues, Metter decided to fire Plaintiff. Plaintiff believed this decision was discriminatory on the basis of his gender and religion. His direct supervisor, Collom, had made remarks about women finally outnumbering men in their office. Similarly, Metter, who was Jewish, had often made remarks about networking the “Jewish network” of potential customers. Metter had also described Collom as a “great Jewish lady” and mentioned that Plaintiff would “have to start learning to take direction from a Jewish woman.” While Plaintiff was terminated for issues on the Alcon account, Kramer, who was Jewish, was simply transferred to another office instead of being fired for mishandling that account. Plaintiff was told that his termination was due to his poor interactions with co-workers and a failure to support an important account.
Plaintiff sued his former employer under Title VII alleging that he was discriminated against by Metter and Collom for not being Jewish, and by Collom for being a man. The district court found that Plaintiff had established a prima facie case of discrimination based on religion and sex. However, the district court granted Defendant’s motion for summary judgment because Plaintiff was unable to show that Defendant’s proffered reasons were pretexts for discrimination. Plaintiff appealed.
The Eighth Circuit upheld the judgment of the district court. On appeal, Plaintiff argued that the district court erred by allowing Defendant to expand its proffered reasons, and that the district court erred by holding that Plaintiff submitted insufficient evidence to prove pretext. The 8th Circuit addresses the first argument by distinguishing between elaboration and a substantial shift as proof of pretext. The court held that an employer’s burden to articulate non-discriminatory reasons is triggered when the employee meets his burden of establishing a prima facie case of discrimination, and that Title VII does not impose a legal obligation for an employer to articulate that reason at the time of firing. Thus, an employer may elaborate on its explanation for an employment decision. However, evidence of a substantial shift in the employer’s explanation may be evidence of pretext. The court held that there was no contradiction in Defendants explanation that it gave to Plaintiff at the time of his termination and the proffered reasons articulated during litigation. Similarly, the 8th Circuit found that Defendant’s evidence of repeated errors and omissions on the Alcon account to be convincing, especially since Plaintiff failed to argue that he was not responsible for the mismanagement. The court found that Plaintiff failed to show how he was affected by the alleged sex discrimination, since the record showed that Metter had decided to terminate Plaintiff’s employment and there was no evidence supporting a cat’s paw theory of liability. Moreover, the court found that Plaintiff had failed to prove that Kramer was similarly situated to him.
Submitted By:
Frances E. Baillon
Baillon Thome Jozwiak & Wanta LLP
100 South Fifth Street Suite 1200
Minneapolis, MN 55402
(612) 252-3570
www.baillonthome.com
Alana Mosley
Law Clerk, Baillon Thome Jozwiak & Wanta LLP
University of Minnesota School of Law
Juris Doctorate Candidate, May 2018
Eleventh Circuit
Vibe Micro v. Shabanets, 878 F.3d 1291 (11th Cir. 2018).
The case concerns a district court’s discretion to dismiss a complaint on shotgun pleading grounds. Plaintiff, represented by counsel, admittedly filed a shotgun pleading as a Second Amended Complaint even after the district court provided Plaintiff an opportunity to replead, with a thorough set of directions on how to remedy the errors in the First Amended Complaint. The district court dismissed the Second Amended Complaint with prejudice, including the state law claims. The Eleventh Circuit affirmed, except to remand for the limited purpose of clarifying that the dismissal of the state law claims is without prejudice as to refiling in state court.
“When a litigant files a shotgun pleading, is represented by counsel, and fails to request leave to amend, a district court must sua sponte give him one chance to replead before dismissing his case with prejudice on non-merits shotgun pleading grounds. In the repleading order, the district court should explain how the offending pleading violates the shotgun pleading rule so that the party may properly avoid future shotgun pleadings. Although the Byrne [v. Nezhat, 261 F.3d 1075, 1133 (11th Cir. 2001), abrogated on other grounds by Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (2008)] line of cases requires one sua sponte chance to amend a shotgun pleading, Daewoo [Wagner v. Daewoo Heavy Indus. Am. Corp., 314 F.3d 541 (11th Cir. 2002)(en banc)] operates in the background. After that one Byrne opportunity to replead comes and goes, Daewoo’s rule operates to allow the district court to dismiss with prejudice if the party has still neither filed a compliant pleading nor asked for leave to amend.” 878 F.3d at 1296.
United States v. Stein, __ F.3d __, 2018 WL 635960 (11th Cir. 2018)(en banc).
“We hold that an affidavit which satisfies Rule 56 of the Federal Rules of Civil Procedure may create an issue of material fact and preclude summary judgment even if it is self-serving and uncorroborated.” 2018 WL 635960, *1. Though the case concerned IRS assessments, the Eleventh Circuit made clear the principle involving the use of affidavits on summary judgment applies in all civil cases. Id. Stein, opposing the government’s motion for summary judgment claiming she owed outstanding tax assessments, late penalties and interest, submitted an affidavit indicating that she paid the taxes in question. The district court entered summary judgment in favor of the government. A panel of the Eleventh Circuit affirmed “because, under Mays [v. United States, 763 F.2d 1295, 1297 (11th Cir. 1985)], her ‘general and self-serving assertions . . . failed to rebut the presumption established by the assessments.’”
Id. at *2, quoting United States v. Stein, 840 F.3d 1355, 1357 (11th Cir. 2016).
On rehearing, the Court held that if there is any corroboration requirement for an affidavit, it must come from a source other than Fed. R. Civ. P. 56. Id. at *4. “An affidavit cannot be conclusory . . . but nothing in Rule 56 (or, for that matter, in the Federal Rules of Civil Procedure) prohibits an affidavit from being self-serving.” Id. at *3.
“We do not mean to suggest that a self-serving and/or uncorroborated affidavit will always preclude summary judgment. We hold only that the self-serving and/or uncorroborated nature of an affidavit cannot prevent it from creating an issue of material fact.” Id. at *5.
Submitted by:
Patricia T. Paul
Attorney at Law
Oliver Maner LLP
218 W. State Street
P. O. Box 10186