Archive for the ‘Lawsuits’ Category

At some point in time, every employer of a certain size will have to deal with employees who begin a romantic relationship.  In a perfect world, that would be none of an employer’s business, and would not be a basis for a lawsuit.  In the real world, a host of bad things can happen, especially when the relationship is between a supervisor and a subordinate.

The most obvious problem is that a subordinate may feel pressured to go on a date or enter a relationship.  He or she may feel that their job is on the line if they don’t.  That’s called quid quo pro (Latin for “this for that) sexual harassment.  It also translates to “big ass lawsuit.”  Especially in Massachusetts, which makes your company strictly liable for the actions of a supervisor.

Even if the relationship is completely consensual, you are still not in the clear.  First, the relationship may end badly, and the subordinate may engage in revisionist history and claim that he or she was pressured into the relationship.  They may even file suit to get back at the supervisor, especially if he’s an owner of the company.  Believe me, this happens.

Second, the other subordinates in the office will resent what they see is favoritism for sleeping with the boss.  They get the subtle message that to get ahead, you have to put out.  This can translate into a form of sexual harassment, for which your company will also be liable. 

What can you do?, you ask.  You can’t stop human nature.  I agree that you are never going to completely stop workplace relationships.  Nor should you try.  I’ve known plenty of people who met their spouses at work.  But you can and should protect yourselves.  You should have certain polices in place, especially for your supervisors.  You should also consider a Consensual Relationship Agreement (a/k/a a “Love Contract”). 

If your company wants to proactively address these issues, or if you are already faced with an employment relationship in your office, give me a call.  As always, this blog is information and not legal advice.

By Adam P. Whitney, 617-338-7000.

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The case of Kogut v. The Coca-Cola Company, Massachusetts Commission Against Discrimination, No. 08-SEM-01239 (2012) demonstrates that even the biggest of companies, with professional H.R. (and the best lawyers defending them at trial) can make costly mistakes with respect to disability discrimination in Massachusetts.  This is undoubtedly the most complex area of law and it is easy to make a mistake.  For one thing, you will be held to a reasonableness standard, which means that you can act completely in good faith, but someone else gets to determine if you acted reasonably.

In this case, the complainant worked in the Coca-Cola plant in Northampton, Massachusetts through a temp. agency.  The employee was blind in one eye, but that did not prevent him from performing his job duties.  When a permanent position came up, Coca-Cola gave the employee a conditional offer of employment, subject to a medical examination.

When Coca-Cola learned of his visual disability, it revoked the conditional offer of employment.  It’s reasoning was that driving a forklift was part of the permanent position, and it had a legitimate safety concern with a visually disabled person driving a forklift.

Not so fast, said the MCAD.  It noted that for the particular job at issue, a Level 3 Operator, there was no reference to forklift use or operation in the “Physical Demands Analysis” or Job Descriptions, although the Level 1 Operator position did list “operate lift trick” among the essential job functions.  There appeared to be some confusion from some Coca-Cola managers as to which job position the Complainant applied for, but the MCAD clearly found that he applied for a Level 3 position, which did not require forklift operation.

The MCAD further found that, “even if forklift driving would have been required of the Complainant on occasion, . . . Respondent could have determined that, given the number of other available and certified drivers on Complainant’s shift, he could be excused from driving a forklift altogether as a reasonable accommodation.”

It appears that Coca-Cola’s mistake was that, according to the MCAD ruling, “its HR and medical safety consultants never met with Complainant or his direct supervisors at the plant to identify and evaluate the actual position for which he was being hired or to discuss possible accommodations, if required.”  Coca-Cola probably could have saved itself with the “interactive process” that it was required to do.  Had it done so, it would surely have discovered its errors, or alternatively it would have a record that the complainant could not have performed the essential job duties.  But simply relying on job descriptions did not go far enough to either meet its obligations or to protect itself from liability.

If you have a job candidate with a disability, carefully consider your legal obligations.  If you need help figuring this out, call me at 617.338-7000

By Adam P. Whitney

Jujitsu (actually spelled “jujutsu”) is a martial art where one uses the opponent’s force against himself rather than confronting it with one’s own force.  This is what employment lawyers are doing when they set you up for the Retaliation Trap.

The Retaliation Trap is simple in concept, but usually takes considerable skill and knowledge to set effectively.  It works best on arrogant, unwary employers with an intemperate owner or supervisor, especially if not represented by competent legal counsel.  It works like this.  An employee is having some trouble at work.  The employee senses that his or her days are numbered.  The employer is papering the file and gearing up for termination.  The employee visits a lawyer to see what can be done.

There is almost no direct force to stop a termination.  Employers always have the power to fire an employee, even where they don’t have a right.  That power, however, can be reversed to cause a self-inflicted wound.  The clever employee’s lawyer in the above situation will look for some colorable legal claim that the employee may have, and have the employee file some sort of complaint or charge.  The Retaliation Trap is set.  If the employer springs the trap by firing the employee, the employee may have a good claim for retaliation.  Believe it or not, this is true even if the original complaint was without merit. At least in Massachusetts, as long as the employee had a good faith belief in the complaint or charge, you are liable for full damages if you retaliate against the employee who filed the complaint or charge.

A recent appeals court decision, with a huge verdict (even after an 80% remittitur for the emotional distress damages), shows a significant self-inflicted wound when springing the Retaliation Trap. The case is reported as Trainor v. HEI Hospitality, LLC, 669 F.3d 19 (1st Cir. 2012).  According to the reported facts, the plaintiff and his lawyer were negotiating ongoing employment terms with the defendant, including whether the plaintiff would be relocated to an inconvenient location.  When the negotiations began to deteriorate, which could have resulted in either the end of the plaintiff’s employment or other unfavorable terms, the plaintiff’s lawyer filed a Charge of Discrimination based on age with the Massachusetts Commission Against Discrimination (“MCAD”).  He promptly forwarded a copy to the apparently hotheaded executive of the defendant (good move, he put them on notice).  The trap was set.

The executive fired the plaintiff three hours after receiving the Charge of Discrimination.  Not surprisingly, the jury found for the plaintiff on the retaliation claim, even though it rejected the age discrimination claim.  Other than cutting down some of the damages (the jury awarded $1,000,000 in emotional distress damages, the Court cut it down to $200,000, or a re-trial), the Appeals Court affirmed the verdict.  The jury and the Court also awarded $500,000 in back pay, $750,000 in front pay, and $550,000 in attorneys’ fees and costs.  The first three figures were doubled upon a finding of an intentional violation of the statute.  The rash firing appears to have cost the employer about $4 million, not to mention its own attorneys’ fees and costs.

In my estimation, jurors will punish you if they think you abused your power and retaliated against someone who made a complaint, even where the underlying claim cannot be proven.  The $1,000,000 emotional distress damages award could be seen as de facto punitive damages.  The Trainor makes it clear that where there are different versions of the facts, it is wholly the jury’s prerogative to decide for one side or the other.  This unfortunately means that every time you fire someone who has complained of discrimination, or some other claim (there are many different types of statutes that punish retaliation), you run the risk that a jury will think you retaliated.  Even if you didn’t and you planned to fire the employee anyway.

If you need help avoiding the Retaliation Trap, call me at 617.338.7000.

By Adam P. Whitney

 

Massachusetts has broad statutory protection against discrimination in employment, much of which can be found in G.L. Chapter 151B.  The Massachusetts Supreme Judicial Court recently ruled on two little known provisions of the statute, the “aiding and abetting” provision, found in Section 4(5) and the interference provision, found in section 4(4A).  The most important thing about these provisions is that a person or a business can be liable for discrimination under Chapter 151B even if they are not the employer of the claimant.  The case is reported as Lopez v. Commonwealth, 463 Mass. 696 (2012).  Although the Lopez case concerns the Human Resources Division’s testing for public jobs, the reasoning of the case will apply equally in the private sector.

Discrimination for Interference With Employment Rights:

Under the words of the statute, it is unlawful for “any person to coerce, intimidate, threaten, or interfere with another person in the exercise or enjoyment of any right granted [by the statute].”  The SJC ruled in Lopez that under Section 4(4A), a person “need not be an employer to be subject to an interference claim.  Id. at 706.  Pursuant to this paragraph, in pertinent part, it is unlawful for any person to “interfere with another person in the exercise or enjoyment of any right granted or protected by [G.L. c. 151B].”  Id. 

Although its precise application is hard to define, the message is clear: if you act in a discriminatory fashion you and your company may be liable for the full amount of damages under the statute.  For example, if a salesperson called on your company from ABC Sales, you could be found liable if the complained to ABC Sales that you did not care for this salesperson because of his (race, religion, sexual orientation, etc.) if ABC Sales then took negative action against the salesperson.

In fact, you could be liable even if you did not have a discriminatory motive, so long as your actions were intentional.  Take another example, let’s say that your company hires temporary employees from BCD Temps.  If you required BCD Temps to provide you only with new college graduates, that would likely have a disparate impact on older workers.  Under the reasoning of the SJC in Lopez, you could be held liable to older workers who were not given the job with BCD Temps because of your requirements.

There can also be liability for creating a hostile work environment, even to your non-employees.  You cannot turn a blind eye to egregious discrimination or sexual harassment that is happening in your premises or a worksite you control.

Liability for Aiding and Abetting.

Chapter 151B, Section 4(5) provides in pertinent part that it is unlawful “for any person, whether an employer or an employee or not, to aid, abet, incite, compel or coerce the doing of any [forbidding discriminatory act.”.  In order to prevail on an aiding and abetting claim under Section 4(5), the SJC ruled that a claimant “must show that the defendant (1) committed ‘a wholly individual and distinct wrong … separate and distinct from the claim in main’; (2) ‘that the aider or abetter shared an intent to discriminate not unlike that of the alleged principal offender’; and (3) that ‘the aider or abetter knew of his or her supporting role in an enterprise designed to deprive [the claimant] of a right guaranteed him or her under [G.L. c. 151B].’”  Lopez, at 713, quoting Harmon v. Malden Hosp., 19 Mass. Discrimination L. Rep. 157, 158 (1997).

The biggest difference in aiding and abetting liability is the requirement of specific intent.  It is hard to imagine a case where a claimant could show aiding and abetting, if the claimant could not also show interference with its lower standard.  In the examples set forth above, a claimant would likely be able to prove aiding and abetting if he could show the intent to discriminate.  It remains to be seen whether there are applications of Section 4(5) that do not fit under section 4(4A).

In summary, you have to at least be aware of these types of issues in your business dealings.  While few modern employers intentionally discriminate, you now have to be cautious that your actions will unintentionally discriminate against non-employees.  These are serious matters.  When successful, discrimination awards can and often do range in the hundreds of thousands of dollars, and higher.  If you have any questions on how your business dealings could be putting you at risk, call me at 617.338.7000.

By Adam P. Whitney

Many employment lawyers tell their corporate clients to provide only basic information when giving a job reference.  That is, to just verify dates of employment and the position held, and nothing more.  Employers invariably think we are being too cautious.  But there is recent proof that saying too much can not only get your company sued, you can end up paying significant damages as well.  The case is reported as Timothy J. O’Brien v. Mark L. Chretien et al, (unpublished, MA Appeals Court).  From my reading of the case, the plaintiff actually sued a party who was not his employer, but was related to the plaintiff’s employment. In any event, the cautionary tale is one for Massachusetts employers.

The plaintiff, represented by Jeremia Pollard of Hannon Lerner, P.C. in Lee, MA, worked as a paramedic.  The appeals court determined that the evidence was sufficient for a jury to find that Berkshire Medical Center, Inc. (“BMC”) told the plaintiff’s potential employer that the plaintiff had lost his medical clearance and that a “no trespass” order had been issued against the plaintiff.  There was no evidence presented that there was truth in these statements, the Appeals Court found.  The defendant denied making these statements, but because the statements were oral, the jury apparently believed the testimony and notes of the person who heard the comments and passed them on to the potential employer.  Because of the statements made by BMC, the plaintiff was bypassed for a municipal job even though he was better qualified.

The plaintiff prevailed at trial on claims of defamation and interference with his prospective business relationship.  The Appeals Court upheld the ruling.  My research indicates that the plaintiff won $204,000 at trial.  With interest, this figure is well over $300,000.  That’s not including BMC’s own legal fees, which would likely put the total exposure north of $400,000.

There are a few ways that an employer could potentially avoid this exposure.  For one, they could follow their standard advice and provide only the dates of employment and job position held.  For another, the employer could ask the former employee for a complete waiver to allow them to speak honestly.  There is no guaranty that such a waiver would hold up, but I do not see why it wouldn’t.  Third, the employer could provide any reference in a carefully-vetted (by an attorney) written correspondence, to make sure that it is not subject to a defamatory interpretation.  In the case set forth above, BMC was in the position of defending a he said-he said situation, which put it at the mercy of the jury.

If your company needs guidance on providing a reference, give me a call at 617.338.7000.

By Adam P. Whitney

Summer is over and it’s time to get back to work.  For me, that means back to blogging and protecting my clients’ business interests.  For you business owners, consider it a good time to review your business contracts.  As a business litigator, I frequently see poorly drafted contracts that result in companies being dragged into court, or in a weakened position if they have to file suit.  You may find free contract samples on the internet, and they may be worth every penny.  Contracts need to be tailored to your industry, your state law, and to accomplish your particular goals.

While contractual language may seem routine and mundane and full of boilerplate, the language of contracts can make the difference between being sued and not sued, between losing a trial or prevailing on a summary judgment motion, and between paying triple damages or just single damages.

Here are a few of the more important provisions.  I’ll add some more provisions in later segments.  I know that the attention span for contractual clauses (at least for me) is not that long.  No one actually needs these provisions …. until things fall apart and they need these provisions.

Choice of Forum Clause

Getting sued is never pleasant, but getting sued in a state other than your home state can be even worse.  You’ll have to find an attorney in the other state to represent your company.  You’ll have to travel to the other state for depositions and trials.  You may be concerned that a judge or jury will view your out-of-state company less favorably than the local company.

This can be avoided with a very simple, commonly enforced clause.  Better yet, you can reverse this by making your opponent come to Massachusetts to sue you.  This creates a disincentive to sue you, and makes your opponent spend all the travel related expenses.

Whenever you have the bargaining power, and especially when you are contracting with an out-of-state company, insist on a choice of forum clause.  You can also insist on what law applies, which doesn’t necessarily have to be Massachusetts.

Merger/Integration Clause Plus.

Many contracts have boilerplate merger and integration clauses which essentially state that the contract contains the entire agreement and that all prior negotiations are merged into the agreement.  This gives you some protection from the other party claiming that there were different oral terms discussed.  This is fine, as far as it goes.

But you can do better.  The “plus” that I would include would be language that would protect you (to the extent possible) from claims of misrepresentation and fraudulent inducement.  This is important, because your opponent will use these claims to get around the plain terms of the contract.  Worse yet, your opponent will make a claim under Chapter 93A, which provides for potential double or triple damages, plus attorneys’ fees and litigation costs.  This area of law is very tricky.  There is a line of Massachusetts precedent that states that boilerplate language will not protect you against claims of fraud.

As a lawyer, it’s frustrating that the courts disregard tried and true contractual language by simply dismissing it as “boilerplate.”  But we have to play the hand we are dealt.  There is another line of cases that allow sophisticated business entities to set forth the entirety of the representations that they are relying upon.  There is no one-size-fits-all provision that works here.  You’ll need to spend a few dollars in legal fees to protect yourself from a potentially big judgment.

Limitation of Liability/Damages Clause

Parties can agree to a maximum limit of the amount and type of damages for which they will be liable.  This is more important if you are the party who is more likely to be sued for consequential or punitive damages.  For example, if you are providing services, you may want to have a provision that your liability is limited to the total amount that you are being paid.  If you are providing goods, you may want to limit any remedy to replacing the goods.

You can have a provision that precludes punitive and exemplary damages, and provides that the parties will pay their own attorneys’ fees.  There are dozens are variations, depending on your particular industry and your goals.  Not every provision will be enforceable for every industry, which is why you should not just pluck some provisions from the internet and hope for the best.

If your business contracts need a tune up, give me a call at 617.338.7000.

Adam P. Whitney

It sucks when your company gets sued.  But it’s part of operating a successful business.  No one wants to sue a business that has no money and no assets.  The more successful you are, the bigger the target you have on your back.  Lawsuits are not fun.  They are risky.  And very expensive.  No lawyer can change any of that, but there are certain things that you should do, and not do, as soon as you receive lawsuit papers, including the following.

 

  1. Don’t Ignore It.  Although some threatening letters from lawyers are empty threats (you should not ignore these either; some require a response by statute) that you may choose to ignore, a summons and complaint notifying you of a lawsuit will not go away on its own.  In fact, there can be grave consequences, including a default judgment against the named defendants, or, in some cases, an immediate injunction (court order) against your company.  Although a default can sometimes be vacated if you take swift action, you don’t want to leave that to chance.  This leads to the second point …

 

  1. Call Your Lawyer Immediately.  I know this sounds self-serving, and no one likes to pay legal fees, but you need legal advice, and fast.  If your business is a legal entity, such as a corporation or LLC, you cannot represent it in court in Massachusetts (with the exception of small claims).  One of the consequences of incorporating is that your business is a separate legal entity from its owners; unless one of the owners is a licensed lawyer, you will need to hire an attorney or else face default.

 

  1. Choose the Right Lawyer.  All lawyers are not the same.  There are different specialties, different personalities and styles, and different hourly rates.  Your ideal lawyer will have some experience in the type of case at issue, will have a reasonable rate, and will have a personality and style that you can work with.  Don’t be shy about asking tough questions about the lawyer’s experience.  Consider asking for references.  Investigate the lawyer on-line (www.avvo.com is a good starting point).  Ask the lawyer for a litigation budget, a general defense strategy, and the lawyer’s thoughts on alternative dispute resolution.  You will not offend the lawyer by being a smart consumer of legal services.  If you do, then you are probably talking to the wrong lawyer.

 

  1. Check for Insurance Coverage Immediately.  Even if you think that your policy, be it a general liability policy, directors and officers policy, or other insurance does not cover the claim, check with your insurance agent anyway.  You may be pleasantly surprised.  If you are fully covered, the insurer will assign a lawyer and will pay the lawyer, subject to any deductible, and will likely pay for any settlement or judgment.  Sometimes insurers agree that they have a duty to defend your company, subject to a reservation of rights.  This usually means that you can pick your own lawyer, and the insurer will pay the reasonable and necessary legal fees, at least until and unless it or a court determines that there is no coverage.

 

  1. Preserve Electronic and Paper Information.  Put any normal document destruction or e-mail purging programs on hold.  You have a duty to preserve information, which could help you or the other side.  If you destroy information, that fact can be used against you, which may look like you are trying to hide something even when you are not.

 

  1. Be Careful What You Say or Write.  Other than communications with your attorney, almost everything you say about the plaintiff or the lawsuit is discoverable.  That includes internal e-mails with your staff.  It likely includes investigations or interviews that you take without a lawyer (sometimes, it makes sense for companies to do their own investigations).  Your best bet is to let your lawyer handle it.  A meeting with you and your key personnel is not protected from discovery if your lawyer is not there.  E-mails and memoranda can be especially devastating.  Don’t put something in an e-mail unless you want it blown up on a giant poster-board in front of a judge and jury.  If you have any doubt, check with your lawyer.

 

  1. Don’t Just Let the Lawyers Handle It.  Although you want to continue to focus on your business, it would be a mistake to turn the defense of the suit over to your lawyers and then not monitor it.  You want to be involved, because you know your business and the facts better than the lawyers.  There is so much at stake.  Think of yourself as part of the defense team.  If you have no insurance coverage, you can also keep a better handle on legal fees and expenses.

 

  1. Consider Alternative Dispute Resolution.  First, check to see if a contract at issue requires arbitration.  In some circumstances, arbitration can be quicker and cheaper than litigation (but not always).  It’s also more private.  Also consider, after consultation with your attorney, pursuing early mediation.  If there is some exposure on the claim and the plaintiff and plaintiff’s lawyer appear to be reasonable, you may be able to save tens of thousands in legal fees and eliminate the risk of a judgment in an indeterminate amount.  Consider that, in Massachusetts, interest runs at 12% per annum from the date of the breach of contract or the date of filing.  Do the math; it adds up.  If handled correctly, a request for mediation is not a sign of weakness.

If you or your company have been sued, or you know a lawsuit is on the horizon, and you need assistance, give me a call at 617.338.7000.