A $650,000 compensatory award was affirmed by the 6th Circuit recently (in an unpublished decision) where a plaintiff prevailed on a Title VII retaliation claim. Fischer v. UPS. The court rejected the defendant’s argument that the award was too high given that the plaintiff did not present expert medical proof as to emotional distress or mental harm. Acknowledging the large size of the award, the court held that the jury’s compensatory damage award did not clearly exceed the maximum that a jury could reasonably find to be compensatory for the plaintiff’s loss.

Also, the 6th Circuit reinstated an award of punitive damages to the plaintiff. The jury’s award of 1.3M in punitive damages was reduced to Title VII’s statutory cap of $300,000. In a post-trial motion, the defendant convinced the district court that the jury’s award of punitive damages was improper. The 6th Circuit reversed the district court’s decision finding that the jury could have reasonably concluded that the defendant did not engage in good faith efforts to implement its anti-discrimination/anti-retaliation policies.

This is a fantastic decision on many levels. The 6th Circuit panel hearing the case was compromised of Judges Cook, Sutton and Suhrheinrich. The panel was appropriately deferential to the jury in this case, which is a nice to see at the appellate level. Thanks to my friend Nashville attorney Wade Cowan for bringing this case to my attention.

On July 1, 2010, we (Donati Law Firm and the Nichols Kaster firm) filed a lawsuit in the U.S. District Court for the District of Minnesota against Multiband Corporation under the Fair Labor Standards Act seeking unpaid overtime compensation on behalf of satellite tv installers, who have been treated as independent contractors by Multiband.

Click on link to access a copy of the Complaint

The case is getting some press. Click here and here.

If you believe you have been improperly classified by a company as an “independent contractor”, and thus denied overtime compensation in work weeks in which you worked in excess of forty hours, please contact my law firm at 901-278-1004 for a free consultation.

Another case decided by the 6th Circuit against an employee (See, e.g., Crawford, Pollard, Harris) has been accepted by the Supreme Court Of The United States.

On June 29, 2010, the SCOTUS granted Eric Thompson’s petition for a writ of cetriorari in his case against North American Stainless, L.P. Click here.

The issue before the Court is whether a third party is afforded protection under Title VII’s anti-retaliation provision based on his association with an employee who has engaged in protected activity.

An en banc 6th Circuit had held last summer that a third party such as Mr. Thompson was not afforded protection from retaliation based on his association with an employee (his fiancee’) who engaged in protected activity.09a0202p-06

I blogged about this unfortunate decision in June 2009. Click here.

Interestingly, the Court agreed to hear the Thompson case even though the U.S., through the Solictor General’s office, argued to the court that the case was not cert-worthy. 09-291_cvsg The U.S. did, however, argue that the 6th Circuit’s decision was in error.

The case will likely be argued before the SCOTUS in the fall of 2010 or early 2011. A decision is expected by spring of 2011.

The U.S. Department of Labor, Wage and Hour Division, issued its second Administrator’s Interpretation on June 16, 2010. Interpretation 2010-2

The AI concerns application of 29 U.S.C. 203(o).

In my opinion, this AI may very well have a significant impact in donning and doffing cases brought under the Fair Labor Standards Act (FLSA). In these cases, workers seek to be paid for time spent donning and doffing protective/sanitary gear, for example, and for time spent walking to the worksite.

In some circumstances, however, 29 U.S.C. 203(o) permits employers to not pay workers for time spent donning and doffing protective/sanitary gear and for time spent walking to the worksite.

Specifically, an employer can avoid paying for donning and doffing time, if the employer establishes that the workers are changing into “clothes” and that the employer and the workers’ union have expressly agreed to exclude such time as being compensable or a custom or practice exists between the employer and the union regarding the non-payment of time.

Many court cases recently have discussed what constitutes “clothes” as that term is defined at § 203(o).

AI 2010-2 defines the term “clothes” as used in § 203(o) in a narrow fashion as intended by Congress and rejects Opinion Letters issued by the DOL during the Bush Administration, which had greatly expanded the definition of “clothes”. Before the Bush Administration, the DOL had interpreted the term “clothes” in a narrow, pro-worker fashion that is consistent with the purpose and remedial scope of the FLSA. Thus, in my opinion AI 2010-2 restores the status quo.

Also, AI 2010-2 further states that clothes changing activity, which is covered by § 203(o), may constitute a principal activity under the FLSA. Accordingly, for example, walking time, which follows clothes changing activity covered under § 203(o), may be compensable even if the time spent changing clothes is not compensable.

An attorney friend in Nashville, David Cooper, has alerted me to a new decision by the Tennessee Court of Appeals, which holds that Tennessee’s whistleblower statute (Tenn. Code Ann. 50-1-304) only applies to employees who have been terminated or discharged from their employment.

COA – Harman v University of Tennessee

In the Harman case, the plaintiff, a professor at the University of Tennessee, was demoted, but not terminated.

The court of appeals’ decision was predictable give the language of the statute, which states that “[n]o employee shall be discharged or terminated solely for refusing to participate in, or for refusing to remain silent about, illegal activities.” T.C.A. § 50-1-304(b).

It’s my opinion, however, that the decision only applies to statutory whistleblower claims. I believe that a plaintiff suing a private entity may bring a claim for retaliatory demotion under Tennessee common law.

Unfortunately for Professor Harman, he was foreclosed from suing the University of Tennessee under a common law theory because governmental entities are immune from suit under Tennessee common law. See, e.g., Baines v. Wilson County, 86 S.W.3d 575 (Tenn. Ct. App. 2002)(holding governmental entity is immune from liability for the common law tort of retaliatory discharge).

George Fort filed a complaint with the U.S. Department of Labor alleging he was subjected to adverse actions by his employer, Tennessee Commerce Bancorp., in violation of the Sarbanes-Oxley Act (SOX). See 18 U.S.C. 1514A. Click here.

Following an investigation, the Dept. of Labor ordered that Fort be reinstated to his former position as CFO of the bank along with full back pay. The bank refused and the Dept. of Labor sought enforcement of its order in the Middle District of Tennessee.

On May 19, 2010, Judge William Haynes of the Middle District of Tennessee granted the Dept. of Labor’s motion for preliminary injunction and ordered that Fort be reinstated to his former position. See Solis v. Tennessee Bancorp., Inc., 2010 WL 2010944 (M.D. Tenn. May 19, 2010).

The court rejected the bank’s arguments that the Dept. of Labor’s order violated the bank’s due process rights “because the preliminary order results in a permanent and irreparable loss to the [bank] of the permanent deprivation of payments and wages pending a final resolution of the Secretary’s proceedings against the [bank].” In this regard, the court noted that the bank was regulated by the SEC and sought investors in publicly traded stock. Accordingly, the court held that “[i]n this context, the costs of compliance with the Secretary’s preliminary order based upon factual findings is a regulatory cost of doing business.”

UPDATE: On May 25, 2010, the 6th Circuit has issued an order staying the injunctive relief ordered by the Middle District of Tennessee. Order Thus, Mr. Fort’s reinstatement has been put on hold for the time being.

Many employers have adopted no-fault attendance policies. Under the typical policy, employees are assessed points for violations of the attendance policy without regard to the reason for the absence. See, e.g., Bauer v. Varity Dayton-Walther Corp., 118 F.3d 1109-10 (6th Cir. 1997).

Occasionally, a no-fault attendance policy will collide with an employee’s use of FMLA.

A FMLA regulation specifically states that employers are prohibited from counting qualifying leave as part of a no-fault leave policy. 29 C.F.R. 825.220(c). And a termination based only in part on an absence covered by the FMLA, even in combination with other absences, may still violate the FMLA. Cavin v. Honda of America Mfg., Inc., 346 F.3d 713, 726 (6th Cir. 2003)

Thus, if an employee is terminated due to a no-fault attendance policy and is subsequently able to demonstrate that he had points assessed against him that should have been protected under the FMLA, then the employee will be entitled to damages and/or reinstatement to his former position. See 29 U.S.C. 2617.

In a case decided yesterday, a jury verdict awarding $750,000 in compensatory damages and $300,00 in punitive damages, as well as an approx. $130,000 in back pay and front pay, was upheld by the 6th Circuit Court of Appeals. Click here to read the decision: West v. Tyson

One interesting issue involved the defendant’s request that the compensatory damage award of $750,000 be remitted. (Opinion at 29-31).

At trial, the plaintiff requested that the jury award up to $500,000 in compensatory damages. Notwithstanding the plaintiff’s request, the jury proceeded to award the plaintiff $750,000 ($500,000 for past emotional distress and $250,000 for ongoing emotional distress). Now, this is my kind of jury.

On appeal, the defendant argued that an award of compensatory damages beyond that requested by the plaintiff must be remitted. This argument was rejected by the 6th Circuit.

While it acknowledged that an award in excess of that requested was a factor to be considered when entertaining a motion for remittitur, the Court disagreed that it was bound as a matter of law to reduce the award to an amount that had been requested. Instead, the Court held that the proper legal standard simply required it to determine whether the award “is beyond the maximum damages that the jury reasonably could find to be compensatory for a party’s loss.” (Op. at 30). And based on the Court’s review of the evidence, an award of $750,000 was not beyond the max a jury could have awarded.

Yesterday, Magistrate Judge Tu M. Pham from the Western District of Tennessee issued a decision granting a plaintiff’s motion for partial summary judgment in a FMLA case. The name of the case is Green v. Third Party Solutions, Inc. and a copy of the decision can be accessed by clicking here. SJ Order. There are a couple of interesting points in the decision.

First, the court found that the defendant had interfered with the plaintiff’s FMLA rights thus finding in favor of the plaintiff on her FMLA interference claim. (SJ Order at 12-19). The court found that the defendant improperly terminated the plaintiff’s employment based on its belief that the plaintiff had not submitted a properly completed health care provider certification form regarding her FMLA leave request. Specifically, the court held that the FMLA certification form completed by the healthcare provider was sufficiently complete as a matter of law even though the form did not set forth an end duration date. As a result, the court held that the defendant illegally interferred with plaintiff’s FMLA rights.

Second, the court held that the defendant had waived its right to raise and rely on an after-acquired evidence defense, which would cut off the plaintiff’s damages if successful. The defendant argued that it discovered during litigation that the plaintiff had lied on her job application; therefore, plaintiff’s damages should be cut off as of the date it learned of plaintiff’s deception.

As an initial matter, the court agreed “with the majority of the courts and conclude[d] that the after-acquired evidence defense is an affirmative defense that must be pleaded under [FRCP] Rule 8(c).” (SJ Order at 26-27). The court next found that the defendant had not raised the after-acquired evidence defense in its answer waiting to first raise the matter in its motion for summary judgment. The court then held that the plaintiff would be prejudiced if it permitted the defendant to raise the defense after the close of discovery. Thus, the court determined that the defendant had waived its right to raise and rely on the after-acquired evidence defense.

Nice win for the plaintiff in this case.

A recent case from the Eastern District of Tennessee discusses the enforcement of settlement agreements in a FLSA case. See Solis v. Magana, 2010 WL 1257859 (E.D. Tenn. Mar. 26, 2010).

In this case, the defendant agreed to settle a FLSA case brought by the U.S. Department of Labor. The amount of the settlement was agreed upon, as well as a payment schedule. Some months later, before the Court had approved the final settlement, the defendant sought to modify the payment schedule. The DOL refused and sought to enforce the parties’ agreement. The defendant argued that not all material terms had been agreed on by the parties, but the court rejected that argument.

As an initial matter, the court agreed with the defendant that before enforcing a settlement agreement, a court must conclude that the parties have agreed on all material terms. The court found, however, that all material terms had indeed been agreed upon.

The defendant’s change in financial circumstances, which caused the defendant to seek modification to the settlement agreement’s payment schedule, was not a sufficient basis for the court to find that an agreement had not bee reached in the first instance. The court noted that an employer’s economic hardship is not a valid ground for opposing the entry of an order relating to FLSA violations.