May 2012 - Laborsphere

Report Confirms Large Increase in ADA Employment Litigation in Federal Courts

A Syracuse University report provides confirmation for what employment litigators already suspected — the number of ADA employment lawsuits filed in federal court are way up, nearly 90% higher than five years ago and 12% from a year ago. To read the full report click here.

The report by Syracuse U.’s Transactional Records Access Clearinghouse found 183 lawsuits were filed in April 2012 in the 90 federal district courts around the country compared to less than 100 five years ago. The report also documents the steady increase in ADA employment litigation over the last five years.

The vast expansion of the definition of “disability” under the ADA Amendments Act of 2008 (Pub. L. 110-325), which became effective January 1, 2009, is likely the biggest culprit, along with the general aging of the population and the continued economic downturn.

The report also details the 10 biggest hotbeds for ADA employment litigation, measured by lawsuits per capita in those judicial districts. Not surprisingly, federal courts based in Tulsa, Pensacola and Manhattan took the top three spots, with the courts based in Chicago, Las Vegas and Philadelphia occupying three other spots in the top 10.

Interestingly, three of the bottom 10 spots are held by federal courts in California, primarily because California disability discrimination laws and California’s state courts are, by far, the strong preference of the plaintiffs’ employment bar. I would love to see a similar report on disability in employment claims filed in California’s state court, but my experience tells me that we’d see a similar increase that we see in the federal statistics reported above.

Sadly, I’m afraid that these trends will continue for quite some time.

9th Circuit Says ADA Does Not Protect Medpot Users and California Court of Appeals Rules California Law Applies to Wrongful Discharge Claim of Corporate Officer

Reflecting on the employer’s perspective on two decisions with national ramifications emanating from California last week, you have an unexpected victory from the Ninth Circuit on medical marijuana and an expected loss from the California Court of Appeal on the application of California law to a California-based officer of a Delaware corporation.

James v. City of Costa Mesa, 10-55769 (9th Cir. May 21, 2012) — The ADA Does Not Protect Medpot Users

The first of these decisions from the Ninth Circuit means that California employers are now free under state and federal law to prohibit marijuana use or possession in the workplace and working while under the influence. See also Ross v. Ragingwire Telecomms., Inc., 174 P.3d 200 (Cal. 2008) (no right to use or be under the influence of medical marijuana in the workplace under California disability discrimination laws).

In hearing a challenge to two California cities’ decisions to bar med-pot dispensaries within their borders, the Ninth Circuit in James held in a 2-1 vote that plaintiffs using medical marijuana under California law were not “individuals with disabilities” under the ADA and thus not entitled to its protections. Although the lawsuit was not an employment case, it nonetheless addressed the same definition of “individuals with disabilities” used in Title I of the ADA, the act’s employment provisions. Given a strong and reasoned dissenting opinion, one can expect a request for the Ninth Circuit to decide the matter en banc (through an 11-judge panel).

To read the full opinion of the court click this link: James v. City of Costa Mesa

Lidow v. Superior Court (International Rectifier Corp.), B239042 (Cal. Ct. of App. May 23, 1012) — California Law Applies to Wrongful Discharge Claim of Corporate Officer

The second decision was far less surprising. There, a California court held that California law applied to the discharge of a Delaware corporation’s California-based CEO, despite the so-called “internal affairs” doctrine. Under that doctrine, matters involving a corporation’s “internal affairs” are governed by the law of the state of incorporation. In an acknowledged case of first impression, the Court of Appeal held that an employer’s discharge of its CEO for complaining about the company’s harmful or unethical policies was not an “internal” corporate matter and should be governed by California law. While it left open the possibility that another basis for discharge may invoke application of the doctrine, it is hard to imagine a circumstance where a California-based CEO or other corporate officer/employee would not be able to claim protection under California’s highly-protective, employee-friendly laws. The Court also rejected, on summary adjudication, the claim that the CEO was not an “employee” and merely an “officer.”

Corporations with California-based officers who may also be seen as employees should consider taking steps to prevent their identification of these officers as employees.

To read the opinion of the court click this link: Lidow v. Superior Court

California Lawyers Author Article for The Recorder

San Francisco partner Cheryl Orr and counsel Fey Epling wrote an article for The Recorder on recent trends that indicate a shift in the landscape of employer class actions, especially in the wake of Brinker Restaurant v. Superior Court.

Cheryl and Fey note that “employers across America are breathing a collective sigh of relief at the California Supreme Court’s ruling,” in Brinker, particularly its holding that “an employer satisfies its duties by providing and permitting breaks, as opposed to ensuring that their employees take them.” This is, however, “just the latest blow to putative class actions” they have observed as management-side class action defense practitioners.

The article outlines other factors, such as, a shift in the nature of filings, the choice of venue, the matter of class certification and a “greater sense of urgency for resolution” of litigation, that have all resulted in “a fairly dramatic shift in the class action landscape.”

To read the entire article, click here.

DOJ Extends Compliance Deadline for Means of Entry and Exit to Swimming Pools at Hotels and Other Public Accommodations

On the disability access front, on May 21, 2012, the DOJ issued the following regulations applicable to swimming pools at public accommodations (including hotels). Cutting through the regulatory jargon, the DOJ’S action extended to January 31, 2013, a compliance deadline that had been March 15, 2012 and was then extended to May 21, 2012. To read the final rule in its entirety click the below link.

http://www.ada.gov//regs2010/ADAregs2012/finalrule_existingpools_FR_may21.htm

The compliance deadline applies to rules passed in the Fall of 2010 that require hotels and other public accommodations to install pool lifts for entry and exit in new construction and alterations. Hotels with existing pools must consider whether it is “readily achievable” to install lifts.

For more information on the substance of the rules, the DOJ recently issued guidance, which can be viewed by clicking the below link.

http://www.ada.gov//pools_2010.htm

New Jersey’s Highest Court Rejects “Absolute Liability” Standard for Employee Assault of Patient

The New Jersey Supreme Court in Davis v. Devereux Foundation, 209 N.J. 269 (2012), recently rejected an attempt to impose absolute liability against a residential health care facility for a criminal assault committed by an employee against a resident patient. The Court determined that the facility should be held to the traditional reasonable duty of care towards its patients. Further, the traditional “scope of employment” analysis should be applied to determine whether the employer could be held liable for the tortious conduct of its employee.

In Davis, a resident counselor employed by Devereux, a residential institution for the developmentally disabled, engaged in a pre-meditated act of aggression when she assaulted a residential patient by pouring boiling water on him. The counselor was arrested and imprisoned for criminal assault, and the patient’s guardians obtained a default judgment against her for assault in the ensuing civil action.

The family also brought a civil action against the health care facility. Reversing the trial court’s grant of summary judgment in favor of the facility, the Appellate Division remanded for trial and imposed an absolute liability standard on the employer under the common law “non-delegable duty” analysis, which imposes a duty on the master to protect those entrusted to its care in an in loco parentis relationship, such as a school or health care facility, and subjects the master to liability for the acts of its employees whenever they fail to meet their duty of care. Under that common law approach, the non-delegable duty imposed on the employer cannot be satisfied by any level of care taken by the employer in hiring or supervision of its staff, but is based solely on the level of care taken by the employee.

The Supreme Court reversed and reinstated summary judgment in favor of the health care facility. The Court observed that the “non-delegable duty” would unfairly impose absolute liability on the employer regardless of the level of care engaged in by the employer. “Once an employee has committed a tortious act, the duty would effectively impose absolute liability upon residential institutions” even if the employer had acted reasonably in screening applicants and supervising its employees.

The Court instead determined that traditional principles of the duty of reasonable care should be followed with respect to the actions of employees of facilities responsible for in loco parentis care. The Court observed that such facilities are expected to take reasonable measures to assure that their staff members are not endangering the safety of the patients entrusted to their care, and that liability for the tortious acts of their employees would be determined under traditional “scope of employment” principles. Finding in this case that Devereux acted reasonably in screening individuals prior to hiring, and in supervising the relationship of its employees with the residential patients, the Court determined that the facility had met its duty of care to its patients. The Court further determined that the counselor had acted far outside the scope of her employment in pouring boiling water on the patient where she acted out of personal anger and frustration, and not in any way to further the interests of her employer.

New Jersey’s Appellate Court Denies Employer’s Attempt to Dismiss Claims on Eve of Trial Based on Employee Agreement to Arbitrate

Can an employer litigate employment claims in court and then enforce an arbitration agreement against the plaintiff-employee on the eve of trial to avoid presenting the case to a jury? The New Jersey Appellate Division just said, “No.”

Plaintiff Karen Cole was a nurse anesthetist employed by Liberty Anesthesia Associates, LLC to work at Jersey City Medical Center. When her privileges were revoked by the Hospital, Liberty terminated her employment and she filed suit against both Liberty and the Hospital for retaliatory discharge under the New Jersey Conscientious Employee Protection Act (“CEPA”), and for discriminatory discharge based on her disability under the New Jersey Law Against Discrimination (“LAD”).

Cole settled her claims against the Hospital at the hearing on the Hospital’s motion for summary judgment. Liberty did not settle with plaintiff at that time. Instead, after defending the action for almost two years in litigation, Liberty moved to dismiss the claims against it one month later in a motion in limine filed three days before trial based on the arbitration agreement Cole had entered into in her employment agreement with Liberty. The trial court enforced the arbitration agreement and dismissed the case on the eve of trial, and Cole appealed.

In a March 29, 2012 opinion, the New Jersey Appellate Division reversed and remanded the action for trial. The court found that Liberty’s counsel had pursued the litigation – instead of seeking to enforce the arbitration agreement – as a deliberate trial strategy, and determined that Liberty was equitably estopped from enforcing the arbitration provision at the last minute before trial where it had failed to mention arbitration among the thirty-five affirmative defenses asserted in its Answer; failed to identify the arbitration agreement in discovery; and failed to raise the agreement in its motion for summary judgment on the merits. The court observed that Liberty’s deliberate course of conduct was prejudicial to Cole where it had caused her not only to participate in extensive discovery, but also to prepare to try her case before a jury, which the court noted required a great deal more preparation than presenting a case in arbitration.

To read the published opinion in Cole click here. Cole is reported at 425 N.J. Super 48 (App. Div. 2012).