Partners Cheryl Orr and Heather Sager contributed articles in today’s special section on Privacy in The Recorder. Cheryl’s article, Employer’s BYOD dilemna, looks at the issues and approaches employers are taking as employees use dual devices, i.e. one device for both work and personal use. Heather’s article, Why can’t we be ‘friends’?, looks at what companies need to know when drafting their social media policies. Copies of both articles are available via this link.
The New Jersey District Court in St. Cyr v. Brandywine Senior Living LLC, recently granted summary judgment to the employer dismissing the plaintiff’s causes of action for handicap and race discrimination, but allowed the plaintiff to go to trial on her claim that she was unlawfully discharged in violation of the FMLA in retaliation for asking for a medical leave of absence because she was fired only two days before the leave of absence was to begin. In granting summary judgment on the claim of handicap discrimination, the court determined that the plaintiff, who suffered from arthritis, was not “handicapped” under the NJLAD because the condition, which was alleviated with medication, did not interfere with her ability to perform her job, and because she never asked for an accommodation for the condition. The court rejected her claim of race discrimination based on her admission that the only evidence implicating racial animus was the fact that she was fired for watching the BET Network on television during working hours. The court noted that the plaintiff, who had previously been placed on probation for poor performance and was on final warning, was replaced by an African American employee and had failed to show the legitimate reason given for her discharge was pretextual. Despite that finding, however, and despite the fact that the employer had granted the plaintiff’s request for a medical leave of absence, the court denied summary judgment on the claim of retaliatory discharge under the FMLA based only on the determination that the timing of the discharge – only two days before her FMLA leave was to begin – was “unusually suggestive” of retaliatory motivation. The court did not explain how the timing could be suspect if that was when the plaintiff was found watching television instead of doing her job, and if there was no evidence that the proffered reason was pretextual.
In Ehling v. Monmouth-Ocean Hospital Service Corp., the District Court in New Jersey recently denied the employer’s motion to dismiss the plaintiff’s cause of action for invasion of privacy in connection with a supervisor having gained unauthorized access to her private Facebook account. The plaintiff nurse, who was also the union president at the hospital, had posted comments on her Facebook wall about the news story out of Washington, D.C. in 2009 concerning the killing of a security guard at the Holocaust Museum by a white supremacist in which she expressed her opinion or rant that the paramedics in D.C. should have let the shooter die rather than help him after he was shot during the incident: “He survived [and] I blame the DC paramedics. I want to say 2 things to the DC medics. 1. WHAT WERE YOU THINKING? and 2. This was your opportunity to really make a difference! WTF!!!! And to the other guards…. go to target practice.” The supervisor apparently wanted access to plaintiff’s Facebook comments because of her leadership role with the union, and convinced a co-worker to give him access to her private account so he could copy her postings. When he saw the comments about the D.C. incident he sent a copy to the State Board of Nursing suggesting that it represented an improper disregard for patient safety.
A federal judge in Pennsylvania has signed off on a multi-million dollar settlement of a class action lawsuit for unpaid overtime brought by registered nurses against a number of hospitals affiliated with the Lehigh Valley Hospital and Health Network. The nurses claimed in their lawsuit, which was filed in January 2010, that the Hospitals violated the FLSA and Pennsylvania wage law by paying them on a per-shift basis, failing to compensate them for reporting early or remaining on duty after their shifts ended, and also failing to pay for work performed during lunch periods or while attending training. The $4.5 million settlement provides more than $2.5 million to the more than 2,000 nurses who joined in the lawsuit. This is a significant development for hospitals and other health care providers who pay nurses on a per-shift basis. While Pennsylvania and New Jersey have enacted statutes which prohibit mandatory overtime for nurses, the laws allow nurses to volunteer for extra hours and to work overtime in emergencies or unforeseen circumstances. Nurses are entitled to overtime pay in such circumstances whenever they work more than 40 hours in a week.
The United States Supreme Court recently granted certiorari of a decision by the Third Circuit Court of Appeals, Symczyk v. Genesis HealthCare Corp., 656 F.3d 189 (3d Cir. 2011), a case that could have a significant impact on employers’ litigation strategy in putative FLSA collective actions. The Third Circuit in Symczyk held that a collective action brought under the FLSA is not rendered moot when the defendant makes a Rule 68 offer of compromise in full satisfaction of the individual claim to a putative representative before the class representative moves for “conditional certification” and before any other plaintiff opts into the action.
Under the FLSA, an employee may file a “collective action” against an employer on behalf of himself and other similarly situated employees. Unlike traditional class actions, however, the FLSA requires that the “similarly situated” employees affirmatively decide to join or opt into the collective action. In Symczyk, the plaintiff filed a putative FLSA collective action, alleging that her employer, Genesis, automatically deducted her pay for meal breaks regardless of whether she performed any compensable work during the break. After answering the Complaint, Genesis served the plaintiff with an offer of judgment for the full amount of her claims, including costs and attorneys’ fees, pursuant to Federal Rule of Civil Procedure 68. Genesis then moved to dismiss the Complaint, arguing that the offer to pay her claims in full mooted the claims, depriving the plaintiff of any ongoing personal stake or legally cognizable interest in the litigation, and divesting the court of any jurisdiction over the case.
The district court granted Genesis’ motion, holding that an offer in full satisfaction of a plaintiff’s claims moots those claims. At this point, no other employees had opted into the suit because the plaintiff had not yet sought conditional certification of the collective action. Thus, the case was dismissed. The Third Circuit reversed, holding that “conventional mootness principles do not fit neatly within the representative action paradigm.” Id. at 195. The court compared FLSA collective actions to class actions, in which it is settled law that a defendant cannot moot a putative class action by making an offer of judgment to the named plaintiff before the class is certified and held that there was no rationale for treating the two types of actions differently. Id. at 197-201.
Accordingly, the Third Circuit reversed, holding that “[w]hen Rule 68 morphs into a tool for the strategic curtailment of representative actions, it facilitates an outcome antithetical to the purposes behind [the FLSA].” Id. at 200. The Third Circuit remanded to the district court in order to allow the plaintiff to file a motion for conditional certification, which would then be deemed to “relate back” to the filing of the original complaint and thus preserve the district court’s subject matter jurisdiction. Id. at 201 The Third Circuit noted that if the mootness inquiry were based solely on whether another employee had opted in at the same moment a plaintiff receives a Rule 68 offer of judgment, employers would encounter little or no difficulty in “preventing FLSA plaintiffs from attaining the “representative” status necessary to render an action justiciable.” Id. at 199.
The Third Circuit’s decision in Symczyk cited with approval the Fifth Circuit’s decision in Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 922 (5th Cir. 2008) (holding that, although a Rule 68 Offer of Judgment could theoretically moot a FLSA collective action, the “relation back principle applies to ensure that defendants cannot unilaterally “pick off” collective action representatives and thwart availability of collective actions under the FLSA.”)
However, both the Ninth and Eleventh Circuits have held, to the contrary, that an offer of judgment for the full amount of the named plaintiff’s claims prior to the certification of a class does moot a collective action. See Smith v. T-Mobile USA, Inc., 570 F.3d 1119, 1122-23 (9th Cir. 2009); Cameron-Grant v. Maxim Healthcare Serv., Inc., 347 F.3d 1240 (11th Cir. 2003).
The Supreme Court granted Genesis’ petition for certiorari on June 25, 2012 and stated the question presented as “Whether a case becomes moot, and thus beyond the judicial power of Article III, when the lone plaintiff receives an offer from the defendants to satisfy all of the plaintiff’s claims.” The Supreme Court’s decision in this case will likely have a significant impact on the strategies available to employers to defend against FLSA collective actions and will also resolve a circuit split on this issue.
The Court will hear the case in the term beginning October 2012, and a ruling is expected by the end of the term in June 2013.
Just when it seemed safe for companies with employees in Georgia to try to enforce their restrictive covenant agreements, the Eleventh Circuit has brought back to life – if only for one last hurrah – the old Georgia law that made non-competition and other restrictive covenant agreements virtually impossible to enforce. The Court did so in Becham, et al. v. Synthes USA, et al., No. 11-14495, 2012 U.S. App. LEXIS 11225 (11th Cir. June 4, 2012), by holding that Georgia’s first attempt to re-write the State’s non-competition law was unconstitutional and that the second attempt did not apply to the agreement at issue.
The backdrop, well known to those who practice in Georgia, is a frustrating one for employers who have attempted to enforce restrictive covenant agreements. For years, Georgia statutory and constitutional law disfavored non-competition and other restrictive covenants and, through a very narrow view of what is reasonable and a refusal to reform overly broad agreements, made them nearly impossible to enforce. This changed beginning in 2009 when the Georgia legislature approved a law allowing the enforcement of previously unenforceable covenants, by, among other things, creating presumptively reasonable time periods for restrictions, removing the requirement of an expiration date for certain confidentiality covenants, and, perhaps most importantly, giving Georgia courts the ability to reform overly broad agreements. The law was subject to a constitutional amendment permitting the change, which occurred on November 2, 2010 through Georgia’s citizens’ ratification of the amendment.
The confusion then began. The new law went into effect on November 3, 2010, the day after the constitutional amendment was ratified. The constitutional amendment, however, did not take effect until January 1, 2011. Fortunately, the Georgia General Assembly recognized the gap and passed a second law that repealed the first law and authorized a second, virtually identical law effective May 11, 2011. Problem solved, right?
Not so fast. Unfortunately for Synthes, the restrictive covenants at issue were reaffirmed on December 1, 2010, after the effective date of the first law, but before the effective date of the second law. The Eleventh Circuit thus focused on the first law and held that, because the law was implemented before the constitutional amendment went into effect, it “was unconstitutional and void the moment it went into effect.” The Court then went back to “old” Georgia law, and like so many agreements before it, found Mr. Becham’s restrictive covenant agreement unenforceable.
Although the result was an unfortunate one for Synthes, the impact can be managed going forward by making note of the critical May 11, 2011 date. Restrictive covenant agreements entered into on or after May 11, 2011 will be subject to the second new law, and hence subject to more favorable court review. Agreements entered into prior to that date, even if after the November 2, 2010 constitutional amendment, will be judged under “old,” pro-employee Georgia law. Employers of Georgia employees will therefore want to make sure that their restrictive covenant agreements are effective on or after May 11, 2011 and, where they are not, arrange for the execution of new agreements.