Background: Peer Review Statute

Minnesota Statute section 145.63 provides, in pertinent part:

No review organization and no person who is a member or employee, director, or officer of . . . a review organization shall be liable for damages or other relief in any action brought by a person or persons whose activities have been or are being scrutinized or reviewed by a review organization, by reason of the performance by the person of any duty, function, or activity of such review organization, unless the performance of such duty, function or activity was motivated by malice toward the person affected thereby.

The peer review immunity statute was created “to encourage the medical profession to police its own activities with a minimum of judicial interference.” Campbell v. St. Mary’s Hosp., 312 Minn. 379, 252 N.W.2d 581, 587 (Minn. 1977).

Case Background and Decision

Plaintiff, Dr. Gregory Sherr, was a neurosurgeon who began performing surgeries at a large health system’s hospitals in 2015. The health system utilized a multi-phased peer review process for evaluating and disciplining its physicians. Specifically, the health system’s practitioners sat on councils that conducted peer review of surgeries performed at the health system’s hospitals. Council members referred troublesome cases to the health system’s Medical Executive Committee (MEC) for consideration of corrective action. Physicians who received discipline were then entitled to review by the health system’s Judicial Review Committee (JRC).

After Plaintiff began working at the large health system, it received several complaints about Plaintiff’s work performance. For example, operating room staff reported six cases in which Plaintiff’s patients suffered post-operative infections. No other surgeon had more than two. Other staff members and physicians also submitted various complaints about Plaintiff. The health system’s Spine Council met, discussed these issues, and voted to suspend Plaintiff’s privileges. The MEC then upheld Plaintiff’s suspension. Plaintiff received a hearing before the JRC at which his suspension was ultimately overturned. Plaintiff then alleged that his referral sources had been devastated as a result of the suspension process. Plaintiff resigned and sued the health system and individual members of the Spine Council for defamation, tortious interference with prospective economic relationship, and tortious interference with contract.

The court analyzed three allegedly defamatory statements: (1) Defendants told nurses that Plaintiff’s “speed in surgery was putting his patients at risk”; (2) at the October 6 peer review meeting, Defendants accused Plaintiff of “failing to order some basic and necessary imaging in connection with the treatment” of eight patients; and (3) Dr. Dunn (a defendant) “professed at that same meeting that Dr. Sherr was known by the operating room staff to have his patients ‘lose a liter of blood for every level of fusion surgery Dr. Sherr performed.’”

As to the first statement, the Eight Circuit held that it relied exclusively on inadmissible hearsay and, therefore, did not constitute defamation. As to the second and third statements, the court held that Plaintiff failed to prove they were made with malice because he could not show that the health system or the Spine Council deviated from their established procedure. The court rejected Plaintiff’s argument that it was improper for Dr. Wallenfriedman (another defendant) to lead the peer review process because she competed with Plaintiff for patient referrals. Because Plaintiff showed no clear violation of any established peer review procedure, the court held Defendants were entitled to peer review immunity. Notably, one judge filed a dissent, explaining he would have allowed Plaintiff’s claims to go to trial because there was a dispute as to whether Dr. Wallenfriedman’s presence during the peer review process was evidence of “malice” in the decision-making process.

The court also affirmed summary judgment on Plaintiff’s tortious interference claims on two separate grounds. First, the court held that, to the extent these tortious acts were committed during the peer review process, they are barred by peer immunity. Second, the court affirmed summary judgment on each of these claims on the merits.

Bottom Line

Minnesota’s peer review immunity statute is a powerful tool that can protect healthcare organizations from liability. This case re-affirms the immunity to which covered employers can be entitled if they implement and follow objective guidelines when conducting peer review. However, as the dissent in this case highlights, peer review guidelines should be carefully drafted and reviewed by counsel to ensure they meet the statutory requirements.

The post Eighth Circuit Affirms Minnesota’s Peer Review Immunity Statute appeared first on Felhaber Larson.

Anjela Greer, a security guard with the Wichita Art Museum, was one of two applicants for promotion to the job of “Operations Supervisor.” However, Greer was not interviewed for the promotion, which led her to sue the Museum under the Uniformed Services Employment and Reemployment Rights Act (USERRA).  Greer alleged that the Museum’s Executive Director, Dr. Patricia McDonnell, was biased against her because of her continuing service in the U.S. Naval Reserves and that such bias motivated the decision not to advance her along in the promotion process.

Talk is Not Cheap

Greer’s proof of McDonnell’s bias consisted of recollections of various comments that McDonnell allegedly made about her military service, including:

∗ When Greer was called to attend her annual two-week training, McDonnell allegedly asked: “[C]an’t they reschedule that? Don’t they know you have a real job?”

∗ When Greer previously expressed interest in the position of “Weekend Supervisor,” McDonnell allegedly responded: “[Y]ou’re still in the military, military thing, the crap, whatever . . . . [Y]ou’re not going to be considered or promoted or you’re not going to do anything here.”

∗ When a security guard slammed a door into Greer’s shoulder, McDonnell reportedly admonished Greer and said “[B]eing [in the] military, I figured you would be able to handle it.”

Greer further alleged that after she learned that she would not be interviewed for the job, she confronted Olivia Hensley, the employee who screened the applications.  Hensley supposedly told Greer that McDonnell ordered her to leave her “right where she was” and that Greer “wasn’t going anywhere” regardless of how many applications she put in.

The District Court dismissed Greer’s claim, finding that she was not qualified for the job because she lacked the required supervisory experience for the position.  Therefore, no reasonable fact-finder could conclude that McDonnell’s anti-military animus was the motivating factor in the denial of Greer’s quest for this promotion.

Manager’s Word Was Her Bond – And Her Undoing

Greer appealed to the 10^th Circuit Court of Appeals, who reversed the dismissal and remanded the case for trial.  The Appeals Court concluded that summary dismissal was improper because a very real question existed as to whether McDonnell’s animus motivated the denial of the promotion.

First, there was a legitimate fact dispute as to whether Greer did in fact meet the supervisory experience requirement for the promotion.  Greer alleged that she was the Museum’s security supervisor for the second shift and that she prepared schedules, approved time off and provided work oversight of the crew members. In addition, Greer stated on her application that she supervised 2 people. Hensley testified that while it was not completely clear if Greer had the requisite supervisory experience, she had discretion in cases of such ambiguity to advance applications to the next stage if she felt that they were deserving.

Since Hensley had the authority to accept debatable applications, a reasonable fact-finder could decide that McDonnell’s feelings about Greer’s military service influenced the Hensley’s decision not to exercise her discretion to process Greer’s submission.  McDonnell’s sentiments about Greer’s military service were well known, and Hensley actually testified that she was in fact influenced by McDonnell’s feelings.

Therefore, the Appeals Court remanded the case back to the lower court so that Greer could have her chance to prove to a jury that she was denied a promotion because of McDonnell’s bias against her military service, not because she lacked the necessary qualifications.

Bottom Line

This could easily have been a simple matter of denying an application because of a legitimate question about whether the minimal requirements were met.  Instead, McDonnell and the Museum snatched defeat from the jaws of victory by openly expressing views that the law says are not proper considerations for workplace decisions.  A reasonable jury could find that such expressions motivated the employer’s decisions.

As is so often the case, the manager in this instance should have Just. Stopped. Talking.

The post Open Mouth. Insert Foot. Lose Case appeared first on Felhaber Larson.

Christopher Vega sued his former employer in 2016 claiming disability discrimination.

Some time later, he officially changed his name to Richard Stryker.  Upon learning of the name-change, Magistrate Judge Kevin Nathaniel Fox ordered that the caption of the lawsuit be amended to reflect the new name of the plaintiff.  Stryker objected and filed an application to keep his former name on the lawsuit.

Stryker argued that it was vital to proceed under his old name to protect his ability to secure new employment.  Stryker contended that if prospective employers learn of the lawsuit, they might be dissuaded from hiring someone who is suing a former employer and/or was once diagnosed with depression and attention deficit disorder.

Much Ado About Nothing

Judge Fox denied Stryker’s application, noting that it was essentially a request to proceed in a lawsuit anonymously.  The judge explained that it is in the public’s interest to know who is using the courts and that requests to proceed anonymously must demonstrate a compelling reason, such as:

 – the need to protect highly sensitive matters of a personal nature;

– the need to avoid harm stemming from the disclosure of the name of a vulnerable person (e.g. a child); or

– the need to avoid retaliatory physical or mental harm, or other harms of a serious nature.

A Plaintiff By Any Other Name is Still Protected

Judge Fox found that Stryker’s concerns about possible damage to his ability to find a new job were insufficient to justify allowing him to proceed with the lawsuit under his old name.  Indeed, the judge found this argument “speculative and baseless” since it was premised on conjecture that future employers might violate the laws protecting against discrimination and retaliation in hiring practices.  Even if such violations occurred, those laws provide Stryker with valid remedies for any damages that might result.

Judge Fox concluded that the details of the lawsuit did not involve highly sensitive personal matters, nor did they subject Stryker unduly to retaliatory physical, mental or other special harm.  He is not particularly vulnerable because of his age or circumstance and he has not demonstrated any other compelling rationale that would balance against the public’s interest in requiring Stryker to proceed under his current legal name.  Stryker’s application was therefore denied and he was required to pursue his lawsuit under his current name.

Bottom Line

If current or former employees wish to allege that their employers violated the law, they should have to stand behind those allegations and not hide behind former names or pseudonyms. Judge Fox clearly understood this and ruled appropriately.  All’s well that ends well.

The post Man Suing Former Employer Must Pursue Case Under His Newly-Changed Name appeared first on Felhaber Larson.

Louis Longo was fired from his job as Executive Vice President of Wheeling Hospital in West Virginia.  He sued the hospital under the Federal False Claims Act (FCA) alleging that the hospital defrauded Medicare and Medicaid by inflating payments to doctors with high patient volumes in return for patient referrals.

Longo’s lawsuit was brought under the Qui Tam provision of the FCA, which allows a private citizen to bring lawsuits alleging fraud in federal programs so as to assist the government in recovering misappropriated funds.  The person bringing the lawsuit receives a portion of the ultimate penalty assessed against the defrauding party as a reward for bringing the wrongdoing to light.  The federal government sometimes intervenes in such cases, as they did here, to add their resources to claims they believe to be significant.

The Employer’s Complaint

In response, the employer sued Longo in federal court claiming that he breached his fiduciary duty to them.  Specifically, they contended that Longo had a duty to report possible illegal activity internally but instead used his insider knowledge to “extort a settlement” through a “false and frivolous” whistleblower action.

The hospital also claimed abuse of legal process, alleging that Longo’s lawsuit overlooks the fact that the IRS had previously audited the compensation paid to the doctors in question such that any discrepancies regarding compensation would have been discovered and resolved. Thus, they claimed that “Longo’s threats and the legal action he filed … are consistent with a concerted effort to contort the legal process to his own personal advantage and wealth.”

The lawsuits are relatively recent and therefore have not yet been subject to any rulings.

Bottom Line

If the court rules in the employer’s favor, it could have a significant impact on whistleblower claims.  For one thing, those individuals who had a duty to bring wrongdoing forward now face greater consequences for not adhering to their obligations.

In addition, this raises the stakes for anyone who wants to claim that that they actually did blow the whistle but the employer did not respond.  Such individuals better have proof that they raised the issue with the employer or face a possible lawsuit for not having done so.

We will report further developments.

The post Employer Sues Whistleblower For Failure to Report Illegal Conduct Internally appeared first on Felhaber Larson.

Everett Bad Wound worked for the Bureau of Indian Education (BIE), a division of the US Department of the Interior, from 1999 until late 2016 when he was terminated after he failed to report a car accident that caused his driver’s license to be revoked.  The BIE determined that this prevented him from performing many of his job duties and they therefore terminated his employment.

Claims Were a Blank Page

Bad Wound filed a discrimination charge with the Equal Employment Opportunity Commission (EEOC).  After the EEOC ruled in BIE’s favor, Bad Wound initiated a lawsuit in Minnesota Federal District Court alleging harassment on the basis of sex and sexual orientation, retaliation and age discrimination.  His specific allegations were:

– On one undetermined occasion, his supervisor said he looked “all dolled up”;

– In October, 2016, his supervisor’s assistant referred to him as a “girl scout.”

– After filing an internal complaint with the Human Resources Department and later speaking with an EEOC Investigator (without actually filing a charge) his supervisors ignored him, impeded his work and subjected him to a hostile work environment.

BIE filed a motion to dismiss the lawsuit for failure to state a claim upon which relief can be granted.  This is a difficult standard to meet since legal complaints require only a short plain statement indicating, after all factual allegations are considered to be true, that the complainant is entitled to relief.

Notwithstanding the elevated standard, United States District Court Judge Wilhelmina Wright wasted no time dismissing the lawsuit, noting first that an actionable harassment claim requires behavior that is “both objectively and subjectively offensive, such that a reasonable person would consider it to be hostile or abusive.” Behavior that constitutes “[s]imple teasing, offhand comments, and isolated incidents (unless extremely serious)” are insufficient” to meet this standard.

Nothing + Nothing = Nothing

Judge Wright concluded that while the two comments at issue may have been subjectively offensive to Bad Wound, they clearly were the type of isolated and offhand remarks that simply do not rise to the level of actionable harassment under Title VII.  The remaining allegations of harassment were merely conclusory with no evidence of actual events to support them.  She therefore dismissed the harassment claims.

As for retaliation, Judge Wright observed that Bad Wound was not terminated for almost seven months after filing his internal complaint with the Human Resources Department.  Without any other evidence linking the termination decision to the complaint, the passage of this much time rendered a connection between these two events implausible.

Finally, Judge Wright dismissed the age discrimination claim because Bad Wound had no evidence whatsoever of an age-based motive other than the fact that he is 62 and was terminated.

Bottom Line

When employees are convinced that they are subject to bias, they often view every statement and every interaction through that filter.  In this case, all it took for the employee to conclude that he needed to sue was two relatively innocuous statements.

While it is certainly desirable to avoid any comments of the type made in this case, it is simply impossible to envision a busy work environment without the occasional slight or incivility.  To think that a lawsuit can be brought as a result can be frustrating to employers, although comfort can be taken in the fact that Judge Wright did not allow this claim to move past the filing stage.  Hopefully, this decision will influence other judges to do the same when called upon.

The post Ex-Employee’s Lawsuit Demonstrates That Some People Sue Over Absolutely Nothing appeared first on Felhaber Larson.

Here are three 2017 decisions from other jurisdictions that we hope our Minnesota courts overlook, and one we can’t wait for them to apply.

One Word is All It Takes

In a post entitled In Some Cases Even a Single Word Can Create a Hostile Environment, we wrote about two African American workers who sued for racial harassment after their supervisor threatened to fire them if they “[N-word]-rigged” the task to which they were assigned.

The Third Circuit Court of Appeals noted that the standard for harassment is whether the conduct was “severe OR pervasive” and that even a one-time use of the offending word was severe enough to allow the workers to proceed with their claim.

Nobody doubts that the language was horrid and offensive but have we really reached the point where a single utterance of it is sufficient to create an actionable legal claim? The answer will be yes if the courts in Minnesota decide to borrow this Third Circuit precedent.

Accommodation for Medical Marijuana Creates a Buzz

While some states have legalized medical marijuana, it is still a banned substance under federal law so state and federal courts continue to rule that employers need not accommodate an employee’s use of medical marijuana.

As we explained in Mass. Court Blazes New Trail On Employee Medical Marijuana, however, the Massachusetts Supreme Court ruled last year that while medicinal marijuana use at work is not protected, their state law does protect the right to use it while off duty. As such, a positive drug test reflecting off-duty use of medicinal marijuana should not result in a job-related penalty to the employee.

The Massachusetts court did not say that employees have to be allowed to come to work stoned. Rather, marijuana use should not be an automatic disqualifier from work and that the ADA’s requirement of an interactive process must be followed to determine whether off-duty use of medical marijuana can be reasonably accommodated.

A Simple Handshake Will Do

In Court Embraces Claim That Workplace Hugging is Sexual Harassment, we reported that the Ninth Circuit Court of Appeals ruled that a supervisor’s habit of greeting his female subordinate with a hug on a regular basis was beyond “ordinary workplace socializing.” Instead, it could be viewed as severe enough to alter the conditions of the subordinate’s employment. Therefore, the employee could proceed with a hostile work environment sexual harassment claim.

The court reminded us to look at the context of the behavior – there was evidence that the supervisor hugged other women but only greeted the men with handshakes. In addition, there was testimony that the supervisor kissed the employee on one occasion and that she suffered from stress and anxiety from his behavior.  The big issue, however, was the hugging and that was enough to be considered a hostile work environment without any other overt sexually-oriented behavior.

If You Leave, You Can’t Come Back

Here’s the one we are waiting for.  In a post entitled Court Says Long Term Leave is Not a Reasonable Accommodation, we wrote about how the Seventh Circuit Court of Appeals sided with an employer who fired a worker seeking additional time off for medical reasons after his time under the Family and Medical Leave Act (FMLA) expired.  The Court explained that the Americans with Disabilities Act (ADA) “is an antidiscrimination statute, not a medical-leave entitlement.” As such, the duty to provide reasonable accommodation just encompasses workplace modifications that that will allow the employee actually to perform their work.  An employee who is not able to work is not a “qualified individual” for whom accommodation is required.

The court did leave open the question of whether a short term absence could still be a reasonable accommodation under the ADA in the nature of a part-time or modified work schedule.  However, they were clear that the need for a medical leave spanning multiple months is outside the protections of the ADA because“[l]ong-term medical leave is the domain of the FMLA.”

If Minnesota courts adopt this reasoning, we will likely see a seismic shift in the way that employers in this state deal with long term medical leaves.  Until then, remember that the Equal Employment Opportunity Commission (EEOC) continues to interpret the ADA as requiring consideration of long term leaves as possible accommodations, and courts typically give substantial deference to the EEOC’s interpretation of the ADA.  Therefore, Minnesota employers should continue to consider longer terms leaves as part of the interactive process in determining whether and to what extent a disabled worker can be accommodated.

Bottom Line

We hope that in the coming year, the federal and state courts in Minnesota will exercise good judgment in determining which lines of reasoning to borrow from other jurisdictions and which ones to reject.  We will be keeping track.

The post Three Worrisome Rulings From Other States in 2017 – And One We Love appeared first on Felhaber Larson.

Court Delivered Wrong Analysis of Pregnancy Discrimination

We wrote this year in Employer Needn’t Be Angry About Pregnancy to Discriminate Against It about what the Minnesota Supreme Court views as the standard for showing illegal bias.

After receiving a job offer as an orthodontic assistant, the applicant informed the clinic that she was pregnant and would want 12 weeks off.  The clinic was happy for her but as a small employer (not subject to federal or state leave laws), they could not afford such a long leave and therefore rescinded the job offer.

The trial court dismissed the pregnancy discrimination lawsuit under the Minnesota Human Rights Act because the clinic did not demonstrate any actual hostility or animus about the pregnancy; they just were concerned about the impact of a long maternity leave on their business.

The Minnesota Supreme Court delivered bad news to the clinic in ruling that “a finding of animus, in the sense of dislike or hostility, is not necessary for a forbidden criteria to ‘actually motivate’ an employer’s decision.” As such, even though the clinic was not angry about the pregnancy, they were still motivated by it to take adverse action and they therefore discriminated against the applicant.

Retaliation Claims Are Now Easier to File – and Prove

In a piece entitled It Just Got MUCH Easier to Sue as a Whistleblower in Minnesota, we reported that the Minnesota Supreme Court removed a critical element of the good faith requirement for whistleblower claims.

An employee claimed that he was fired for objecting to and reporting the company’s plan to breach a contract with an outside party. He sued under the state whistleblower statute, which bars employers from terminating an employee who “in good faith” reports a violation or suspected violation of law to their employer or to a government agency or official.  Good faith for many years meant:

(1) The report was not knowingly false or made in reckless disregard for the truth; and

(2) The reporter acted with the “purpose of blowing the whistle, i.e., to expose an illegality.

The company defended on the grounds that the employee knew that company officials were aware of his concerns.  Therefore, he could not have been seeking to “expose an illegality” since the (alleged) illegality had already been made known to the company.

The Supreme Court disagreed, noting that the statute sought to codify this definition but only included the first of the two tests.  Therefore, the legislature must have intended that the definition of good faith is met whenever a claim is not false or made in reckless disregard of the truth.  In short, the employee’s motives are irrelevant.

Now, employees can proceed on these claims simply by showing they are not just making the whole thing up.  That is a pretty easy standard to meet.

Here’s a Tip For You – Wrongful Discharge Cases May Increase

Minnesota’s Fair Labor Standards Act (MFLSA) now permits a wrongful discharge claim even though the statute never actually says so.  How did that happen?

In Minnesota Tip Sharing Decision Sets the Table For More Wrongful Discharge Claims, we reported that a restaurant employee got fired for refusing to share tips with other employees. Minnesota’s tip sharing law says that restaurants cannot fire employees on that basis but the law does not say that the fired employees can sue for retaliation if they are in fact fired for that reason.

Nevertheless, the Minnesota Supreme Court allowed such a claim to proceed, finding that when the law was enacted to permit pursuit of “damages and other appropriate relief”, the Legislature expressly abrogated the “at will” doctrine in these instances and created a wrongful discharge claim for any termination accompanying an alleged violation of the MFLSA.  The Court never quite explained why the legislature would not have just created this right explicitly; they just assumed they did and left it at that.  As a result, every MFLSA claim involving a terminated employee is now likely to include a wrongful discharge component.

Minneapolis Sick Leave Ordinance is Alive and Well

In one of two momentous decisions on the rights of cities to legislate on employment issues, the Minnesota Court of Appeals ruled that Minneapolis (and by extension, St. Paul as well) may proceed with its new ordinance mandating sick leave for employees working in the city.

As explained in Appeals Court Upholds Minneapolis Sick Leave Ordinance, however, Minneapolis will continue to be prevented from enforcing its ordinance against employers who do not have a physical presence in the geographical boundaries of the city.

If you are located in Minneapolis or St. Paul, you should have revised your policies by now.

Minneapolis Employees Get a Raise

We just wrote in Judge says $15.00 Minimum Wage in Minneapolis Applies to All Employers Starting Jan. 1 that the new city minimum wage ordinance is set to go into effect on January 1 for pretty much every employer with workers inside the city limits.

The affirmation of the City’s right to regulate minimum wage closed out a big year in Minnesota employment law.

Bottom Line

Watch for our next post on the most significant federal court decisions from around the country that may affect Minnesota employers in 2018.

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The post Top 5 Minnesota Employment Law Cases in 2017 appeared first on Felhaber Larson.

Frank Branham applied for a vacant maintenance worker position at Detroit Baptist Manor. He made it through the screening by Human Resources and was referred for an interview with Paul Doelle, Director of Operations.

Even Fools are Thought Wise When They Keep Silent

Branham claimed that during the interview, Doelle said he “was not looking to hire anyone at [Branham’s] age because he had enough staff that was 40 or 50-year-old guys” and that he “needed younger men that can be able to climb ladders and get on the roof.” Doelle admitted that he “probably” referred “to the age of [his] staff” and that he told Branham that he “already had staff members in their forties and fifties.”

Branham emailed his HR contact to complain about Doelle’s statements and the fact that his age obviously was going to keep him from getting the job. Ultimately, the company decided not to fill the opening, prompting Branham to sue for age discrimination under federal and state law.  The company eventually filed a motion for summary judgment (early dismissal) with Federal District Court Judge Judith Levy.

Speak Only If It Improves Upon the Silence

The company argued that since nobody was hired for the position, Branham cannot prove that he was wrongfully denied a job or that he was treated differently from any other applicant.  In short, if a job is not filled, there really was no opening to begin with.

Branham responded that of course there was an opening.  Why else would he have been recruited, screened and interviewed without anyone ever mentioning the fact that there was no actual job to fill?  The fact that the company ultimately decided not to hire anyone does not relieve them of liability for a specific decision to deny him the job once they learned how old he was.

The Judge Has Heard Enough 

Judge Levy denied the dismissal motion and ordered the case to proceed to a full jury trial.  She ruled that it certainly could be inferred from Doelle’s remarks that the company was indeed looking to hire a maintenance worker, just not one as old as Branham. After all, HR had written Branham before the interview to confirm his interest in “the General Maintenance job opening” and it was clear that nobody ever told Branham that there were no jobs available during any of the multiple contacts they had with him.

It also was not lost on the judge that the company was well aware of Branham’s concerns about age discrimination.  Therefore, as if to provide the jury with a clear road map, she quite pointedly wrote that it was best for a jury to determine if the company did have a vacant position but chose not to fill it in order to have a better defense to a potential lawsuit.

Bottom Line

It is impossible to take back words once they are spoken.  The employer tried the best they could to minimize the impact but the judge appears to have seen through it.

Employers should never let up in reminding their managers and supervisors just how dangerous it can be to make reference to an applicant’s or employee’s race, gender, age or other protected characteristic in an employment-related interaction.

The post Talk is Cheap but Age-Based Remarks Will Cost you appeared first on Felhaber Larson.

Mandatory Conciliation Efforts under Title VII

Title VII of the Civil Rights Act of 1964 sets out a detailed procedure through which the EEOC enforces the statute’s ban on employment discrimination.  The law first requires all potential plaintiffs to file a Charge of Discrimination with the EEOC.  If the EEOC finds merit to the Charge, EEOC then “shall endeavor to eliminate” the alleged unlawful employment practices by “informal methods of conference, conciliation, and persuasion” before filing suit.

EEOC’s Case against Mach Mining

In Mach Mining, LLC v. EEOC, No. 13-1019 (April 29, 2015), the EEOC had found reasonable cause to believe the company had discriminated against the woman whose complaint triggered the case, as well as a class of women who had also unsuccessfully applied for mining-related jobs.

The EEOC sent the employer two letters: (1) one letter notified Mach Mining of its intention to begin informal conciliation and (2) the second letter, sent about a year later, notified Mach Mining that it had determined that the conciliation process had failed.

After the EEOC filed suit, Mach Mining asserted its defense that the EEOC had failed to conciliate in good faith.  The district court denied the EEOC’s motion to dismiss, the Seventh Circuit Court of Appeals reversed, holding that courts had no legal basis for reviewing the EEOC’s conciliation efforts.

Supreme Court’s Decision

Writing for a unanimous Court, Justice Elena Kagan first declared that the EEOC’s conciliation efforts are subject to judicial review – albeit limited review.  Specifically, in order to comply with Title VII’s conciliation requirements, the EEOC must complete two tasks:

• First, “the EEOC must inform the employer about the specific allegation” and “describe[] both what the employer has done and which employees (or what class of employees) have suffered as a result.”
• Second, “the EEOC must try to engage the employer in some form of discussion (whether written or oral), so as to give the employer an opportunity to remedy the allegedly discriminatory practice.”

The Court decided that the EEOC can satisfy this obligation by submitting a sworn affidavit stating that these requirements have been met.  Then, only if the employer presents “credible evidence” that the EEOC did not engage in these efforts, will the court engage in fact finding in order to determine whether the conciliation efforts were properly undertaken.

If the EEOC fails to engage in the required conciliatory efforts, the Supreme Court ruled that a Title VII lawsuit should only be stayed until the EEOC complies, but should not be dismissed altogether.

Bottom Line

While the Supreme Court’s decision in Mach Mining ensures that the EEOC and its agents will engage in at least some conciliation efforts prior to bringing suit, this decision is disappointing to employers because the Court declined to authorize dismissal of the EEOC’s lawsuits if conciliation efforts were not undertaken.  Still, the next time you receive an EEOC charge, pay careful attention to whether the EEOC has complied with the conciliation obligations outlined above.

The post U.S. Supreme Court OKs Limited Review of EEOC’s Conciliation Efforts appeared first on Felhaber Larson.

Facts of the Case

The plaintiff in the case, Yvette Ford, worked for the Minneapolis Public Schools. In her lawsuit, Ms. Ford alleged that during the summer of 2007, she reported financial improprieties and budget discrepancies to the school-district superintendent and another staff person. Then, the following April, Ms. Ford was notified that her position would be eliminated effective June 30, 2008. She subsequently brought her lawsuit on June 29, 2010—exactly two years after the termination of her employment—alleging she was terminated in retaliation for engaging in whistleblowing rather than for legitimate, business-related reasons.

The trial court in Ford originally dismissed the lawsuit, finding that Ms. Ford was required to bring it within two years of the date she was first notified that her position was being eliminated in April 2008, rather than within two years of the date of her termination at the end of June 2008. Interestingly, both the plaintiff and the defendant-employer agreed the two-year limitations period applied to Ms. Ford’s claim, in light of a 1995 Court of Appeals decision holding to that effect, Larson v. New Richland Care Ctr., 538 N.W.2d 915 (Minn. Ct. App. 1995).

On appeal, the Minnesota Court of Appeals initially agreed with the trial court that Ms. Ford’s lawsuit was correctly dismissed as untimely. Ms. Ford appealed again, this time to the Minnesota Supreme Court. Notably, Ms. Ford did not challenge either of the lower courts’ applications of the two-year limitations period. Although the Minnesota Supreme Court denied review on all issues raised in the appeal, including the decision to measure the limitations period from the date Ms. Ford received notice of her impending termination rather than the date of her actual termination, the Minnesota Supreme Court nonetheless remanded the case back to the Court of Appeals “solely for the purpose of reconsideration of the statute of limitations that applies to [Ms. Ford’s] claim in light of Sipe v. STS Mfg., Inc., 834 N.W.2d 683 (Minn. 2013).”

Sipe was the first in this new line of cases from the Minnesota appellate courts lengthening the limitations period for statutorily-created wrongful discharge claims. In Sipe, the Minnesota Supreme Court applied the six-year limitations period to wrongful discharge claims brought under the Minnesota Drug and Alcohol Testing in the Workplace Act, Minn. Stat. §§ 181.950, et seq.

On remand in Ford, the Minnesota Court of Appeals took the hint and held that the six-year statute of limitations period applied to Ms. Ford’s whistleblower claim.  Accordingly, the court reversed the district court’s decision dismissing Ms. Ford’s lawsuit as untimely.

Bottom Line

The Ford case has two primary takeaways:

1. First, Minnesota courts must now apply a six-year rather than two-year statute of limitations to wrongful discharge claims created by state statute, including claims arising under the Minnesota Whistleblower Statute, Minn. Stat. § 181.932, and claims arising under the Minnesota Drug and Alcohol Testing in the Workplace Act, Minn. Stat. §§ 181.950, et seq., in the absence of statutory language providing for a shorter limitations period.
2. Second, the limitations period for wrongful discharge claims arising under Minnesota law should be measured from the date an employee receives notice of his or her impending termination, rather than the actual date of termination.

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Factual Background

In 2009, RN Laura Symczyk filed a lawsuit on behalf of herself and “all other persons similarly situated” claiming that her employer violated the FLSA by automatically deducting a 30-minute meal break from her daily pay.  In response, the employer made an offer of judgment under Federal Rule of Civil Procedure 68, which provides that if the offer is not accepted, and if the ultimate judgment in the case does not exceed the offer, the party rejecting the offer must pay all the subsequent costs incurred by the other side. The employer’s offer in this instance was $7,500 for alleged unpaid wages as well as “such reasonable attorneys’ fees, costs, and expenses . . . as the Court may determine.”

Symczyk failed to respond to the offer one way or the other, so the employer asked the court to dismiss the case. The employer argued that the claim was now moot because the employer offered Symczyk complete relief on her individual damages claim. The trial judge agreed, noting that since no other individuals had actually joined the suit, the employer’s offer of judgment fully satisfied Symczyk’s claim. The judge felt that Symczyk should not be allowed to continue litigating when she was already being offered everything she was seeking.

The Third Circuit Court of Appeals disagreed, however, noting that while Symczyk’s claim might have been moot, the claims of the proposed class were not completely satisfied. The Appeals Court concluded that a defendant is not permitted to use an offer of judgment to “short-circuit the class action process.” This might seem a bit odd since there were no other members of the class, but under the terms of the court’s previous rulings, there was still time for other people to “opt in” to the litigation. Therefore, technically not all of the claims were resolved by the offer of judgment.

Supreme Court Decision

The case was appealed to the U.S. Supreme Court, who agreed with the original ruling that dismissed the case. They ruled that since Symczyk’s individual case became moot, she no longer was an adequate representative of the class of persons harmed by the challenged employment practice. With nobody else able to step up and fill that role, the case had to be dismissed.

One of the questions that the Supreme Court left open was whether an offer of judgment that is not accepted by the other side should be allowed to end the litigation. It seems reasonable to say that if the lead claimant is offered everything she is seeking, she shouldn’t be allowed to reject the offer and keep suing. On the other hand, should employers be able to short circuit the entire action simply by satisfying the lead claimant’s claim? Courts differ on this issue, and the Eighth Circuit (in which Minnesota sits) has not yet weighed in.

Bottom Line

The employer’s approach in this case might be useful in some instances to avoid protracted litigation. However, it is not certain whether the federal courts in Minnesota would approve such a tactic, and it is very possible that employers would not want to make such offers because they could be seen as tacit admissions that they did in fact violate the FLSA.

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Under Minnesota law, a claim for injury to a person ordinarily expires when the person dies.  However, where the injury was allegedly caused by the act or omission of another person (including a corporation), and the claimant thereafter dies from a cause unrelated to those injuries, courts will continue to hear a claim for “special damages” arising out of the injury.  “Special damages” are those that can be ascertained in a precise, exact amount, such as back wages or medical expenses.

Federal District Court Judge John R. Tunheim ruled that Gilbert’s discrimination claim, which included demands for back pay, front pay and the monetary value of various employment benefits, were special damages that could survive Gilbert’s death.

MetLife argued that there were times when Gilbert could not work because of her disability and that without her testimony at trial, they would be unable to establish the precise amounts by which her back pay and benefit claims should be reduced during those periods.  The judge responded, however, that Gilbert died after her deposition testimony had been taken.  Thus, if there was a gap in MetLife’s information, it was caused by their own failure to inquire adequately about the issue.  As a result, Gilbert’s daughter was allowed to step in as the substitute plaintiff to pursue her mother’s claims for special damages.

However, Judge Tunheim ruled that the claims for mental anguish damages were not easily quantifiable because they are personal and unique. Without the deceased employee’s testimony, the jury would be left to speculate on whether and to what extent she suffered from the type of humiliation and distress that is addressed through awards for mental anguish and suffering.  Therefore, Judge Tunheim ruled that these damage claims did not survive Gilbert’s passing. Gilbert v. Metro. Prop. & Cas. Ins. Co., Civil No. 09-1990 (D. Minn. Oct. 7, 2011).

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In EEOC v. Schwan’s Home Services, No. 10-3022 (8th Cir. July 13, 2011), a female employee filed a charge of discrimination with the EEOC in 2007 alleging she was harassed, demoted, and ultimately lost her job because of her gender. Specifically, she claimed that she was not promoted to Local General Manager because of her gender, even though she had completed the required General Manager Development Program.

The EEOC commenced an investigation into Schwan’s. In the course of its investigation, the EEOC subpoenaed information from Schwan’s on how many women are local managers, as well as the selection process and graduation rates for the company’s manager training program. The employer refused to comply with the subpoena because the employee had not alleged any class claims and, even if she did, the statute of limitations had lapsed.

The Eighth Circuit disagreed with the employer.  According to the court, once the EEOC presents a valid charge of discrimination, it has to show only that the subpoena requests information that “relates to” unlawful employment practices covered by Title VII and “is relevant to the charge under investigation.” While an EEOC subpoena cannot wander into wholly unrelated areas, the “relevancy” requirement is “not especially constraining” and includes any evidence that “might cast light on the allegations.”

The court found the information sought in the subpoena within the scope of the EEOC’s investigatory authority, citing the employee’s allegation that if she had completed the company’s manager training program, she would have been one of only two female local managers out of 500 such managers nationwide. The employee had also claimed Schwan’s had rejected one female applicant for management because she had children at home.

Bottom Line

The EEOC has broad power to subpoena information from an employer under investigation. The EEOC can subpoena information relevant to systemic discrimination even absent a valid systemic charge, whenever an investigation into a charge of individual discrimination reveals potential companywide discrimination.

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The employees and their lawyers argued that despite their differences in compensation, position and circumstance, the 500,000 female employees shared the burden of facing a company-wide pattern of discrimination against women.  They claimed that this allowed them to be certified as a class for the purpose of pursuing their unified class action against the company.

The Supreme Court disagreed in an opinion, authored by Justice Scalia, that was split 5-4 on some aspects of the case, and unanimous on others.  From the ruling, this much is clear:

• The Court unanimously agreed that the group of people suing the company should not have been certified for a “class” action under Federal Rule 23(b)(2).  This rule requires that a class action not be one where the ruling on claims by individual class members would dispose of, impede or interfere with the interests of non-class members.

• A majority of the Court (5-4) ruled that the plaintiffs also failed to satisfy Rule 23(a)(2), which requires “questions of law or fact common to the class.”  Justice Scalia specifically noted that the workers “provide no convincing proof of a company wide discriminatory pay and promotion policy.”

• Justice Ginsburg, joined by Justices Breyer, Sotomayor and Kagan, filed an opinion concurring in part, dissenting in part.  While those judges agreed the class should not have been granted under Rule 23(b)(2), they criticized the majority opinion for “disqualify[ing] the class at the starting gate.”

Bottom Line

This case was one of the most closely watched cases in a long time, as the Court had not addressed the standards for class certification in over ten years. The case is expected to have far reaching implications, both in discrimination cases, as well as wage and hour and other class/collective cases, and may result in a dramatic reduction of class-based claims in those areas.

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The lower court decision by the Ninth Circuit Court of Appeals in California is believed to have forged a new standard for wage-based class claims that the other federal appeals courts have not followed.  The Supreme Court often seeks to resolve interpretive differences between the various appellate courts, and this issue seems particularly worthy of their attention since the Ninth Circuit case was decided by a 6-5 vote.  By ruling one way or the other, the Supreme Court may clear up the confusion over which standard is to be applied.

The Supreme Court also wants to address how the ordinary threshold requirements for a class action are applied in this case.  Typically, class actions require a sufficiently large group of litigants with similar claims in order to justify treating the litigants as one big class.  In this instance, the Supreme Court will want to examine whether the use of subjective decision-making policies supports a class type of claim.  Wal-Mart has argued that it does not since store managers at their almost 3,400 United States stores make individualized hiring and promotional decisions that have to be decided on their unique facts.  In other words, there is no overriding policy or practice being applied – just localized decisions seeking to distinguish between small groups of candidates for particular jobs.

Bottom Line

The eventual decision could have momentous consequences.  A decision in favor of the applicants and employees could pave the way for many more wage-based class actions in the courts.  On the other hand, a decision for Wal-Mart could signal the end of this litigation for the company, and the death knell for wage-based class action cases in general.

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On May 26, 2010, Central District of California in Crispin v. Audigier, Inc., Case No. 09-cv-09509 (C.D. Cal. May 26, 2010) addressed whether a defendant can subpoena Facebook and MySpace directly in order to obtain communications between the plaintiff and other parties.

The plaintiff had a Facebook and MySpace account and the defendants wanted Facebook and MySpace to produce communications between the plaintiffs and other parties.  The plaintiffs argued that the messages were subject to the Stored Communications Act, 18 U.S.C. § 2701, et. seq., which prevents a third party from acquiring the information directly from the service provider.

The key for the judge was whether the messages sent over Facebook and MySpace were “private” or “public” communications.  If the messages were public communications, like posted comments on Startribune.com, the information would not be protected by the Stored Communications Act.  Here, the judge found that the message features on Facebook and MySpace were not public and therefore could not be compelled by a subpoena.  Of course, the messages would be subject to ordinary discovery–that is, the defendant could request the information as part of its request for documents–but the defendant must request them directly from the plaintiff.

A final issue was whether wall postings (i.e., messages posted on a user’s Facebook or MySpace “wall”) were public or private communications under the Stored Communications Act.  The judge determined that more information was needed, including the user’s privacy settings (i.e., whether every could view his “wall” or only the user’s “friends”), and remanded the issue back to the magistrate.

Even though social networking sites may contain game-changing information for employers faced with an employment-related suit, to ensure that the information is not lost or overlooked, it is important  for employers to consult with counsel familiar with social networking discovery.   Felhaber’s Labor and Employment or Litigation Section members are experienced with social networking discovery, and more than qualified to assist you.

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