{"id":30,"date":"2019-12-09T18:15:42","date_gmt":"2019-12-09T18:15:42","guid":{"rendered":"https:\/\/www.fedbar.org\/labor-employment-law-section\/\/december-2017\/"},"modified":"2019-12-09T18:15:42","modified_gmt":"2019-12-09T18:15:42","slug":"december-2017","status":"publish","type":"page","link":"https:\/\/www.fedbar.org\/labor-employment-law-section\/le\/circuit-updates\/2017-2\/december-2017\/","title":{"rendered":"December 2017"},"content":{"rendered":"

Second Circuit<\/span><\/strong> <\/p>\n

<\/a> <\/em>Rodriguez-Depena v. Parts Authority, <\/em>877 F.3d 122 (2d Cir. 2017).<\/em><\/strong> <\/p>\n

The Second Circuit holds that arbitration clauses are enforceable under the Fair Labor Standards Act. The Court notes that \u201cstatutory claims are arbitrable unless Congress \u2018has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue.\u201d That language derives from Gilmer v. Interstate, 500 U.S. 20 (1991), a case brought under the Age Discrimination in Employment Act. Under Gilmer, age discrimination claims are arbitrable. That reasoning applies under the FLSA. The Court of Appeals adopts the district court\u2019s analysis on this issue: \u201cThe federal policy favoring arbitration extends to the enforcement of agreements to arbitrate claims founded on statutory rights.\u201d <\/p>\n

<\/a>Wang v. Hearst Corporation, <\/em>877 F.3d 69 (2d Cir. 2017).<\/strong><\/p>\n

While some factors favor Hearst because plaintiffs did not expect payment or entitlement to a job, as for factor 2 (the extent to which the internship would provide training that would be similar to an educational environment), the Court says plaintiffs \u201cwould . . . limit the discussion of beneficial training . . . to education that resembles university pedagogy to the exclusion of tasks that apply specific skills to the professional environment.\u201d That Court does not see it that way. \u201cTraining\u201d under the Glatt test \u201cclearly contemplates that training opportunities offered to the intern include products of experiences on the job.\u201d While plaintiffs tacitly assume that professions, trades and arts are or should be just like school, \u201cmany useful internships are designed to correct that impression.\u201d Factors 3 and 4, addressing the extent to which the internship is tied to the intern\u2019s formal educational calendar, favors Hearst for most of the interns because for one, the internship was a graduation requirement, and for another, the internship meshed with her academic major. Under factor 5 (\u201cThe extent to which the internship\u02b9s duration is limited to the period in which the internship provides the intern with beneficial learning\u201d), this also favors Hearst because \u201cpractical skill may entail practice, and an intern gains familiarity with an industry by day to day professional experience.\u201d As for favor 6 \u2014 which considers the extent to which an intern\u2019s work complements the work of paid employees or displaces it \u2014 the Court notes that \u201cAn intern\u2019s work is complementary if it requires some level of oversight or involvement by an employee, who may still bear primary responsibility.\u201d This factor is not dispositive. Under the totality of the circumstances, the factors favor Hearst. While plaintiffs argue that any mixed inferences require a trial, Hearst prevails as a matter of law. The mere existence of some factual dispute is not enough for trial under general summary judgment principles, and \u201cStatus as an \u2018employee\u2019 for the purposes of the FLSA is a matter of law, and under our summary judgment standard, a district court can strike a balance on the totality of the circumstances to rule for one side or the other.\u201d <\/p>\n

Submitted by:<\/strong> <\/p>\n

Stephen Bergstein<\/strong><\/a>, Esq.
\nBergstein & Ullrich, LLP
\n5 Paradies Lane New Paltz, New York 12561
\n(845) 419-2250
www.TBULaw.com<\/a>
www.secondcircuitcivilrights.blogspot.com<\/a> <\/p>\n

Fourth Circuit<\/span><\/strong> <\/p>\n

<\/a>Flynn v. United States Securities and Exchange Commission, <\/em>877 F.3d 200 (4th Cir. 2017).<\/strong> <\/p>\n

An attorney at the Securities and Exchange Commission (SEC) raised concerns to his supervisor and others regarding a backlog of cases. The attorney believed that the backlog violated two SEC rules, Rules 900(a) and (b), which provided timelines for resolving appeals. Shortly after raising his concerns, the attorney was fired. He filed suit under the Whistleblower Protection Enhancement Act (Act). An ALJ held that the attorney was not entitled to relief because he had not made any protected disclosures. The Merit Systems Protection Board affirmed, and the attorney petitioned the Fourth Circuit for review.
\nUnder the Act, an agency cannot fire an employee for making a protected disclosure, which includes a disclosure the employee reasonably believes evidences a violation of any law, rule, or regulation. The parties agreed that Rule 900(a) fell within the Act as a law, rule, or regulation. Therefore, the issue on appeal was whether a disinterested observer with knowledge of the facts known or readily ascertainable to the attorney could reasonably conclude that the actions of the SEC showed a violation of Rule 900(a). The Fourth Circuit found that a disinterested observer could not reasonably conclude that the SEC\u2019s actions violated Rule 900(a). The Court noted that Rule 900(a) included discretionary and aspirational language regarding what \u201cshould\u201d occur \u201cto the extent possible.\u201d The Court concluded that such language could not reasonably be interpreted to mean that a failure to strictly follow the timelines in Rule 900(a) would be a violation. As a result, the Fourth Circuit denied the attorney\u2019s petition with regard to Rule 900(a).
\nAs to the attorney\u2019s claim regarding Rule 900(b), the Fourth Circuit found that the ALJ failed to analyze Rule 900(b). Even under the Court\u2019s deferential standard of review, the Court concluded that the ALJ\u2019s decision regarding Rule 900(b) could not stand. Accordingly, the Fourth Circuit remanded the Rule 900(b) claim for consideration by the ALJ. <\/p>\n

<\/a>O\u2019Hara v. Nika Technologies, Inc., <\/em>___F.3d___, 2017 WL 6542675 (4th Cir. Dec. 22, 2017).<\/strong> <\/p>\n

An employee sued his employer under the whistleblower-protection provisions of the False Claims Act and the American Recovery and Reinvestment Act (ARRA). The employee claimed that he was fired for disclosing another company\u2019s fraud against the government. The district court entered summary judgment for the employer on the basis that the whistleblower provisions only protect disclosures targeting the employer. The employee appealed, and the Fourth Circuit affirmed. ,p> The employee worked as a cost estimator under a government agency contract to build new research facilities. Another company, for whom the employee did not work, contracted to construct the facilities. During the course of the project, the government agency issued a request for proposal for additional work. The construction company submitted a bid that reflected the addition of a slab over certain pipelines.<\/p>\n

The employee reported to his employer that the construction company\u2019s bid was fraudulent because the additional slab was unnecessary work. When the employer disagreed, the employee contacted the government agency directly. Over the next several months, the employee failed to meet several agency deadlines, which caused the employer to hire outside help to stay on schedule. When the funds for the employee\u2019s position ran out, the employer decided not to reallocate funds for the employee and, instead, terminated his employment.\n<\/p>\n

The Fourth Circuit first held that the district court erroneously concluded that the whistleblower provisions of the False Claims Act apply only to disclosures directed at the employer. The Court noted that the plain language of 31 U.S.C. \u00a7 3730(h) protects disclosures against any person or company and is not limited to disclosures against the whistleblower\u2019s employer.\n<\/p>\n

Nevertheless, the Fourth Circuit concluded that the employer was entitled to summary judgment. The Fourth Circuit held that the employee\u2019s disclosure that the construction company attempted to charge the government for unnecessary work could not have led to a viable False Claims Act action. The government directed the construction company to submit a bid for additional work, which is precisely what it did. The construction company was simply following the government\u2019s direction. Accordingly, the Fourth Circuit affirmed summary judgment for the employer as to the Section 3730(h) claim.\n<\/p>\n

The Fourth Circuit further concluded that the record showed by clear and convincing evidence that the employer would have fired the employee absent any whistleblowing activity. The Court found that the employee submitted untimely estimates on several occasions and forced the employer to hire outside help to compensate. The employee also purported to speak on behalf of the employer directly to the agency, without having the authority to do so. Accordingly, the Fourth Circuit also affirmed summary judgment on behalf of the employer on the employee\u2019s ARRA claim.\n<\/p>\n

Submitted by:<\/strong>
Paul Sun<\/strong><\/a>
Emily Erixson<\/strong><\/a>
\nELLIS & WINTERS LLP
Paul.sun@elliswinters.com<\/a>
\nPost Office Box 33550
\nRaleigh, North Carolina 27636
\nTelephone: 919.865-7000
www.elliswinters.com<\/a> <\/p>\n

Fifth Circuit<\/span><\/strong> <\/p>\n

<\/a>Swenson v. United of Omaha Life Ins. Co.,<\/em> 876 F.3d 809 (5th Cir. 2017).<\/strong> <\/p>\n

Plaintiff Katheryn Swenson filed suit in Louisiana seeking benefits from a life insurance policy after her husband\u2019s death. The insurer refused to pay on the grounds that Plaintiff\u2019s husband was not a \u201ccovered employee\u201d at the time of his death. Plaintiff argued that ERISA\u2019s savings provision allowed her to obtain relief under a Louisiana law that allows an employee to convert employer-provided policy into an individual life insurance policy. The district court dismissed the Complaint. Plaintiff appealed the dismissal of her state law claims and the ERISA equitable claim for breach of fiduciary duty. On appeal, the Fifth Circuit affirmed the dismissal.<\/p>\n

The appellate court reasoned that, although ERISA\u2019s savings clause preserves a role for certain state laws that regulate insurance, state claims that provide a separate vehicle for seeking benefits from an ERISA plan remain preempted as such claims must be brought under ERISA\u2019s civil enforcement provision. To hold otherwise would undermine the exclusivity and uniformity of that federal remedy. A beneficiary may, however, argue that the administrator failed to comply with applicable laws including any state laws that retain force because of the savings clause. Such arguments must, however, be raised in the context of ERISA\u2019s civil enforcement provision. Likewise, because ERISA\u2019s civil enforcement provision provides a direct mechanism to address the injury for which Plaintiff seeks equitable relief, she cannot assert a separate ERISA claim for breach of fiduciary duty.<\/p>\n

<\/a>Babin v. Quality Energy Services, Inc., <\/em>877 F.3d 621 (5th Cir. 2017).<\/strong> <\/p>\n

After becoming disabled in 2012, Plaintiff Todd Babin applied for short-term disability with his employer Quality Energy Services. His claim was denied in February 2013. In February 2014, he requested documents regarding both the short- and long-term disability plans. Despite his request, the documents were never sent to him. Plaintiff filed suit in October 2015 under ERISA, alleging failure to pay benefits and failure to produce plan documents upon request. After the parties settled the failure to pay benefits claim, the district court found that the failure to produce documents claim was time-barred and granted summary judgment. <\/p>\n

The trial court reasoned that Louisiana\u2019s one-year prescriptive period for delictual actions, rather than its general ten-year prescriptive period governing personal actions, applied to the failure to produce claim. Relying on binding Fifth Circuit precedent that forecloses the argument that a claim under 1132(c) is contractual, the appellate court affirmed. It also rejected Plaintiff\u2019s efforts to invoke the ten-year period by characterizing the claim as one for breach of fiduciary duty, noting that Louisiana courts only apply the 10-year limitation period to fiduciary duty claims when it arises from the breach of a special obligation between the parties rather than a violation of a general duty. Thus, only fiduciary duty claims for deliberate offenses (such as fraud) are characterized as personal actions subject to the 10-year limitation period; claims against a fiduciary for negligence are considered delictual and subject to the 1-year period.\n<\/p>\n

Plaintiff\u2019s Complaint alleged only simple negligence. Thus, the Fifth Circuit affirmed the summary judgment dismissing that claim, noting that the claim for failure to produce plan documents was barred one year and 30 days after the request.\n<\/p>\n\n

<\/a>United States v. Thomas, <\/em>877 F.3d 591 (5th Cir. 2017).<\/strong> <\/p>\n

Michael Thomas worked as Manager of Information Technology Operations for ClickMotive, LP, a software and webpage hosting company. His duties included network administration; maintaining production websites; installing, maintaining, upgrading, and troubleshooting network servers; ensuring system security and data integrity; and performing backups. He was granted full access to the network operating system and had the authority to access any data and change any setting on the system. <\/p>\n

Upset that a coworker had been fired, Thomas embarked on a weekend campaign of electronic sabotage, including deleting over 600 files, disabling backup operations, diverting executives\u2019 emails to his personal account, and setting a \u201ctime bomb\u201d that would prevented employees from remotely access the company\u2019s network after he submitted his resignation. Most of these acts were conducted from his home, but he did set the \u201ctime bomb\u201d on Sunday evening from his employer\u2019s office, which he entered using another employee\u2019s credentials. At that time, he left his resignation letter for his employer to discover the following Monday. As a result of Thomas\u2019 conduct, the employer incurred over $130,000 in costs to fix these problems.\n<\/p>\n

Thomas fled to Brazil before the grand jury returned an indictment. Nearly three years later, Thomas was arrested when he surrendered to FBI agents at Dallas\/Fort Worth International Airport. A jury convicted Thomas of \u201cknowingly caus[ing] the transmission of a program, information, code, or command, and as a result of such conduct, intentionally caus[ing] damage without authorization, to a protected computer.\u201d Computer Fraud and Abuse Act, 18 U.S.C. \u00a7 1030(a) (5)(A) (CFAA). Thomas appealed his conviction, arguing that the \u201cwithout authorization\u201d requirement of the CFAA was not satisfied because his IT job gave him full access to the system and required him to \u201cdamage\u201d the system\u2014for example, at times his duties included deleting certain files\u2014so his conduct did not lack authorization. Because he was authorized to damage the computer when engaging in these routine tasks, Thomas argued that any damage he caused while an employee was not \u201cwithout authorization\u201d and thus cannot be prosecuted under section 1030(a)(5)(A). In support of that argument, he relied on case law addressing the \u201caccess\u201d provisions of the CFAA. He also argued that the CFAA was unconstitutionally vague,\n<\/p>\n

The Fifth Circuit flatly rejected his arguments, citing the important differences between the \u201caccess\u201d and \u201cdamage\u201d crimes that make it inappropriate to import access caselaw into the damage statute. Noting that \u00a71030(a)(5)(A) is the only independent \u201cdamage\u201d provision and prohibits \u201cintentionally caus[ing] damage without authorization\u201d (i.e., it does not also require a lack of authorization to access the computer in contrast to 18 U.S.C. \u00a7 1030(a)(5)(B) & (C) (both applying to damage that results from unauthorized access of a computer)), the court held that its plain meaning is to make it a crime to intentionally impair a computer system without permission. Nothing in statute says it does not apply to intentional acts of damage that lacked permission if the employee was allowed to engage at other times in other acts that impaired the system. Further, the court reasoned that, under Thomas\u2019 argument, the damage statute would not reach any employee who intentionally damaged a computer system as long as any part of that employee\u2019s job included deleting files or taking systems offline.\n<\/p>\n

Holding that \u00a71030(a)(5)(A) prohibits intentionally damaging a computer system when there was no permission to engage in that particular act of damage, which inquiry is guided by \u201cexpected norms of intended use,\u201d the Fifth Circuit affirmed the conviction. The court concluded that it was inconceivable that any employee, regardless of their level of computer access, would be authorized to, or reasonably believe he had permission, to engage in such \u201chighly incriminating conduct,\u201d such as stopping the system from providing backups, or to deleting files outside the normal protocols, or falsifying contact information in a notification system, or setting a process in motion that would prevent users from remotely accessing the network. It also rejected Thomas\u2019 attack on the conviction based on the doctrine of vagueness: \u201c[E]ven if a statute might be vague when applied to some situations, \u2018a defendant whose conduct is clearly prohibited cannot be the one making that challenge.\u2019\u201d Thomas, 877 F.3d at 594 (citing United States v. Westbrooks, 858 F.3d 317, 325 (5th Cir. 2017)).\n<\/p>\n

Submitted by:<\/strong>
Donna Phillips Currault<\/strong><\/a>
\nGordon, Arata, Montgomery, Barnett,
\nMcCollam, Duplantis & Eagan, LLC
\n201 St. Charles Ave. 40th Floor
\nNew Orleans, Louisiana 70170-4000
\nDirect: (504) 569-1862
\nEmail: dcurrault@gamb.law<\/p>\n

Sixth Circuit<\/span><\/strong> <\/p>\n

<\/a>Clayton Pierce v. General Motors LLC, et al., <\/em>___Fed. Appx.___, 2017 WL 5952738 (6th Cir. Dec. 1, 2017) (unpublished opinion).<\/strong> <\/p>\n

Pierce claimed GM suspended him because of his religion (Seventh Day Adventist), his disability and in retaliation because he had filed a race claim with the EEOC. GM claimed it suspended Pierce because Pierce threatened his supervisor. Pierce had been mandated to work Saturday overtime. Pierce talked to a supervisor, but not his direct supervisor, and simply took the day off. When Pierce\u2019s immediate supervisor notified Pierce he might be subject to discipline, Pierce admittedly became upset, \u201cballed up his fists\u201d and \u201cexperienced symptoms of a rage attack\u201d. Pierce filed an EEOC charge, and then brought suit after receiving a \u201cright to sue\u201d letter. The District Court (ED Michigan) granted summary judgment to GM and the named supervisors. The Sixth Circuit affirmed, finding that the two supervisor decision-makers \u201chonestly believed\u201d the immediate supervisor\u2019s fears of being threatened\/attacked by Pierce, that the two supervisors were unaware Pierce had filed a prior claim with the EEOC (hence no retaliation), and that GM had legitimate non-discriminatory reasons for suspending Pierce. <\/p>\n

<\/a>Bradley A Arndt v. Ford Motor Company., <\/em>___Fed. Appx.___, 2017 WL 6375584 (6th Cir. Dec. 13, 2017) (unpublished opinion).<\/strong> <\/p>\n

Arndt was a 24 year US army veteran who was diagnosed with PTSD. Arndt was hired by Ford to supervise hourly employees. After a series of leaves, Arndt requested accommodation, asking that he be allowed to bring his service dog into the manufacturing facility. Ford moved Arndt from medical leave to active status, then classified him as \u201cno work available\u201d (Arndt received full pay but was not required to report to work) while Ford considered Arndt\u2019s request. After approximately 3 months Ford met with Arndt and asked what job functions Arndt was unable to perform. Arndt became frustrated and resigned. Arndt sued, claiming Ford refused to accommodate Arndt\u2019s disability, failed to engage in the ADA interactive process in good faith and constructively discharged Arndt. The District Court granted summary judgement in favor of Ford. The Sixth Circuit affirmed, noting that Ford had \u2013 in good faith \u2013 engaged in the ADA interactive process. The Court found that Arndt had resigned while the interactive process was ongoing and before Arndt had allowed Ford the opportunity to reach a conclusion as to Arndt\u2019s request for reasonable accommodation. In essence, Arndt\u2019s resignation terminated the interactive process. Lastly, the Court noted that Arndt was being paid while Ford deliberated, such that a reasonable person in Arndt\u2019s position (even though understandably frustrated) would not have felt compelled to resign; hence no constructive discharge. <\/p>\n

<\/a>Stevens Engineers & Constructors, Inc. v. Local 17 Iron Workers Pension Fund, <\/em>877 F.3d 663 (6th Cir. 2017).<\/strong> <\/p>\n

Stevens is in the construction industry. From 1985 to 2013 Stevens entered into several CBA\u2019s with Iron Workers Local 17, all requiring that Stevens contribute to a multi-employer pension plan\/fund. Under 29 USC \u00a71383(b), construction industry employers are not subject to withdrawal liability if the employer completely withdraws from \u201cwork in the jurisdiction of the collective bargaining agreement [CBA] of the type for which contributions were previously required.\u201d All CBA\u2019s between Stephen and Local 17 contained language regarding jurisdiction where the CBA applied. Jobs within the \u201ccraft\u201d and \u201cterritorial\u201d jurisdiction required that Stevens pay into the fund. The CBAs also recognized assignment agreements. One such work assignment agreement stated that \u201conce a job is assigned through a pre-job conference, it belongs to the assigned craft unit.\u201d In 2013 Stevens terminated its CBA with Local 17 and announced it would not in the future directly employ ironworkers; it would instead subcontract such work. As a result, Stevens stopped contributing to the fund.<\/p>\n

On a subsequent project Stevens held a pre-job conference and announced that millwrights, not ironworkers, would perform work on the project. The fund\u2019s trustees sued Stevens, claiming Stevens was using millwrights where Stevens had previously used ironworkers and therefore owed the fund withdrawal liability. An arbitrator ruled that Stevens followed the work assignment agreement and assigned the craft work to millwrights (the work was within the jurisdiction of the millwrights, not the ironworkers). Consequently, as per the CBA\u2019s jurisdictional language, Stevens had not conducted work in the jurisdiction of the CBA or the fund and therefore under 29 USC \u00a71383(b), was not subject to withdrawal liability. The District Court granted Stephen\u2019s request to enforce the arbitrator\u2019s award. The Sixth Circuit affirmed.\n<\/p>\n\n

<\/a>Hughes v. Gulf Interstate Field Services, Inc., <\/em>878 F.3d 183 (6th Cir. 2017).<\/strong> <\/p>\n

Plaintiffs were welding inspectors paid a flat rate salary of $337\/day, thereby earning in excess of $100,000 annually. Plaintiff\u2019s brought a class action under the FLSA claiming they were entitled to overtime pay during weeks in which they worked in excess of 40 hours. The District Court granted summary judgement to Gulf Interstate, finding all similarly situated employees were exempt highly compensated employees. The Circuit Court reversed and remanded, finding there was a genuine issue as to whether welding inspectors were guaranteed a qualifying minimum weekly salary amount, or were their salaries subject to reduction because of variations in the quality or quantity of work performed?<\/p>\n

<\/a>Hall v. Edgewood Partners Insurance Center, Inc., <\/em>\u00ac\u00ac___F.3d___, 2017 WL 6460082 (6th Cir. Dec. 19, 2017).<\/strong> <\/p>\n

Plaintiffs sold their business, clients and goodwill to USI, stayed on as USI employees and agreed not to solicit their old clients for two years after termination. USI subsequently sold to Edgewood and terminated Hall\/Thompson. Hall\/Thompson began soliciting their former clients and Edgewood sought and obtained a preliminary injunction from the district court. Though Hall\/Thompson raised several arguments, the Circuit Court largely rejected those arguments and affirmed the preliminary injunction.<\/p>\n

<\/a>Johnson v. City of Memphis, ___<\/em>Fed. Appx.___, 2017 WL 6492847 (6th Cir. Dec. 19, 2017) (unpublished opinion).<\/strong> <\/p>\n

In 2000 police officers began challenging the City\u2019s promotion processes as racially discriminatory in violation of Title VII. Three groups of plaintiffs were eventually involved. The district court granted the Plaintiffs\u2019 motion for partial summary judgement and ordered the City to pay appropriate backpay to at least one group of plaintiffs. The City repeatedly appealed, including appealing the backpay award. Seventeen years after litigation commenced the Circuit Court affirmed that plaintiffs were entitled to the relief (backpay) originally granted.<\/p>\n

<\/a>Cooley v. East Tennessee Human Resource Agency, Inc., <\/em>___Fed. Appx.___, 2017 WL 6547387 (6th Cir. Dec. 22, 2017) (unpublished opinion).<\/strong><\/p>\n

Cooley sued under the ADA and FMLA after being fired as a bus driver. The district court granted summary judgment, finding that no jury could conclude Cooley was qualified for her job and that Cooley had not demonstrated the employer\u2019s nondiscriminatory reason for firing her was pretextual. The Circuit Court affirmed, finding that Cooley was not qualified, had failed her medical exam and was unsafe to drive while using narcotics. As Cooley\u2019s doctors were unsure when Cooley might be weaned off of the narcotics and might be able to return to work, the Court concluded additional leave as an accommodation was \u201cunreasonable\u201d. Finally, the Court concluded the employer had not discharged Cooley in retaliation for exercising her rights under the FMLA, but rather had terminated her for the legitimate reason that her FMLA entitlement had been exhausted. <\/p>\n

Submitted by:<\/strong>
Kurt N. Sherwood<\/strong><\/a>,
\nMiller, Canfield, Paddock & Stone, P.L.C.
\n277 S. Rose Street, Suite 5000
\nKalamazoo, MI 49007
\nsherwood@millercanfield.com <\/p>\n

Seventh Circuit<\/span><\/strong> <\/p>\n

<\/a>Elliott v. Bd. of Sch. Trustees of Madison Consol. Sch., <\/em>876 F.3d 926 (7th Cir. 2017).<\/strong> <\/p>\n

The Seventh Circuit Court of Appeals struck down the retroactive application of an Indiana law that removed job security protections for tenured teachers. The court determined that the application of the law to teachers who were tenured before the law took effect is a substantial impairment to their constitutional contractual rights.<\/p>\n

Indiana passed its teacher tenure law in 1927, which required school districts to retain qualified teachers over non-tenured teachers in the case of a layoff. However, effective 2012, Indiana passed Senate Bill 1 (\u201cSB 1\u201d) which replaced the 1927 law, requiring schools to lay off teachers based on performance rather than tenured status.\n<\/p>\n

In 2012, pursuant to SB 1, the Madison school district (\u201cSchool District\u201d) laid off Joseph Elliot (\u201cPlaintiff\u201d), a tenured teacher at Dupont Elementary School, along with five other teachers due to declining enrollment and funding restrictions. Six non-tenured teachers were not laid off during this period of time. The Plaintiff sued the School District and the district court ruled that the layoff provisions of SB 1 violated the Contract Clause when applied retroactively to teachers who were tenured before the law took effect.\n<\/p>\n

The Seventh Circuit affirmed the district court\u2019s decision, noting that the job security accompanying the Plaintiff\u2019s tenure was a \u201ccentral term\u201d to induce him to teach in Indiana. In addition, SB 1 was unforeseeable to tenured teachers, which made the retroactive application of SB 1 a substantial impairment to their constitutional contract rights. The court noted that \u201c[h]aving restricted tenure for new teachers, the State and its school districts were and are free to buy out the tenure rights of more senior ones.\u201d<\/p>\n

<\/a>Milligan-Grimstad v. Stanley, <\/em>877 F.3d 705 (7th Cir. 2017).<\/strong><\/p>\n

The Seventh Circuit Court of Appeals affirmed the district court\u2019s grant of summary judgment for Morgan Stanley Smith Barney (\u201cMorgan Stanley\u201d) in a lawsuit brought by a former employee, Kerrie Milligan (\u201cPlaintiff\u201d). The Plaintiff alleged that she was terminated based on her gender and that Morgan Stanley allowed her coworkers to create a hostile work environment.\n<\/p>\n

The Seventh Circuit held that the Plaintiff presented no evidence that her gender influenced Morgan Stanley\u2019s decision to terminate her. Rather, the court found that Morgan Stanley\u2019s position that the Plaintiff was fired because of her oversight of a fraudulent wire transfer was not genuinely disputed. Additionally, the court rejected the Plaintiff\u2019s cat\u2019s paw theory, concluding that mere speculation that other employees could have influenced her manager\u2019s decision was insufficient evidence that the other employees actually influenced the termination.\n<\/p>\n

As to the Plaintiff\u2019s hostile work environment claim, the court held that some of the Plaintiff\u2019s allegations fell outside the statute of limitations. The Plaintiff alleged two different periods of harassment that occurred from 2003 to 2009 and from 2011 to 2012. The court held that although the standard under Nat\u2019l R.R. Passenger Corp. v. Morgan allows it to look outside the limitations period when assessing hostile work environment claims, the length of the time between incidents has been a consistent limiting factor. 536 U.S. 101, 115 (2002). Plaintiffs are required to \u201cprovide more than speculative, unspecific assertions\u201d when asserting that allegations with gaps form a single employment practice. In this case, the Plaintiff could only recall unspecific instances of alleged harassment that could have occurred two to three years apart. Ultimately, the court determined that the Plaintiff\u2019s assertions lacked specificity to connect otherwise distant allegations into form a single employment practice.\n<\/p>\n

Based on the remaining allegations of harassment that occurred within the limitations period, which consisted of comments about the Plaintiff\u2019s future pregnancy and about the attire of others, the court concluded that these allegations were not severe or pervasive enough to sustain a hostile work environment claim.<\/p>\n

<\/a>In re Jimmy John\u2019s Overtime Litig., <\/em>877 F.3d 756 (7th Cir. 2017).<\/strong><\/p>\n

The Seventh Circuit Court of Appeals reversed a district court decision that blocked Jimmy John\u2019s assistant store managers (\u201cPlaintiff\u201d) from suing the owners (\u201cFranchisee\u201d) of the franchise where they work while their litigation against Jimmy John\u2019s corporate defendants (\u201cJimmy John\u2019s) proceeds.\n<\/p>\n

In their consolidated suit (three separate lawsuits were consolidated and since then, the cases have proceeded under In re: Jimmy John\u2019s Overtime Litigation) against Jimmy John\u2019s, pending in the Northern District of Illinois, the Plaintiffs claim that Jimmy John\u2019s violated the Fair Labor Standards Act (\u201cFLSA\u201d) by misclassifying the Plaintiffs as exempt from federal and state wage-and-hour laws. The Plaintiffs also filed a separate lawsuit against Franchisees asserting the same claims. Approximately 660 individuals joined the FLSA collective action.\n<\/p>\n

Shortly thereafter, three opt-in Plaintiffs filed collective action lawsuits against their respective Franchisee in other federal district courts, asserting the same claims. U.S. District Judge Charles Kocoras, overseeing the consolidated class and collective action against Jimmy John\u2019s in Illinois federal court, granted an injunction halting the progress of the Plaintiffs\u2019 lawsuits against the Franchisees until their claims against Jimmy John\u2019s were resolved. The district court reasoned that it had the \u201cpower to prevent the plaintiffs in front of [him] from staying [sic] any actions in another jurisdiction, in the interest of harmony and delaying expense and overlapping work for judges doing the same kind of thing.\u201d The court did allow Plaintiffs to file motions to toll the statute of limitations in their suits against the Franchisees. In total, the district court enjoined thirteen lawsuits proceeding in twelve federal district courts.\n<\/p>\n

The Seventh Circuit reversed the district court\u2019s order, holding that the lower court did not have the authority to enjoin the case. The Seventh Circuit determined the order was not necessary to prevent duplicative litigation because although the litigation in a different district court involved identical matters, it did not involve the same parties. The litigation against Jimmy John\u2019s and the Franchisees could not be resolved in a single forum because the Illinois federal court does not have jurisdiction over the out-of-state Franchisees. Moreover, the court rejected the notion that the injunction was necessary to prevent inconsistent rulings because there were less drastic ways to address these concerns (i.e. issue preclusion). Furthermore, the court rejected Jimmy John\u2019s assertion that the injunction protected the Illinois federal court\u2019s pretrial orders because this was not the proffered reason for granting the injunction. The court noted that in granting the injunction, the district court pointed to efficiency concerns, which alone were not enough to justify the injunction.\n<\/p>\n\n

<\/a>Ennin v. CNH Indus. Am., LLC, ___<\/em>F.3d___, 2017 WL 6602932 (7th Cir. Dec. 27, 2017).<\/strong> <\/p>\n

The Seventh Circuit Court of Appeals affirmed the district court\u2019s grant of summary judgment for CNH Industrial America, LLC (\u201cCNH\u201d) in a lawsuit brought by a former employee, Abdullah Ennin (\u201cPlaintiff\u201d), a naturalized American citizen from Ghana. The court held that the Plaintiff failed to present any admissible evidence to counter CNH\u2019s legitimate, nondiscriminatory reason for terminating him. <\/p>\n

The Plaintiff worked at CNH without incident for more than two years before he received a written warning for a verbal altercation with another supervisor. A few months later, on November 17, 2014, Plaintiff asked his lead hourly worker for help when his car broke down. The worker left CNH\u2019s facility to assist the Plaintiff and the Plaintiff and the worker returned to CNH. In violation of company policy, Plaintiff allowed his subordinate to follow him through the supervisor\u2019s entrance without swiping his security card and neglected to adjust the worker\u2019s hours to reflect that he had been off the premises while clocked in. Two days later, on November 19, 2014, the Plaintiff was called in for a meeting where he was confronted with the violations. Shortly after the meeting, CNH decided to let the Plaintiff know the next day that he would be terminated for his violations of company policy. However, the Plaintiff went home early that same day and did not come back to work the next day. Instead, the Plaintiff rescheduled a hemorrhoidectomy for November 21, 2014. The Plaintiff requested and received leave from CNH\u2019s third-party administrator and indicated that he would return to work by January 1, 2015.\n<\/p>\n

On December 1, 2014, CNH learned that the Plaintiff was approved for disability benefits and immediately sent a letter to the Plaintiff, informing him that he was terminated and that the decision was made on November 19th for the November 17th incident and his refusal to take responsibility for his actions.\n<\/p>\n

In his complaint, the Plaintiff asserted claims for race, national origin and disability (related to his hemorrhoidectomy) discrimination, as well as claims under the FMLA. In the lower court proceedings, the district court rejected the Plaintiff\u2019s attempt to introduce evidence that CNH did not decide to terminate him until after it knew of his FMLA leave and disability. CNH, in its reply brief, argued that the evidence was inadmissible hearsay and unauthenticated. The district court ruled that the Plaintiff had waived his evidentiary arguments because he never filed a surreply brief and granted summary judgment to CNH based on the rest of the record.\n<\/p>\n

On appeal, the Seventh Circuit affirmed that the Plaintiff had waived his evidentiary argument because he had \u201ca meaningful opportunity to be heard on the evidentiary issue in the district court.\u201d The local rules expressly permitted surreply briefs to be filed to respond to evidentiary objections made in a reply brief. The court held that this rule held true even where parties are not required to file surreply briefs. As to the merits of the case, the Seventh Circuit agreed that CNH terminated the Plaintiff for a legitimate, nondiscriminatory reason and that the Plaintiff failed to produce evidence that the reason was pretext. The court further rejected evidence of comparators, white employees who were not fired for the same reason, because the comparators did not have a similar disciplinary history and performance record as the Plaintiff. Furthermore, the court determined that CNH terminated the Plaintiff before it even knew of his FMLA leave or disability, which disposed of his disability and FMLA claims.\n<\/p>\n

Submitted by:<\/strong>
Jenna Kim, Associate<\/strong><\/a>
\n312.846.7039 direct
\n312.480.0941 mobile
\nJeKim@littler.com
\n321 North Clark Street, Suite 1000 Chicago, IL 60654 <\/p>\n

Eighth Circuit<\/span><\/strong> <\/p>\n

<\/a>Rush v. State Arkansas DWS, <\/em>876 F.3d 1123 (8th Cir. 2017).<\/strong> <\/p>\n

Emma Rush worked as a Workforce Specialist for the State of Arkansas Department of Workforce Services (\u201cADWS\u201d). In November 2015, Ms. Rush applied for a promotion to Program Supervisor, but on December 9, 2015 ADWS told her that she did not receive the promotion. Instead, the promotion went to a white male in his thirties.<\/p>\n

Ms. Rush sent an unverified letter to the EEOC on June 6, 2016 alleging that ADWS discriminated against her on December 9, 2015. The EEOC received this letter and sent a Notice of Charge of Discrimination to ADWS on June 15, 2016. The EEOC sent Ms. Rush a letter on June 21, 2016 asking her to call and arrange an interview. However, on June 30, 2016, the EEOC sent Ms. Rush a letter stating that it had not received a verified charge, and included a copy of the Form 5 Charge for Ms. Rush to sign. Then, on July 26, 2016, the EEOC sent Ms. Rush a Dismissal and a Notice of Right to Sue. Finally, on July 28, 2016, Ms. Rush mailed a verified charge of discrimination on the Form 5 Charge to the EEOC.\n<\/p>\n

On October 26, 2016, Ms. Rush filed a complaint pro se against her employer alleging sex, race (African American), and age (54 years old) discrimination in violation of Title VII and the ADEA. Her complaint alleged that she filed a charge with the EEOC on June 6, and received a Notice of Right to Sue on July 26. Ms. Rush included her June 6 unverified letter, the EEOC\u2019s dismissal letter, and the Notice of Right to Sue. The magistrate judge held that Ms. Rush failed to exhaust her administrative remedies with the EEOC because her charge was not verified, and thus, the magistrate judge recommended that the case be dismissed for lack of subject matter jurisdiction. The magistrate judge also found that Rush failed to state a claim upon which relief may be granted since her complaint was too sparse to meet the Federal Rule of Civil Procedure 8(a) standard, and Ms. Rush was not granted leave to amend her complaint on the grounds that she had not exhausted her administrative remedies. Lastly, the magistrate judge found that it lacked subject matter jurisdiction over Ms. Rush\u2019s ADEA claim because ADWS is a state agency with sovereign immunity under the Eleventh Amendment. Ms. Rush filed timely objections to the magistrate judge\u2019s recommendations, and included the July 28 verified charge she later sent to the EEOC. The United States District Court for the Western District of Arkansas simply adopted the magistrate judge\u2019s recommendation for dismissal for failure to state a claim without addressing Ms. Rush\u2019s objections. Ms. Rush appealed.\n<\/p>\n

The Eighth Circuit Court of Appeals held that Ms. Rush adequately exhausted her administrative remedies by supplying along with her timely objection the Notice of Right to Sue from the EEOC and the later, verified charge. The court noted that to exhaust administrative remedies an individual must timely file a charge of discrimination with the EEOC that sets forth the facts of the charge, and the individual must receive a notice of their right to sue. The court concluded that the documents included with Ms. Rush\u2019s objections, the verified charge and the Notice of Right to Sue, showed that she had fixed any technical issues in the exhaustion requirements. The court held that the district court erred by failing to conduct a de novo review of the case after Ms. Rush filed timely objections on the exhaustion issue. Therefore, the court reversed in part and remanded the case with the instruction to allow Ms. Rush to amend her pleadings. However, the court affirmed the district court\u2019s holding that the ADWS, as a state agency, had sovereign immunity under the Eleventh Amendment, and therefore, Ms. Rush\u2019s ADEA claim was barred.<\/p>\n

<\/a>Ibson v. United Healthcare Servs., Inc., <\/em>877 F.3d 384 (8th Cir. 2017).<\/strong> <\/p>\n

Plaintiff, CeCelia Ibson, was a former shareholder at an Iowa law firm that provided health insurance to its employees through United HealthCare Services, Inc. (\u201cUHS\u201d). The law firm performed little administration relating to the group health plan other than distributing information from UHS to its employees and forwarding payments to the insurer. However, UHS explicitly rejected the role of \u201cplan administrator\u201d in its policy document, and thus, this role remained undesignated.\n<\/p>\n

In March of 2004, Ms. Ibson enrolled herself and her family in her employer-sponsored healthcare plan. In 2008, UHS began denying claims and instituting recoupment actions for claims it had previously paid. During this time, Ms. Ibson\u2019s husband, Jay Wagner, was receiving treatment for metastatic melanoma. In April of 2008, UHS emailed Ms. Ibson to admit its error and promised to set her coverage back to normal. In June of 2008, Ms. Ibson\u2019s law firm cancelled the policy. However, UHS continued to seek recoupment until 2010.\n<\/p>\n

Ms. Ibson initially filed suit in September of 2012 alleging state-law claims against UHS. However, on appeal, the Eighth Circuit Court of Appeals held that Ms. Ibson\u2019s state-law claims were preempted by ERISA. Therefore, she refiled her complaint against UHS in July 2015, and later amended it in November 2015. Ms. Ibson sought the value of unpaid benefits in relation to her late-husband\u2019s care and the value of premiums she paid to the insurer, statutory damages for the insurer\u2019s failure to act as \u201cplan administrator,\u201d attorney\u2019s fees, and damages arising out of a breach of contract based on UHS\u2019s April 2008 email to Ms. Ibson. Ms. Ibson alleged that UHS still owed $190,579.91 in unpaid benefits that arose from her late-husband\u2019s care.\n<\/p>\n

Regarding the value of unpaid benefits, the Eighth Circuit Court of Appeals held that Ms. Ibson lacked standing to bring the claim in her personal capacity, and instead, a legal representative of her husband\u2019s estate had to bring the claim for benefits due to him under 29 U.S.C. \u00a7 1132(a)(1)(B). The fact that Ms. Ibson was the plan participant did not matter, since the benefits were specifically for Mr. Wagner\u2019s treatment as a beneficiary of the plan. The court concluded that the statutory language of \u00a7 1132(a)(1)(B) only provides a cause of action to the one whom benefits were due. Similarly, the court rejected Ms. Ibson\u2019s claim in equity to unpaid benefits, since recognizing the claim would violate equity jurisprudence which establishes that equity is governed by applicable law. Here, \u00a7 1132(a)(1)(B) governs the recovery of benefits, and the provision requires that Mr. Wagner\u2019s estate bring the claim.\n<\/p>\n

Relating to the premiums paid by Ms. Ibson, the court held that Ms. Ibson had a cognizable equity claim to premiums she paid to UHS, under 29 U.S.C. \u00a7 1132(a)(3)(B), if a plan violation occurred. Ms. Ibson brought a claim for premiums under two theories: reformation and restitution. The court concluded that the reformation theory was not applicable because there was no disagreement between the parties as to the terms of the policy, but rather, the parties disagreed as to whether UHS actually violated the policy. Under the restitution theory, the court found that Ms. Ibson had identified specific funds, her premiums, that UHS possessed, and thus, the remedy of restitution for those premiums was equitable if the funds were maintained separate from UHS\u2019s general assets. Therefore, the court reversed and remanded the case to determine whether there was a plan violation, and if so, then whether restitution of Ms. Ibson\u2019s premiums would be appropriate equitable relief under \u00a7 1132(a)(3)(B).\n<\/p>\n

Concerning UHS\u2019s alleged failure to act as \u201cplan administrator,\u201d the court held that, under 29 U.S.C. \u00a7 1002(16)(A)(ii), Ms. Ibson\u2019s former employer, as \u201cplan sponsor,\u201d would be the plan administrator where one had not been specifically designated. Finally, regarding the breach of contract claim relating to UHS\u2019s April 2008 email, the court held that the state law claim was preempted by ERISA because any claim that is either connected to or references an ERISA plan is therefore preempted by ERISA.\n<\/p>\n

Submitted by:<\/strong>
Frances E. Baillon<\/strong><\/a>,
\nBaillon Thome Jozwiak & Wanta LLP
\n100 South Fifth Street
\nSuite 1200 Minneapolis, MN 55402
\n(612) 252-3570
\nwww.baillonthome.com <\/p>\n","protected":false},"excerpt":{"rendered":"

Second Circuit Rodriguez-Depena v. Parts Authority, 877 F.3d 122 (2d Cir. 2017). The Second Circuit holds that arbitration clauses are…<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":27,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"kp-content-permissions":[],"class_list":["post-30","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/www.fedbar.org\/labor-employment-law-section\/wp-json\/wp\/v2\/pages\/30","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fedbar.org\/labor-employment-law-section\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.fedbar.org\/labor-employment-law-section\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.fedbar.org\/labor-employment-law-section\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fedbar.org\/labor-employment-law-section\/wp-json\/wp\/v2\/comments?post=30"}],"version-history":[{"count":2,"href":"https:\/\/www.fedbar.org\/labor-employment-law-section\/wp-json\/wp\/v2\/pages\/30\/revisions"}],"predecessor-version":[{"id":433,"href":"https:\/\/www.fedbar.org\/labor-employment-law-section\/wp-json\/wp\/v2\/pages\/30\/revisions\/433"}],"up":[{"embeddable":true,"href":"https:\/\/www.fedbar.org\/labor-employment-law-section\/wp-json\/wp\/v2\/pages\/27"}],"wp:attachment":[{"href":"https:\/\/www.fedbar.org\/labor-employment-law-section\/wp-json\/wp\/v2\/media?parent=30"}],"wp:term":[{"taxonomy":"kp-content-permissions","embeddable":true,"href":"https:\/\/www.fedbar.org\/labor-employment-law-section\/wp-json\/wp\/v2\/kp-content-permissions?post=30"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}