BSCR Firm News/Blogs Feedhttps://www.bscr-law.com/?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10en-us21 Jan 2019 00:00:00 -0800firmwisehttps://blogs.law.harvard.edu/tech/rssCourts favor the Federal Arbitration Act, but some workers are exempt.https://www.bscr-law.com/?t=40&an=87344&format=xml&p=5258&stylesheet=blog18 Jan 2019Employment & Labor Law Blog<p>In New Prime, Inc. v. Oliveira, petitioner New Prime Inc. was an interstate trucking company, and respondent Dominic Oliveira was one of its drivers. Oliveira worked under an operating agreement that called him an independent contractor and contained a mandatory arbitration provision. When Oliveira filed a class action alleging that New Prime denied its drivers lawful wages, New Prime asked the court to invoke its statutory authority under the Federal Arbitration Act to compel arbitration.</p> <p>Oliveira countered that the court lacked authority, because &sect;1 of the Act excepts from arbitration disputes involving &ldquo;contracts of employment&rdquo; of certain transportation workers. New Prime insisted that any question regarding &sect;1&rsquo;s applicability belonged to the arbitrator alone to resolve, or, assuming the court could address the question, that &ldquo;contracts of employment&rdquo; referred only to contracts that establish an employer-employee relationship and not to contracts with independent contractors. The District Court and First Circuit agreed with Oliveira, and the Supreme Court <a href="http:// https://www.supremecourt.gov/opinions/18pdf/17-340_o7kq.pdf">affirmed</a>, holding that a court should determine whether a &sect;1 exclusion applies before ordering arbitration.</p> <p>A court&rsquo;s authority to compel arbitration under the Act does not extend to all private contracts, no matter how clearly the contract expresses a preference for arbitration. In relevant part, &sect;1 states that &ldquo;nothing&rdquo; in the Act &ldquo;shall apply&rdquo; to &ldquo;contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.&rdquo;</p> <p>For a court to invoke its statutory authority under the Act to stay litigation and force arbitration, it must first know if the parties&rsquo; agreement is excluded from the Act&rsquo;s coverage by the terms of &sect;1. This sequencing is significant, because it means the court and not the arbitrator decides this issue, unlike other issues, which may be delegable to the arbitrator.</p> <p>The issue for the Supreme Court thus became whether the Act&rsquo;s term &ldquo;contract of employment&rdquo; referred to any agreement to perform work or applied strictly to contracts of employment. The Court held that Oliveira&rsquo;s agreement with New Prime falls within &sect;1&rsquo;s exception.</p> <p>The unanimous opinion relied on the Act&rsquo;s original meaning for its decision.&nbsp; Citing dictionaries, statutes, and rulings from the era, Justice Gorsuch concluded that &ldquo;contract of employment&rdquo; was understood to encompass &ldquo;work agreements involving independent contractors.&rdquo;&nbsp;At the time of the Act&rsquo;s adoption in 1925, the phrase &ldquo;contract of employment&rdquo; was not a term of art, and dictionaries tended to treat &ldquo;employment&rdquo; more or less as a synonym for &ldquo;work.&rdquo; Contemporaneous legal authorities provide no evidence that a &ldquo;contract of employment&rdquo; necessarily signaled a formal employer-employee relationship. Evidence that Congress used the term &ldquo;contracts of employment&rdquo; broadly can be found in its choice of the neighboring term &ldquo;workers,&rdquo; a term that easily embraces independent contractors.</p> <p>New Prime also made a policy argument that the Court should order arbitration to further Congress&rsquo; effort to counteract judicial hostility to arbitration and establish a favorable federal policy toward arbitration agreements. Justice Gorsuch stated that courts, however, are not free to pave over bumpy statutory texts in the name of more expeditiously advancing a policy goal. Rather, the Court should respect &ldquo;the limits up to which Congress was prepared&rdquo; to go when adopting the Arbitration Act.</p> <p>Finally, the Court declined to address New Prime&rsquo;s suggestion that it order arbitration anyway under its inherent authority to stay litigation in favor of an alternative dispute resolution mechanism of the parties&rsquo; choosing.</p> Justice Ginsburg, in a concurring opinion, explicitly agreed with the Court&rsquo;s unanimous opinion that words should be interpreted as taking their ordinary meaning at the time Congress enacted the statute.&nbsp; However, she also reasoned that Congress may design legislation to govern changing times and circumstances, perhaps foreshadowing future disputes between judicial philosophies.https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Eighth Circuit Refuses to Punish Employer for History of Granting Special Treatment to Disabled Employee with Poor Attendance Recordhttps://www.bscr-law.com/?t=40&an=86930&format=xml&p=5258&stylesheet=blog08 Jan 2019Employment & Labor Law Blog<p>While the Americans with Disabilities Act requires employers to make reasonable accommodations for the mental and physical limitations of otherwise qualified employees with a disability, it does not require employers to set aside their established attendance policy to accommodate disabled employees who simply cannot reliably and regularly make it to work. The recent Eighth Circuit case of <i>Lipp v. Cargill Meat Solutions Corporation</i> demonstrates this principle.</p> <p>Sheena Lipp worked for 19 years at a Cargill meat processing facility in Ottumwa, Iowa, until she was terminated for absenteeism in November 2014.&nbsp;For most of her employment, she suffered from an incurable lung disease known as eosinophilic granuloma.&nbsp;For the final two years of her employment, this condition limited her ability to work in several ways.&nbsp;She required lifting assistance, limited working hours, and a clean working environment.&nbsp;But most notably also suffered from &ldquo;flare-ups&rdquo; that would require her to take off work for a few days at a time, two to four times a year.&nbsp;</p> <p>Cargill accommodated all of Ms. Lipp&rsquo;s needs, despite its written attendance policy allowing only six &ldquo;unplanned&rdquo; absences (i.e. sick days, personal business, etc.), if reported via an automated call-in system.&nbsp;After those six unplanned absences, a progressive disciplinary system existed, which culminated with termination after the ninth unplanned absence.&nbsp;In the case of medical absences, Cargill&rsquo;s policy was that employees &ldquo;may be required&rdquo; to provide a doctor&rsquo;s note or other verification upon their return to work.</p> <p>Ms. Lipp&rsquo;s ability to satisfy the attendance requirements of her job was further compromised in early 2014, when she was forced to take a nine-month leave of absence (originally planned to be only a few weeks) to care for her ailing mother.&nbsp;The first twelve weeks of leave were protected under the Family and Medical Leave Act.&nbsp;Beyond that, Cargill voluntarily accommodated Ms. Lipp&rsquo;s request for additional leave, during which time she called the automated phone system daily to report her absences.</p> <p>When she returned to work in October 2014, Ms. Lipp was presented with a series of written disciplinary notifications, indicating that she had accumulated 194 unplanned absences and was being placed on a &ldquo;Last Chance&rdquo; attendance policy.&nbsp;&ldquo;Employee needs to understand,&rdquo; the notices stated, &ldquo;that any call-ins, lates, or leave early without authorization will violate this last chance agreement and will terminate her employment.&rdquo;&nbsp;Ms. Lipp refused to sign any of the notifications but was allowed to return to work anyway.</p> <p>Two weeks later, Ms. Lipp called the automated phone system and reported that she would be absent for &ldquo;vacation.&rdquo;&nbsp;Her testimony was that she must have mistakenly keyed the wrong entry on the phone system, because her absence was actually due to a &ldquo;flare-up&rdquo; of her lung condition.&nbsp;When she returned to work, she was terminated, despite explaining that her absence was for medical reasons, not vacation.&nbsp;Although she eventually provided medical documentation of her flare up, she did not do so until about three months after her termination.</p> <p>She filed suit for disability discrimination under the ADA, but the Northern District of Iowa granted summary judgment in Cargill&rsquo;s favor.&nbsp;Although the parties agreed that Ms. Lipp qualified as a disabled employee under the ADA, only &ldquo;qualified individuals&rdquo; can assert a claim for disability discrimination.&nbsp;A &ldquo;qualified individual&rdquo; is one &ldquo;who, with or without reasonable accommodation, can perform the essential functions&rdquo; of his or her job.&nbsp;42 U.S.C. &sect; 12111(8).&nbsp;An employer&rsquo;s written policies&mdash;including attendance policies&mdash;are relevant guidance as to what constitutes an essential function of employment.&nbsp;Cargill insisted Ms. Lipp not a &ldquo;qualified individual&rdquo; under the Act, because she could not &ldquo;regularly and reliable attend work, an essential function of her employment.&rdquo;&nbsp;On appeal, the Eighth Circuit agreed.</p> <p>The appellate court relied on a long line of ADA cases holding that &ldquo;regular and reliable attendance is a necessary element of most jobs,&rdquo; and that &ldquo;the ADA does not require employers to provide an unlimited absentee policy.&rdquo;&nbsp;Ms. Lipp argued that her 195 unplanned absences in 2014 were not excessive, since they were authorized by the employer.&nbsp;The court was unconvinced, noting that &ldquo;persistent absences from work can be excessive, even when the absences are with the employer&rsquo;s permission.&rdquo;&nbsp;</p> <p>Ms. Lipp also argued that Cargill was required to grant her additional time off for &ldquo;flare-ups&rdquo; after her return from the extended leave of absence, as a reasonable accommodation under the ADA&mdash;pointing out that Cargill had always been willing to do so in the past.&nbsp;The court rejected this argument, holding that even though medical leave of absence &ldquo;might, <b><i>in some circumstances</i></b>, be a reasonable accommodation,&rdquo; an accommodation is not reasonable if it requires the employer to set aside the essential functions of the job, including regular and reliable attendance (emphasis supplied by the court).</p> <p>As for the past pattern of granting Ms. Lipp leave for &ldquo;flare-ups,&rdquo; the Court was unwilling to punish Cargill for its history of accommodating Ms. Lipp&rsquo;s condition: &ldquo;If an employer bends over backwards to accommodate a disabled worker, it must not be punished for its generosity by being deemed to have conceded the reasonableness of so far-reaching an accommodation.&rdquo;&nbsp;&ldquo;To hold otherwise,&rdquo; the opinion concluded, &ldquo;would punish Cargill for giving Lipp another chance instead of terminating her employment&rdquo; earlier.</p> <p>This case offers lessons for employers facing requests for disability accommodations or potential ADA claims.&nbsp;First, there is a limit to what is a <b><i>reasonable</i></b> accommodation for absenteeism.&nbsp;There is no bright-line rule for how much leeway a disabled worker must be given, but if an employee&rsquo;s disability keeps her away from work so often that she cannot meet the basic requirements of her employment, she is not legally &ldquo;qualified&rdquo; for the job under the ADA.&nbsp;Second, employers should not live in fear that they will be punished for good behavior.&nbsp;As this case demonstrates, past acquiescence to a disabled employee&rsquo;s request for special treatment should not be used to set some new standard for what accommodations are &ldquo;reasonable&rdquo; under the ADA.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=1010th Circuit Declares Adverse Employment Action Required For Failure To Accommodate Claimshttps://www.bscr-law.com/?t=40&an=86073&format=xml&p=5258&stylesheet=blog11 Dec 2018Employment & Labor Law Blog<p>The Tenth Circuit was tasked with evaluating whether or not an adverse employment action is an essential element of a failure to accommodate action under the American Disabilities Act (ADA). In a divided opinion, the court said Yes.&nbsp;</p> <p>In <i>Exby-Stolley v. Board of County Commissioners, </i>plaintiff worked as a county health inspector and her job required her to inspect restaurants, bars, other places that handle food, interview employees and observe safety practices.&nbsp;While on the job, plaintiff broke her arm and required two surgeries.&nbsp;Because of her injury, plaintiff had to use makeshift devices to assist her and she could not complete the number of inspections required for her position.</p> <p>The court noted there were two very different versions of the efforts to accommodate plaintiff.&nbsp;Plaintiff alleged that she suggested various accommodations that were rejected by her supervisors.&nbsp;This resulted in her supervisor telling her to resign.&nbsp;The County alleged that plaintiff requested that a new position be created for her piecing together various tasks from her job and other positions.&nbsp;The County considered it unfair to take tasks from fellow employees to create a new job for plaintiff.&nbsp;Plaintiff resigned when she was told the County would not provide job she requested. &nbsp;</p> <p>Plaintiff filed suit alleging that the County violated the ADA by failing to reasonably accommodate her disability.&nbsp;The Court of Appeals recited the familiar proposition that &ldquo;failure to accommodate&rdquo; claims are actionable under the ADA, but then turned to the question of whether proof of an adverse employment action is an essential element of such claims; and whether the plaintiff in this case had in fact suffered an adverse employment action.&nbsp;The court explained at length that although the language &ldquo;adverse employment action&rdquo; does not appear in the ADA, it is well established in judicial opinions.&nbsp;Furthermore, the court will not consider a mere inconvenience to accommodating an individual, there must be a material alteration in a term, condition or privilege of employment.</p> <p>The Court rejected the dissenting judge&rsquo;s view that an &ldquo;adverse employment action&rdquo; was not essential, as having relied on dicta &ldquo;of the weakest sort&rdquo;, which it viewed as contrary to the weight of authority on this subject.&nbsp;The majority further concluded that the record showed Plaintiff had permission to continue to perform her job with some minor inconveniences or alterations in how she performed the work, but that she declined to do so, and insisted on more substantial accommodations. The Court thus held that the &ldquo;inconveniences and minor alterations&rdquo; of job responsibilities required of the plaintiff did not rise to the level of an adverse employment action &nbsp;</p> <p>This <a href="https://www.ca10.uscourts.gov/opinions/16/16-1412.pdf">ruling</a> from the Tenth Circuit ups the ante for plaintiffs asserting a failure to accommodate claim.&nbsp;There must be a material and significant impact on the employee.&nbsp;Inconveniences and minor alterations of job responsibilities will not suffice.&nbsp;</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10At-Will Employee Properly Paid Commission as Monthly Drawhttps://www.bscr-law.com/?t=40&an=86089&format=xml&p=5258&stylesheet=blog29 Nov 2018Employment & Labor Law Blog<p>Recently, the Southern District Court of Appeals <a href="https://www.courts.mo.gov/file/SD/Opinion_SD35159.pdf ">affirmed</a> the trial court&rsquo;s determination in a bench tried case on an employee&rsquo;s claim for what he described as unpaid commissions. In affirming the trial court&rsquo;s Judgment, the court of appeals made clear that Missouri law allows an employer to unilaterally modify the terms of an at-will employee&rsquo;s compensation.&nbsp;However, the facts of this case show that the employer did not fail to pay earned commissions, but rather, due to the specific compensation arrangement, plaintiff had drawn against any commissions he had earned.&nbsp;</p> <p>Plaintiff began working for Dennis Oil in January 2010, on a trial basis and had specific terms of compensation which involved 8% commission on profit from new sales plus a $550 per week salary.&nbsp;He also was to be paid 5% commission on profit from existing sales, and provided a company truck and phone.&nbsp;Employee did not dispute the amount or calculation of his compensation during the trial period.&nbsp;</p> <p>Effective June 1, 2010, and after the trial had expired, the employer unilaterally changed the terms such that the employee received a guaranteed draw of $2,333.33 per month, which was to be drawn against the employee&rsquo;s commissions to be earned.&nbsp;The employee also was to receive commissions of 5% on profits earned by employer on existing customer accounts, as well as commissions of 8% on profits earned by employer on newly-acquired customer accounts.&nbsp;During the bench trial, the employer&rsquo;s manager explained this to be &ldquo;draw against commissions&rdquo;, which meant that if the employee earned commissions that exceeded the guaranteed draw amount of $2,333.33 per month, then he would be paid the excess.&nbsp;However, if the employee did not clear that guaranteed amount, only that amount would be paid.&nbsp;The employer made no attempt to recoup payments to the employee for months where his commissions fell short of the guaranteed draw amount.</p> <p>It is well settled that where sales have been fully consummated, commissions are considered due and owing, even if the employee is terminated before the scheduled payout date.&nbsp;Earned commissions, like salary or hourly pay, are &ldquo;wages&rdquo; that must be paid, even if the employee is an employee-at-will. &nbsp;Here, however, the Southern District Court of Appeals had to enlighten plaintiff that his simply was not a case in which his employer had failed to pay commissions he had earned.&nbsp;</p> <p>This case demonstrates the potential confusion which can arise if counsel retained does not have the experience needed in the area of employment law.&nbsp;At Baker Sterchi we pride ourselves in providing clients with experience in all the areas of law in which we practice.&nbsp;Employment, labor, and wage-hour law are certainly no exceptions.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Adding to a Circuit Split, the Tenth Circuit Rules that Arbitrators May Determine Whether Classwide Arbitration is Allowedhttps://www.bscr-law.com/?t=40&an=80185&format=xml&p=5258&stylesheet=blog13 Sep 2018Employment & Labor Law Blog<p>In August 2018, the Tenth Circuit Court of Appeals <a href="https://www.ca10.uscourts.gov/opinions/17/17-1013.pdf ">decided </a><i>Dish Network L.L.C. v. Ray</i>, an important ruling in the field of arbitration clauses and their effect on potential class action litigation. The Tenth Circuit specifically addressed the question of who should determine whether an arbitration clause allows classwide arbitration: a court or an arbitrator?</p> <p>While the contract at issue and its accompanying arbitration clause did not expressly grant the right or ability to apply arbitration on a classwide basis, the Court concluded that the arbitrator appropriately interpreted the broad language of the contract as authorizing classwide arbitration.&nbsp;The Tenth Circuit cited the contract&rsquo;s adoption of American Arbitration Association rules, granting arbitrators the power to determine their own jurisdiction and scope of authority.&nbsp;The Court reasoned that this explicit adoption of the AAA rules was clear and unmistakable evidence that the parties intended to empower an arbitrator to determine whether classwide arbitration of a dispute is permitted.</p> <p>Through the <i>Ray</i> decision, the Tenth Circuit cast its vote in a growing circuit split.&nbsp;Now, the Tenth, Second, and Eleventh Circuits have ruled that an arbitrator may determine whether or not an arbitration clause permits classwide litigation.&nbsp;The Third, Fourth, Sixth, and Eighth Circuits have reached opposite conclusions.&nbsp;The Circuits that reject an arbitrator&rsquo;s authority to determine whether classwide arbitration is allowed have held that adoption of AAA rules within the underlying contract is not sufficiently clear or unmistakable so as to bind the parties to class arbitration.&nbsp;The developing circuit split has turned largely upon the tension between explicit contract language, and the intent that can be implied from the adoption of AAA rules and the explicit content of those rules.</p> <p>As a growing number of circuits reach opposite conclusions on the availability of classwide arbitration through the adoption of AAA rules, it is imperative that parties entering arbitration agreements be aware of whether or not the circuit governing the agreement has ruled on the issue.&nbsp;Parties should also consider spelling out their intent that classwide arbitration either is or is not permitted under the contract, thus removing any uncertainty.&nbsp;Clear and unequivocal language remains the best medicine to prevent against the unintended consequences of seemingly innocuous provisions within an arbitration agreement or clause.&nbsp;While this circuit split continues to grow, it seems only a matter of time before the Supreme Court of the United States fully considers and resolves this growing issue.&nbsp;</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Missouri Voters Overwhelmingly Reject "Right-to-Work" Lawhttps://www.bscr-law.com/?t=40&an=79540&format=xml&p=5258&stylesheet=blog08 Aug 2018Employment & Labor Law Blog<p>While we regularly report to our readers on significant case law developments in the labor and employment field, the most dramatic developments in Missouri, over the past year, have played out in the legislative arena.</p> <p>Last year, with a Republican governor and Republican-majority legislature, two major pieces of labor and employment law legislation were passed. One enacted major changes in the Missouri Human Rights Act, revising its terms to <b>largely</b> parallel those of their equivalent federal anti-discrimination statutes.&nbsp;(Over the years, Missouri courts had held that the MHRA had considerably broader reach than federal statutes like Title VII, the ADEA, and the ADA.)&nbsp;The other was the enactment of a right-to-work law that was signed by former Governor Greitens, which would have made Missouri the 28th right-to-work state.&nbsp;The latter result was short-lived, as union supporters gathered enough signatures to keep it from going into effect pending the results of a statewide referendum.</p> <p>The rejection of so-called &ldquo;Proposition A&rdquo; became a major national priority for organized labor, which contributed substantial funds to the cause. &nbsp;And Missouri voters, by a 2-to-1 margin, have effectively blocked the right-to-work law.&nbsp;</p> <p class="MsoNormal">In a right-to-work state (like Kansas), employees in unionized workplaces are permitted to opt out of both union membership and the payment of union fees of any kind.&nbsp;In states without right-to-work laws, employees at unionized workplaces don&rsquo;t have to be dues-paying union members, but are required to pay &ldquo;agency fees.&rdquo; to cover the union&rsquo;s cost of negotiating employment contracts that affect all bargaining unit workers.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10U.S. Supreme Court, in a 5-4 Ruling, Upholds Employers' Use of Class Action Waivers in Employment Agreementshttps://www.bscr-law.com/?t=40&an=76529&format=xml&p=5258&stylesheet=blog21 May 2018Employment & Labor Law Blog<p>In a closely watched and long-awaited ruling, the U.S. Supreme Court on May 21st held that it is lawful for an employer, in an agreement with an employee, to provide that all disputes be resolved through one-on-one arbitration between the company and the employee. Accordingly, an employee may waive his right to bring his claims in a class action or collective action.</p> <p>The decision, in a case titled <i><a href="https://www.supremecourt.gov/opinions/17pdf/16-285_q8l1.pdf">Epic Systems Corp. v. Lewis</a></i>, resolved a split in authority between Circuit Courts of Appeal, and actually resolved three recent separate appellate court cases with very similar facts.&nbsp;(The other two cases involved employers Ernst &amp; Young, and Murphy Oil USA.)&nbsp;In each instance, the employee had entered into an employment agreement with his employer, which referred disputes to arbitration, and which contained a class action waiver clause.&nbsp;In the <i>Murphy Oil </i>case, the Court of Appeals had upheld the arbitration/class waiver clause.&nbsp;In <i>Epic Systems </i>and <i>Ernst &amp; Young </i>cases, the Courts of Appeal had denied enforcement of those clauses.</p> <p>At issue was the friction between, on one hand, a consistent line of recent Supreme Court cases upholding arbitration clauses with class waivers, under the Federal Arbitration Act (e.g. <i>Concepcion, Italian Colors, Kindred Nursing</i>); and a doctrine first espoused by the National Labor Relations Board in 2012, in the <i>D.R. Horton </i>case, holding that an agreement purporting to waive class action rights was unenforceable, because it encumbered the fundamental right under Section 7 of the National Labor Relations Act for employees to engage in concerted activity for their mutual aid or protection.</p> <p>The majority opinion, written by Justice Gorsuch, rejected the employees&rsquo; argument about Section 7 rights, holding that the NLRA &ldquo;does not express approval or disapproval of arbitration. It does not mention class or collective action procedures. It does not even hint at a wish to displace the Arbitration Act&mdash;let alone accomplish that much clearly and manifestly, as our precedents demand.&rdquo;&nbsp;The opinion further observed that unlike the NLRA, various other federal statutes contain very specific language about the manner in which disputes should be resolved, and &ldquo;when Congress wants to mandate particular dispute resolution procedures it knows exactly how to do so.&rdquo;</p> <p>This is a very important ruling for employers.&nbsp;An employer considering whether to resolve disputes with its employees through arbitration might take be tempted to take a narrow view in weighing whether arbitration is worth the bother, compared to having disputes resolved in court.&nbsp;The arguments against arbitration go roughly as follows: &nbsp;It is no longer cheaper than court.&nbsp;Discovery is allowed in arbitration.&nbsp;Cases take a long time to resolve.&nbsp;Arbitration fees can be substantial.&nbsp;And arbitrators are more likely to &ldquo;split the baby&rdquo;, and issue a compromise ruling in a case, even where the employer&rsquo;s position is meritorious.</p> <p>But this type of analysis overlooks an important additional factor.&nbsp;For it is now established law that an employment agreement containing an arbitration clause can preclude a wage-hour claim or discrimination claim from being brought in court as a collective action or class action.&nbsp;Employers who have been &ldquo;on the fence&rdquo; about whether to utilize arbitration agreements with class waiver clauses, because of the legal uncertainty about their enforceability, now have their answer.&nbsp;And if avoidance of class actions is a high priority for the company, now would be a good time to take action.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Intra-Corporate Immunity Rule Alive, Applied, and Affirmed in Dismissal of Missouri Defamation Suithttps://www.bscr-law.com/?t=40&an=76243&format=xml&p=5258&stylesheet=blog04 May 2018Employment & Labor Law Blog<p>In <a href="https://www.courts.mo.gov/file.jsp?id=124497"><i>Lovelace v. Van Tine</i></a>, the Missouri Court of Appeals, Eastern District, applied the &ldquo;intra-corporate immunity&rdquo; rule, and upheld the dismissal of a defamation claim filed by a medical assistant against a physician at the hospital where both worked.</p> <p>Plaintiff Lovelace worked for the Washington University School of Medicine for 12 years, but was terminated after the Defendant, Dr. Van Tine, reported to her supervisors that Lovelace said a certain job candidate should not be hired because that job candidate, as quoted in the opinion, &ldquo;doesn&rsquo;t like working with white people.&rdquo; After being confronted by her supervisors about this allegation, Lovelace called in sick for several days, allegedly due to her distress. She was first placed on administrative leave, but her employment was later terminated. Her lawsuit against Dr. Van Tine followed, asserting that his report to her supervisors was false and defamatory.</p> <p>A claim for defamation requires a Plaintiff, such as Lovelace, to plead and prove the following elements:</p> <p style="margin-left: 40px;">1) a publication,</p> <p style="margin-left: 40px;">2) of a defamatory statement,</p> <p style="margin-left: 40px;">3) that identifies the plaintiff,</p> <p style="margin-left: 40px;">4) that is false,</p> <p style="margin-left: 40px;">5) that is published with the requisite degree of fault, and</p> <p style="margin-left: 40px;">6) damages the plaintiff&rsquo;s reputation.&nbsp;</p> <p>At issue with Lovelace&rsquo;s Petition was the element of &ldquo;publication&rdquo; -- the communication of the defamatory matter to a <i>third person</i>. The pivotal question was whether Dr. Van Tine&rsquo;s communication was made to a third person, or whether, in the eyes of the law, it was a protected internal communication, within the hospital&rsquo;s management group, and subject to intra-corporate immunity.</p> <p>The idea behind this long-standing rule, as it applies to a defamation case, is that when a false statement is made and/or repeated in the context of a business, this generally does not constitute a publication when the business is merely communicating with itself.</p> <p>The rule, however, does not offer protection to all communications within the corporate entity.&nbsp;The Missouri Supreme Court, in <i>Rice v. Hodapp, </i>has held that defamatory statements made by company supervisors or officers to <i>non-supervisory</i> employees constitute publication for purposes of a defamation action.&nbsp;However, communications between company supervisors or officers, or made by a non-supervisor to a supervisor or officer, are a different matter.</p> <p>The public policy behind the intra-corporate immunity rule is to promote responsible reporting of issues within the work place from the bottom to the top or, in certain situations, along the same, linear supervisory lines, without fear of reprisal against the person making the report. The rule encourages reporting of inappropriate work place actions or comments to those in the business who are responsible for addressing those issues - i.e. those who handle the hiring or discipline decisions. Those who receive the reports are expected to take reasonable steps to investigate the report to ensure the report was made in good faith.</p> <p>Conversely, per the <i>Rice </i>decision, communications made to non-supervisors - who have no need to know the information, and no responsibility for acting on inappropriate conduct &ndash; are not protected.</p> <p>Without the intra-corporate immunity rule, there could be a chilling effect on responsible reporting to management by employees, for fear they could face a lawsuit for reporting the issue.&nbsp;However, the intra-corporate immunity rule apparently is alive and well in Missouri.&nbsp;Indeed, in the case of <i>Lovelace</i>, it was used to affirm the dismissal of a defamation complaint where the information in question was reported only to company management, and no outside publication of the alleged defamatory statement occurred.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Verdict Based on Disjunctive Jury Instruction Gets Junkedhttps://www.bscr-law.com/?t=40&an=74558&format=xml&p=5258&stylesheet=blog13 Feb 2018Employment & Labor Law Blog<p>A recent ruling by the Court of Appeals for the Eastern District of Missouri illustrates the perils of using disjunctive verdict directing instructions. In <i><a href="https://www.courts.mo.gov/file.jsp?id=121434">Kader v. Bd. of Regents</a>, </i>the court reversed a $2.5 million verdict against Harris-Stowe State University (&ldquo;HSSU&rdquo;) and remanded the case for a new trial based upon instructional error in the disjunctive verdict directing instruction.&nbsp;</p> <p>Plaintiff <i>Kader</i> sued under the Missouri Human Rights Act, alleging that the Board of Regents of HSSU discriminated against her based upon several factors, including race and national origin, and retaliated against her for opposing the university&rsquo;s discriminatory practices.&nbsp;Kader, originally from Egypt, came to the United States on a visa for individuals involved a work and study based program.&nbsp;After completing her studies, she worked at HSSU for three years under her original visa.&nbsp;HSSU then appointed a new dean to the program where Kader worked, and Kader alleged she received poor reviews from the new dean based upon her national origin.&nbsp;She reported this to the president of the university.</p> <p>When Kader&rsquo;s visa was about to expire, she sought assistance from HSSU to obtain a new visa.&nbsp;HSSU agreed to submit the paperwork she needed for this new visa and did provide the initial information needed.&nbsp;When Kader had not heard about whether her visa was granted, she contacted the United States Citizenship and Immigration Services and learned it had requested additional information from HSSU, but had not received a response.</p> <p>When Kader contacted HSSU to inquire about the additional information requested, it denied receiving any such request.&nbsp;HSSU further informed Kader that her visa application had been denied and she had to leave HSSU within 30 days.&nbsp;Kader requested a work leave of absence, which HSSU did not provide.&nbsp;Three days later, Kader again requested a leave of absence from HSSU but received no response.&nbsp;Thereafter, Kader received a letter from HSSU that it would not appeal the denial of her visa application.</p> <p>During the trial, the court gave the jury disjunctive verdict directing instructions, instructing them to rule in Kader&rsquo;s favor if: (1) the jury found HSSU failed to do one or more of five listed acts, one of which was whether HSSU denied Kader a work leave of absence; (2) Kader&rsquo;s national origin or complaints of discrimination were a contributing factor to HSSU&rsquo;s failure to do any of those acts, and (3) such failure damaged Kader. The jury returned verdicts in Kader&rsquo;s favor on her claims of national origin discrimination and retaliation.</p> <p>In reversing the trial court, the appellate court relied on authority holding that &ldquo;[i]n order for disjunctive verdict directing instructions to be deemed appropriate, each alternative must be supported by substantial evidence.&rdquo;&nbsp;The court held that the denial of a work leave of absence was not supported by substantial evidence &ldquo;because the record shows that, at the time she was denied leave, Dr. Kader did not have a valid visa authorizing her to work in the United States, and, therefore, HSSU could not legally employ her.&rdquo;&nbsp;Therefore, the court declined to find that the denial of employment or a work leave of absence to one who no longer has a valid visa is discriminatory or retaliatory conduct.&nbsp;</p> <p>&ldquo;[A]s there is no way to determine upon which disjunctive theory the jury chose, we cannot rule out the possibility that the jury improperly returned its verdict upon a finding that HSSU discriminated against Dr. Kader by denying&nbsp;her a work leave of absence, which misdirected or confused the jury,&rdquo; explained the court.&nbsp;Accordingly, the judgment was reversed and remanded for a new trial.</p> <p class="MsoNormal" style="text-align:justify"><span style="font-family:&quot;Arial&quot;,sans-serif">For more on this subject, see our earlier blog post titled <a href="https://www.bscr-law.com/?t=40&amp;an=58116&amp;stylesheet=blog&amp;p=5258">&ldquo;Employers Know That Instructions Matter.&rdquo;</a><o:p></o:p></span></p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Choice of Venue Provision Upheld in Employment Contracthttps://www.bscr-law.com/?t=40&an=72818&format=xml&p=5258&stylesheet=blog28 Dec 2017Employment & Labor Law Blog<p>After Reilly Company terminated his employment, Plaintiff Jeff Reed brought claims against Reilly in Jackson County, Missouri Circuit Court. Reilly moved to dismiss the claims based upon an employment contract provision stating that all disputes between the parties calling for interpretation and enforcement of the contract must be brought in Johnson County, Kansas.&nbsp; Plaintiff argued that: (1) because he was not seeking to enforce the contract, the forum selection provision had no applicability to his common-law and statutory tort claims, (2) the forum selection clause, and the contract as a whole, were unenforceable because his employment was &ldquo;at-will&rdquo; and no additional consideration was given for the forum selection clause, and, finally, (3) the forum selection clause was unfair and unreasonable because it was procured by fraud and concealment and therefore unenforceable.&nbsp; The dismissal was affirmed by the Court of Appeals, and the Supreme Court <a href="https://www.courts.mo.gov/file.jsp?id=120434">affirmed</a>, rejecting all of plaintiff&rsquo;s arguments.</p> <p align="center"><u>Facts</u></p> <p>Reed sued in Missouri, seeking declaratory and injunctive relief based on his employment contract with Reilly, damages for alleged fraud including a Missouri Merchandising Practices Act claim of fraud in procuring the contract, and damages for wrongfully withholding commissions.&nbsp; Reilly moved to dismiss the claims, asserting that Reed&rsquo;s lawsuit could only be brought in Johnson County, Kansas.&nbsp; The motion to dismiss was granted, and the Court of Appeals further affirmed the validity and enforcement of the forum selection clause.&nbsp; The Missouri Supreme Court accepted the case for review.</p> <p align="center"><u>The Forum Selection Clause Was Enforceable Despite Allegations of Non-Contract Disputes </u></p> <p>Reed argued that the trial court erred in enforcing the forum selection clause in the employment contract because the contract lacked precise language requiring him to bring his non-contract claims in Kansas.&nbsp; The provision at issue stated:&nbsp;</p> <p>&ldquo;In the event of a dispute, jurisdiction and venue to interpret and enforce any and all terms of the Agreement shall be the District Court of Johnson County, KS.&rdquo;</p> <p>The Court ruled that whether a forum selection clause applicable to contract actions also reaches non-contract claims depends upon whether resolution of the claims is dependent upon interpretation of the contract.&nbsp; The resolution of plaintiff&rsquo;s claims in this matter necessarily required an inquiry into the terms and enforceability of the employment contract, and accordingly, the non-contract claims were subject to the forum selection clause.&nbsp; Plaintiff&rsquo;s claims for injunctive and declaratory relief clearly sought determinations regarding the enforcement and validity of the contract as a whole, and therefore the forum selection clause was enforceable.</p> <p align="center"><u>The Trial Court Was Not Required to Determine Whether the Employment Contract Was Wholly Enforceable and Supported By Appropriate&nbsp;Consideration, Before Ruling on the Forum Selection Provision </u></p> <p style="text-align: left;">The Supreme Court held that the trial court was not required to determine whether the contract was valid and enforceable, before ruling on the enforceability of the forum selection clause.&nbsp; Such a determination would be absurd, particularly if the matter was sent to a different jurisdiction for the same analysis to be conducted.&nbsp; Also, assuming that additional consideration was required in exchange for the forum selection clause and no additional consideration was given by Reilly, as long as the contract terms were not arrived at under terms deemed &ldquo;adhesive&rdquo; the forum selection clause would be enforceable.&nbsp; Plaintiff Reed did not argue that the contract was adhesive.</p> <p>Because resolution of Reed&rsquo;s arguments that (1) at-will employment does not create an enforceable employment relationship and (2) Reilly breached the agreement were issues that could be addressed in the new venue, they did not void the forum selection provision.</p> <p align="center"><u>The Forum Selection Clause Was Not Void Due to Unfairness, Fraud, or Misrepresentation.</u></p> <p>The Court rejected Plaintiff&rsquo;s assertion that the forum selection clause was void because the employment agreement, as a whole, was void due to fraud.&nbsp; Although a forum selection clause may be voided if procured by fraud, there was no evidence in the record concerning negotiation of the forum selection provision, and plaintiff&rsquo;s arguments that the employment agreement was procured by fraud did not void the forum selection clause because plaintiff did not argue that the forum selection clause was specifically procured by fraud.</p> <p>The Court likewise rejected plaintiff&rsquo;s argument that the forum selection clause was unfair and unreasonable, because there was no evidence submitted that the contract was adhesive.&nbsp; Finally, the Court found that the chosen venue in the contract was a neutral forum for the parties&rsquo; dispute which cut against plaintiff&rsquo;s fairness and reasonableness arguments.</p> <p align="center"><u>Conclusion</u></p> <p>Forum selection clauses that are not adhesive will be interpreted independently of the court&rsquo;s determination of the enforceability and validity of the contract as a whole.&nbsp; When, as in this case, a contract specifies a forum for all disputes concerning the contract&rsquo;s interpretation and enforcement, and the dispute between the parties involves those matters, the forum clause will be enforced.&nbsp; Parties drafting forum selection clauses should exercise care to avoid contracts that are adhesive &ndash; i.e. agreements reached without a realistic opportunity for bargaining &ndash; and to choose forums which will be considered &ldquo;neutral&rdquo; and not overly advantageous to the party drafting the agreement.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10