August 2013 - Laborsphere

In the Second Circuit, Unpaid Overtime Claims Must Allege Specifics

Earlier this month, the United States Court of Appeals for the Second Circuit, in Dejesus v. HF Management Services, 2013 U.S.App.LEXIS 16105 (2d Cir. August 5, 2013), held that plaintiffs cannot rely solely on vague allegations in asserting claims for unpaid overtime. In this case, the plaintiff alleged that her former employer had failed to pay her overtime, but her Complaint lacked details such as the amount of overtime she had allegedly worked. Instead, it simply parroted the language of the Fair Labor Standards Act (“FLSA”). Affirming dismissal of the Complaint, the Second Circuit agreed with the district court that the allegations failed to state a claim. This decision makes it more difficult for plaintiffs who lack a basis for an unpaid overtime claim to file a lawsuit in the hope of finding one during discovery.

Ramona Dejesus (“Dejesus”) worked for HF Management Services, LLC (“Healthfirst”), a company providing administrative and support services to healthcare organizations. Dejesus alleged that she had worked more than forty hours per week for “some or all weeks” of her employment, but that Healthfirst had failed to pay her time and a half for the hours she worked over forty. The Complaint did not indicate the number of overtime hours Dejesus had worked, her rate of pay or an estimate of the unpaid wages.

Dejesus filed the lawsuit in the United States District Court for the Eastern District of New York, alleging violations of the FLSA and the New York Labor Law (“NYLL”). Both the FLSA and NYLL require an employer to pay non-exempt employees at an hourly rate of at least one and a half times their regular rate for each hour that the employees work in excess of forty hours in a workweek. Healthfirst filed a Motion to Dismiss the Complaint arguing, among other things, that the vague allegations in the Complaint failed to state a claim for unpaid overtime. The district court granted the motion. Dejesus appealed and the Second Circuit affirmed.

In reaching its decision, the Second Circuit quoted the U.S. Supreme Court, which stated in Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), that, in order to state a claim, a Complaint must contain more than “‘[t]hreadbare recitals of the elements of a cause of action … supported by mere conclusory statements.’” According to the Second Circuit, a plaintiff asserting an overtime claim must allege that he or she worked more than forty hours in a week without receiving the required compensation. The Court indicated that “an approximation of overtime hours” is helpful, but not necessarily required in every case. The Court further indicated that courts should consider the allegations in context and on a case by case basis to determine if they are sufficient.

The Second Circuit concluded that the allegations in Dejesus’ Complaint “did not plausibly allege that she worked overtime without proper compensation.” The Court observed that Dejesus “did not estimate her hours in any or all weeks or provide any other factual context or content.” The Court further observed that her Complaint “was devoid of any numbers to consider beyond those plucked from the [FLSA].” According to the Court, Dejesus “was required to do more than repeat the language of the statute.” The Court explained that the Complaint “tracked the statutory language of the FLSA, lifting its numbers and rehashing its formulation, but alleging no particular facts sufficient to raise a plausible inference of an FLSA overtime violation.”

The Court emphasized that plaintiffs are not required to “keep careful records and plead their hours with mathematical precision.” However, the Court explained, plaintiffs must “draw on” their “memories and experience” in order to provide “complaints with sufficiently developed factual allegations.” The Court affirmed the dismissal of Dejesus’ Complaint.

In recent years, employers have faced a wave of wage and hour lawsuits. In many instances, it seems that plaintiffs pursue these actions – particularly class or collective actions – without any real knowledge of wage and hour violations but in the hope of finding them during the litigation. The Dejesus decision is a welcome development for employers in the Second Circuit, because it requires plaintiffs, before filing a lawsuit, to at least come up with factual allegations supporting their claims.

FMLA Protected Leave Now Available To Same-Sex Spouses

United States Secretary of Labor, Thomas Perez, recently issued an internal memorandum to department staff outlining the Department of Labor’s plan to issue guidance documents which will, among other things, make protected leave available to same-sex couples under Family and Medical Leave Act (“FMLA”). This action comes as the Department prepares to implement the Supreme Court’s recent decision in U.S. v. Windsor, which struck down the provisions of the Defense of Marriage Act (“DOMA”) that denied federal benefits to legally married same-sex spouses. Calling it a “historic step toward equality for all American families,” Secretary Perez noted that the Department of Labor will coordinate with other federal agencies to make these changes “as swiftly and smoothly as possible.”

Secretary Perez stated that guidance documents would be updated to remove references to DOMA and to “affirm the availability of spousal leave based on same-sex marriages under the FMLA. This change is of great consequence to same-sex spouses who previously were unable to access the job-protected leave provided under the FMLA. Now, eligible same-sex spouses will be able to take FMLA leave for certain specified family and medical reasons, including caring for a spouse with a serious health condition, and generally will be returned to their original position or another position with equivalent pay, benefits and status. The new interpretation reflected in the Department’s updated guidance documents will be effective immediately.

In the Department’s official blog, Modern Families and Worker Protections, Laura Fortman, the principal deputy administrator of the Wage and Hour Division, announced on August 13, 2013 that revisions had already been made to various FMLA guidance documents to reflect the changes necessitated by U.S. v. Windsor. Fortman clarified that the “changes are not regulatory, and they do not fundamentally change the FMLA.” They merely expand the universe of employees who are eligible for FMLA benefits by including legally married same- sex couples. The updated documents can be viewed at these links:

Fact Sheet 28F
FMLA PowerPoint (slide 12)
WHD Field Operations Handbook Chapter 39d03(d)(1) (p.23 of PDF)
WHD Opinion Letter FMLA 98 (header)

Although Secretary Perez did not specifically address the question, the updated guidance documents indicate that the Department only intends to expand FMLA benefits to same-sex spouses in the 13 states and the District of Columbia that have recognized same-sex marriage. As an example, Fact Sheet#28F, Qualifying Reasons for Leave Under the Family and Medical Leave Act, defines “spouse” for purposes of FMLA leave as “a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including “common law” marriage and same-sex marriage.” In contrast, the Office of Personnel Management announced on its website that benefits will be extended to Federal employees and annuitants who have “legally married a spouse of the same sex, regardless of the employee’s or annuitant’s state of residency.”

As initial steps to implementing these changes, employers should inform or train human resources personnel regarding the availability of FMLA leave to eligible employees under the specified definition of spouse; review internal procedures and leave documentation to ensure compliance, and finally, review employee handbooks and policies to include provisions for same-sex couples where appropriate.

Sixth Circuit Approves NLRB Micro-Bargaining Units

On August 15, 2013, the Sixth Circuit Court of Appeals affirmed the National Labor Relations Board’s (NLRB or the Board) controversial ruling in Specialty Healthcare, 357 NLRB No. 83 (2011), which has allowed the proliferation of what some term “micro-bargaining units.” This decision makes it easier for unions to organize employees from all industries into smaller units than in the past and makes it challenging for employers to successfully challenge smaller bargaining units.

The Board’s Specialty Healthcare decision overruled its decision in Park Manor Care Center, 305 NLRB 135 (1991), which set forth the Board’s previous test for determining the appropriateness of a bargaining unit in non-acute healthcare facilities. Park Manor Care established a “pragmatic and empirical community of interest” approach that considered traditional community-of-interest factors, as well as evidence considered relevant by the Board during rulemaking concerning acute-care hospitals and the Board’s prior experience involving the types of facilities in dispute or units sought. In Specialty Healthcare, the Board ruled that an employer claiming that the proposed bargaining unit should include additional employees must be able to show that the excluded employees share an “overwhelming community of interest” with the employees in the proposed bargaining unit. Under Specialty Healthcare, numerous decisions have found small units appropriate that would not have been approved under previous Board law.

In Kindred Nursing Ctrs. E., LLC v. NLRB, Case No. 12-1027 (6th Cir. Aug. 15, 2013), the successor in interest to Specialty Healthcare’s facility in Mobile, Alabama challenged the Board’s ruling that a bargaining unit of Certified Nursing Assistants “constituted an appropriate unit.” Pursuant to Specialty Healthcare, the Board had found a unit of fifty-three CNAs to be an appropriate bargaining unit, while Kindred Nursing argued that the bargaining units should have included an “additional eighty-six non-supervisory, non-professional service and maintenance employees.” In its attack on the Specialty Healthcare decision, Kindred Nursing argued that the Board had abused its discretion because it

“adopt[ed] a new approach and [did] not return to applying the traditional community-of-interest approach; (2) [did] not ‘reiterate and clarify’ the law by adopting the overwhelming-community-of-interest test, but inappropriately imports this test from another area of labor law; (3) violat[ed] section 9(c)(5) of the National Labor Relations Act in its application of the traditional community of interest test and adoption of the overwhelming-community-of-interest test; and (4) [made] all of these changes through adjudication instead of rulemaking.”

In rejecting Kindred Nursing’s arguments, the Sixth Circuit first stated that it must uphold both the Board’s bargaining unit determination and its interpretation of the National Labor Relations Act (“NLRA”) unless the Board had abused its discretion. The Court noted that in exercising its discretion, the “Board must cogently explain why it has exercised its discretion in a given manner.” Citing oft-quoted precedent that the Board must select an appropriate unit and is not required to select the most appropriate unit, as well as the principle that the Board has the discretion to develop standards for determining the appropriateness of a bargaining unit, the Sixth Circuit found that it was in the Board’s discretion to overrule its own precedent and adopt a test based on prior Board precedent – even if it represented a material change in the law. Furthermore, the Court found that the Board had not departed substantially from prior law as it had previously relied upon the overwhelming-community-of-interest test in prior cases, and that it had explained its reasons for adopting its new standard. The Court noted that the Board’s new test had been approved by the District of Columbia Circuit prior to the Board’s holding in Specialty Heatlhcare. See Blue Man Vegas, LLC v. NLRB, 529 F.3d 417 (D.C. Cir. 2008).

The Court also rejected Kindred Nursing’s arguments that the Board improperly changed its bargaining unit standards by adjudication rather than by rulemaking, and that Specialty Healthcare violated Section 9(c)(5) of the NLRA. The Court first noted that the Supreme Court had specifically held in NLRB v. Bell Aerospace Co., 416 U.S. 267 (1974), that the Board is not precluded from choosing adjudication as a method of developing new standards. As for Kindred Nursing’s Section 9(c)(5) argument, the Court held the Board’s decision did not violate this Section 9(c)(5) because it does not assume that a requested bargaining unit is per se appropriate; rather, Specialty Healthcare requires an employer to make the showing of an overwhelming community of interest only after the proposed bargaining unit is deemed appropriate.[1]

In light of the approval of the District of Columbia and Sixth Circuits, it is likely that Specialty Healthcare’s “overwhelming-community-of-interest” test will be the rule unless or until the make-up of the Board changes sufficiently, which is unlikely during the remainder of President Obama’s second term, or it is reversed by the U.S. Supreme Court. Moreover, it has been applied in industries beyond non-acute healthcare facilities. With the increased risk of targeted organizing campaigns aimed at small units of sympathetic employees, the need for employers in all industries to proactively consider union avoidance strategies has never been more important.

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[1] The Supreme Court has interpreted section 9(c)(5) to prohibit the Board from approving bargaining units “based solely upon the extent of organization.” NLRB v. Metro. Life Ins. Co., 380 U.S. 438, 441-442 (1965).

Significant Illinois and Massachusetts Non-Compete Rulings

Two recent cases should give employers pause as to whether their restrictive covenants with their at-will employees are enforceable. On May 28, 2013, a United States District Court in Massachusetts held that under Massachusetts law, a confidentiality agreement signed by an at-will employee was unenforceable where the employee’s title, duties, remuneration and other terms of employment had materially changed since signing the agreement. Then, on June 24, 2013, an Illinois Appellate Court held that unless an at-will employee is employed for at least two years, restrictive covenants the employee signed at the beginning of employment are unenforceable for lack of adequate consideration. Moreover, the Illinois court held it was irrelevant whether the employee quits or is terminated before two years of employment. While the rulings rely on the applicable state law, they address important points that may have broader application than only in Massachusetts and Illinois.

In Smartsource Computer & Audio Visual Rentals v. Robert March et al, D. Mass. (May 28, 2013), Smartsource filed an action to enforce its noncompete agreements with its former employee, March. March was hired by Smartsource in 2006 as a Senior Account Executive, and signed an offer letter with a simple confidentiality agreement/restriction. In 2007, March was promoted to Branch Sales Manager, in 2008 to Regional Sales Manager, in 2010 to Regional General Manager, and again in 2012 to Regional Sales Manager. With each change his job responsibilities and compensation changed. Citing to Massachusetts law, the court denied the requested injunctive relief to Smartsource. Although stopping short of a definitive ruling on the merits, the court noted that “it may well be under [Massachusetts case authority], March’s 2006 confidentiality agreement has been abrogated, and he is not bound by any restrictive covenants.” March and the Massachusetts cases cited therein suggests that when material changes to an employment relationship are contemplated, the employer should consider revisiting the existing restrictive covenant agreement and consider whether a new agreement is advisable.

More recently, the Illinois Appellate Court for the First District (Cook County) in Eric D. Fiefield et al v. Premier Dealer Services, Inc., (Ill. App. Ct., 1st Dist. June 24, 2013), answered the question as yet definitively unanswered in Illinois: What additional employment period after the signing of a restrictive covenant agreement is sufficient consideration to make the agreement enforceable against an at-will employee? The Court answered at least two years, even where the employee signs the restrictive covenant at the outset of employment. Fiefield had worked for the predecessor company that was acquired by Premier. Fiefield was then hired by Premier in late October 2009, and as a condition of employment Fiefield was required to and did sign an employment agreement containing a two-year restrictive covenant. Fiefield signed the agreement on October 30, 2009 and started work on November 1, 2009. On February 12, 2010, Fifield resigned to go to work for a competitor. Fiefield and his new employer then filed suit against Premier seeking a declaratory judgment that the restrictive covenant agreement was unenforceable. The circuit court ruled the agreement was not enforceable because it lacked consideration. Premier appealed and the Appellate Court affirmed, agreeing that there was inadequate consideration. The court held that regardless of whether Fiefield had signed the agreement before he started work or after he started work, “Illinois courts have repeatedly held there must be at least two years or more of continuous employment to constitute adequate consideration in support of a restrictive covenant…This rule is maintained even if the employee resigns on his own instead of being terminated.”

The Premier decision will surely send employers in Illinois scrambling to reconsider the validity of their at-will employee restrictive covenant agreements in Illinois. However, help may be on the way as Premier has filed a petition for leave to appeal the decision to the Illinois Supreme Court. Granting review is within the Court’s discretion, and the Illinois Chamber of Commerce and other employer groups are backing Premier’s bid. Even if the case is not reviewed or reversed, however, there are a number of possible solutions to the Premier consideration problem. These include offering employees consideration for the non-compete in addition to simply offering at-will employment (such as a “bonus” payment or possibly elaborating on the consideration offered to include, for example, training, access to customers and valuable confidential information and trade secrets) or offering employees some form of term employment contract.

If you have at-will employees with restrictive covenants less than two years old, and you view confidentiality and restrictive covenant agreements important to your business, or if your agreements with your employees significantly predate their current job positions, compensation and other conditions, these cases should sound the alarm to review your competitive advantage protections.

Employer Liability Under State Medical Marijuana Laws

Across the country, employers in states allowing medical marijuana use have been grappling with whether these statutes impact employer policies concerning drug testing and maintaining a drug-free workplace. Though the statutes allow for marijuana use for medical purposes (and some for recreational purposes), these statutes do not consistently address the impact of legal medical marijuana on employers, if at all. And the number of states enacting such legislation is continuing to grow.

Since 1996, 20 states[1] and the District of Columbia have enacted some form of legislation that allows for the non-criminal use of marijuana for medical purposes. In fact, in the last three years, eight states have passed medical marijuana laws – and Illinois became the 21st jurisdiction to legalize medical marijuana when Governor Quinn signed HB 1 into law on August 1.

As such, companies that employ individuals in states with medical marijuana may be uncertain as to whether or under what circumstances they can take action with respect to an employee that fails a drug test or otherwise admits to being a medical marijuana patient.

Civil Protections – Where Do We Stand Today?

Most of the states that have enacted a medical marijuana law have statutory language that is silent about medical marijuana patients’ civil protections. Of the 21 jurisdictions that have medical marijuana on the books, 15 do not provide for any form of employment protections.[2] In fact, supreme courts in California, Oregon, Washington and Montana have all upheld employer decisions to discharge employees that were medical marijuana patients. The plaintiffs in these lawsuits have argued that medical marijuana users are protected under such statutes because the law itself creates the sought-after employment protections, that the employer’s decision to discharge the user violates the public policy of the state, and/or that the employer discriminated against them on the basis of a disability when it failed to accommodate their medical marijuana use. The courts, in response, have held that the medical marijuana statutes in their state only protect patients from criminal sanctions and do not create any civil remedies or protections. As such, the courts have held that these statutes do not create a clear public policy that might otherwise support a wrongful termination claim or establish that medical marijuana users belong to a protected class. With respect to claims based on asserted disabilities, courts, like the Supreme Court of Oregon, have held that federal law preempts any argument that an individual is protected from disability discrimination on the basis that they are a medical marijuana patient.

Another argument that was recently tested by a plaintiff in Colorado is that an employer’s decision to discharge a medical marijuana user who fails a drug test violated the state’s “lawful activities” statute. Colorado, like many states, prohibits employers from taking action against an employee for engaging in lawful activities or using lawful products outside of the workplace. In a decision dated April 25, 2013, the Court of Appeals of Colorado held that the state’s “lawful activities” statute did not bar the employer from discharging an employee who tested positive for marijuana after a random drug test and who was also a licensed patient. Coats v. Dish Network, LLC, case nos. 12CA0595, 12CA1704 (Co. Ct. App. April 25, 2013). The court held that since the Colorado statute did not specify whether an activity’s “lawfulness” was determined by state or federal law, and marijuana is illegal under federal law, employees that use medical marijuana are not shielded by the statute from the risk of termination.

Despite the lack of civil protections in a majority of jurisdictions that have legal medical marijuana, a few states do provide clear restrictions on an employer’s ability to discriminate against a medical marijuana patient. In Connecticut, Maine and Rhode Island, medical marijuana patients are given protected status and employers are prohibited from discriminating against an employee merely due to their status as a medical marijuana patient. Under Illinois’ HB 1, Illinois also now prohibits such discrimination.

In addition, Arizona and Delaware have adopted much more explicit and impactful statutorily language that bars an employer from discriminating against a registered and qualifying patient who has failed a drug test for marijuana metabolites or components. The only exceptions to this rule are that an employer may act upon the results of a failed drug test if the patient “used, possessed or was impaired by marijuana on the premises of the place of employment or during the hours of employment” or failing to do so would jeopardize an employer’s “monetary or licensing related benefit under federal law or regulations.” See ARS 36-2813 and Del. Code Title 16, § 4905A. Neither statute has been tested in the courts, but the language of these statutes appears to plainly prohibit employers from firing an employee who is a qualified medical marijuana patient based solely on a failed drug test. Rather, in these two states, most employers will need to prove that their decision was based on the fact that the employee used, possessed or was impaired by marijuana while on the job.

Uncertainties Around Illinois Statute

Whether Illinois’ medical marijuana statute provides similar protections is a more uncertain question. With regard to employer liability under the proposed statute, HB 1’s provisions are generally couched in what they do not prohibit, leaving open to interpretation what it may bar with regard to workplace decision-making. HB 1 first states that it does not prohibit “an employer from enforcing a policy concerning drug testing, zero-tolerance or a drug free workplace provided the policy is applied in a nondiscriminatory manner.” The bill also states that employers are not limited from “disciplining a registered qualifying patient for violating a workplace drug policy.” These initial provisions suggest that Illinois’ statute is in line with the majority of jurisdictions, but then it goes on to provide that “[n]othing in this Act shall limit an employer’s ability to discipline an employee for failing a drug test if failing to do so would put the employer in violation of federal law or cause it to lose a federal contract or funding.” This language, like that in Arizona and Delaware, appears to potentially prohibit employers from relying upon a failed drug test for marijuana unless the employer has contrary obligations under federal law or regulation. The statute continues down this road by also stating that it does not create a cause of action against an employer for actions based on a good faith belief that the medical marijuana user used, possessed or was impaired by marijuana while working. It also provides that an employer may consider a patient to be impaired when they exhibit “articulable symptoms … that decrease or lessen [the employee’s] performance of the duties or tasks of the employee’s job position.” This provision further states that if an employee is disciplined under this section, that they must be given an opportunity to contest the employer’s determination.

Taking these latter provisions into account, there are strong arguments in favor of the position that Illinois’ medical marijuana does provide similar civil employment protections as found in Arizona’s and Delaware’s statutes. First, the bill states that employees cannot sue an employer for actions that were based on a good-faith belief that the employee was impaired, that the belief that an employee is impaired must be based on “articulable symptoms,” and that employees must have an opportunity to rebut the idea the they were impaired. These provisions suggest that an employer may be found to have acted in bad faith and subject to liability if it discharges an employee without an articulable basis for why it believed that the employee was impaired or fails to give an employee a chance to challenge an assertion that they were impaired on the job. In addition, the statute appears to tie the ability of an employer to discipline an employee for failing a drug test to an employer’s obligations under federal law. This framework creates a plausible argument that the statute does provide protections for medical marijuana users who do not use or are not impaired by marijuana on the job. However, the pronouncement that employers are not limited in keeping drug testing, zero tolerance, or drug-free workplace policies seems to conflict with such a finding. Perhaps one way to read these provisions consistently is to find that the statute allows employers to maintain such policies, but that they must treat medical marijuana patients in the same manner as other employees that have been prescribed legal medications. In reality, the only way we will know the answer to this question is when the law is inevitably relied upon by a qualified patient who is fired for failing a drug test that is positive for marijuana.

Recommendations for Employers in Medical Marijuana Jurisdictions

So, how should employers respond to these increasingly more common medical marijuana laws? For those employers who have federal contracts or are otherwise subject to federal regulations concerning drug-free workplaces, your practices do not need to change. According to the Department of Transportation, which regulates and provides drug testing requirements for certain safety-sensitive positions, it is “unacceptable for any safety-sensitive employee subject to drug testing under the Department of Transportation’s regulations to use marijuana.” Thus, employers subject to such or similar regulations should continue to comply with applicable federal law.

Employers that are not subject to federal drug testing regulations should review their substance abuse policies to ensure compliance with local and state law. Employers in states that generally do not provide for employment protections should still consider whether their state has a “lawful activities” or “lawful products” statute or whether courts in their state may be more favorable to finding a clear public policy protecting medical marijuana users. In light of the holdings of those decisions that have addressed the issue, courts in these states will likely find that their state law does not establish a clear public policy in favor of medical marijuana patients. However, this analysis may differ in Colorado and Washington, both of which now allow for legal recreational use. In those states that do provide for some form of employment protection, you should carefully revise your policies to be consistent with those laws.

Employers should also consider whether or when they will conduct drug testing. With the passage of these laws, employers should expect that more of their employees may be using marijuana outside of the workplace. Similarly, employers should expect more challenges, based on the long period of time that marijuana metabolites remain in an individual’s system, from employees that have failed drug tests but who claim they were not impaired while working. In Arizona, Delaware and Illinois, employers should revise their substance abuse policies to make sure they conform to state law and ensure that employees who are qualified patients are not disciplined solely on the basis of a failed drug test. Lastly, employers should train their supervisors and managers to recognize signs of impairment (whether due to marijuana, alcohol, or other substances) and how to deal with inquiries from employees regarding their use of medical marijuana.

[1] States that provide for some form of legalized medical marijuana states are: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington.

[2] The six jurisdictions that do provide some level of civil protections are: Arizona, Connecticut, Delaware, Illinois, Maine, and Rhode Island.

Are You Ready For Your Company’s Holiday Party?

Many companies start planning their holiday party now. Employers need to know that an employer can be held liable for accidents and injuries caused by their employees who over indulge themselves with alcohol at the party, even if the employee initially made it home safely! You read that correctly. The California Court of Appeal, in Purton v. Marriott International, Inc., recently held that the company was potentially liable for a fatal motor vehicle accident caused by one of its employees who had attended the company’s hosted party. While the employee arrived home safely, the employee left about 20 minutes later to drive another co-worker home. The co-worker was also intoxicated. During this trip the employee struck another car, killing its driver. The trial court granted summary judgment for the employer on the ground that the employer’s potential liability under the doctrine of respondeat superior ended when the employee arrived home.

The court of appeal reversed and held that an employer may be found liable for its employee’s tortious conduct “as long as the proximate cause of the injury occurred within the scope of employment. It is irrelevant that foreseeable effects of the employee’s negligent conduct occurred at a time the employee was no longer acting within the scope of his or her employment.” The court explained that a jury could conclude that the proximate cause of the injury, i.e., the employee’s alcohol consumption, and the negligent conduct, i.e., the car accident, occurred within the scope of his employment. The court further found that the going and coming rule, which generally exempts an employer from liability for the torts of its employees committed while going to or coming home from their work, was an “analytical distraction” because the “thrust of [plaintiff’s] claim for vicarious liability was that [the employee] was an `instrumentality of danger’ because of what had happened to her at work.” As such, the court focused on the “act on which vicarious liability is based and not on when the act results in injury.” The court also stated that the record presented sufficient evidence for a finding that the employee in question breached a duty of due care he owed to the public once he became intoxicated and that the employer “created the risk of harm at its party by allowing an employee to consume alcohol to the point of intoxication.”

This case certainly gives the definition of “within the course and scope of employment” a broader meaning. That said, the moral of the story: (1) don’t drink and drive; (2) don’t let your employees do so either; and (3) limit your employees’ consumption of alcohol at company events.