Archive for the ‘Lawsuits’ Category

I’ve blogged before about the need for drafting and updating your employee handbook: https://damnedif.com/category/personnel-policy-fun/

I know, handbooks are boring. But you know who they are not boring too? That plaintiff’s lawyer who wants to take your company for a million dollars. She’ll do her job and read every word of your employee handbook that you haven’t bothered to read in, what, three years? She’ll find every ambiguity, every outdated policy, every discrepancy with how you do things. And she’ll smack you in the mouth with all of them at deposition or trial.

Here are just some of the ways that you can screw yourself with your employee manual.

  1. You have policies that you don’t follow.

Every employer has policies and provisions in the manual that they do not really follow. They are outdated, irrelevant or ignored. Get rid of them. They serve no purpose other than showing how you don’t follow your own manual, which can be used in a variety of ways to make you look bad in litigation.

  1. You have no or an outdated sexual harassment policy.

Massachusetts is serious about sexual harassment, as it should be. Employers with six or more employees by law must have a sexual harassment policy. You also must provide the policy to new employees, and to all employees yearly. Our diligent plaintiff’s attorney will certainly use it against you if you don’t do these things. They may also use it against you if do not train employees – at least your supervisors (which is recommended, but not required, by Massachusetts law). Your company is automatically liable if a supervisor commits sexual harassment of a subordinate. Training takes about an hour, so just get it done.

  1. You don’t include disclaimers and at-will language.

All the lawyer speak in modern employee manuals are nauseating, but strictly necessary.  Why?  Because the Massachusetts courts have told us so.  If you fail to put them in there, you may have bound yourself to a contract whereby you have all the obligations of performance. If you fire an employee or take other action, you may have breached the “contract.” This would be like winning the Darwin Awards, employer version.

  1. You don’t have a comprehensive leave policy.

There are many types of leave required by federal and state law. You can’t simply stick your head in the sand and give people time off whenever they need it. No good deed goes unpunished. If you give one person leave and not another, you may just have committed discrimination. Unless you are okay with a “come in when you feel like it” policy, you need to address vacation time, military leave, jury duty leave, sick leave, family and medical leave, small necessities leave, maternity leave, domestic violence leave, voting leave, etc.

  1. You restrict NLRA rights.

Even non-union employers now have to worry about the National Labor Relations Act, which historically was thought to apply only to union employees. Employees have rights to engage in “concerted” activities regarding the terms and conditions of employment. Your policies regarding standards of conduct, social media, distribution of materials in the workplace, confidentiality, etc. could inadvertently run afoul of the statutes and land you in hot water.

  1. You have an overly detailed and rigid progressive discipline policy.

This is a rare occasion where non-specific may be better. If you are too rigid, you may create a presumption that employees cannot be fired unless you progress through the stages of discipline. Moreover, if you do not follow your explicit policy to the letter in every occasion, you will open yourself up to claims that you treated employees differently on the basis of gender, race, religion or other protected class. This is not just theoretical. It was a costly lesson for an employer in a recent Massachusetts case.

  1. You have wage and hour policies that violate the law on their face.

If you are going to have wage and hour policies in your handbook, including overtime, comp time, and break polices, make extra sure that they are accurate and up to date. Wage and hour law is very detailed and frequently changes. I often see employers unwittingly put their illegal policies in writing, which will make our hypothetical plaintiff’s lawyer very, very happy.

  1. You inadvertently run afoul of the federal ERISA law.

If you are not careful about how you describe your employee benefits, you could trigger compliance with strict obligations under federal law. Don’t do that.

In summary, dust off your employee handbook in your bottom draw and have your employment lawyer review and update it. Out of sight may be out of mind, but that won’t keep you out of court.

By Adam P. Whitney, Esq.

617-338-7000

(I’ve taken about 11 months off from blogging. I’m back, baby.).

Most employers (of over 50 employees) know full well that they have to provide up to 12 weeks of leave under the FMLA and that you generally cannot terminate an employee who is on leave. But don’t assume that means you can terminate an employee who is not medically cleared to come back when her FMLA leave is exhausted. In some cases, doing so will lead to a large verdict in favor of the former employee, as was demonstrated by a recent case from the Massachusetts Supreme Judicial Court, Esler v. Sylvia-Reardon, 473 Mass. 775 (2016).

The following is from the SJC’s rendition of the possible facts most favorable to Ms. Esler, and I do not represent them as true (the hospital may have presented different alleged facts). Esler worked as a registered nurse in the acute hemodialysis department of MGH. She went out on FMLA leave in December 2008, although there was some hassle from her supervisor about her paperwork. Her doctor suggested that she engage in light exercise and pleasurable activities. So she went to New York City. Her supervisor accused her of “vacationing,” and sounded displeased. When Esler then said that she broke her wrist while ice skating, her supervisor allegedly said “I need to have you back here next week or I can’t hold your job.”

In spite of her supervisor’s alleged statements, to its credit, the hospital extended her FMLA leave past her statutory 12 weeks of leave. However, the hospital said that it could not accommodate her temporary lifting restriction (no lifting more than five pounds in left hand) and need to wear a splint. Esler was expected to return on February 15, 2009. She spoke to her supervisor on January 28th and reported that she was making good progress. Although there was no equipment that required lifting more than five pounds, Esler’s supervisor canceled an occupational health assessment that was part of the return to work process and put Esler on inactive status. The hospital stated that her job could not be accommodated with the restrictions. However, the hospital hired a replacement with less training, who could not have fully performed the job until at least April 6th, a date that was after the date that Esler would have had no medical restrictions.

Esler sued for retaliation, which is prohibited under the FMLA (and most other employment statutes). A jury returned a verdict in her favor of back wages consisting of $567,500 and front pay of $672,686. The judge overturned the front pay award, and this decision was upheld on appeal. The trial judge also overturned the backpay award, but this was reinstated on appeal (subject to further proceedings at the trial court). Because the case was filed in 2010, if the backpay award sticks, interest will add a staggering 75% and counting (12% per annum in Massachusetts), which I calculate to be $425,625. Liquidated damages equal to the back pay could also be awarded. With an award of attorneys’ fees and costs surely on the horizon, the total verdict could approach or exceed two million dollars, even with the front pay being overturned. Not to mention the Defendants’ own legal fees, which are surely sizable.

Takeaways

There are a few lessons for employers. First, if an employee takes FMLA leave, don’t assume that her FMLA rights end after 12 weeks. In fact, the FMLA provides “proscriptive provisions” to protect employees from retaliation after exercising substantive rights.

Second, an employer should take a realistic look at accommodations an employee needs. Although it appears that Esler did not file a disability discrimination claim, she could have. Employers should always consider whether continued leave or other accommodations are reasonable for an employee who has been out on FMLA leave. You should also be careful to not use the FMLA leave in any future employment decision, as that could be deemed retaliation.

Third, train your supervisors to not make comments that are hostile to protected FMLA leave.

Fourth, for God’s sake call your employment lawyer before firing an employee who went out on FMLA leave! A short phone call might save you from a $2 million mistake. If the facts were as Esler alleged, the decision to not accommodate her for a short time was foolhardy and reckless.

As always, the above is not legal advice, just general information.

By Adam P. Whitney, Esq. 617.338.7000

Revenge is best served cold. The phrase is apt in the business-legal world. Some industries are very cutthroat. Some of your competitors or other business enemies are dirty, rotten scoundrels. They may pull various dirty tricks on your business. Steal your key employees. Defame you to clients or strategic partners, suppliers, contractors, employees, etc. Falsely report you to authorities, such as licensing agencies, taxing authorities, or other government entities who have some control over your business. They may even file frivolous lawsuits against you or your clients. If you are feeling paranoid, it’s only because they are out to get you.

These dirty tricks can hurt your business. They enrage you. That’s human. But resist the temptation to go off half-cocked and respond in kind. Tell yourself that it is just business. Part of being a success is becoming a target. Now, smile and start plotting your revenge. But there are many traps for the unwary business owner plotting revenge against a scoundrel competitor.

Don’t defame them just because they have defamed you. Generally speaking, defamation is making a false oral or written statement about another person or entity to a third party, that holds them up to scorn or ridicule. What is “false” and what is a “fact” are often gray areas. Unless you are 100% sure that the nasty letter/e-mail you are about to send is not defamatory, and not even arguably defamatory, you probably should not send it. You could also get tagged with a business tort known as Intentional Interference with Contract or Contractual Relations, even if your statements are not defamatory. If your business enemy loses business, you could be on the hook for the damages.

Additionally, you usually cannot sue someone just because they sued you or because they made some report to the government, because such actions may be protected under the Massachusetts Anti-SLAPP Statute. This could subject your company to immediate dismissal of the lawsuit and award of the other side’s attorney’s fees.

These laws are very complex; and the damages caused can be significant. Businesses can get themselves in serious trouble when they act to harm a competitor, even when the competitor drew first blood. It’s like in sports when the referee always notices the player who reacts to a dirty play with one of his own. Your reaction, or over-reaction, may get your business in trouble and even mask the original bad act by your business enemy. My (admittedly self-serving) advice should be clear. Consult a qualified business litigator before plotting your revenge or taking action to defend your company.

How to get back at your business enemies? The best revenge is to continue your success and crush your competitors in the market. You also may have a legitimate legal claim against them that will allow you to sue for your damages. While you should only file legitimate suits seeking legitimate damages, litigation may send an additional message that you will not be a punching bag. Sometimes there are other legal and ethical guerrilla tactics, but those are not for a public discussion.

By Adam P. Whitney, Esq.

We live in crazy times for businesses. Any crackpot with a computer and internet connection can say anything that they want about your business in an online review, on social media, etc. That’s the unfortunate reality for today’s private businesses. The crackpots may even attack the business owner personally. Even worse, there is little you can do to stop it and, in many cases, you can’t even get it removed (I won’t bore you with a treatise on prior restraints of free speech). But do not take a defeatist attitude. Like getting sued, poor online reviews are now just a part of being a successful business. Below are some ideas on how to deal with them.

If you operate your business in such a way as to avoid angering the crackpots, you will get less negative posts. If you treat everyone with the utmost respect and avoid pointless disputes, you will be ahead of the game. At the very least, if you communicate your policies, services, fees, etc. in as much detail as possible, you avoid surprises and avoid upsetting the crackpots. Doing so will also put you in a much better position to defend yourself, either in a court of law or the court of public opinion.

But no matter what, you will still get bad reviews from crackpots, from competitors posing as your customers, or even someone who just doesn’t like you or one of your employees. The more successful you are, the more you become a target. If the review is purely opinion from an actual customer, consider responding to the review in a professional, non-defensive way. Consider what you can learn from the feedback. That doesn’t mean that you have to agree with some or all of the review, each one must be assessed on its own merits. If you believe that the review was not written by a legitimate customer, you should say that as well, and also contact the review service (Yelp, Google+, etc.) to try to have it removed if possible.

If the review or post contains outright lies of factual statements, not just pure opinion (this can be a fine line), or if the review comes from one who is not a legitimate customer, you may have legal claims. You should consult with a lawyer to see if you have actionable claims and what your options are. These could include a lawyer’s letter to the offending crackpot, working with the review service to remove the review, or as a last resort, a lawsuit. Crackpots may think that they are anonymous and that they cannot be sued for writing false statements about a business on-line, but that is simply not true. A lawsuit should be your last resort, but if you are considering it, find an experienced business litigator and discuss your options. You should also consider a public relations professional to deal with the immediate impact on your business. In fact, public relations should be an ongoing part of your business planning.

The above is not meant to be legal advice, but is merely general information.

By Adam P. Whitney, 617.338.7000

 

 

 

You defend a discrimination claim aggressively all the way to trial. The plaintiff wins a technical victory and gets only a small award of damages. So small, that it seems like a win for you. You can live with that, right? But now here comes the employee’s attorney’s petition for fees and costs. If you think that the small award of damages would be a significant factor to determine the award for the attorney’s fees and costs, you would be wrong, at least in Massachusetts. A Massachusetts employer found that out recently, when an appeals court upheld an award of attorney’s fees and costs to the employee of over $100,000, even though the jury awarded the employee only $7,650 in damages. The case is reported as Diaz v. Jiten Hotel Management, Inc., No. 13-1444 (1st Cir. 2013) (this was the third trip to the appeals court for the case).

 

In fact, the attorneys’ fees and costs could have been much higher. The trial court reduced the amount considerably because the employee had pursued other claims that had no merit and were not successful. The trial court originally reduced the attorney’s fees award because the employee rejected a $75,000 settlement, which would have resulted in the employee’s attorney obtaining a $25,000 contingency fee. However, the appeals court reversed that ruling and stated that it was error to consider the employee’s refusal to settle.

 

On the most recent trip the appeals court, the court rejected the employer’s contention that the award of fees and costs of over $100,000 was so disproportional to the $7,650 damages award as to be an abuse of discretion. The appeals court rejected this contention and reasoned that, under Massachusetts law, fee shifting statutes are “designed to encourage attorneys to take these types of cases and are based on full compensation for the work performed.” It went on to note that these statutes are designed to encourage suits that will not result in a big fee award because the vindicate important rights.

 

Thus, the message in Massachusetts is clear. If an employee wins a discrimination suit against you, you could be on the hook for a large award of attorney’s fees and costs, even if the employee wins a very modest award, and even if the employee was unreasonable in rejecting your settlement demand.

 

What to do? There is no magic bullet. Consider an early settlement of a claim that may have some merit. Keep in mind that even if it is a claim that you may not subjectively believe in, that does not mean the case does not have settlement value. Cases that turn heavily on questions of fact can be decided against you, regardless of what the true facts may be. As Denzel Washington’s rogue cop character said in the movie Training Day, “it’s not what you know, it’s what you can prove.”

 

In this case, the employer did try to settle, and actually made a very generous (considering the jury award) offer of $75,000. Who knows why the employee rejected the offer. Ironically, the employee would have been much better of with the settlement (assuming a typical contingency fee agreement), but the employee’s attorney presumably ended up better off with the award. Mediation should be strongly considered in these situations. There is no shame in putting a wedge between the employee and her attorney at mediation if it results in a fair settlement to the employee. There may be other options to consider, including an Offer of Judgment. But full-fledged defense of the claim can backfire, because you spend more fees on your own counsel, but also run up the fees and costs of the employee’s attorney. Have a candid discussion with your attorney about how to defend any claim against your company, including the risks of an adverse judgment and an award of attorney’s fees and costs.

 

By Adam P. Whitney, 617.338.7000

 

 

I written before about how an employer can be damned when supervisors have sex with employees: https://damnedif.com/category/sexual-harassment/.

 

But being obsessed and pursuing a relationship can be just as damning. Take the recently-reported case at the Massachusetts Commission Against Discrimination (“MCAD”) MCAD v. Illumina Media. The employer is on the hook (subject to potential appeals) for a sizable award because, the MCAD found, one of the company’s owners made repeated sexual advances to a female employee, even though she repeatedly rejected them. This was the case even though, the MCAD found, the female employee actively participated in a sexually charged workplace atmosphere, where sexual innuendo and horseplay were commonplace and people looked at pornographic images on the internet.

 

The case reads like a made-for-TV movie of the week. The female employee started at Illumina as a 24 year old. According the case report, the company owner was at first friendly, but soon started to make comments about his sexual prowess with much younger women, and then suggested that he and the victim were “on a date.” The employee thought that these comments were strange and inappropriate, and would often reply that “it’s not happening” or “it will never happen.” Undaunted, the owner continued his pursuit, according to the report, and escalated the behaviors by explicitly asking for sex on a number of occasions, which the employee refused. The actions went downhill from there, according to the report. You can find a link to the decision here: http://www.mass.gov/mcad/documents/MCAD%20&%20Brooke%20Anido%20vs%20Illumina%20Media%20LLC%20dba%20Illumina%20Records%20&%20Ronald%20Bellanti.pdf

 

It does not appear that Illumina strongly or effectively contested that the owner aggressively pursued a sexual relationship with the employee. The MCAD Hearing Officer found Illumina and the owner liable for quid quo pro sexual harassment (generally thought of as conditioning a job or employee benefits on succumbing to sexual advances) as well as for constructive discharge. The MCAD reasoned that by treating the employee differently after she rejected the owner’s sexual harassment, Illumina could be held liable for quid quo pro sexual harassment. The decision was upheld after an appeal to the Full Commission of the MCAD.

 

Illumina and the owner were ordered to pay $75,000 in emotional distress damages and nearly $10,000 in lost wages. These two figures are subject to 12% interest from the date of filing the Complaint, which was a staggering six years prior to the decision of the Full Commission. Thus, interest will run at about 71%, adding $60,000 to this figure. The defendants are also liable for the employee’s legal fees and costs of over $62,000. Assuming that Illumina spent a similar amount on legal fees, the total out of pocket for the company appears to be at least $270,000, barring any further appeal.

 

While the facts here appear to be fairly egregious, the case should serve as a warning to all employers. Owners and managers, as human beings, will inevitably be attracted to subordinate employees. If you are a company of any significant size, there is no doubt that there are such attractions occurring right now at your business. You need to train all of your managers on how to deal with these issues (a subject for another post), or you could be on the hook for $270,000 or much, much more. Mangers and owners can easily fall into the trap of thinking that a loose environment means that anything goes in the workplace. But this case proves that such thinking can lead to big trouble.

 

By Adam P. Whitney

 

Enforcing a Subpoena at the Massachusetts Commission Against Discrimination (MCAD)

1. If a duly served witness fails to appear, ask the Hearing Officer for an Order appointing you (the attorney) as an agent of the Commission for the limited purpose of enforcing the subpoena. The order should state that the witness failed to appear and is in contempt of the Commission.

2. Draft a Petition to the Superior Court (Suffolk Superior works for the Boston office of the Commission). The Petition should attach the following documents:

a. The original Order from the Hearing Officer.
b. The Subpoena with the Return of Service.
c. A proposed order for the Judge to sign to compel the witness to appear at a certain date or time, and/or to call the counsel to arrange a time to appear and testify.

3. The Petition should include the following legal citations:

a. GL. C. 151B, §3(7) (the Commission’s subpoena power. See Generally, MCAD v. Liberty Mutual Ins. Co., 371 Mass. 186 (1972); Univ. Hosp., Inc. v. MCAD, 396 Mass. 533 (1986).
b. G.L. c. 233, §10 (the Superior Court’s power to enforce an agency subpoena.

4. The Petition should be captioned the same as the Commission’s caption, but excluding the docket number. The Superior Court will use its own docket no. The top of the document and the proposed order should have the following: “Commonwealth of Massachusetts, Suffolk Superior Court.”

5. File the Petition with the docket clerk. You may have to explain that this is not a normal civil action, and that you are only seeking to enforce an agency subpoena. Explain that as an agent of the Commission, there is no filing fee. You will have to fill out a simple cover civil cover sheet. Ask to be heard immediately, as there is an ongoing public hearing at the Commission.

6. After the docket clerks enter the matter in the computer system, they will give you the original petition and send you to a specific courtroom. If the judge grants your application, she will either sign your proposed order or draft the Court’s own order. Return to the docket clerk’s office to make a copy of the order and to return the original Petition for filing and docketing.

7. Serve a copy of the Order and Petition on the recalcitrant witness along with a copy of the Petition. You may want to serve a cover letter explaining what has occurred.

8. If the witness still fails to appear, you can request that the Court declare the witness be placed in contempt of court.

By Adam P. Whitney, Esq.