Supreme Court Ducks Mootness Question In Genesis

By: Jerrold J. Wohlgemuth

Does an unaccepted offer of judgment for full relief made prior to a motion to certify moot the plaintiff’s claim in an FLSA collective action?  That was the question we hoped the Supreme Court would answer in Genesis Healthcare Corp. v. Symczyk.  Unfortunately, the majority in the 5-4 opinion issued April 16 refused to decide that question, finding that the issue was not properly before the Court because the plaintiff had conceded her claim was moot in the district court and Third Circuit, and had not contested the issue in her opposition to the petition for certiorari.  While we now know from the dissent that Justices Kagan, Breyer, Sotomayor and Ginsburg would find that an unaccepted offer of judgment has no impact on the validity of the underlying claim, the majority opinion leaves unresolved a split among the Circuits.  The Seventh Circuit accepts the argument that a claim must be dismissed as moot when an offer of judgment for full relief is made prior to a motion to certify, while the Third, Fifth and Ninth Circuits allow plaintiffs to circumvent mootness by immediately filing a motion to certify (the Second and Sixth Circuits accept mootness but reject the argument that the case should be dismissed, finding instead that judgment should be entered for the plaintiff in the amount offered by the defendant).  Because the issue remains in doubt, Defendants in FLSA collective actions may prefer to pursue settlement with the individual plaintiff  before a motion to certify has been filed to end the claim, rather than make an offer of judgment, in order to avoid endless litigation over the impact of the offer.

To read our client alert for this case click here.

Employee’s Deactivation Of Facebook Account Leads To Sanctions

By: Helen Tuttle and Noreen Cull

The latest Facebook case highlights how courts now intend to hold parties accountable when it comes to preserving their personal social media accounts during litigation.  Recently, a federal court ruled that a plaintiff’s deletion of his Facebook account during discovery constituted spoliation of evidence and warranted an “adverse inference” instruction against him at trial.  Gatto v. United Airlines and Allied Aviation Servs., et al. , No. 10-CV-1090 (D.N.J. March 25, 2013).

The plaintiff, a ground operations supervisor at JFK Airport, allegedly suffered permanent disabling injuries from an accident at work which he claimed limited his physical and social activities.  Defendants sought discovery related to Plaintiff’s damages, including documents related to his social media accounts.

Although Plaintiff provided Defendants with the signed authorization for release of information from certain social networking sites and other online services such as eBay, he failed to provide an authorization for his Facebook account.  The magistrate judge ultimately ordered Plaintiff to execute the Facebook authorization, and Plaintiff agreed to change his Facebook password and to disclose the password to defense counsel for the purpose of accessing documents and information from Facebook.  Defense counsel briefly accessed the account and printed some portion of the Facebook home page.  Facebook then notified Plaintiff that an unfamiliar IP address had accessed his account.   Shortly thereafter, Plaintiff “deactivated” his account, causing Facebook to permanently delete the account 14 days later in accordance with its policy.

Defendants moved for spoliation of evidence sanctions, claiming that the lost Facebook postings contradicted Plaintiff’s claims about his restricted social activities.  In response, Plaintiff argued that he had acted reasonably in deactivating his account because he did know it was defense counsel accessing his page.  Moreover, the permanent deletion was the result of Facebook’s “automatically” deleting it.  The court, however, found that the Facebook account was within Plaintiff’s control, and that “[e]ven if Plaintiff did not intend to deprive the defendants of the information associated with his Facebook account, there is no dispute that plaintiff intentionally deactivated the account,” which resulted in the permanent loss of  relevant evidence.  Thus, the court granted Defendants’ request for an “adverse inference” instruction (but declined to award legal fees as a further sanction).

The Gatto decision not only affirms that social media is discoverable by employers, but also teaches that plaintiffs who fail to preserve relevant social media data will face harsh penalties.  Employers are reminded to specifically seek relevant social media (Facebook, Twitter, blogs, LinkedIn accounts) in their discovery requests since such sources may provide employers with sufficient evidence to rebut an employee’s claims.  This case also serves as a reminder and a warning to employers that the principles of evidence preservation apply to social media, and employers should take steps very early in the litigation to preserve its own social media content as it pertains to the matter.

Blowing The Wrong Whistle – Close Scrutiny Of Code Of Ethics Dooms Nurse’s Lawsuit Under New Jersey’s Whistleblower Statute

By: Lawrence J. Del Rossi

New Jersey’s Conscientious Employee Protection Act (CEPA) is remedial legislation designed to protect employees who “blow the whistle” on illegal or unethical activity committed by their employers or co-workers.  To be sure, CEPA is a powerful anti-retaliation statute, providing an array of significant remedies to an aggrieved party.  However, as the saying goes, with great power comes great responsibility.  A recent decision by the Appellate Division, Hitesman v. Bridgeway, Inc. (decided March 22, 2013), highlights the important gatekeeping functions of trial courts in CEPA cases.  Click here for a copy of Hitesman. http://www.judiciary.state.nj.us/opinions/a0140-11.pdf.

Not every employee who “blows a whistle” is a “whistleblower” subject to the protections of CEPA.  An employee who lacks an objectively reasonable belief that his or her employer’s conduct violated a law or public policy or constituted improper quality of patient care cannot, as a matter of law, sustain a viable claim under CEPA.  The Supreme Court in Dzwonar v. McDevitt, 177 N.J. 451 (2003) provided the legal framework for trial courts to use to separate the proverbial wheat from the chaff in most CEPA cases.  First, the trial court must identify a law, rule, or regulation promulgated pursuant to a law or a clear mandate of public policy, that the plaintiff believed was violated by the employer’s conduct.  Next, the court must determine whether there is a “substantial nexus between the complained-of conduct and [the] law or public policy identified by the court or the plaintiff.”  If the trial court so finds, the jury then must determine whether the plaintiff “actually held a belief and, if so, whether that belief was objectively reasonable.”

In Hitesman, the plaintiff, a nurse who worked at a long-term nursing home facility, disclosed to government regulators “practices of Defendant that he reasonably believed constituted improper quality of patient care and violations of his professional code of ethics.”  He sued under CEPA after he was fired for admittedly violating the defendant’s confidentiality policy (improper disclosure of patient information).  The trial court allowed the plaintiff’s CEPA claim to proceed to a jury trial, and the jury found in the plaintiff’s favor on liability.  However, on appeal the Appellate Division reversed the jury’s verdict.

Applying the analytical framework in Dzwonar for determining whether the plaintiff has established a prima facie case under CEPA, the court in Hitesman found that the plaintiff had failed to proffer facts that would support an objectively reasonable belief that a violation of law or clear mandate of public policy by his employer had occurred.  The Appellate Division concluded that the plaintiff’s reliance on the American Nursing Association’s Code of Ethics (“Code”), his employer’s Employee Handbook and a Statement of Residents’ Rights, was misplaced because none of these documents constituted a source of law or public policy closely related to the conduct about which the plaintiff claimed he had blown the whistle.  While the section of the Code relied upon by the plaintiff provided guidance as to whether he had acted in compliance with the Code in expressing his concerns, nothing in the Code established any standards regarding patient care.  As a result, the court held that the plaintiff’s belief that his employer had acted in violation of the Code was not objectively reasonable as a matter of law.

The court in Hitesman also concluded that “generalized statements” in the employer’s Employee Handbook about a commitment to “the best quality of health care” and requirements that its employees comply with all applicable statutes, regulations and ethical standards were “far too vague” to provide a “high degree of public certitude in respect of acceptable versus unacceptable conduct.”  Thus, an employee’s reliance on generalized statements that the employer and its employees will comply with the law will not support a CEPA claim.

All too often, plaintiffs in CEPA cases cite a litany of broad and generalized legislative, ethical rule or code of conduct statements to challenge management decisions.  Do not let a plaintiff get away with the “throw everything at the wall to see what sticks” approach in CEPA cases.  Hitesman and Dzwonar require trial courts to engage in a rigorous analysis to determine whether the plaintiff had, as a matter of law, an objectively reasonable belief that the complained-of conduct violated a law or public policy.  Because CEPA does not shield a complainer who simply disagrees with an employer’s course of lawful conduct, close scrutiny of the complained-of conduct by the trial court is essential.  As the court in Hitesman explained, it is “not enough for an employee to rest upon a sincerely held – and perhaps even correct – belief that the employer has failed to follow the most appropriate course of action, even when patient safety is involved.”  Instead, the employee must have an objectively reasonable belief that a violation of relevant legal authority occurred.

Bill Horwitz Article Published in New York Law Journal

An article by Florham Park counsel Bill Horwitz titled, “Second Circuit Adopts New Standard Involving Harassment by Non-Employees,” was published in the New York Law Journal.

Bill discussed the case of Summa v. Hofstra University, in which the U.S. Court of Appeals for the Second Circuit addressed the question of whether an employer is liable when non-employees harass its personnel and adopted a standard for answering it.

The case involved claims of sexual harassment and retaliation by a former part-time manager of Hofstra University’s football team, a graduate student named Lauren Summa. Bill says the decision, however, has implications “beyond the world of college sports and applies to harassing conduct by vendors, customers and other third parties.”

The Second Circuit held that Summa could not pursue her sexual harassment claims against the university because it promptly responded to her complaints about football players’ conduct and took appropriate remedial action. The court, however, allowed her retaliation claim to continue because Summa provided sufficient proof that her complaints about the football team influenced the university’s decision to ultimately terminate her employment.

Bill says the decision “serves as a reminder to employers that: (1) ensuring that employees do not engage in inappropriate conduct will not necessarily shield an employer from civil liability for harassment; and (2) preventing retaliation against an employee who complains about harassment may be as important as preventing harassment in the first place.”

New York City Expected to Pass Expansive Paid Sick Leave Law

By: Lynne Anne Anderson

The New York City Council has reached a compromise that will enable it to pass a paid sick leave law.  Although Mayor Michael Bloomberg objects to the legislation, news outlets are virtually unanimous in predicting that the City Council has enough votes to override his veto.  While federal law does not require employers to provide paid sick leave, Connecticut and some cities (including San Francisco, Seattle and Portland) have adopted paid sick leave laws.  Other cities (including Philadelphia) are considering doing so.  In New York City, even employers that already provide paid sick leave will have to take a close look at the new legislation and reconcile their current sick leave policies with the city’s mandates.  For example, New York City’s proposed law includes anti-retaliation provisions that would prohibit employers from firing employees for using their paid sick leave.

What employers are covered by the proposed law and when would it go into effect?

Under the proposed New York City law, as of April 1, 2014, companies with 20 or more employees would have to provide at least five paid sick days a year.  The law would be extended to apply to companies with 15 or more employees as of October 1, 2015.   Earlier versions of the legislation had required nine paid sick days, so five days was part of the compromise lawmakers reached in response to small business owners’ very vocal objections.  The New York City law is not as expansive as some other city laws.  For example, paid leave obligations in San Francisco, Seattle and Portland apply to companies with as few as five employees.

Notably, the New York City law will also require companies of any size to provide five days of sick leave as of April 1, 2014, but the time off may be unpaid.

What employees would be eligible?

To be eligible for paid leave, employees working within the borders of New York City would have to be employed for at least 4 months.  The law applies to full-time and part-time workers, although seasonal workers and student interns would not be eligible.

Other details include that the New York City Department of Consumer Affairs would have enforcement authority and there is a safety net provision that would delay implementation of the law if New York City’s economy slows down.

Advocates of the legislation claim that the law will provide paid sick leave for one million workers.  It is clear that this law will have a significant impact on small businesses.  The Society for Human Resource Management reports that only 32% of small businesses (50 or less employees) currently offer paid sick leave, and an advocacy group, A Better Balance, reports that over 80% of restaurant workers and 60% of retail workers in New York City do not receive pay when they miss work due to sickness.  As noted above, this law will also impact larger employers to the extent that they do not already provide five days of paid sick leave or only offer benefits to full-time employees or employees employed for longer than four months.  And, as with any new law, it is important to track implementation to comply with notice requirements, both in terms of posting and adoption of compliant company policies prior to the April 2014 and October 2015 effective dates.

Editor’s Note:

On May 8, 2013, the New York City Council passed the Earned Sick Time Act by a 45-3 vote.  New York City Mayor Michael Bloomberg had vetoed the bill on June 7, 2013, but the New York City Council overrode the veto on June 27.   New York City now joins San Francisco, Washington, D.C., Seattle, Portland, and the State of Connecticut to pass mandatory sick leave laws.

 

EEOC Warns Employers Against Domestic Violence Discrimination

By: Alejandra Lara

In its recent guidance titled “Questions and Answers: The Application of Title VII and the ADA to Applicants or Employees Who Experience Domestic or Dating Violence, Sexual Assault, or Stalking,” the EEOC cautions employers against unwittingly violating Title VII and the ADA in addressing employment-related issues involving victims of domestic violence.

The EEOC reminds employers that while Federal law does not expressly protect domestic violence victims from employment discrimination, such victims may still be entitled to protection under federal employment discrimination laws.

In its guidance, the EEOC provides examples of situations where employers may violate Title VII by engaging in disparate treatment, or applying sex-based stereotypes to victims of domestic violence.  For example, an employer that terminates an employee victimized by domestic violence due to fear of the potential “drama battered women bring to the workplace” may engage in discrimination based on sex in violation of federal law.

The EEOC further warns employers to exercise caution before transferring or discharging domestic violence victims based on general concerns that they may pose greater workplace safety risks.  Instead, employers should seek alternate resolutions before taking adverse action, such as paying for workplace security or getting a temporary restraining order.  Even if such options are not effective, an employer should take adverse action against an employee only based on specific and concrete facts showing that the employee poses a threat to other employees.

Further, the EEOC guidance highlights situations in which an employer may violate the Americans with Disabilities Act (“ADA”) in treating employees and applicants adversely based on actual or perceived impairments resulting from domestic or dating violence.  An example of this includes refusing to hire a domestic violence victim “based on a concern that she may require future time off for continuing symptoms or further treatment of depression.”  The ADA may also require an employer to provide employees reasonable accommodations; such as where a victim of sexual assault requests unpaid leave to get treatment for depression and anxiety, but has no accrued sick leave and is not covered by the Family and Medical Leave Act.  In certain situations the employer may have to modify its leave and attendance policies to accommodate the leave request, or risk violating the employee’s rights under the ADA.

Many of the scenarios discussed in the EEOC’s Q&A’s are straightforward and may surprise few employers.  Yet the guidance highlights the agency’s interest in protecting victims of domestic violence, and signals to employers that the EEOC will be paying close attention to these issues.  Finally, while Federal law offers limited protection to domestic violence victims, a handful of States have specific laws either directly protecting victims of domestic violence from employment discrimination, or requiring employers to give employees time off to attend court proceedings, obtain protective orders and/or seek services for the effects of domestic violence.  Employers are well advised to consult the laws of their individual States and otherwise tread lightly when dealing with victims of domestic violence.