Defending and Preventing Employment Litigation – 2014 Edition

Drinker Biddle proudly announces the release of the 2014 edition of Defending and Preventing Employment Litigation. Written and updated for 2014 by Labor & Employment Group partners Gerald S. Hartman and Gregory W. Homer, Defending and Preventing Employment Litigation is a must have reference for employment lawyers, in-house employment counsel, general counsels, and human resources professionals.  The one-volume annually updated manual provides insight on preventing, preparing for, and managing employment litigation in discussing all types of discrimination, harassment, wage, leave and wrongful discharge claims.

The 2014 edition of Defending and Preventing Employment Litigation retails for $385.  Drinker Biddle has arranged a special discount rate of 20% off the retail price for friends of the firm. To purchase your copy of Defending and Preventing Employment Litigation click here.

Lawrence Del Rossi and Joshua Rinschler Publish Article on an ‘Awkward Theory’ of Personal Liability for Supervisory Employees Under the NJLAD

Associates Lawrence J. Del Rossi and Joshua D. Rinschler’s article, Aiding and Abetting Your Own Conduct – An ‘awkward theory’ of personal liability for supervisory employees under the N.J. Law Against Discrimination (NJLAD), was published in the July 16, 2012 edition of the New Jersey Law Journal.  Their article takes a look at what is becoming a common practice in wrongful discharge cases brought under the NJLAD where terminated employees are not only suing their employer, but also naming as an individual defendant the supervisor who made the decision to terminate.  Their complete article appears below.

Aiding and Abetting Your Own Conduct – New Jersey Law Journal – Larry Del Rossi and Joshua Rinschler – 7-16-12

 

 

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

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

By: Lynne Anne Anderson and Jerrold Wohlgemuth

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 hereCole is reported at 425 N.J. Super 48 (App. Div. 2012).

New York High Court: No At-Will Exception For Complaining Hedge Fund Executive

By: William R. Horwitz

The New York State Court of Appeals declined this week to recognize an exception to the at-will employment doctrine for a hedge fund’s Chief Compliance Officer who alleged that he was fired for objecting to his employer’s unlawful trading practices.  In Sullivan v. Harnisch, Plaintiff Joseph Sullivan was an employee and minority owner of Defendants Peconic Partners LLC and Peconic Asset Managers LLC (collectively, “Peconic”), holding various titles including Chief Compliance Officer.  Defendant William Harnisch was the majority owner, President and Chief Executive Officer.  Sullivan filed a lawsuit for wrongful discharge, alleging that Peconic fired him for objecting, in his capacity as Chief Compliance Officer, to Harnisch’s “manipulative and deceptive trading practices.”  The trial court denied Defendants’ motion for summary judgment seeking to dismiss the claim.  The Appellate Division, First Department, reversed and Sullivan appealed.

According to the Court of Appeals, the “gist of Sullivan’s claim is that the legal and ethical duties of a securities firm and its compliance officer justify recognizing a cause of action for damages when the compliance officer is fired for objecting to misconduct.”  The Court reiterated the at-will employment doctrine, explaining that, “absent violation of a constitutional requirement, statute or contract,” an employer has the right to terminate employment at will.  The Court indicated that it has “recognized an exception” to this doctrine “only once.”

That exception arose in Wieder v. Skala, in which a law firm had allegedly fired a lawyer for insisting that it comply with the profession’s ethical obligations.  According to the Court, that decision “stressed both the ethical obligations of members of the bar and the importance of those obligations to the employment relationship between a lawyer and a law firm.”  Moreover, the decision focused on the legal profession’s “unique function of self-regulation.”

In Sullivan, the Court emphasized the narrow scope of the Wieder decision.  Although the Court left open the possibility that “there are some employment relationships, other than those between a lawyer and a law firm, that might fit within the Wieder exception,” the Court concluded that “the relationship in this case is not one of them.”  Distinguishing Wieder, the Court explained that Sullivan’s regulatory and ethical obligations were not inextricably tied to his duties as an employee.  Indeed, the Court observed, Sullivan “was not even a full-time compliance officer.”  The Court also stated that regulatory compliance was not at the “very core” and the “only purpose” of Sullivan’s employment.

The Court affirmed the Appellate Division’s decision.  In a strongly-worded dissent, Chief Judge Lippman charged that the “majority’s conclusion that an investment adviser like defendant Peconic has every right to fire its compliance officer, simply for doing his job, flies in the face of what we have learned from the Madoff debacle, runs counter to the letter and spirit of this Court’s precedent, and facilitates the perpetration of frauds on the public.”

Notwithstanding the dissent’s alarm that New York employers are now free to fire employees who allege wrongdoing, prudent employers – particularly in highly regulated fields like the securities industry – take such allegations seriously and investigate them, and are careful to avoid allegations of retaliation.