Men accused of sexual harassment can sue!

For years, employment lawyers like me have had to break the bad news to men who have been fired for allegedly sexually harassing women in the workplace:  there is very little I can do for you!  Title VII is designed to protect women (and men) from sexual harassment in the workplace.  It is not designed to protect men (or women) from being falsely accused.  Employers faced with a charge of sexual harassment are free to terminate the alleged harasser, even if they didn’t do it and even if the investigation proves inconclusive. 

On May 22, 2009, the Second Circuit took a step toward providing men (and women) with a bit more protection when they are accused of sexual harassment.  In Sassaman v. Gamache … F.3d … , 2009 WL 1424433 (2d Cir. 2009), the court reversed the grant of summary judgment and permitted a man’s case to proceed to trial, based on allegations and evidence that he was forced to resign because of his employer’s belief that men have a propensity to commit sexual harassment.  Integral to the Court’s opinion was the employer’s failure to adequately investigate the claims.

The Court took great pains to clarify what it was not holding:

“We emphasize that we do not hold that an arguably insufficient investigation of a complaint of sexual harassment leading to an adverse employment action against the accused is, standing alone, sufficient to support an inference of discriminatory intent.

Rather, we hold only that where a plaintiff can point to evidence closely tied to the adverse employment action that could reasonably be interpreted as indicating that discrimination drove the decision, an arguably insufficient investigation may support an inference of discriminatory intent.”

The take away here is that men can bring Title VII cases of their own if they can provide evidence that the employer terminated them because of a belief that as a man, it was likely that he committed the sexual harassment complained of.  Relevant to this claim could be, as here, a poor investigation by the employer.

Going forward, Plaintiff’s employment lawyers need not dismiss a new caller’s claim that he was terminated for sexual harassment when he really didn’t do it!

Paycheck Fairness Act in U.S. Senate. Keep your fingers crossed!

The Paycheck Fairness Act, an amendment to the Equal Pay Act, is currently before the U.S. Senate after having passed the House in January.  Introduced by our own Rosa DeLauro, this bill will make it more difficult for employers to justify pay disparities between men and women.  A great explanation of this imp0rtant bill can be found at themiddleclass.org. 

Previously, employers could defend otherwise indefensible pay disparities by asserting that the differences were attributable to “any factor other than sex.”  This catch-all defense was overused by defense attorneys and judges.  This law would narrow that defense, making employers show that the other “factor” was job related, bona fide and related to business necessity. 

Women should encourage their Senators to vote for this legislation, since women still make far less than men in comparable positions. 

Like the FLSA, employees victimized under this law can bring actions “collectively” or as quasi-class actions.  This new law may bring a new day and a new power to underpaid working women in America.

Pharmaceutical Sales Reps at issue again!

A short time ago, I wrote about a decision here in Connecticut that pharmaceutical “sales reps” were entitled to overtime since they were not actually selling anything and therefore not entitled to the “outside sales” exemption of the FLSA. 

This issue isn’t going away.  The Ninth Circuit Court of Appeals has asked the California Supreme Court to issue an opinion to guide it in a similar case pending before it.  A great discussion of this matter can be found at EpsteinBeckerGreen blog. 

It seems pretty clear to me that you can’t be a sales person if you don’t actually sell anything.  Lets hope the California Supreme Court gets it right!

Connecticut Supreme Court reverses Lyon v. Jones! Yipee!!

Contrary to my fellow blogger’s opinion, this decision is not a” yawner.”  In Lyon, our Appellate Court had ruled  that the State of Connecticut could not be sued in court under the Connecticut Fair Employment Practices Act (our anti-discrimination law) unless the Claims Commissioner gave permission.  This ruling ignored the plain language of the statute and ignored decades of practice by employment attorneys and judges.  

The effect of Lyon was that employees of the State could not bring their discrimination claims to court and were forced to accept as their sole remedy a hearing at the CHRO.  This forum deprived them of a right to a jury trial and the right to obtain reimbursement for their attorneys’ fees, among other limitations.  

The Supreme Court got it right in reversing this terrible decision.  Almost every practicioner I know predicted that Lyon would be reversed.  Even the Attorney General’s office agreed that the Appellate Court’s reliance on the doctrine of sovereign immunity was incorrect.

Far from being a boring case, this ruling restores the important right of a jury trial in Superior Court to employees of the State of Connecticut.

New Haven Fire Fighters case triggers debate

I have been waiting to blog about this case (Ricci v. DeStefano), not to be dramatic, but because I wanted to understand the complex issues that it presents.  My patience has been rewarded, and so have you.  George Will (Connecticut ties include being a Trinity College graduate) and Attorney David Rosen (a New Haven lawyer who brought race bias cases since the 70s) have provided the two sides of this coin far better than I ever could have. 

Mr. Will writes:

“Racial spoils systems must involve incessant mischief because they require a rhetorical fog of euphemisms and blurry categories (e.g., “race-conscious” measures that somehow do not constitute racial discrimination) to obscure stark facts, such as: If Ricci and half a dozen others who earned high scores were not white, the city would have proceeded with the promotions.” 

Attorney Rosen writes, in the Hartford Courant:

“It should recognize that it is not discrimination for New Haven to try to comply with the same civil rights law that led to more equal employment in the first place. The federal law against employment discrimination was intended to encourage employers like New Haven to act voluntarily to end group disadvantages. It was not intended to be a trap, damning employers when they act to head off possibly unlawful exclusion of minorities as well as when they don’t.”

Of course, the devil is always in the details.  I tend to think that Attorney Rosen has it right.  We are not yet in that “promised land” that Dr. King dreamt about where we can simply move forward without thinking about our racist past.  I do not believe that New Haven refused to promote Mr. Ricci because he is white.  I believe that it simply concluded that the test must have been biased.  If true, this is simply not discrimination.  Lets hope the Supreme Court gets it right!

More Assistant Managers win overtime claims!

On April 2, 2009, Judge Sarah Vance for the United States District Court for the Eastern District of Louisiana issued an Order and Reasons following a bench trial in favor of two Assistant Managers at Big Lots Stores, Inc.  Johnson, et al v. Big Lot Stores, Inc. 2009 wl 886232 (E.D.La. April 2, 2009).  They were awarded over $63,000 each, including bad faith liquidated damages.  They will also be awarded attorneys fees at a subsequent hearing. 

Judge Vance followed the recent 11th Circuit decision of Family Dollar Stores (see my recent post) in issuing this ruling.  These cases are important to the hard working retail assistant managers in Connecticut because the FLSA (the law applied in these cases) applies in Connecticut, too. 

The take away is that retail assistant managers are frequently misclassified as exempt executives when in fact their primary duty is not management.  Employers may not deny overtime pay under the Executive exemption of the FLSA unless the employee’s primary duty is management.  More and more, courts are recognizing this important law and awarding employees the compensation they have earned. 

There are several cases currently pending in Connecticut, including cases against CVS Caremark and Staples and it will be interesting to see how our District Judges apply this important law.  Nice job to Mr. Johnson and Mr. Burden, the plaintiffs, and to their attorneys and to Judge Vance.   Lets hope our Connecticut judges rule in a similar fashion!

Schering “sales reps” entitled to overtime!!

When is a “sales rep” not a sales rep?  When they don’t actually make sales, says the United States District Court for  the District of Connecticut (Arterton, J).

The Fair Labor Standards Act requires that overtime premiums be paid (time and a half) for all non-exempt employees.  Schering Corporation had designated its Pharmaceutical Sales Representatives (PSAs) as exempt under the FLSA’s outside sales exemption.  A group of these employees brought suit, claiming that they were not actually sales reps because they didn’t actually sell anything.  Kuzinski, et al v. Schering Corporation(2009 WL 807572 (D.Conn. March 20, 2009).  Judge Arterton bought the plaintiffs’ argument and denied Schering’s Motion for Summary Judgment.  The case is an interesting read, if for no other reason than to see how the pharmaceutical industry actually works.  In effect, these sales reps spend their days promoting the drugs with the goal of having the doctors prescribe their drug instead of the competition.  What the reps don’t do is actually consumate a sale.  That happens after the doctor prescribes the drug and the patient goes to the drug store. 

The opinion contains great employee friendly language, including references to the 2d Circuit about the remedial nature of the FLSA.  It can be used as a reference in almost any FLSA litigation.  And, as usual, Judge Arterton’s logic and analysis is impeccable.  She distinguished the defendant’s argument that their work is “incidental” to sales beautifully, indicating that this argument fails if you aren’t the person who actually makes the subsequent sale. 

The take away is that you have to actually sell something to be an exempt outside sales person under the FLSA.  The larger question is why didn’t Schering’s executives and attorneys get this simple question right when they misclassified these workers?  I hope the plaintiffs and their lawyers (Hurwitz, Sagarin, Slossberg & Knuff, LLC) go on to win double damages in this interesting case.

Federal Judge calls FLSA suits “nuisance!!”

A United States District Judge in Florida has publicly opined that FLSA suits are “basically nuisance type claims that get bought off” and little more than attorneys’ “retirement bills” that require congressional reform Employment Law 360 reported.  Judge Kenneth L. Ryskamp of the Southern District of Florida made these statements and is now facing a motion for recusal. 

While no Connecticut Federal Judge is known to have made these statements, it is nevertheless alarming to hear that any federal judge would make such remarks. 

Congress passed the Fair Labor Standards Act in 1938 as part of the New Deal.  It has been modified many times, including as recently as 2004.  It is an  important law that helps employees obtain fair compensation for the hours they work.   Employees who bring claims under these laws are not looking for emotional distress awards, they are only asking to be paid for the hours they worked.

Many times, employees do not understand their rights, including that they have been misclassified under the FLSA.  Accordingly, the law includes a mechanism to allow employees and their attorneys to invite other similarly situated employees into the litigation.  If this provision did not exist, other employees who were also the victims of wage violations, would not have a reasonable chance to advance their claims.

Judge Ryskamp’s comments are deplorable.  They fall in line with the same mentality that sought to blame UAW workers for the demise of the auto industry.  Workers in America deserve to be paid the wages they have earned.  The fact that wages in America have been historically low has been a contributing factor to the economic crisis we are in.  What merchant wouldn’t wish that his customers had more money to spend buying his products?

The FLSA’s collective action provisions do not need congressional reform.  To the contrary, what is needed are more lawyers like attorney Shavitz and his firm to enforce  this important law.  Judge Ryskamp should be removed from the case and never permitted to preside over another FLSA case.

Can AIG avoid paying out retention bonuses?

The blogosphere is filled today with articles about AIG and the controversial retention bonuses.  One fellow blogger has included AIG’s white paper on this topic in which it explains why it believes that it cannot avoid these payments.  Generally, retention bonus contracts require an employee to be paid if he/she stays with the company through a certain date.  Of course, it is always essential to see the actual terms of these contracts in order to determine if the money is due.

One term, however, that is contained in every contract, regardless of its express terms, is that the employee materially perform his/her duties in order to be entitled to take advantage of its terms.  We learn this in first year law school:  material breach by one party excuses performance by the other.  

In Connecticut, this principal has been applied by our Appellate Court in the employment setting.  In Shah v. Cover-It, Inc., 86 Conn.App. 71 (2004), that court held that an employee materially breached his employment contract by not working hard enough and was therefore not entitled to contractual severance pay.

I admit that I have no personal knowledge of how hard the AIG employees in question worked, but it seems to me that there may be a claim that by their poor performance, they have bankrupted the company.  If their trading in risky mortgage backed securities was knowingly reckless and exposed AIG to this risk, I would think that AIG could claim that they materially breached their contracts and are therefore not due their retention pay.  

AIG claims in its white paper that it cannot legally deny these employees their pay and that they have been so advised by outside counsel.  While I don’t know who these lawyers are, I can assure you all that they are probably the same type of corporate defense attorneys who routinely deny legitimate claims for earned compensation in my cases and in the suits brought by my brothers and sisters of the Connecticut plaintiff’s employment bar.  

I say that AIG should deny the retention pay and let the employees sue.  They will have to prove that they materially performed and we will all get to go to the public trial on this issue and hear them explain how their risky trading was not a material breach.  I can even suggest a few aggressive employment defense attorneys to defend AIG!

Are bonuses wages? – Part III

On November 24, 2008, I posted a report on the case of Ziotas v. Reardon Law Firm which held that a bonus due an employee was considered a wage and enforceable under our wage enforcement laws (C.G.S. Section 31-72), which include the remedies of double damages and attorneys fees.  I reported that it was shaping up to be a banner year for employees.

On December 19, 2008, a fellow blogger from the dark side of employment law reported about the Connecticut Supreme Court case of Weems v. Citigroup, Inc., in which it held that a discretionary bonus was not a wage under that statute.  Attorney Schwartz indicated that employers could “breath a sigh of relief” because of this ruling.

Not so fast, Attorney Schwartz!  Sometimes we have to wait and see how the Superior Court judges are applying these holdings.  On January 15, 2009, Judge Robert Martin of New London had a chance to deal with these two seemingly contradictory rulings, and he chose to apply Ziotas and to read Weems narrowly.  

In the new case of Edwards v. Edwards Wines, LLC, an employee brought a claim for, among other things, unpaid bonus compensation.  She claimed that she was due a bonus because of an agreement that she would be paid a bonus for increasing the winery’s productivity and profitability.  Judge Martin squarely addressed the tension between Ziotas and Weems and chose Ziotas.   He pointed out that in Weems, the Supreme Court held that “bonuses that are awarded solely on a discretionary basis, and are not liked solely to teh ascertainable efforts of the particular employee, are not wages under Section 31-71a(3).”  He refused to strike Edwards claim because she alleged that her bonus was dependent on her efforts to increase productivity and profitability.

This is a good first indication for employees that the Superior Courts will interpret Weems narrowly and apply Ziotas.  This writer agrees and in fact, would have gone further.  How can any money that an employer pays an employee not be a wage?  Will employers invoking Weems pay discretionary bonuses without withholdings?  Will they issue 1099 forms?  Does such a payment turn the employee into an independent contractor?

Weems was wrongly decided.  All bonuses are wages and employers should not be allowed to avoid the enforcement provisions of our laws by saying otherwise.  Our legislature should address this issue by rewriting the definition of wages to overturn Weems.