From time to time I will hear about retaliation experienced by job applicants. This can generally happen in one of two ways.

First, a job applicant may be subjected to illegal retaliation by the applicant’s prior employer, who informs the prospective employer of the applicant’s prior protected activity in an effort to prevent the applicant from getting a job. See, e.g., Dunlop v. Carriage Carpet Co., 548 F.2d 139 (6th Cir. 1977). Fortunately, the job applicant has a cause of action against his/her former employer in this situation. In Dunlop, the 6th Circuit held that “a former employee, voluntarily separated from his employer, is protected from discrimination by his former employer under sec. 15(a)(3) of the Fair Labor Standards Act of 1938.”

Second, a job applicant may be subjected to illegal retaliation by a prospective employer because of the applicant’s prior protected activity. See, e.g., Hayes v. Computer Sciences Corp., 2003 WL 113457 (Tenn. Ct. App. Jan 14, 2003). In Hayes, the employee stated a claim of common law retaliatory discharge under Tennessee law where the employee alleged that he was terminated by his current employer for filing workers’ compensation claims againsy his previous employer. Also, in Christopher v. Stouder Memorial Hosp., 936 F.2d 870 (6th Cir. 1991), the 6th Circuit held that the plaintiff could state a retaliation claim under Title VII against a hospital who denied the plaintiff hospital privileges because of the plaintiff’s previous protected activity.

We are preparing to file a case involving a claim for race discrimination. We are going to allege a violation of 42 U.S.C. 1981, which is a federal law enacted by Congress following the Civil War that prohibits race discrimination in the making and enforcement of contracts. Section 1981 specifically provides:

(a) Statement of equal rights

All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.

(b) “Make and enforce contracts” defined

For purposes of this section, the term “make and enforce contracts” includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.

(c) Protection against impairment

The rights protected by this section are protected against impairment by nongovernmental discrimination and impairment under color of State law.

Here are a number of interesting facts concerning Section 1981 claims:

Private Employment:

In Johnson v. Railway Exp. Agency, Inc., 421 U.S. 454, 460 (1975), the Supreme Court held that 1981 provides a remedy against discrimination in private employment.

Damages:

An individual who establishes a cause of action under Section 1981 is entitled to both equitable and legal relief, including compensatory and, under certain circumstances, punitive damages. Johnson, 421 U.S. at 460. Importantly, unlike Title VII, there are no caps on the amount of compensatory and punitive damages that can be awarded under Section 1981.

Statute of limitations:

Unlike Title VII, which has a detailed adminstrative scheme, no such scheme exists under Section 1981. Thus, no exhaustion is required in order to bring a Section 1981 claim. Furthermore, a four year statute of limitations applies to hostile work environment claims, wrongful termination claims, and failure-to-transfer claims brought under 1981. See Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369 (2004). A failure to promote claim may be governed by a four year statute of limitations or the most analgous state law limitations period depending on whether the promotion amounts to the formation of a new relationship between employee and employer. See, e.g., Malone v. State of Tenn., 2005 WL 2671343, at *6 (W.D.Tenn. Oct. 19, 2005) (holding that where the promotion at issue was best characterized as a mere advancement in the plaintiff’s career path, no new and distinct employment relationship existed and, therefore, the four-year statute of limitations was applicable).

Independent Contractors:

Unlike Title VII, Section 1981 applies to independent contractors. See, e.g., S.K. Services v. FedEx Ground Package System, Inc., — F.Supp.2d —-, 2009 WL 3241712 (E.D.Tenn. 2009).

Individual liability:

Unlike Title VII, an indvidual can be held personally liable for engaging in race discrimination and/or retaliation arising out of a complaint of race discrimination. See, e.g., Jones v. Continental Corp., 789 F.2d 1225, 1231 (6th Cir. 1986) (noting the law is clear that individuals may be held liable for violations of Section 1981).

Retaliation:

The Supreme Court has explicitly held retaliation claims are cognizable under § 1981. See CBOCS W., Inc. v. Humphries, 128 S.Ct. 1951, 1954-55 (2008).

Jurisdiction:

Unlike Title VII, which applies to employers who employ 15 or more persons, there is no such requirement regarding Section 1981. Thus, a Section 1981 claim can be brought against any person or company regardless of size.

On Friday, November 20, 2009, we (Billy Ryan and Bryce Ashby of Donati Law Firm, LLP and Paul Lukas and Rachhana Srey of Nichols Kaster, PLLP) filed another lawsuit alleging failure to pay overtime as required under the Fair Labor Standards Act (”FLSA”).

The case is styled Bowman et al. v. New Vision Telecommunications, Inc. et al.; M.D. Tenn. Case No. 3:09-cv-01115. We filed the case in U.S. District Court in Nashville, Tennessee. Click here. Our local counsel is Doug Janney.

This is yet another case brought against a cable installation contracting company for not paying overtime compensation to its installers/technicians. The defendant company, New Vision Telecommunications (”NVT”), has operations in Nashville, Tennessee and Atlanta, Georgia and does installation and service work for Comcast.

Prior to January 2009, we allege that NVT intentionally misclassified its installers/technicians as “independent contractors” in an effort to avoid paying the installers/technicians overtime compensation under the FLSA. We allege that the installers/technicians routinely worked more than 40 hours per week so the financial savings in classifying the installers/technicians is believed to be significant.

Since January 2009, we allege that the installers/technicians have been properly classified as “employees”, yet for some unexplained reason NVT has continued to fail to pay overtime compensation to the installers/technicians.

Hopefully, this lawsuit will recover all or some of the overtime compensation that we contend should have been paid to NVT’s installers/technicians over the last 3 years. If you need additional information about the lawsuit or have questions about the lawsuit, please give me a call at 901-278-1004 or 800-521-0578.

In the litigation of employment cases, tax returns filed by the plaintiff, as well as the defendant, are frequently sought by the opposing party.

For example, a plaintiff may seek to discover the tax returns filed by the defendant in an effort to discover the net worth of the defendant. This information is relevant because net worth is a factor to be considered by the jury in determining the amount of punitive damages to be awarded at trial. See, e.g., Westbrook v. Charlie Sciara & Son Produce Co., 2008 WL 839745, at *2 (W.D.Tenn. Mar. 27, 2008) (Pham, Mag. J.).

Likewise, a defendant employer will frequently seek to discover tax returns filed by the plaintiff following the plaintiff’s termination because the income information relates to mitigation of damages. See, e.g., Kumar v. Hilton Hotels Corp., 2009 WL 3681837 (W.D. Tenn. Oct. 30, 2009).

In Kumar, Magistrate Judge Pham rejected the plaintiff’s arguments that tax returns were not discoverable under Fed. R. Civ. P. 26(b)(1) because plaintiff’s wage information was available from other sources. Id. at 2. Judge Pham held that the plaintiff’s income tax returns were relevant to the issues of damages and mitigation. Thus, the plaintiffs tax returns were required to be produced.

Interestingly, in Kumar, the plaintiff also argued that “discovery of his income tax returns should be prohibited because he filed joint income tax returns with his spouse during the relevant period, and therefore the tax returns contain confidential information relating to his spouse and should be privileged.” Id. at 3. Judge Pham agreed finding that the plaintiff’s spouse had a privacy interest in her financial information. Id. Accordingly, Judge Pham ordered that financial information that related solely to the plaintiff’s spouse should be redacted to protect her privacy interest. Id.

Frequently, a defendant will move to strike all or portions of a post deposition affidavit submitted by a plaintiff in response to a motion for summary judgment. The defendant will argue that the statements in the affidavit are inconsistent with prior deposition testimony and should be disregarded by the court because the plaintiff is attempting to create a “sham” issue of fact.

Whether the court strikes the affidavit will depend on whether the court finds the statements set forth in the affidavit are inconsistent with prior deposition testimony or whether the statements in the affidavit merely fill in gaps not covered or addressed during the deposition. Stated another way, the court must distinguish between legitimate efforts to supplement the summary judgment record from attempts to create a sham issue of material fact.

In the 6th Circuit, “[a] party may not create a factual issue by filing an affidavit, after a motion for summary judgment has been made, which contradicts her earlier deposition testimony.” Reid v. Sears, Roebuck & Co., 790 F.2d 453, 460 (6th Cir.1986). Therefore, when determining whether to strike a post-deposition affidavit, the district court “must first determine whether the affidavit directly contradicts the nonmoving party’s prior sworn testimony.” Aerel, S.R.L., v. PCC Airfoils, L.L.C., 448 F.3d 899, 908 (6th Cir.2006). If so, then the court must strike the affidavit “unless the party opposing summary judgment provides a persuasive justification for the contradiction.” Id.

Importantly, however, a party who is not directly questioned about an issue is not prevented from supplementing incomplete deposition testimony with a sworn affidavit. As the 6th Circuit has noted, “[s]uch an affidavit fills a gap left open by the moving party and thus provides the district court with more information, rather than less, at the crucial summary judgment stage.” Aerel, 448 F.3d at 907. This is because a deponent is under no obligation to volunteer information not fairly sought by the questioner. Id. Put another way, a deponent has no duty to volunteer relevant information during the deposition absent a question seeking that information. Id.

In sum, the 6th Circuit rules on this issue as set forth by the Aerel court can be summarized as follows:

1. The district court deciding the admissibility of a post-deposition affidavit at the summary judgment stage must first determine whether the affidavit directly contradicts the nonmoving party’s prior sworn testimony.

2. A directly contradictory affidavit should be stricken unless the party opposing summary judgment provides a persuasive justification for the contradiction.

3. If, on the other hand, there is no direct contradiction, then the district court should not strike or disregard that affidavit unless the court determines that the affidavit constitutes an attempt to create a sham fact issue.

4. A useful starting point for this inquiry is the following nonexhaustive list of factors: where the court noted that the existence of a sham fact issue turns on whether the affiant was cross-examined during his earlier testimony; whether the affiant had access to the pertinent evidence at the time of his earlier testimony or whether the affidavit was based on newly discovered evidence; and whether the earlier testimony reflects confusion that the affidavit attempts to explain.

Finally, the 6th Circuit has stated that courts should use a scalpel, not a butcher knife, in striking portions of affidavits that contradict prior deposition testimony. Upshaw v. Ford Motor Co., 576 F.3d 576, 593 (6th Cir. 2009). Thus, a court should carefully consider whether specific portions of the affidavit are truly in conflict with deposition testimony rather than striking the entire affidavit because an inconsistency in one are is found.

I am posting a couple of questions recently asked of me by an attorney friend, as well as my responses:

What’s the statute of limitations for retaliatory discharge cases brought under Tennessee law? One year. According to Weber v. Moses, 938 S.W.2d 387, 393 (Tenn. 1996), a claim for retaliatory discharge is a tort action and is governed by Tenn. Code Ann. § 28-3-104, which requires that a lawsuit be “commenced within one (1) year after the cause of action accrued…”

A more nuanced questions is when does the cause of action accrue in a retaliatory discharge case?

Under Tennessee law, which tracks federal law, see, e.g., Delaware State College v. Ricks, 449 U.S. 250 (1980), the statute of limitations begins to run in retaliatory discharge case (as well as discriminations cases) “when the employee is given unequivocal notice of the employer’s termination decision.” Fahrner v. S.W. Mfg., Inc., 48 S.W.3d 141, 143 (Tenn. Ct. App. 2001).

Thus, an employee who receives unequivocal notice of termination on January 1, 2010, but who works until January 15, 2010, must file suit by January 1, 2011 to have timely filed a retaliatory dischareg case under Tennesse law.

After three and one-half years of litigation, my co-counsel (James Harper of Stroud and Harper in Southaven, MS)(click here) and I have finally been able to favorably resolve a case brought by our clients, The Hampton National Surety Company, LLC, James Hampton Gardner, and James Dean, against Tunica County, Mississippi and Sheriff K.C. Hamp.

The case involved our clients, who are in the bail bond business, contesting their removal from the bonding roster at the Tunica County Jail. The facts are pretty interesting and if you are curious about the details you can read the opinions below.

What was most interesting in my opinion was the fact that we had parallel proceedings going in state and federal court in an attempt to have our clients restored to the bonding roster and an in an effort to recover lost compensation.

Initially, we prevailed before the trial court in the state court lawsuit, where we sought to have our clients restored to the bonding roster. But the defendants appealed our victory to the Mississippi Supreme Court and subsequently prevailed. Click here. It was a tough loss for our clients, as well as their attorneys.

In the federal court proceeding, which involved constitutional claims under Sec. 1983, the defendants prevailed before the district court. We then appealed the case to the U.S. Court of Appeals for the Fifth Circuit. Click here. Fortunately, we prevailed on appeal and the case was sent back to the district court for trial. The case settled on the eve at trial.

In the end, we acheived a nice monetary result for our clients and that, of course, is always satisfying. Our clients were also restored to the bonding roster. So after 3 1/2 years the case is finally over. On to the next case.

Under Tennesse statutory law, “[n]o employee shall be discharged or terminated solely for refusing to participate in, or refusing to remain silent about, illegal activities.” T.C.A. 50-1-304. The same is true under Tennessee common law. See, e.g., Crews v. Buckman Labs. Int’l, Inc., 78 S.W.3d 852, 865 (Tenn. 2002) (common law claim for refusing to remain silent about illegal activities) and Reynolds v. Ozark Motor Lines, Inc., 887 S.W.2d 822, 825 (Tenn. 1994) (common law claim for refusing to participate in illegal activities).

A new case decided by the Tennessee Court of Appeals on 10/30/09 (VanCleave v. Reelfoot Bank) illustrates the differences between a complaint that alleges an employee was fired for refusing to particpate in an illegal activity versus an employee fired for refusing to remain silent about an illegal activity. Click here.

In VanCleave, the plaintiff, a bank employee, alleged she was terminated for refusing to participate in an activity, i.e., opening a bank account without identification and signature card from a customer, that she reasonably believed was illegal under federal and state banking laws.

In granting the employer’s motion for summary judgment, the trial court stated that the plaintiff failed to show that she intended to protect the public, rather than simply herself or the bank, when she refused to open the account in the manner requested by the customer.

To the extent that the trial court required the plaintiff to establish that she subjectively intended to protect the public when she refused to participate in activity that she reasonably believed to be illegal, the court of appeals stated that in a refusal-to-participate retaliatory discharge claim a plaintiff need not show a subjective intent to further the public good. All that is required, according to the court of appeals, is for the plaintiff to simply show that the alleged illegal activity implicated important public policy concerns.