AUGUST 2019 WARN ACT SUIT
Former Tampa Employees Gain Class Action over Business Closure that Caused Layoffs
By Tom Harper, The Law and Mediation Offices of G. Thomas Harper, LLC (Tom@EmploymentLawFlorida.com)
A federal judge in Tampa has granted class certification for a group of former employees to sue over the sudden closing and layoff of a Tampa medical facility in March of this year. Laser Spine Institute (“Laser Spine” or “LSI”) operated a seven (7) story medical facility in Avion Park in Tampa with hundreds of employees. Laser Spine specialized in minimally invasive spinal procedures. According to the newspapers, a perfect storm of law suits and lack of cash flow caused the banks to withhold financing that forced the business to close facilities in Florida, Ohio, Arizona and Missouri. Media sources quoted the Laser Spine CEO as explaining that several banks that supported the franchise-type medical centers suddenly “froze” the company’s accounts and stripped operating cash from their accounts. When they were unable to obtain other financing, they were forced out of business.
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On March 1, 2019 hundreds of employees in Tampa were laid-off due to the closing. Three days after the layoffs, several employees hired a law firms and three separate class action lawsuits were filed. Each suit alleged that the closing and layoffs violated the federal Plant Closing Law, officially known as the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq. (the “WARN Act”). The suits were all three filed as “class actions” seeking to include a claimed 1,000 former employees of Laser Spine in a number of states and locations. The plaintiffs in each suit claimed they were laid-off in violation of the WARN Act. WARN can apply when at least 50 employees are affected (a mass layoff) and one-third of the workforce. |
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Some Background:
WARN covers private, for-profit employers and private, nonprofit employers, as well as some public and quasi-public entities which operate in a commercial context and are separately organized from the regular government. (Of course, regular federal, state, and local government entities which provide public services are not covered by WARN.) |
| The WARN law is unique in that both hourly and salaried employees, as well as managerial and supervisory employees are entitled to notice of a closing or mass layoff. Owners and business partners are not entitled to notice. |
Under the WARN Act, employees are required to receive 60 days notice for lay-offs and closings that meet the conditions of the law. The former employees of Laser Spine claimed that they received no notice and are thus entitled to 60 days pay and benefits under the law.
The Storm isn’t Over
In June of this year, the plaintiffs filed joint motions for class certification asking the court to combine the suits into a class action. In their motion the plaintiffs’ lawyers told the court that they represented 61 former employees of Laser Spine. After briefing and hearing the arguments, District Judge William Jung in Tampa granted class certification to the plaintiffs. This does not mean that the plaintiffs have won, but the case will have class action status and many former employees will likely be involved and included in the suit.
The class that the plaintiffs will represent will include:
All Laser Spine Institute employees throughout the United States who were not given a minimum of 60 days’ written notice of termination and whose employment was terminated on or about March 1, 2019, as a result of a “mass layoff” or “plant closing” as defined by the Workers Adjustment and Retraining Notification Act of 1988, excluding the directors and officers of Laser Spine Institute.
Earlier this month the plaintiffs filed with the court their proposed “Notice” that, when approved by the court, will be sent to all persons identified in the above-described class. Deanna Ali v. Laser Spine Institute, LLC, et. al., Case No.8:19-cv-00535-T-23JSS (M.D. Fla., July 8, 2019)
Takeaway: Today’s economy is strong and large layoffs and closings are, thankfully, rare. But WARN also applies when businesses, facilities and plants are bought and sold. When this happens a new owner may make changes over 30 or 90 days that trigger WARN requirements. Both buyer and seller may be embroiled in WARN litigation. There are a number of exceptions in the law and detailed requirements on different topics such as who “notice” of the closure or layoff is to be provided to.
Spoliation of Evidence
Orlando Court Decision Reviews Requirements for Preserving Video Tapes and Other Evidence
By Tom Harper, The Law and Mediation Offices of G. Thomas Harper, LLC (Tom@EmploymentLawFlorida.com)
In today’s digital age, most Florida businesses use, or have access to, video cameras that record everything that happens in certain areas, both inside and outside a business. Often there is information on video that may relate to an employee’s actions or conduct and may support the employer’s decision to reprimand or discharge an employee. Theft of merchandise or equipment may be captured on video. Employee and customer or visitor accidents may also be recorded. When an incident happens, when is an employer in Florida required to preserve video tapes and other evidence from the day/time of an incident? An August decision by a federal judge in Orlando reviews some of the requirements that apply.
The judge’s decision involved a slip and fall case from a customer at a CVS Pharmacy in central Florida. A customer slipped and fell and broke her leg in front of a cooler in the store that displayed milk, Gatorade and other refrigerated merchandise. Two CVS employees helped the customer immediately. The customer, Ms. Peggy Noftz, claimed that the floor in front of the cooler was wet, even though the two CVS employees said that the floor was dry. As you can imagine, 16 days after the accident, Peggy’s lawyer wrote a letter to the pharmacy demanding that the store preserve all video tapes from the day of the accident. This is referred to by the courts as a “preservation letter.” The letter from Peggy’s lawyer demanded that the store preserve:
ANY VIDEO TAPE OF THE DATE IN QUESTION FOR ALL SECURITY CAMERAS INSIDE THE STORE FROM THE HOURS OF 9:00 A.M. TO 5:00 P.M. IT IS OUR INTENT TO NOT ONLY PRESERVE EVIDENCE OF THE INCIDENT ITSELF, BUT ALSO OF THE AREA OF THE INCIDENT TO DETERMINE HOW WATER NEAR THE MILK SHELVING AREA CAME UPON THE FLOOR AS WELL AS VIDEO SUBSEQUENT TO SHOW CLEANUP OF THE WATER. YOUR [sic] DISTRUCTION OF THIS CRUTIAL EVIDENCE WILL BE CONSIDERTED ACTIONABLE SPOLIATION. (Emphasis in Original)
CVS claimed that it never received this letter, but the pharmacy saved a CCTV video from the day of the accident from one of the cameras in the store anyway. The video from the store showed the accident but the floor at the spot of the accident was not visible. Peggy’s lawyer asked about other videos and learned that another camera at the photo center in the store may have captured the accident. CVS however, did not save the video from this camera since it did not receive the letter from Peggy’s lawyer.
Ms. Noftz sued CVS in federal court in Orlando over her injuries. During the suit, her lawyer filed a motion with the court claiming that CVS was guilty of “spoliation of evidence” in failing to keep the video from photo center cameras from the day of the accident. Ms. Noftz claimed that the pharmacy’s failure to keep this video, “…resulted in the loss of what would have been strong and persuasive evidence for the jury to consider regarding the nature of the condition which (Ms. Noftz) slipped in, along with the cause of, and (CVS’s) notice of, the same.” As a result of the spoliation, her lawyers asked the court to instruct the jury at trial that there was a presumption that the video showed evidence that supported Ms. Noftz.
The court defined “spoliation” as the intentional concealment, destruction, mutilation, or material alteration of evidence. In this case, there was no proof submitted by Ms. Noftz that CVS had ever received her lawyer’s letter asking them to preserve the videos. Despite this lack of notice, the court looked to a federal court decision from Maryland and stated that, “Once a party reasonably anticipates litigation, it is obligated to suspend its routine document retention/destruction policy and implement a ‘litigation hold’ to ensure the preservation of relevant documents.” This statement thus may become the standard that Florida employers should look to when deciding whether or not they should take steps to preserve evidence. And this includes documents (such as cash register receipts, damaged merchandise or property, text messages, e-mail, social media posts, etc.) or any other physical evidence including video and photos.
In reaching its decision the court explained that in Florida, the actions of a party in litigation (or the failure to affirmatively preserve) happens when the other side proves (1) that the lost documents or evidence existed at one time, (2) that the other party had a duty to preserve the lost evidence and, (3) that the evidence was crucial to the party’s case or defense that is asking the court for sanctions.
In deciding whether CVS was guilty of spoliation, the court found that CVS has control of all of the video cameras covering its store and once it knew that Ms. Noftz had fallen and was injured, it should reasonably have anticipated litigation. Yet, in this case the court found that Ms. Noftz had failed to establish element number three, above. Mere speculation by Ms. Noftz’s lawyer that the photo center camera would have captured the floor where she slipped was not enough for the court to find CVS guilty of spoliation! Had she shown the court even where the camera was pointed that day, and the normal field of view of the camera, that may have been enough! However, Ms. Noftz did not conduct discovery as to any of these particulars on the photo center camera. As a result, the court found that, “[w]hile the Court does not hold (Ms. Nuftz) to a high standard of proof, more is required than her speculation,…about what the photo area camera may have glimpsed.” Peggy’s Motion for Sanctions for spoliation of evidence was denied by the Court. Peggy Noftz vs. Holiday CVS, LLC, Case No. 6:17-cv-1638-Orl-31TBS (M.D. Fla., August 21, 2018).
Takeaway: This decision makes clear that employers in Florida must “act reasonably by taking positive action to preserve material evidence.” Even though this was a slip and fall personal injury of a customer, the decision will also apply to evidence in labor relations and employment cases. Oftentimes there is video (or documents) of employee conduct or incidents that should be preserved. Make sure your managers are trained to know these rules and take steps to save evidence.
Sex Harassment
Lone Sexual Advance is Enough to Support harassment Claim
By Tom Harper, The Law and Mediation Offices of G. Thomas Harper, LLC (Tom@EmploymentLawFlorida.com)
If you thought that you could ask once with no harm, you had better think again! In a case of first impression in Florida and the U.S., the 4th District Court of Appeals (DCA) in West Palm Beach has ruled that a police dispatcher who was propositioned once and refused constitutes “protected activity” under the Florida Civil Rights Act (FCRA) to support her claims of retaliation. The dispatcher won her claims before a Palm Beach County jury who awarded her back pay and $400,000.00 in compensatory damages. Here is what she claimed.
Tara Luscavich was a police dispatcher for the Village of Tequesta Police Department. Tara went to a party one night at one of the Village police officers’ house to celebrate his job promotion. A number of police officers were at the party including Lieutenant Gerald Pitocchelli, who was soon to be the Chief of the Department after the current Chief retired in a few months.
The Police were already there!
Tara testified in her trial that during the party a group of about eight people were sitting around a table, with Tara and Gerald Pitocchelli in the group. A male police officer “exposed himself” to the group, which “apparently he does this a lot.” Someone then passed around a dollar bill, and Tara grabbed the bill and stuffed it down her shirt! Tara exclaimed, “it’s safe in here.” Not letting a dollar get away, Lieutenant Pitocchelli stood up from the table and said, “No its not!” Pitocchelli then put his hand down Tara’s shirt, and started to “feel her” under her bra. Tara told the jury that she was “shocked” and “embarrassed” by Pitocchelli’s actions. Someone at the table then asked how it felt “down there,” and Tara uncomfortably replied that she didn’t have much to feel, to which Pitocchelli responded: “What I felt felt pretty nice.” Tara was embarrassed and got up and left the table (but not the party). (Surprisingly, the court did not find this incident to be “protected conduct” since Tara did not say anything to show that Pitocchelli’s conduct was “unwelcome”!)
Further than she wanted to go!
Tara developed a headache and went to lie down in a back bedroom with another female police officer. Tara told the female officer that she wanted to sleep so the female left and the lights were turned out. Tara was lying on her stomach and thought that she was alone. Suddenly Tara testified that she realized that someone else was in the room and Tara felt someone rubbing her back. When the person commented that “you have a nice back and such smooth skin,” Tara knew it was Lieutenant Pitocchelli! He offered to give Tara a back rub, but Tara declined and sat up on the side of the bed. Next, Pitocchelli told her that he had always been attracted to her and “I always wanted to make love to you.”
At that point, Tara told Pitocchelli,
I said, listen, I know you’re going through a hard time right now. You’re separated from your wife. You’re single. I understand that, but I am not. I am married. I have never cheated on my husband.
Undaunted, according to Tara, Pitocchelli then grabbed her hand and placed it on his crotch to show that he was ready. (Details omitted.) Tara immediately left the room and went straight to another female officer and they both left the party.
Back at work:
Tara testified that the next day at work she noticed a change in Pitocchelli’s demeanor towards her. Pitocchelli was soon promoted to Chief of the Department. Tara’s supervisor wanted to send her to a training course that would qualify her for other jobs in the department. Without reason, however, Chief Pitocchelli turned down her request to attend the training!
Nine months after the party, Tara applied for a job assisting the department’s evidence custodian. Two other employees applied for the position but Tara’s immediate supervisor told her that, in his opinion, she was the most qualified. Tara’s supervisor told the selection panel, including Chief Pitocchelli, that Tara was the most qualified candidate. When Tara’s supervisor made the statement that Tara was the most qualified, the supervisor was told that comments about Tara were “no longer needed.” Months later, Tara was passed over for another position and officers were reprimanded for talking with her while she was on dispatch duty.
Tara’s claim of unlawful retaliation survived pre-trial motions by the Village and her retaliation claim was decided by a Palm Beach County jury. Tara’s retaliation claim was brought under the Florida Civil Rights Act (FCRA). Section 760.10(7), of the FCRA states:
(7) It is an unlawful employment practice for an employer, an employment agency, a joint labor-management committee, or a labor organization to discriminate against any person because that person has opposed any practice which is an unlawful employment practice under this section, or because that person has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this section.
To establish a prima facie claim for retaliation under section 760.10(7), a plaintiff must demonstrate that: (1) he or she engaged in statutorily protected activity; (2) he or she suffered an adverse employment action; and (3) there is a causal relation between the two events.
After the jury found for Tara, the Village appealed to the District Court of Appeals. Before the appeals court, the Village argued that Tara’s claims should have been dismissed before trial because Tara had refused a one-time sexual advance by (1) communicating that she was married, (2) by communicating she had never cheated on her husband, and (3) by leaving the bedroom. Given the location of the conduct, the isolated nature of the incident, and the absence of any connection back to the Village Police Department, Tara could not establish that she had “opposed” the conduct under the FCRA. The appeals court did not buy this argument by the Village and found that her actions in response to the Chief were sufficient to show her “opposition.”
In its appeal the Village Police Department also claimed that: “(1) the Chief’s one-event sexual advances at a private party did not constitute an unlawful employment practice; and (2) the employee’s declination of the Chief’s sexual advances was not protected activity under the FCRA because it did not qualify as opposition and provided no notice to the Village.” The appeals court broke these arguments into two sub-parts: (1) one-event sexual advances do not constitute an unlawful employment practice; and (2) sexual advances at a private non-work-sponsored party do not constitute an unlawful employment practice. In reaching its decision, the appeals court noted that there were no Florida state-court opinions discussing either of the above arguments. Indeed, the 4th DCA could not find federal court decisions anywhere that addressed these issues.
The appeals court looked to federal court cases for insight on the question of whether a single incident of harassment could be enough to support a claim. The 4th DCA stated, “As the federal courts do, we give deference to the definition of “sexual harassment” by the EEOC.” The court reviewed cases and noted that most sexual harassment cases had facts that involved multiple instances of unwelcome conduct. The appeals court noted, “We could find no federal appellate opinions explicitly opining that one-event sexual conduct cannot constitute sexual harassment or core facts for a retaliation claim under Title VII.” That said, the 4th DCA applied the rationale of other cases and held that cases that involved multiple instances of contact were broad enough that “one-event physical sexual contact” was sufficient to establish an unlawful employment practice in Florida. The court ruled that even a one-event instance could be “severe and pervasive” enough to meet the federal court definition of sexual harassment. The appeals court did not agree with the arguments of the police department. As described by the 4th DCA:
The Chief not only groped the Employee’s breast in front of others, he also sexually touched her by taking her hand and placing it on his [groin]. We determine that it was for a jury to decide whether the Chief’s sexual conduct constituted ‘[u]nwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature’ within the EEOC guidelines and whether the conduct was ‘severe’ enough to impose liability on the retaliation claim. (portions omitted)
Private Parties:
The court also addressed the argument that harassment at a non-work function was not actionable. For reasons similar to the one-event argument, the appeals court found that conduct away from sanctioned work functions are covered. Here again, the 4th DCA noted that most of the federal cases deal with fact patterns involving instances of verbal or physical sexual behavior by a supervisor at a jobsite or off-premises work event. “None of the federal opinions specifically address an argument about how the location or event context of the sexual behavior impacts the analysis.” Looking at the facts in this case, however, the appeals court was satisfied that the fact that the party was not a work sanctioned event made no difference. There were many police department employees present at the party who observed the conduct around the table.
A Surprise Twist!
Despite finding that one-event of harassment was enough, and that conduct at a private party was actionable, in a surprising twist at the end of the decision, the 4th DCA granted a new trial to the police department! Why, the police department also raised on appeal that the trial court made a mistake in the language given to the jury to use to decide if Tara had proven her claim. The instruction given by the trial court allowed Tara to win her claim by showing that she declined the Chief’s advances and that this was not “completely unrelated” to the adverse employment actions Tara encountered. Since the U.S. Supreme Court changed the causation standard for Title VII retaliation claims in a case in 2013 to “but-for causation,” the court’s instructions were wrong and required a new trial on Tara’s retaliation claim! Village of Tequesta v. Tara Luscavich, Case No. 4D16-2432 (Fla. 4th DCA, March 7, 2018).
Takeaway: The Village of Tequesta website reports that Gerald Pitocchelli is no longer the Chief of Police.
This decision clarifies two questions that employers have about sexual harassment: 1.) is a single incident enough to be severe and pervasive? and, 2.) can victims use incidents that occur at non-work related meetings? The court answered both questions in the affirmative. Supervisory training and a culture of respect are keys to the avoidance of problems.
Protecting Confidential Information
Court Dismisses Claims of HR Manager fired for Downloading and E-mailing Company documents to Home
By Tom Harper, The Law and Mediation Offices of G. Thomas Harper, LLC (Tom@EmploymentLawFlorida.com)
A recent decision by the federal appeals court over Florida deals with the sticky situation of a senior Human Resource official at an automotive plant who believed that he was being directed to violate the law by reducing the number of African American and older workers working at the plant. After complaining, the HR manager filed his own charge of discrimination with the EEOC. The employer realized that the HR Manager had access to a lot of confidential information, maybe even records and information that could be used by the HR Manager in his EEOC Charge. Can he do that? What tools can an employer use to prevent having its own inside information used to make a case against the employer? Here is what happened at Kia Motors:
Friends from Toyota
Robert D. Tyler was hired by the Kia Motors Manufacturing plant in 2007 as its Human Resources Manager, reporting to an old friend, Randy Jackson. Tyler had worked in Human Resources for years, including many years with Randy Jackson at Toyota Motors. Randy Jackson was Kia’s V.P. of Human Resources and Administration and he was Tyler’s immediate supervisor.
At Kia, Mr. Tyler was responsible for attracting and retaining quality employees. He also was responsible for establishing “systems” to monitor affirmative action compliance by Kia. Under his supervision, Tyler set-up a database to track the required EEO-1 reporting data. In addition, Tyler was responsible for providing human resources support for up to 2000 team members at the Kia plant. Over 4 years with Kia, Tyler received several promotions and increases in his salary as well as bonuses.
According to Tyler, after he began work at Kia Randy Jackson instructed him to track every applicant’s sex, race, and age in pre-employment assessments to control the number of employees hired who were African-American or over the age of fifty. Tyler claimed that he
complained to Jackson on several occasions that these directions were illegal.
Instructions to Tyler
According to Tyler, Jackson and other “Korean coordinators” at Kia told him that they did not want to repeat the minority population concerns that another vehicle manufacturer had. Tyler claimed that he was instructed to exclude the hiring of production team members in the 50+ age category and to reduce the number of African-Americans that were being hired due to the high level of minority vs. non-minority representation at the plant. Tyler claimed that Jackson told him that he could not let Kia get into the same situation as its “sister plant” which had approximately 60% African-American workers! In order to comply with these directions, Tyler was “forced” to keep a chart of each candidate’s age, race, and sex to determine which candidates would receive job offers.
In late September of 2010, Tyler decided that he couldn’t just go along anymore. He sat down and authored a memo which outlined his concerns regarding Kia’s alleged discriminatory hiring practices, and sent it to Kia officials. After Kia management appeared not to be interested in Tyler’s concerns, he filed an EEOC charge in November of 2010. (The court noted that in January of 2011, African-Americans comprised approximately 50 to 60 percent of Kia’s team members.)
The Mutiny Begins
About this same time (November 2010), one of Tyler’s own employees in Human Resources, Andrea Gogel, filed a charge of gender discrimination against Kia with the EEOC. Gogel claimed in her charge that she had been denied the position of Head of the Department of Team Relations because of her gender. Before this happened, Tyler did not notify anyone in Kia’s upper management that Gogel was considering filing an EEOC charge, since he “didn’t feel it was his place to discourage her.”
A few days later, on November 19, 2010, Tyler filed his own charge with the EEOC alleging discrimination based on national origin and retaliation in violation of Title VII. In his charge Tyler claimed that he had reported widespread and systematic discrimination to the V.P. of Human Resources but management at Kia responded by attempting to force him to retract his report and he was then excluded from weekly meetings with the Korean President of Kia. For this reason, Tyler claimed in his own charge that he had been discriminated against due to his national origin (American) in violation of Title VII, and that he had been retaliated against due to his opposition to acts made unlawful by Title VII.
KIA Policies:
As described by the court, Kia relied on “trade secrets and proprietary information in conducting its business,” and therefore Kia was “highly sensitive” to any business information being disclosed to third parties outside of Kia. To protect its proprietary information, in 2008, Kia began restricting the copying of files, and Tyler was aware of this restriction. Employees were thus prohibited from using any “peripheral access device,” which included thumb and flash drives, unless granted specific permission to do so.
Tyler was part of the approval process of Kia’s Information Technology (“IT”) User Policy, which became effective in 2009. While at KIA, Tyler signed a confidentiality agreement described by the lower court as a “form stating that [he] understood all information on Kia’s networks shall not be copied.”
Kia’s IT User Policy stated,
“The electronic systems shall not be used to send or receive unauthorized copyrighted materials, trade secrets, or other proprietary information without prior authorization. . . . Team members who violate[] this policy or use the system to violate local, state, or federal laws will be subject to corrective action up to and including termination, and may be held liable in a civil action or prosecuted under applicable criminal law.”
Indeed, the evidence presented to the court showed that Tyler had approved other employees’ access to Kia’s
electronic systems, using a form entitled “Network & Computer System Access Form.” This form included the following language:
“The [Kia] network belongs to [Kia] and may be used only for official [Kia] business purposes…. [A]ny and all information/data stored or accessed on the [KIA] network is the sole property of [KIA] and shall not be copied, or communicated to unauthorized persons….. [T]he communication of [KIA] trade secrets to unauthorized individuals is expressly prohibited and may result in termination of employment. . . . All copies of [KIA] materials made in violation of this policy will be immediately returned to [KIA] upon termination of employment.”
Suspicion Begins:
An employee in the Human Resources Department at KIA complained to Randy Jackson in early December of 2010 that Mr. Tyler had requested some detailed confidential employee information to be given to him in a computer report. This information made Randy Jackson concerned that Tyler might access documents to use to support his own charge of discrimination against Kia. As a result, on December 3, 2010, Tyler was asked to and signed an agreement in which he agreed that he would not discuss his EEOC charge or similar claims against KIA with Team Members and that he would not use his position in HR to solicit or influence Team Members to make claims against KIA. Further, this agreement provided that Tyler would not seek access to any files or documents that relate in any way to the merits of his EEOC claim.
Ms. Gogel was also asked to sign this agreement, but she refused! After Gogel refused to sign, Randy Jackson asked the IT Department to review the downloads on that day. The IT Department found that Tyler had downloaded several files that day. In particular, the IT department discovered that, on the morning on December 3, Mr. Tyler downloaded fifteen (15) files which included both personal and corporate documents. When questioned regarding these documents, Tyler responded that he had downloaded personal information from his work computer. In response, Jackson issued a new company computer to Tyler. However, two weeks later in mid-December Tyler downloaded 44 additional documents. IT found out about these downloads and Kia immediately began an investigation. Tyler was placed on suspension this same day.
On December 24, 2010, Kia’s counsel sent an email to Tyler’s lawyer to schedule the return of all Kia data that Tyler had in his possession. Tyler returned 15 electronic files to Kia on December 29, 2010, eleven of which were Kia documents while four were personal documents. Tyler had said that he had returned all of the files in his possession, but Kia IT records revealed that Tyler had failed to account for four (4) electronic files downloaded on December 3 and another four (4) downloaded on December 14 and15. As a result, Jackson conducted a review of Tyler’s emails to determine whether any other files had been taken. Jackson discovered that Tyler had forwarded literally hundreds of emails and documents from KIA networks to his personal e-mail accounts between June 1 and December 15, 2010!
Tyler’s employment with KIA was ended on January 6, 2011. In his termination letter, Tyler was instructed to return all KIA files still in his possession. However, he failed to comply, and KIA filed a complaint against him in state court to retrieve its files. A year later in 2012 while Tyler’s EEOC charge was still being investigated by the EEOC, the state court issued a permanent injunction and determined that Tyler’s removal of the records was not authorized. The state court ordered Tyler to deliver to KIA within ten (10) days all Kia documents in his possession. Tyler thereafter returned more than 20,000 files to Kia on a thumb drive!
After the EEOC issued a right to sue in 2014, Tyler sued Kia claiming that Kia had retaliated against him in violation of Title VII when it suspended him and then fired him due to the fact that he reported age, gender, and race discrimination to Kia and filed a charge of discrimination against the company.
Court’s Analysis:
After discovery was completed, Kia asked the court to dismiss Tyler’s suit as insufficient to prove retaliation. A federal judge assigned Kia’s request to a Magistrate Judge for a decision. The Magistrate Judge found that Tyler had presented insufficient evidence that Kia’s reasons for his termination were a pretext for discrimination. The federal District Judge agreed with the Magistrate Judge’s decision and dismissed Tyler’s claims. Tyler then appealed to the appeals court in Atlanta, the federal appeals court over Florida.
The appeals court agreed with Tyler that Title VII prohibits an employer from retaliating against an employee for “opposing any practice” made unlawful by Title VII. To prove his case, however, Mr. Tyler was required to first establish a prima facie case “by showing that: (1) he engaged in a statutorily protected activity; (2) he suffered an adverse employment action; and (3) he established a causal link between the protected activity and the adverse action.
All the courts, including the federal appeals court, found that Tyler had established a prima facie case of retaliation. At this point in the analysis, the burden of proof then shifted to Kia to “articulate a legitimate, non-retaliatory reason for the challenged adverse action.” The court found that Kia had met its burden by showing its policies to protect its confidential information and that Tyler did not have permission to email confidential Kia information to his personal email account or download Kia documents to his personal computer.
Once Kia met this burden, the inference of retaliation by Kia “drops out of the case” [analysis], and Tyler was required to bring to the court evidence that Kia’s reasons for their actions were unworthy for a jury to believe.
To prove “pretext” Tyler argued that Kia had authorized him to download and copy company documents throughout his employment. But to support this claim, the court believed that Tyler had made only “conclusory statements” to support his claims. The appeals court found, however, that, “…Mr. Tyler does not cite to the record to support this argument. Moreover, he has not tried to cast doubt on other evidence that tends to show that his actions were unauthorized. He has not provided any evidence, however, demonstrating that he was authorized to copy (or download) those records onto his personal computer or to blind copy sensitive matters to his personal email address.” Since Tyler failed to show that Kia’s policies, motives and reasons were pretextural, the appeals court affirmed both of the lower court judges and dismissed Tyler’s case. Robert D. Tyler v. Kia Motors Manufacturing of Georgia, Inc., Case No.16-16431 (11th Cir. July 12, 2017)
Takeaway
Employees with access have the potential to take documents quickly and covertly. Company “Trade Secrets” in Florida are protected even without a signed agreement by the employee. This case shows how IT policies, consistently enforced, can be used to protect an employer, even in the sensitive case like here where a senior official files his own charges against his employer.
Disability Discrimination
Miami Judge Rules that Winn Dixie’s Website Violates the ADA
By Tom Harper, The Law and Mediation Offices of G. Thomas Harper, LLC (Tom@EmploymentLawFlorida.com)
After a non-jury trial, on June 12 Federal District Judge Robert N. Scola, Jr. in Miami has entered an Order finding that Winn-Dixie’s website violates the Americans with Disabilities Act (ADA) because the site was not accessible to a vision impaired customer. For years disabled individuals have been visiting Florida retail businesses and filing suits over ADA accessibility violations. This may be the next big area of attack.
Juan Carlos Gil is a long time Miami resident who attended the Florida School for the Deaf and Blind in St. Augustine, graduating in 2002. Mr. Gill is visually impaired, has cerebral palsy and is legally blind. He lives in southwest Miami near one of Winn-Dixie’s stores. While he was in school in St. Augustine he was in a vending program and he visited a Winn Dixie with a group of students to learn how to use Winn Dixie to buy products for the vending business. Back in Miami, he began shopping at a nearby Winn-Dixie because of their low prices and convenience to his home. He used Winn-Dixie for groceries and their pharmacy and signed up for their Rewards Program.
Gil listened to Winn-Dixie ads on TV and heard that someone could access coupons to save on purchases and fill prescriptions on-line. Friends in several blind organizations told him that Winn- Dixie’s website was accessible. Mr. Gil is able to use a computer but cannot read the screen. He can’t use a mouse, but he can use a keyboard. To use his computer he uses special access software designed to assist blind persons to navigate and use websites. Gil uses JAWS screen reader software. There are a number of screen reader programs, but Mr. Gill uses JAWS most of the time. The screen reader software tells the user what is going on at the website. Gil told Judge Scola that he used the “tab” key or the “shift + tab” keys to learn what he needs to type in to use the site.
Gil told the court that when he accessed the Winn-Dixie website, some tabs worked but 90% of the tabs did not work. The court summarized Mr. Gil’s testimony as follows:
Once you enter the website, you usually hit tab until you find a combo box like a box announcing “store hours” or “pharmacy.” When the website is interfacing properly with the JAWS, you would then press enter and that would take you into the specific sub-category. But, when he (Gil) tabbed through the website he could not access any of the sub-categories. He spent about a half an hour on the website but was not able to access any information including store locator. On other websites, he has been able to access store locations. By pressing “control s” most websites take you to a search box in which you can type the specific information you are looking for. But this was not available on the Winn-Dixie website.
Frustrated that the website did not work with JAWS, Gil believed that he did not have access to money saving coupons; He also could not order his prescriptions on line. Gil testified that when he went into the pharmacy area of the store in person and asked questions about his prescriptions, he was uneasy because he did not know who was around and listening to his conversation. Gil sued Winn-Dixie claiming that the company’s website was a public accommodation and that, due to his vision disability, he had been denied the company’s goods and services in violation of the ADA. After a non-jury trial in Miami with just three witnesses, all of which were found by the court to be credible and forthcoming, Judge Scola agreed with Juan Carlos Gil.
In reaching his decision, Judge Scola acknowledged that this issue has not been decided by the federal appeals court over Florida. He also pointed out that there is currently no federal organization that “mandates [the] particulars of website accessibility.” Instead, a consortium of private groups has contributed to the WCAG (Web Content Accessibility Guidelines) so that that websites can be accessible to all. Although not officially adopted, the court noted that the WCAG Guidelines “had virtually been adopted” by the federal government in January of this year when the Access Board refreshed its comments on Section 508 of the Rehabilitation Act.
Rodney Cornwell, Vice president of IT, Application and Delivery for Winn-Dixie told Judge Scola that the company was building an ADA policy, but did not have one as of the trial. He admitted that, in his opinion, it was feasible for their website to be modified and that the company was taking steps to modify their website to make it accessible to the disabled. Mr. Cornwell explained that the company had set aside $250,000.00 to make its website accessible to screen reader software. At trial, Chris Keroack, an expert of website accessibility testified that he believed that his firm could update and make Winn-Dixie’s site accessible for $37,000.00.
Winn-Dixie operates 495 stores throughout the southeast. Before the court there was no dispute that Mr. Gil was disabled or that Winn-Dixie’s physical store locations are public accommodations. Title III of the ADA prohibits a place of public accommodation from discriminating by denying a person with a disability the full enjoyment of goods and services. The testimony revealed that Winn-Dixie does not make sales through their website but customers can access digital coupons and then link that coupon, through their Rewards card so that when they buy the item at a store, the customer is credited automatically with the coupon value.
One issue before the court was whether Winn-Dixie’s website was subject to the ADA either as a service of a public accommodation or as a public accommodation itself. The court reasoned that since Winn-Dixie’s website was “heavily integrated” with their physical store locations, it operated as a “gateway” to their physical store locations. As a result, their website was a service of a public accommodation and covered by the ADA. As a last element of the analysis, the court found that the requested website modifications were reasonable. The court noted that Winn-Dixie had presented no evidence at trial to show that it would be unduly burdensome to make their website accessible to the visually impaired.
Having found a violation of Title III of the ADA, the court turned to the remedy. Prevailing parties under Title II are not entitled to recover damages, but may recover attorneys’ fees, court costs and injunctive relief. Judge Scola asked the parties to try to agree on an amount for Winn-Dixie to pay Mr. Gill’s lawyers as a reasonable fee for prevailing in the suit. He gave the parties until June 30 to propose language for an injunction. The injunction will set a date by which the company must make changes to make its website accessible to the visually impaired. Juan Carlos Gil v. Winn-Dixie Stores, Inc., Case No. 16-23020-Civ-Scola (S.D. Fla., June 12, 2017).
Takeaway: Florida businesses that have their websites connected with a physical store location should study this decision to decide if your website is covered by the ADA. (Send an e-mail to Tom@EmploymentLawFlorida.com for a copy.) If you are you should have your IT people make your website accessible. This opens the door to the next big wave of suits attacking businesses for lack of access by disabled persons. .
Public Sector Employers:
Florida whistle-blower protection extends to those who report misconduct as a part of their job description
By Tom Harper, The Law and Mediation Offices of G. Thomas Harper, LLC (Tom@EmploymentLawFlorida.com)
Florida has two whistleblower laws, a private-sector law and a public-sector whistleblower law. The two laws have different requirements. A state court judge in Miami dismissed a whistleblower claim filed by a city employee because the employee’s job was an Independent Auditor General
(“IAG”) for the City and the court ruled that the public-sector law did not apply to persons whose job was to report on misconduct and corruption in city government. The employee, however, appealed the dismissal of his case and the Third District Court of Appeals agreed with the employee and found that the whistleblower law did apply to someone in his job position.
Victor Igwe was hired under a contract to serve as the Independent Auditor General (“IAG”) for the City of Miami. As part of his job, Mr. Igwe disclosed to the City Commission and the City’s Mayor several instances of alleged misconduct between 2009 and 2011, including a report finding that the City had violated its financial integrity principles by engaging in improper inter-fund borrowing and a report that the City had improperly transferred restricted revenues into the City’s general fund. Mr. Igwe also issued a report to the City Commission and the City’s Audit Advisory Committee disclosing that the City Attorney had overpaid herself!
In addition to these reports, Igwe was also subpoenaed to testify by the Securities and Exchange Commission (SEC) and the FBI, who were both investigating the city’s conduct. Igwe complied with the SEC’s subpoena and testified during their investigation. When the City decided to not renew Igwe’s contract as IAG, Igwe sued the City claiming that the City had retaliated against him by declining to renew his contract in response to his issuance of the written reports and his cooperation with, and testimony before, the SEC.
Background
Florida’s public-sector whistleblower law was passed to prevent government agencies and their independent contractors from taking retaliatory action against an employee who reports violations of law on the part of a public employer (or their independent contractor) that creates a danger to the public’s health, safety, or welfare, or who discloses information of the improper use of governmental office, waste of funds, or other abuse or neglect of duty on the part of a government agency, public officer, or public employee. The law provides, in part, that, “[T]his section protects employees and persons who disclose information on their own initiative in a written and signed complaint.” The law protects five (5) different categories of persons:
Those who are requested to participate in an investigation, hearing, or other inquiry conducted by any agency or federal government entity;
- Those who refuse to participate in any adverse action prohibited by the whistleblower law;
- Those who initiate a complaint through the whistleblower’s hotline or the hotline of the Medicaid Fraud Control Unit of the Department of Legal Affairs;
- Employees who file any written complaint to their supervisory officials, and
- Employees who submit a complaint to the Chief Inspector General in the Executive Office of the Governor or to the employee designated as agency inspector general, or to the Florida Commission on Human Relations.
The Miami Court
Before the trial court in Miami, the City argued that the words “on their own initiative” in the whistleblower law meant that any disclosures under the law must be voluntarily offered and that disclosures made while performing the duties of one’s job are not voluntary. As a result, the City told the court that Mr. Igwe’s disclosures were not protected by the law since he was required to make the disclosures in the course of doing his job as the IAG for the City. Surprisingly, there were cases outside of Florida that followed this interpretation and the trial judge bought the city’s argument and dismissed Igwe’s case.
The trial judge found that Igwe’s disclosures were not voluntary since his reports of misconduct consisted of “things that the job obligated him to report,” and his cooperation with outside agencies like the SEC and the FBI were also a part of his job as IAG. Case dismissed. But Igwe appealed this decision and, in October, a panel of three (3) judges from the Third District Court of Appeals disagreed with the city’s interpretation of the law and reversed the lower court decision.
Reasoning
In reaching its decision, the appeals court first noted that the federal court decisions that were relied on by the trial judge had been overruled by changes in the federal whistleblower law. After a federal court found that the federal whistleblower law did not apply if the disclosure was part of the employee’s job, Congress changed the law to read that an employee is not excluded from whistleblower protection simply because the disclosure is made during the normal course of duties. Thus, the appeals court found the trial judge was in error in relying on a case that had been changed by Congress.
Reviewing the facts and reasoning of the lower court, the 3rd DCA found that Igwe’s disclosures to the City Commission were covered under the fourth category of persons covered by the Florida law (see above). The fourth category covers “employees who file any written complaint to their supervisory officials.” Further, Igwe’s disclosures to the SEC were covered under the first of the above categories: persons who are requested to participate in an investigation, hearing, or other inquiry conducted by any agency or federal government entity.
The appeals court did not buy the city’s reasoning that disclosures made while performing the duties of one’s job were not voluntary, and thus Igwe’s disclosures were not protected by the law since he was required to make the disclosures to do his job as the city’s IAG. Instead, the appeals court looked to the reasons for the law that were included in the language and found that excluding someone because the conduct was his job responsibility was inconsistent with the law’s purpose. The purpose of the law was to prevent employers from taking retaliatory action against “any person” who discloses improper governmental conduct by an agency, public officer, or public employee. The court accepted the common and normal meaning of “any person.”
The appeals court also reasoned that laws like the whistleblower act were to be “liberally construed in favor of granting access to protection from retaliatory actions.” These factors led the court to reject a narrow reading of the law and conclude that all persons, even those whose job is to report on waste and corruption in government, are protected under Florida’s public-sector whistleblower law. Victor Igwe v. City of Miami, Case No. 3D15-1307 (Fla. 3DCA, October 13, 2016).
Conclusion: This decision broadens this protected class for employees who work for public entities. We hire and set up job positions to serve as a watchdog for waste and unethical actions. These jobs now will clearly be covered by the whistleblower law and public employers will need documented performance reasons for discipline and termination for persons who play these roles.
Loose Lips Sink Companies: Florida Court Finds Disclosure of Employee’s Confidential Medical Information Make FMLA Interference and Retaliation Claims
By G. Thomas Harper, The Law and Mediation Offices of G. Thomas Harper, LLC (Tom@EmploymentLawFlorida.com)
A federal court in Ft. Myers has issued a decision that broadens FMLA interference and retaliation to include the release of an employee’s confidential medical information. An employee developed health problems and asked for a medical leave under the Family Medical Leave Act (FMLA). As part of his leave request, he submitted to his employer “sensitive and detailed medical information” about a very personal health issue. The employer, the Collier County Board of County Commissioners (Board of Commissioners), granted the FMLA leave request. When the details of the employee’s personal health issue became known at work, however, the employee sued. The employee made claims for interference and retaliation under the FMLA because his employer breached his right to confidentiality under the FMLA. A Florida court has ruled that the disclosure of the employee’s personal health information by a supervisor constituted unlawful interference and retaliation in violation of the employee’s FMLA rights. Here is what happened.
Scott Holtrey has worked for the Collier County Board of County Commissioners for the past 10 years. He works as a full-time field supervisor of aquatics. In June of 2015, Mr. Holtrey developed a chronic and serious health condition with his genito-urinary system. He was treated by a physician and applied for leave under the FMLA. As part of the leave process, Holtrey submitted to his employer the details of his personal medical condition supporting his request for leave. The Board of Commissioners approved his leave request.
After submitting his personal health information (PHI) to the Board of Commissioners, Mr. Holtrey claimed that a management-level employee disclosed his medical condition to his coworkers and subordinates at a staff meeting that he did not attend. Without Holtrey’s knowledge or approval, other employees were told about the impairment of his genito-urinary system. When Holtrey came back to work, he claimed that his supervisor immediately began quizzing him as to why he took leave and what was wrong with him. Holtrey claimed in his lawsuit that his conversation with his supervisor occurred behind closed doors and that he had communicated the details of his medical condition only so his supervisor would know that he may need intermittent medical leave and could need some accommodations when working.
According to Holtrey, about eight (8) coworkers and subordinates learned of his condition. Holtrey claimed that his coworkers then approached him and inquired about his condition and made fun of him. His fellow employees even made jokes and obscene gestures about his medical condition in front of him! This conduct, he felt, altered the terms and conditions of his employment with the Board. The release of his PHI to managers and employees, and the joking and gestures subjected Holtrey to a hostile work environment. Holtrey complained to management and asked the Board to correct what had happened, but his employer failed to remedy the situation.
After Holtrey filed suit, the Board of Commissioners asked the court to dismiss his suit since the Board had granted Holtrey the leave that he requested. It is settled law that the FMLA authorizes only two types of claims – interference and retaliation. Since Holtrey received his leave his interference claim should be dismissed, correct? The issue for the court, however, was whether confidentiality is a right under the FMLA and whether Holtrey’s employer interfered with that right. Holtrey argued to the court that the release of his medical information violated the FMLA even though the Board gave him the medical leave that he requested. Holtrey based his argument on the fact that the regulations for the FMLA (29 C.F.R. § 825.500(g)) require that records and documents relating to medical certifications, and which are created for purposes of FMLA, should be maintained as confidential medical records separate from the employee’s personnel file.
- S. District Judge Sherri Polster Chappell found that the disclosure of Holtrey’s PHI was enough to make a claim of FMLA interference and the court refused to dismiss his interference claim (Count I of his suit). In reaching her decision, the court pointed out that it is still unsettled whether the release of PHI gives an employee the right to file a private lawsuit over the disclosure of their PHI. As to Holtrey’s interference claim, however, although other courts have held that disclosure does not constitute an interference claim, in this case the FMLA regulation requiring the confidentiality of his medical records was enough to prevent the dismissal of Holtrey’s interference claim (Count I) under the FMLA. As a result, The Motion to Dismiss Count I by the Board of Commissioners was denied.
Then the court turned to Holtrey’s retaliation claim, Count II of his suit. The court looked to the FMLA language that prohibits an employer from “discharg[ing] or in any other manner discriminat[ing] against any individual” for asserting his rights under the FMLA. “[T]o succeed on an FMLA retaliation claim, an employee must demonstrate that [his] employer intentionally discriminated against [him] in the form of an adverse employment action for having exercised an FMLA right.” This is one of three elements an employee must show to support a retaliation claim. The three are: (1) that the employee engaged in activity protected by the FMLA; (2) that the employee suffered an adverse employment decision; and (3) the adverse decision was causally related to the protected activity.
Here, Judge Chappell was of the opinion that the repeated and frequent jokes and obscene gestures by co-workers was sufficient to be a “materially adverse [employment] action.” The standard applied by the court to decide if an employment action was “materially adverse” was resolved by asking if the conduct “might have dissuaded a reasonable worker from making or supporting” a claim under the FMLA. Here, the court determined that these facts were enough to meet a required element of retaliation-that it caused an adverse employment action. “At this early stage of litigation, the Court is hard-pressed to find that disclosing confidential medical information about an individual’s genito-urinary system to that employee’s coworkers and subordinates does not materially affect his working conditions.” The Board’s request to dismiss Count II of Holtrey’s suit was also denied. Scott Holtrey v. Collier County Board of County Commissioners, Case No: 2:16-cv-00034-SPC-CM (M.D. Fla., January 12, 2017)
Takeaway: This is the first case in Florida finding that the disclosure by an employer of PHI constitutes interference and retaliation of FMLA rights. Holtrey’s case is still in discovery and may go to trial. It is also possible that this issue will be appealed to the federal court of appeals over Florida, the Eleventh Circuit in Atlanta. In any event, employers should put into place procedures to make sure that PHI is kept confidential and supervisors are trained on FMLA rights.
Discrimination Claims
When is a Settlement Not a Settlement?
By Tom Harper, The Law and Mediation Offices of G. Thomas Harper, LLC (Tom@EmploymentLawFlorida.com)
P.F. Chang’s China Bistro, Inc.’s (“P.F. Chang’s”) received a letter from a Florida employment law firm who represented one of Chang’s current employees, a wok cook at Chang’s Sawgrass Mills restaurant . The letter claimed that their client, Kareem Williams, who was still employed, had been the victim of harassment and discrimination. Over two months, the lawyer for P.F. Chang’s negotiated with Mr. Williams’ lawyer and reached a settlement, or so P. F. Chang’s thought. When Kareem Williams filed suit on April 25, 2016 against P.F. Chang’s, Chang’s sued Williams back (called a countersuit) seeking to enforce the settlement agreement it had reached with Williams’ lawyer. Here is what happened.
Changing His Mind and Changing His Claims:
Kareem Williams began working for Chang’s in the fall of 2014. At the end of January this year, Williams was still working as a wok cook at Chang’s and he went to a lawyer complaining that he was a victim of harassment and discrimination. Williams hired Jeffrey Del Rio, Esq. with the Spielberger Law Group who wrote Chang’s claiming that Mr. Williams had been called names like “faggot” and the “N” word by two other kitchen employees because of his sexual orientation. William’s lawyer claimed that Kareem had reported the conduct of his co-workers to the Kitchen Manager who took no action.
During February and March of this year the lawyer for P.F. Chang’s negotiated a settlement with Williams’ lawyer, Del Rio. While these discussions were ongoing, Kareem Williams was suspended from his job. On February 29, Mr. Del Rio sent an e-mail to Chang’s lawyers stating that, “Mr. Williams indicated that if he [could] be paid for the time in which he [had] been suspended, he would be agreeable to a resolution at the $6,500 figure.” By early March the e-mails show that the lawyers agreed to settle Williams complaints by paying Williams $3,900.00 plus the scheduled time that Williams lost while suspended–$632.00. In addition, Chang’s agreed to pay Williams’ lawyers $2,600.00. The total settlement was about $7,132.00. Williams’ lawyer agreed to the terms and Chang’s thought they had a settlement!
Chang’s lawyers prepared a written settlement agreement, had it signed by Chang’s officials and overnight mailed three (3) settlement checks with the signed agreement to Del Rio. Williams, however, refused to sign the agreement and eventually hired another lawyer who filed suit in April in federal court in south Florida claiming race discrimination. With a new lawyer, Williams’ suit was for race discrimination-not gender discrimination or sexual harassment as claimed in the January letter. Instead, Mr. Williams, who was born in St. Croix and is African-Caribbean by ethnicity and/or race, claimed that the line cooks at the restaurant were predominantly of African descent, while the management team at Sawgrass Mills was predominantly white. In his suit, Williams claimed that he was treated differently on account of his race and denied promotional opportunities regularly given to white employees. Williams claimed that his kitchen manager had lost his promotional test and then refused to allow Williams to re-take a proficiency test that was required by Chang’s for advancement.
Chang’s answered the suit by filing an answer denying Williams’ claims and Countersuing Williams for enforcement of the settlement agreement reached in March. P.F. Chang’s then asked the federal court in south Florida to grant its motion to enforce the settlement that Del Rio reached on behalf of his client at the time, Kareem Williams. The settlement agreement that Williams refused to sign provided that Williams released Chang’s “… from all and any claims arising from Williams’ previous employment or separation of employment with P.F. Chang’s.” Chang’s argued that the two parties reached a “meeting of the minds” on the essential terms of the settlement and that Del Rio spoke for Williams who then wrongly refused to sign the agreement. In its motion, Chang’s asked the court to find that a settlement agreement had been reached and Williams had breached the agreement by suing Chang’s. (Although three checks were sent with the agreement, and the agreement had been signed by Chang’s, there was no evidence presented that the checks were ever cashed. In fact, the cover letter enclosing the checks stated, “Please do not cash the attorney’s fee check until you receive confirmation from Mr. Williams that he has accepted the settlement payment.”)
Court Won’t Force Settlement:
In deciding whether the settlement agreement should be enforced, the court carefully analyzed all the e-mails and communications between the lawyers. The court found that Chang’s had the burden to establish a “meeting of the minds” or mutual assent to certain and definite terms. “While uncertainty as to an agreement to nonessential or small items will not preclude a finding of an enforceable settlement, the agreement must be sufficiently specific and mutually agreeable as to every essential element,” said the Court.
P.F. Chang’s argued that the settlement was enforceable despite Williams’ failure to sign the agreement because Williams’ lawyer had clear and unequivocal authority to enter into the agreement for Williams. The court, however, found that the hiring of a lawyer to represent a client was not enough to confer on the lawyer implied or apparent authority to compromise and settle the client’s claims. The court noted that even where the lawyer believed that he had authority to settle, that belief was not enough. By its research the court found that in Florida cases, the courts “…have been very stringent in what they find to be a ‘clear and unequivocal’ grant of authority,” to the lawyer. After studying all the correspondence over the settlement negotiations, the court believed that the correspondence did not show that Mr. Del Rio had “clear and unequivocal” authority to enter into the settlement agreement. As a further basis for finding that Chang’s had not met their burden of proof, the court also looked to the fact that Chang’s had twice asked Del Rio to have Williams sign the agreement. The court concluded that the parties thought that Williams’ signature was necessary to complete the settlement. Kareem Williams v. P.F. CHANG’S CHINA BISTRO, INC., Case No. 16-cv-60906, (S.D. Fla, August 16, 2016).
Takeaway: Here in Florida, courts are hesitant to “force” a settlement upon a party, even when all the terms have been agreed upon by lawyers representing the respective sides. Your editor had a three (3) day evidentiary hearing in Tampa a few years ago in a similar case with facts even more favorable for the employer. In that case also, the former employee refused to sign the final agreement and fired his lawyers. The lesson learned is that, until the (former) employee signs, you likely do not have a settlement.
Wage and Hour Law
Employee vs. Trainee? Tampa car dealership learns the difference and escapes liability
By Tom Harper, The Law and Mediation offices of G. Thomas Harper, LLC (Tom@EmploymentLawFlorida.com)
Imagine you have a worker who is nearing retirement. His son agrees to learn the position in anticipation of taking over when his father retires. You don’t pay the worker’s son, even though he performs some work for you. Is the worker’s son your employee? Read on to find out.
Background:
Scott Axel’s father, Michael, was a successful automobile Wholesale Manager at a Tampa car dealership. Michael’s son, Scott, had some problems and need to work. In December of 2012 he applied for a job at his father’s dealership, but he was not offered a job. In 2010, Scott had been arrested for driving while intoxicated. The next year, Scott was hired and worked for Enterprise Rent-A-Car, but was fired by Enterprise for unsatisfactory attendance. At that time, Scott had a drug problem, and he later went into rehab for eight months.
In January of 2013, Scott’s father approached Gary Gordon, the General Manager for Fields Motorcars (“Fields”), and asked if Gordon would hire his son, Scott. Mr. Gordon knew about Scott’s history and he told Michael that he was not hiring at the time. But Gordon told Michael that Scott could work for him (Michael) to begin to learn his job for the day when Michael retired. Michael asked Gordon if Fields would split his compensation between he and his son, but Gordon again said “No”, but Michael could pay his son himself. Thereafter, Scott started showing up to “work” every day for Michael at the dealership, even though Michael did not pay Scott for his work, but instead allowed Scott to live at his home and provided him with financial support.
Scott began to “shadow” his father at the dealership. For over a year Scott located and researched cars, analyzed their condition, attended auctions, transported cars between dealerships, and even signed between 60 and 150 purchase/sales agreements on behalf of Fields Motorcars! Since he was around the dealership daily, he began helping other Field’s employees by posting cars for sale on Craigslist, eBay, and TradeRev for the Used Car Manager at Fields.
Scott was told that he would take over his father’s position when Michael retired, and Scott began to tell employees this. Scott testified that Mr. Gordon even told him that if he learned his father’s job, “we’ll try to ease you in here” and that there was a good chance that Scott could take his father’s position when and if he (Michael) retired. But Michael did not retire. Instead, Michael was “fired” by Fields in May of 2014 and, you guessed it, Scott stopped working also and Scott sued Fields for unpaid wages. Scott sued claiming: (1) Fields had failed to pay him minimum wages under the Fair Labor Standards Act (“FLSA”); (2) Fields had failed to pay him (Scott) minimum wages under the Florida Minimum Wage Act (“FMWA”); (3) Fields had failed to pay him overtime under the FLSA; (4) and state law claims for “quantum meruit” and (5) “unjust enrichment.” These two claims, “Quantum meruit” and “unjust enrichment” are legal theories recognized in Florida that could have allowed Scott to receive compensation based on his claim that he had provided services of value to Fields without compensation and, as a result, was owed money by Fields.
Court’s Decision:
After Scott Axel filed his suit, discovery began and Fields filed a motion with the court asking that the court dismiss the suit based on the fact that Scott was not an “employee” of Fields, and therefore Fields was not responsible for paying wages to Scott. The court viewed the case as an unusual situation since Scott was “working” at the dealership with a promise that he would replace his father when he retired from his job. Indeed, the court described the claim as a case where an employee asks to bring his son to work to learn the employee’s job in order for the son to possibly take over that job one day! Is that an employee?
In deciding the case, the court looked to other decisions and found that most cases like this are analyzed either as “employee vs. independent contractor” or as “employer vs. joint employer” with another entity. But neither of those concepts seemed to fit this situation. Instead, the court looked to “employee vs. trainee” and found that analysis to be the closest to this situation. To make its decision, the court looked to a decision by the federal appeals court over Florida that applied seven factors in deciding whether a person was an “employee” or a “trainee.”
Those seven factors are:
- The extent to which the “intern” or “trainee” and the employer understood that there was no expectation of compensation. “Any promise of compensation, express or implied, suggests that the intern is an employee….”
- The extent to which the internship provides training that would be similar to that which would be given in an educational setting, including the “clinical” and other “hands-on” training provided by educational institutions. This factor shows a trainee.
- The extent to which the internship is tied to the intern’s formal education program by coursework or the receipt of academic credit.
- The extent to which the internship accommodates the intern’s academic requirements by corresponding to the academic calendar.
- The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
- The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern. If the intern or trainee is actually doing the work of an employee, this factor points to an employee.
- The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
Under these factors, the goal of the court is to determine who really is the beneficiary of the relationship- the employer or the trainee/intern. No one factor above is determinative. Instead the above factors are used to determine the economic reality of the relationship. These factors allow a court to view whether the manner in which the employer implements the training takes unfair advantage of the trainee/intern, “…or is otherwise abusive towards the [person].”
In studying some of the above factors, the court commented that Scott Axel had benefitted from the relationship by being allowed to learn the automobile wholesale business and gain valuable experience in this industry by “shadowing” his father. “Given [Scott’s] past drug problems, which caused him to be fired from his last job, this training with his father gave [Scott Axel] an opportunity to prove himself to future employers.” As for the work that Scott did that was not part of his father’s job, like transporting cars between dealerships and posting cars for sale online, although Fields did benefit from this work, Fields did not benefit more that Scott was benefitting by learning the automobile business for a future job. The court concluded that the benefit provided to Fields was not enough, weighing all the circumstances, to make Scott Axel an employee of Fields. Scott Axel v. Fields Motorcars of Florida, Inc., Case No. 8:15-cv-76-T-24 TGW, (M. D. Fla., May 24, 2016).
Takeaway: The court dismissed the wage claims brought by Scott Axel based on the FLSA and unpaid overtime. The claims based on the Florida Minimum Wage law were also dismissed. However, the Florida state law claims based on quantum meruit and unjust enrichment were not dismissed by the court, and may go to a jury to be decided in the future, if the case is not settled.
Summertime is here; a time when students and trainees may be working around your business. Wages are not the only concern; there is also potential liability for injury and accidents. Be careful with casual relationships that you could be held responsible for.
Questions? Call Tom Harper at 904-396-3000 or tom@employmentlawflorida.com
FMLA Leave
Denying Return to Work of Employee who still has work Restrictions Can Violate FMLA and Disabilities Act
By Tom Harper, The Law and Mediation offices of G. Thomas Harper, LLC (Tom@EmploymentLawFlorida.com)
The federal district court in Miami has denied an employer’s motion to dismiss a suit when an employee on medical leave was not “100% cured” and was not fully released to return to work with no restrictions. In reaching its decision, the court discussed the 2 types of medical certifications allowed by the FMLA regulations, and the requirements for each.
Heavy Lifting of Software
Sarah Dykstra worked from 2011 until 2014 for Florida Foreclosure Attorneys, a large Palm Beach County law firm with over 50 employees. Dykstra eventually became the law firm’s IT Director, claiming that she was responsible for the firm’s software systems and their security policies. Dykstra earned up to $100,000 a year!
In March of 2014 Dykstra suffered a serious back injury. She had multiple surgeries and was unable to return to work until about July of 2014. Although her injury occurred in March, the law firm did not place her on family medical leave until June 9, 2014. Since FMLA leave is only for 12 weeks, her protected leave was set to expire on September 6, 2014.
I’m Ready to Come Back
Dykstra claimed that she contacted the law firm on July 1 and asked if she could return to work by working from home. The law firm said “No” to this request. According to Dykstra, the law firm told her that she could only come back if she could work “full-time” in the office. About a month later, in August, Dykstra contacted the firm and told them that she was “ready, willing and able” to resume her position with the firm and she provided the law firm with a medical certification from her doctor stating that she was medically cleared to return to her job “with light duty restrictions.” What her doctor meant by this was never clarified. The law firm, however, said “No” and refused to allow Dykstra to return to work until she was “100% cured.”
Not so fast!
Days before her leave expired, the law firm told her that she could not return to work unless she provided a medical certification confirming that she was medically cleared to return to work without any restrictions. On September 6, Dykstra claimed that the law firm told her that she would be “terminated” if she could not return to work in two (2) days and be “100% cured.” This allegation became true when the firm fired her on September 8, 2014 when she did not have her doctor approve her return to work unrestricted. Despite her doctor’s restriction of light duty, Dykstra claimed that she was able to perform the essential functions of her IT Director position, even with her “light duty” restrictions.
After she was fired, Dykstra sued the law firm and its principal partner making “interference,” and “retaliation” claims under the FMLA as well as disability discrimination claims under the Americans with Disabilities Act (ADA). The law firm responded to her suit by asking the court to dismiss her suit since it was within its rights to require an employee to be completely healed before returning to work. The court however, disagreed with the law firm employer.
Can an employer do this?
If an employee is not fully released to perform all job duties, can the employer refuse to reinstate the employee? The answer is “Yes,” but only if the employer uses the right “tools” available to an employer under the FMLA.
The FMLA regulations are found at 29 Code of Federal Regulations (CFR) Part 825. To help employers prevent fraud and abuse from the 12 weeks of federally mandated attendance policy, employers have two different fitness-for-duty certifications available for use. However, to use either type of fitness-for-duty certification as a condition for job restoration, the employer must advise the employee in its Notice Designating the Employee’s Leave as FMLA-Qualifying (DOL Form WH 382) that the certification will be required before returning to work.
The first type of fitness-for-duty certification that an employer may require is one where the healthcare provider certifies that the employee is “able to resume work.” The second type of fitness-for-duty certification is one that specifically addresses the employee’s ability to perform the essential functions of their job, before returning to work. To use the second type certification, the employer must provide the employee with a list of the essential functions of the employee’s job no later than the time it gives notice of designating the employee’s leave as FMLA -qualifying. In addition, the designation notice itself must state that the answers by the health care provider must address the employee’s ability to perform the essential functions listed.
A Case of Two Forms:
In this case, it was not clear to the court which certification form was used. Clearly, had the law firm required certification of the employee’s ability to perform the essential functions of her position, it is likely that the firm would have pointed this out. Since both sides referred to Dykstra returning the medical certification form, the Court assumed that the request for a medical certification was valid. However, the court was only to extend this assumption to the first type of fitness-for-duty certification, which must state only that the employee is “able to resume work.” There was no evidence from either side that the law firm (Florida Foreclosure Attorneys) satisfied the prerequisites for requesting the second type of fitness-for-duty certification, which requires the healthcare provider to specifically address the employee’s ability to perform the essential functions of her job.
The court explained that, “The question before the Court is thus whether an employee who provides a fitness-for-duty certification that she is able to return to work ‘with light duty restrictions’ may state a cause of action under the FLMA when the lower threshold ‘able to resume work’ certification is requested. The Court holds that the provision of such a fitness-for-duty certification does not foreclose an employee’s FMLA claim (emphasis added).
In this case, Dykstra met the requirements for her fitness for duty certificate by being released to return to work. Looking to other court decisions, the Florida court found that when Dykstra submitted the certification from her doctor that she could return to work, her employer’s duty to reinstate her was triggered under the FMLA. The certification that Dykstra could return to work with light duty restrictions satisfied her requirement to comply with the regulatory obligation to provide a medical certification that she was able to return to work.
But the court went on to explain that:
This does not mean that the FMLA requires an employer who fails to properly request an “ability to perform essential functions” certification (or any fitness-for-duty certification at all) to retain an employee who is unable to perform the functions of the position. Even if an employer fails to request an “ability to perform essential functions” certification, the employer may still require a medical examination of the employee to ensure that she is able to perform the essential functions of her position. See 29 C.F.R. § 825.312(h). And, without delaying the employee’s reinstatement, an employer may contact the healthcare provider for further clarification of the fitness-for-duty certification. Id. § 825.312(b)
The court went on to explain that the light duty restrictions provided by Dykstra may ultimately provide her employer with the right to deny reinstatement to her. But this determination would be based on a different requirement in the FMLA regulations. After an employee returns from FMLA leave, the Disabilities Act (ADA) allows an employer to pay for a medical examination that is job-related and consistent with business necessity. (See, 29 CFR, Section 825.312(h).) If it was found by a healthcare provider that Dykstra could not perform the essential functions of her position as an IT Director, then Dykstra would not be entitled to reinstatement. Sandra Dykstra v. Florida Foreclosure Attorneys, PLLC and Rick Felberbaum, Case No. 15-81275-CIV-MARRA (S.D. Florida, April 26, 2016).
Conclusion: The FMLA regs allow an employer to require that the medical certification specifically address the employee’s ability to perform the essential functions of the employee’s job. But to do this, the employer must provide the employee with a list of the essential functions of the employee’s job no later than with the FMLA Designation Notice. Also, the employer must state on the designation notice that the medical certification must address the employee’s ability to perform those essential functions. If the employer satisfies these requirements, the employee’s health care provider must certify that the employee can perform the identified essential functions of his or her job.
Use the forms, attach a job description and state that the medical certification must address the employee’s ability to perform the essential functions of their job. Why not make this your standard practice?
Discrimination Claims
When is a Settlement Not a Settlement?
By Tom Harper, The Law and Mediation Offices of G. Thomas Harper, LLC (Tom@EmploymentLawFlorida.com)
P.F. Chang’s China Bistro, Inc.’s (“P.F. Chang’s”) received a letter from a Florida employment law firm who represented one of Chang’s current employees, a wok cook at Chang’s Sawgrass Mills restaurant . The letter claimed that their client, Kareem Williams, who was still employed, had been the victim of harassment and discrimination. Over two months, the lawyer for P.F. Chang’s negotiated with Mr. Williams’ lawyer and reached a settlement, or so P. F. Chang’s thought. When Kareem Williams filed suit on April 25, 2016 against P.F. Chang’s, Chang’s sued Williams back (called a countersuit) seeking to enforce the settlement agreement it had reached with Williams’ lawyer. Here is what happened.
Changing His Mind and Changing His Claims:
Kareem Williams began working for Chang’s in the fall of 2014. At the end of January this year, Williams was still working as a wok cook at Chang’s and he went to a lawyer complaining that he was a victim of harassment and discrimination. Williams hired Jeffrey Del Rio, Esq. with the Spielberger Law Group who wrote Chang’s claiming that Mr. Williams had been called names like “faggot” and the “N” word by two other kitchen employees because of his sexual orientation. William’s lawyer claimed that Kareem had reported the conduct of his co-workers to the Kitchen Manager who took no action.
During February and March of this year the lawyer for P.F. Chang’s negotiated a settlement with Williams’ lawyer, Del Rio. While these discussions were ongoing, Kareem Williams was suspended from his job. On February 29, Mr. Del Rio sent an e-mail to Chang’s lawyers stating that, “Mr. Williams indicated that if he [could] be paid for the time in which he [had] been suspended, he would be agreeable to a resolution at the $6,500 figure.” By early March the e-mails show that the lawyers agreed to settle Williams complaints by paying Williams $3,900.00 plus the scheduled time that Williams lost while suspended–$632.00. In addition, Chang’s agreed to pay Williams’ lawyers $2,600.00. The total settlement was about $7,132.00. Williams’ lawyer agreed to the terms and Chang’s thought they had a settlement!
Chang’s lawyers prepared a written settlement agreement, had it signed by Chang’s officials and overnight mailed three (3) settlement checks with the signed agreement to Del Rio. Williams, however, refused to sign the agreement and eventually hired another lawyer who filed suit in April in federal court in south Florida claiming race discrimination. With a new lawyer, Williams’ suit was for race discrimination-not gender discrimination or sexual harassment as claimed in the January letter. Instead, Mr. Williams, who was born in St. Croix and is African-Caribbean by ethnicity and/or race, claimed that the line cooks at the restaurant were predominantly of African descent, while the management team at Sawgrass Mills was predominantly white. In his suit, Williams claimed that he was treated differently on account of his race and denied promotional opportunities regularly given to white employees. Williams claimed that his kitchen manager had lost his promotional test and then refused to allow Williams to re-take a proficiency test that was required by Chang’s for advancement.
Chang’s answered the suit by filing an answer denying Williams’ claims and Countersuing Williams for enforcement of the settlement agreement reached in March. P.F. Chang’s then asked the federal court in south Florida to grant its motion to enforce the settlement that Del Rio reached on behalf of his client at the time, Kareem Williams. The settlement agreement that Williams refused to sign provided that Williams released Chang’s “… from all and any claims arising from Williams’ previous employment or separation of employment with P.F. Chang’s.” Chang’s argued that the two parties reached a “meeting of the minds” on the essential terms of the settlement and that Del Rio spoke for Williams who then wrongly refused to sign the agreement. In its motion, Chang’s asked the court to find that a settlement agreement had been reached and Williams had breached the agreement by suing Chang’s. (Although three checks were sent with the agreement, and the agreement had been signed by Chang’s, there was no evidence presented that the checks were ever cashed. In fact, the cover letter enclosing the checks stated, “Please do not cash the attorney’s fee check until you receive confirmation from Mr. Williams that he has accepted the settlement payment.”)
Court Won’t Force Settlement:
In deciding whether the settlement agreement should be enforced, the court carefully analyzed all the e-mails and communications between the lawyers. The court found that Chang’s had the burden to establish a “meeting of the minds” or mutual assent to certain and definite terms. “While uncertainty as to an agreement to nonessential or small items will not preclude a finding of an enforceable settlement, the agreement must be sufficiently specific and mutually agreeable as to every essential element,” said the Court.
P.F. Chang’s argued that the settlement was enforceable despite Williams’ failure to sign the agreement because Williams’ lawyer had clear and unequivocal authority to enter into the agreement for Williams. The court, however, found that the hiring of a lawyer to represent a client was not enough to confer on the lawyer implied or apparent authority to compromise and settle the client’s claims. The court noted that even where the lawyer believed that he had authority to settle, that belief was not enough. By its research the court found that in Florida cases, the courts “…have been very stringent in what they find to be a ‘clear and unequivocal’ grant of authority,” to the lawyer. After studying all the correspondence over the settlement negotiations, the court believed that the correspondence did not show that Mr. Del Rio had “clear and unequivocal” authority to enter into the settlement agreement. As a further basis for finding that Chang’s had not met their burden of proof, the court also looked to the fact that Chang’s had twice asked Del Rio to have Williams sign the agreement. The court concluded that the parties thought that Williams’ signature was necessary to complete the settlement. Kareem Williams v. P.F. CHANG’S CHINA BISTRO, INC., Case No. 16-cv-60906, (S.D. Fla, August 16, 2016).
Takeaway: Here in Florida, courts are hesitant to “force” a settlement upon a party, even when all the terms have been agreed upon by lawyers representing the respective sides. Your editor had a three (3) day evidentiary hearing in Tampa a few years ago in a similar case with facts even more favorable for the employer. In that case also, the former employee refused to sign the final agreement and fired his lawyers. The lesson learned is that, until the (former) employee signs, you likely do not have a settlement.