November 26, 2011

Decisions of interest concerning Labor and Employment Law
Source: Justia November 25, 2011

Court: U.S. 1st Circuit Court of Appeals
Docket: 10-1607
November 22, 2011
Judge: Lipez
Areas of Law: Civil Rights, Constitutional Law, Labor & Employment Law
Employees of the fire department filed suit under 42 U.S.C. 1983, alleging cronysim and nepotism in employment decisions. The district court granted summary judgment for the department, finding that nothing linked the employment decisions to an identifiable political group, cause, or belief. The First Circuit affirmed. Preferential treatment in public employment decisions, unrelated to protected speech or association, does not infringe upon freedoms secured by the First Amendment.

Court: U.S. 9th Circuit Court of Appeals
Docket: 10-72478
November 21, 2011
Judge: Smith
Areas of Law: Contracts, Labor & Employment Law
The NLRB petitioned for enforcement of its order finding that Legacy Health violated sections 8(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C. 158(a)(1) and (3) by not allowing its employees to simultaneously hold bargaining unit positions and non-bargaining unit positions. The court held that, under section 10(e) of the Act, the court did not have jurisdiction to hear Legacy Health's exceptions to the NLRB's remedial order. Accordingly, the court granted summary enforcement of the NLRB's order.

Court: U.S. 10th Circuit Court of Appeals
Docket: 10-4185
November 22, 2011
Judge: Gorsuch
Areas of Law: Civil Rights, Labor & Employment Law
Plaintiff-Appellant Cherie Lopez-Fisher claimed Defendant-Appellee Abbott Laboratories fired her because of her gender, race, color and national origin. After receiving extensive briefing and hearing oral argument in this Title VII case, a magistrate judge entered an order granting summary judgment to Abbott Labs. In her appellate brief, Plaintiff insisted that because she successfully passed a "Performance Improvement Plan" conducted by Abbott Labs, her termination a week later raised an inference of discrimination. The magistrate judge found no evidence in the record that Plaintiff passed the Plan. Furthermore, the magistrate concluded that Plaintiff did not overcome her burden of proof that Abbott Labs' proffered reason for terminating Plaintiff (poor performance) was pretext for discrimination. Accordingly, the Tenth Circuit adopted the magistrate judge's ruling in affirming dismissal of Plaintiff's case.

Court: U.S. D.C. Circuit Court of Appeals
Docket: 10-1411
November 22, 2011
Judge: Per curiam
Areas of Law: Labor & Employment Law
Petitioner petitioned for review of an order of the NLRB, holding that petitioner violated section 8(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C. 158(a)(1) and (3), when it threatened and disciplined a certified nursing assistant and outspoken union supporter. Petitioner admitted that the nursing assistant's union activity was a motivating factor for her discipline; although other employees engaged in conduct similar to the nursing assistant's, petitioner neither investigated nor punished any one of them; and the nursing assistant was disciplined without an inquiry into her actions, as company policy required. Petitioner premised its discipline, at least in part, on the nursing assistant's expired disciplinary history, an impermissible consideration under company rules. Therefore, the court concluded that substantial evidence supported the NLRB's Wright Line determination. In light of these conclusions, the court need not consider the NLRB's alternative ground for its section 8(a)(3) ruling.

Court: California Supreme Court
Docket: S184059
November 21, 2011
Judge: Baxter
Areas of Law: Government Contracts, Insurance Law, Labor & Employment Law
This case stemmed from a lawsuit filed in 2007 by the Retired Employees Association of Orange County, Inc. against the County of Orange contesting the validity of certain changes the county had made to health benefits for retired employees. At the request of the Ninth Circuit, the court addressed the following question: "Whether, as a matter of California law, a California county and its employees can form an implied contract that confers vested rights to health benefits on retired county employees." In response, the court concluded that, under California law, a vested right to health benefits for retired county employees could be implied under certain circumstances from a county ordinance or resolution. Whether those circumstances existed in this case was beyond the scope of the question posed to the court by the Ninth Circuit.

Court: Connecticut Supreme Court
Docket: SC18751
November 29, 2011
Judge: Eveleigh
Areas of Law: Civil Rights, Constitutional Law, Criminal Law, Labor & Employment Law
Plaintiff, while in the course of employment as a uniformed police officer of the City's police department, was involved in a shooting and was later criminally charged in connection with the shooting. The City suspended Plaintiff without pay pending the outcome of the criminal matter. After being acquitted of all charges, Plaintiff brought an action against the City seeking reimbursement for legal fees, lost wages and lost employment benefits. The trial court awarded Plaintiff $562,277, which included Plaintiff's attorney's fees. The Supreme Court affirmed, holding (1) the trial court's finding of a contract between Plaintiff and his lawyer in which Plaintiff incurred legal fees beyond the retainer was not clearly erroneous; (2) the trial court did not abuse its discretion in awarding damages to Plaintiff for attorney's fees, and the award was not excessive; and (3) Plaintiff was entitled to damages for economic loss during his entire suspension, and the trial court's award of damages for economic loss in this case was proper.

Court: Delaware Supreme Court
Docket: 208, 2011
November 21, 2011
Judge: Jacobs
Areas of Law: Business Law, Corporate Compliance, Labor & Employment Law, Legal Ethics
Plaintiff brought this action under 8 Del. C. 220 to inspect certain books and records of defendant. More specifically, plaintiff sought to inspect one document that defendant refused voluntarily to disclose: an interim report (Covington Report) prepared by defendant's outside counsel in connection with an internal investigation into sexual harassment allegations made against defendant's former CEO. The Court of Chancery denied plaintiff relief and held that plaintiff had not demonstrated a need to inspect the Covington Report sufficient to overcome the attorney-client privilege and work product immunity protections. The court affirmed, but on the alternative ground that plaintiff had not shown that the Covington report was essential to his stated purpose, which was to investigate possible corporate wrongdoing.

Court: Indiana Supreme Court
Docket: 93S02-1102-EX-90
November 17, 2011
Judge: Rucker
Areas of Law: Government & Administrative Law, Health Law, Injury Law, Insurance Law, Labor & Employment Law
Appellant Indiana Spine Group provided medical services to employees of various businesses for injuries the employees sustained arising out of and during the course of their employment. The employers authorized the services and made partial payments. In each case, more than two years after the last payments were made to the injured employee, Appellant filed with the worker's compensation board an application for adjustment of claim seeking the balance of payments. The Board dismissed the applications as untimely. In each case the court of appeals reversed and remanded. At issue on appeal was what limitation period was applicable to a medical provider's claim seeking payment of outstanding bills for authorized treatment to an employer's employee when the Worker's Compensation Act was silent on the question. The Supreme Court reversed the Board, holding (1) the limitation period contained in the general statute of limitation enumerated in Ind. Code 34-11-1-2 controlled; and (2) because Appellant's claim was timely under the statute, the Board erred by dismissing Appellant's application.

Court: Kentucky Supreme Court
Docket: 2009-SC-000015-DG
November 23, 2011
Judge: Venters
Areas of Law: Contracts, Insurance Law, Labor & Employment Law
Travelers Insurance Company brought suit in circuit court alleging that Blackstone Mining Company had underpaid premiums under two separate workers' compensation policies issued by Travelers. Blackstone counterclaimed, alleging that it had overpaid the premiums due under the policies and was entitled to a refund. The circuit court granted summary judgment to Blackstone. The court of appeals reversed. The Supreme Court reversed the court of appeals and reinstated the judgment of the circuit court, holding (1) the court of appeals incorrectly applied well-established burden of proof principles applicable to summary judgment motions; and (2) the circuit court correctly determined that Blackstone was entitled to summary judgment.

Court: Minnesota Supreme Court
Docket: A09-2093
November 23, 2011
Judge: Stras
Areas of Law: Contracts, Insurance Law, Labor & Employment Law
At issue in this case was the interpretation of approximately sixty collective bargaining agreements (CBAs) between the City of Duluth and its employees. Subject to certain conditions and exceptions, the CBAs guaranteed retired City employees health insurance benefits "to the same extent as active employees." The dispute in this case centered on the meaning of that phrase, specifically, whether the phrase guaranteed health insurance benefits to retirees to the same extent as employees who were active at the time of a retiree's departure, or to the same extent as current City employees. Several retired City employees filed a lawsuit, alleging that the City had wrongfully changed or threatened to change their health insurance benefits and claiming that CBAs guaranteed that health insurance benefits for retirees would be frozen as of the time of retirement. The district court held for the City. The court of appeals affirmed the district court's interpretation of the active-employees clause. The Supreme Court affirmed, holding that the CBAs unambiguously guaranteed health insurance benefits to retirees to the same extent as current City employees.

Court: Montana Supreme Court
Docket: DA 11-0147
November 22, 2011
Judge: Morris
Areas of Law: Contracts, Labor & Employment Law
Employee worked as a shareholder accountant for Employer. Employee's employment contract contained a covenant not to compete. After Employer ended its employment relationship with Employee, Employee began working at Employer's competitor, where she provided accounting services for a few of Employer's former clients in violation of the restrictive covenant. Employee sought a declaration that the covenant was unenforceable. The district court determined that the covenant was reasonable and enforceable. The Supreme Court reversed, holding that Employer's covenant was unenforceable because (1) Montana law requires that an employer establish a legitimate business interest in a restrictive covenant, which demands that the restriction on post-employment activities be necessary to protect an employer's good will, customer relationships, or trade information; (2) an employer lacks a legitimate business interest in a covenant when, under ordinary circumstances, it ends the employment relationship with the employee; and (3) Employer in this case elected to end its employment relationship with Employee without any misconduct on the part of Employee.

Court: Nevada Supreme Court
Docket: 54822
November 23, 2011
Judge: Hardesty
Areas of Law: Injury Law, Insurance Law, Labor & Employment Law
Employee suffered a work-related injury to his back in 2004. Employee had also suffered previous accidents resulting in injuries to his lower back. A rating physician determined that Employee's permanent partial disability (PPD) benefits for the 2004 injury should be calculated using a net twenty-six percent impairment rating. Employer's Insurer offered an award to Employee based on a net seventeen percent impairment rating. An appeals officer ordered Insurer to offer Employee a PPD award based on the original impairment rating. The district court affirmed, concluding that Employee's prior impairment rating, which was calculated using an older version of the AMA Guides, should be deducted from his current impairment rating, which was calculated using the current edition of the AMA Guides. The Supreme Court reversed, holding (1) the governing statute required the rating physician to reconcile the different editions of the AMA Guides by first recalculating the percentage of the previous impairment rating using the current edition and then subtracting that recalculated percentage from the current level of impairment; and (2) the district court and appeals officer erred in determining the amount due, and therefore, the PPD award based on the seventeen percent impairment rating for the current injury was proper.

Court: New York Court of Appeals
Docket: 200
November 21, 2011
Judge: Pigott
Areas of Law: Construction Law, Injury Law, Labor & Employment Law
Plaintiff commenced a lawsuit against 96 Rockaway, LLC, Novalex Contracting Corp., and T-Construction Co., Inc., alleging among other things, violations of Labor Law 240(a) and 241(6). Discovery and a third-party action ensued. T-Construction moved for summary judgment, seeking dismissal of the complaint, and all cross-claims against it. 96 Rockaway and Novalex cross-moved for identical relief. Supreme Court granted defendants' motions, and dismissed plaintiff's complaint in its entirety. The Appellate Division reversed so much of Supreme Court's order as granted defendants' motions for summary judgment dismissing plaintiff's claims, denied the motions, and reinstated those claims. The court held that, given that Labor Law 240(1) should be construed with a common sense approach to the realities of the workplace at issue, defendants were entitled to summary judgment dismissing that claim. Plaintiff's Labor Law 241(6) cause of action, predicated on a violation of 12 NYCRR 23-1.7(b)(1)(i), failed for similar reasons. Accordingly, the order of the Appellate Division was reversed.

Court: Ohio Supreme Court
Docket: 2010-0734
November 17, 2011
Judge: Per Curiam
Areas of Law: Government & Administrative Law, Injury Law, Labor & Employment Law
Patrick Donohoe died from injuries sustained in a workplace accident. His widow, Catherine, filed an application for additional workers' compensation benefits, claiming that Patrick's accident resulted from his employer's violation of specific safety requirements (VSSRs) governing the construction industry. The Industrial Commission of Ohio denied her application. The court of appeals vacated the order and returned the cause to the Commission for further consideration. Both Catherine and the employer appealed. At issue on appeal was (1) whether the Commission staff hearing officer's order, which could be interpreted in different ways, was deficient; and (2) whether the Commission erred by denying Catherine's application because there were no eyewitnesses to the accident. The Supreme Court affirmed, holding (1) an order that can engender two viable, yet irreconcilable, interpretations is too ambiguous to withstand scrutiny; (2) an order that is potentially based on an erroneous belief that a VSSR cannot issue in the absence of eyewitnesses is clearly an abuse of discretion; and (3) therefore, the court of appeals was correct in returning the cause to the Commission for clarification and consideration of all the evidence.

Court: Oklahoma Supreme Court
Docket: 109003
November 22, 2011
Judge: Watt
Areas of Law: Arbitration & Mediation, Contracts, Labor & Employment Law
Plaintiffs-Appellants Eddie Lee Howard and Shane Schneider (Employees) entered an employment contract with Defendant-Appellee Nitro-Lift Technologies, L.L.C. For two years following termination, the contract prohibited employees from: working for, leasing to, or selling equipment to competitors. The contract contained an arbitration agreement requiring application of Louisiana law with disputes to be resolved in Houston, Texas. After the employees terminated their employment with Nitro-Lift, they went to work for a competitor in Arkansas. The employer filed an arbitration proceeding in Houston. Howard and Schneider filed an application for a declaratory judgment and injunctive relief in Oklahoma asserting that the non-competition agreement violated public policy. The district court initially granted the employees a temporary injunction, prohibiting Nitro-Lift from continuing the arbitration proceedings in Texas. Thereafter, the employer filed a motion to dismiss. After considering the parties' briefs and arguments, the district court found the arbitration clause to be valid on its face and reasonable in its terms, lifted the temporary restraining order, and granted the motion to dismiss. Upon review, the Supreme Court held that: (1) the existence of an arbitration agreement in an employment contract did not prohibit judicial review of the underlying agreement; and as drafted, the non-competition covenants were void and unenforceable as against Oklahoma public policy. The Court reversed the district court's judgment and remanded the case for further proceedings.

Court: South Carolina Supreme Court
Docket: 27064
November 21, 2011
Judge: Toal
Areas of Law: Government & Administrative Law, Injury Law, Insurance Law, Labor & Employment Law
Appellant Alexander Michau appealed a ruling by the Appellate Panel of the South Carolina Workers' Compensation Commission (Commission) denying his claim for repetitive trauma injuries to his shoulders. Specifically, Appellant challenged the Commission's interpretation and application of section 42-1-172 of the South Carolina Code. Prior to his injury in 2008, Appellant did not report any work-related problems with his arms to his employer, although he sought outside treatment. The Commission denied Appellant's claim on the grounds that "the greater weight of the medical evidence reflects [Appellant's] upper extremity and shoulder problems are related to pre-existing osteoarthritis and/or rheumatoid arthritis and not caused or aggravated by his employment with Georgetown County." Appellant disputed the admissibility of the Commission's expert doctor's report under South Carolina Code section 42-1-172 because it was not stated "to a reasonable degree of medical certainty." Appellant argued that without this evidence, the remaining competent evidence would support his claim of sustaining a compensable repetitive trauma injury. The Supreme Court concluded after a review of the Commission's record that the doctor was not Appellant's treating doctor, and his employer sought a medical "opinion" to decide the compensability of Appellant's claim. In this instance, the Court concluded that the doctor's testimony was indeed an "opinion" within the meaning of the Code, and therefore inadmissible against Appellant in adjudicating his claim. The Court reversed the Commission's decision to admit the doctor's medical opinion and remanded the case to determine whether the remaining competent evidence supported Appellant's claim of injury.

Court: South Dakota Supreme Court
Docket: 25935
November 16, 2011
Judge: Zinter
Areas of Law: Contracts, Government Contracts, Labor & Employment Law
Two unions filed grievances against the Sioux Falls School District, alleging that that the District violated the parties' labor agreements when the District provided 2.5 percent wage increases for the 2008-2009 school year. The District and the Department of Labor denied both grievances as untimely. The circuit court judge concluded that the grievances were timely, and reversed and remanded the matter to the Department to determine the correct percentage wage increase. On remand, the Department concluded that the union members were entitled to a three percent wage increase. The circuit court affirmed. The District appealed. The Supreme Court affirmed, holding (1) the union's grievances were timely; and (2) the union members were entitled to a three percent salary increase, and the District violated the terms of the agreements by implementing a percentage wage increase other than the percentage change in the per student allocation referenced in S.D. Codified Laws 13-13-10.1(4).

Court: Vermont Supreme Court
Docket: 2010-245
November 18, 2011
Areas of Law: Family Law, Government & Administrative Law, Labor & Employment Law
"This is a case of avoidable error and its consequences." The Vermont League of Cities and Towns (VLCT), the workers' compensation insurance carrier for the Town of Randolph, settled a compensation claim of Claimant Stacey Colson and paid the settlement amount to the Office of Child Support pursuant to an earlier order that OCS issued to collect Claimant's back child support payments. VLCT failed to deduct the amount of an attorney's fee lien granted by the Commissioner of the Department of Labor (DOL) to claimant’s lawyer. VLCT acted with the understanding that the lawyer would not seek the fee if, as occurred, claimant was awarded a lump-sum compensation amount. The lawyer sought her fee, but VLCT resisted double paying that amount, and the dispute has ended up before the Supreme Court after two decisions from the Commissioner and one from Superior Court. Claimant appealed the Commissioner’s grant of summary judgment to VLCT, in which the Commissioner concluded that VLCT acted appropriately in paying over the entire proceeds of claimant’s workers’ compensation award to OCS. Claimant argued that his attorney's lien had priority over OCS's claim for child support arrearages. He claimed that the Commissioner's findings were incomplete and contradictory, that the Commissioner erred when she determined his attorney’s lien did not have priority, and that DOL should be compelled to enforce his attorney’s lien for fees. Upon review of the applicable legal authority and the trial court record, the Supreme Court found that the OCS lien was first in time and therefore took priority, and affirmed the Commissioner's holding that VLCT could not be required to pay the attorney's fee amount to Claimant's attorney.

Court: West Virginia Supreme Court of Appeals
Docket: 101414
November 18, 2011
Judge: Davis
Areas of Law: Contracts, Injury Law, Insurance Law, Labor & Employment Law
Employee submitted a claim for workers' compensation under Employer's policy with Insurer, which claim was paid in full. Employee also filed a deliberate intent lawsuit against Employer. After assuming the attorney's fees and costs associated with defending and settling the action, Employer filed a complaint against Insurer, alleging various claims related to Insurer's denial of coverage in the defense of the deliberate intent action. The circuit court granted Employer's motion for partial summary judgment on its bad faith claim against Insurer and awarded damages to Employer. The Supreme Court reversed, holding (1) Insurer met its obligation under W. Va. Code 23-4C-6 to make deliberate intent coverage available to Employer upon the Employer's voluntary request; and (2) because the language of the policy was plain, and the exclusion of deliberate intent coverage was clear, the circuit court erred in concluding that the policy was ambiguous and therefore resulted in deliberate intent coverage being included in the policy under the doctrine of reasonable expectations.

Court: West Virginia Supreme Court of Appeals
Docket: 101499
November 23, 2011
Judge: Benjamin
Areas of Law: Business Law, Injury Law, Labor & Employment Law, Legal Ethics
Employee of a railway company was accused by his Employer of stealing rail. After it was discovered that Employee was involved in the removal and sale of the rail, Employee's employment was terminated. An arbitration panel reinstated Employee's employment the next year. Employer then submitted the matter to an assistant prosecutor. Employee was never arrested or incarcerated. Employee subsequently sued Employer for malicious prosecution. During the trial, the circuit court granted Employee's motion for judgment as a matter of law on the issue of whether Employer had procured his prosecution, which was one element of his required proof. The jury then returned a verdict in favor of Employee. The circuit court denied Employer's motions for judgment as a matter of law, new trial, or remittitur. The Supreme Court reversed the circuit court's order denying Employer's post-trial motions, holding that the circuit court committed reversible error by determining as a matter of law that Employer procured the malicious prosecution of Employee where testimony of the assistant prosecutor directly contradicted the proposition that Employer had a level of control over the prosecution amounting to procurement. Remanded for a new trial.

Court: West Virginia Supreme Court of Appeals
Docket: 101503
November 18, 2011
Judge: Workman
Areas of Law: Business Law, Commercial Law, Constitutional Law, Labor & Employment Law
The Racing Commission suspended certain jockeys' occupational permits for thirty days and imposed fines for the jockeys' failure to declare an overweight amount. Afterwards, PNGI Charles Town Gaming (PNGI), a non-party in the underlying action, excluded the jockeys from its facility. The circuit court (1) entered an injunction and stayed the imposition of sanctions by the Racing Commission until the conclusion of a hearing before the Commission; and (2) extended the injunction and the stay to include PNGI, preventing PNGI from excluding the jockeys from PGNI's premises pending the outcome of the jockeys' administrative appeal. The Supreme Court affirmed, holding (1) an ejection of a permit holder by a racing association or its stewards is subject to review by the Commission, and therefore, the jockeys, as permit holders, had the right to appeal the ejection, and PNGI was bound by the Commission's decision, subject to judicial review; and (2) PNGI waived its assigned errors regarding the injunction and stay.


Subsequent court and administrative rulings, or changes to laws, rules and regulations may have modified or clarified or vacated or reversed the decisions summarized here. Accordingly, these summaries should be Shepardized® or otherwise checked to make certain that the most recent information is being considered by the reader.
New York Public Personnel Law Blog Editor Harvey Randall served as Principal Attorney, New York State Department of Civil Service; Director of Personnel, SUNY Central Administration; Director of Research, Governor’s Office of Employee Relations; and Staff Judge Advocate General, New York Guard. Consistent with the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations, the material posted to this blog is presented with the understanding that neither the publisher nor NYPPL and, or, its staff and contributors are providing legal advice to the reader and in the event legal or other expert assistance is needed, the reader is urged to seek such advice from a knowledgeable professional.
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