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.

A recent decision from the Western District of Tennesee discusses and rejects an employer’s use of the “honest belief” rule in a retaliation case. The case is Turner v. Hoops, L.P. and can be accessed here: Turner v. Hoops

Here are the facts:

Riley Turner, who worked in the engineering department for Hoops, L.P. at the FedEx Forum in Memphis, alleged he was retaliated against after he complained about race discrimination against himself and about a co-worker who was subject to sexual harassment.

Turner was subsequently terminated by Hoops, L.P. because its investigation into the sexual harassment charges brought by Turner’s co-worker allegedly revealed that Turner had viewed pornographic images on his work computer. Turner denied that he ever viewed such images on his work computer.

Hoops argued that it didn’t matter whether Turner actually viewed such images since it performed a good faith investigation and had an “honest belief” that Turner viewed such images.

Judge McCalla rejected this argument permitting a jury to decide whether Hoops’ decision to Turner for allegedly viewing porn was a pretext for retaliation. (Order at 18-20).

Judge McCalla noted that in addition to Turner’s denial that he viewed these images, Hoops admitted to losing the computer hard drive, which would have potentially exonerated Turner. Accordingly, Judge McCalla held that “the loss of the hard drive containing the information relating to Plaintiff’s viewing of pornography precludes Defendant’s reliance on the honest belief rule as a matter of law.” (Order at 19).

Jeffrey Longs, represented by attorneys Venita Martin (click here) and Andre Mathis (click here) of the Glankler Brown law firm in Memphis, scored a big victory in a retaliation case against Ford Motor Co., which was tried in the Western District of Tennessee last week before Chief Judge Jon P. McCalla.

The jury awarded 1M plus to Mr. Longs, who alleged he was fired for complaining about age and race discrimination. The jury verdict is attached. Jury Verdict Form

Is an oral complaint of a violation of the Fair Labor Standards Act (FLSA) protected conduct under the FLSA’s anti-retaliation provision? That’s the question that U.S. Supreme Court has agreed to decide.

On Monday, the Court granted cert in Kasten v. St. Gobain Performance Plastics. (click here).

There’s a split among the circuit court of appeals as to whether an oral complaint is sufficient to give rise to protection from retaliation under the FLSA’s ant-retaliation provision, which is codified at 29 U.S.C. § 215(a)(3). (click here to see statutory language).

Hopefully, the Court will determine that an oral complaint is sufficient to give protection from retaliation under the FLSA. It doesn’t make sense that a written complaint (scrawled on a napkin for example) would be deemed protected activity whereas an oral complaint (made on the company’s phone hotline for example) would not be protected activity.

Mr. Kasten is represented by James Kaster with the Nichols Kaster firm based in Minneapolis. click here. Go Jim!

In an opinion issued today, the 6th Circuit reversed summary judgment in favor of the defendants in a First Amendment retaliation case. The case is styled Kindle et al. v. City of Jefferstown et al. Click on the following link to read the opinion. 10a0159n-06.

Here are the facts: The plaintiffs, who worked for the Jeffersontown, KY police department, wrote a report particularly critical of a supervisor and were terminated shortly thereafter. The district court dismissed the plaintiff’s First Amendment retaliation claim holding that the plaintiffs’ speech did not address a matter of public concern.

On appeal, the 6th Circuit noted that in determining whether a public employer has violated an employee’s First Amendment rights of free speech, the U.S. Supreme Court has instructed courts to engage in a three-step inquiry. First, a court must determine whether the relevant speech addressed a matter of public concern. Second, if the answer is yes, the court must balance between the interests of the employee, as a citizen, in commenting upon matters of public concern and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees. Third, the court must ascertain whether the employee’s speech was a substantial or motivating factor in the employer’s decision to take the adverse employment action against the employee.

Citing various U.S. Supreme Court cases, the 6th Circuit also noted that “statements by public officials on matters of public concern must be accorded First Amendment protection despite the fact that the statements are directed at their nominal superiors.”

According to the 6th Circuit, whether an employee’s speech addresses a matter of public concern must be determined by the content, form, and context of a given statement. Matters of public concern include speech that relates to any matter of political, social, or other concern to the community. But speech dealing with matters only of personal interest to a public employee is generally not afforded constitutional protection.

Analyzing the content of the report submitted by the plaintiffs, the 6th Circuit noted that it had consistently held that speech on the same topics as the report–the efficacy and operations of public agencies and allegations of misconduct by public
officials–addressed matters of public concern. Thus, the 6th Circuit held that the district court erred in granting summary judgment to the defendants and found that the plaintiffs’ speech was protected by the First Amendment because it touched on a matter of public concern. The case was remanded for the district court to address the remaining prongs of the Pickering balancing test.

A friend, who owns a small business recently asked me if he could terminate one of his employees should the employee refuse to take a drug test. My friend suspects that the employee is illegally obtaining and using prescription pain medicines and believes that use of these medicines is affecting his job performance.

The answer is pretty clear. Under a drug testing program, which properly complies with Tennessee’s drug free workplace act, see generally T.C.A. 50-9-101 et seq., “[i]f an employee or job applicant refuses to submit to a drug or alcohol test, the covered employer is not barred from discharging or disciplining the employee or from refusing to hire the job applicant.” See T.C.A. 50-9-108(f)

For general history on Tennessee’s drug free workplace act, see Interstate Mechanical Contractors, Inc. v. McIntosh, 229 S.W.3d 674, 679-80 (Tenn. 2007). This case, which involved a claim for workers’ compensation benefits by an injured worker who tested positive for marijuana, also generally discusses the statutory incentives to employers who implement a drug free workplace program.

It’s been a busy last couple of weeks. One issue I have been dealing with is an opposing counsel’s attempt to have me agree to language in a proposed settlement agreement between my client (employee) and his client (employer) that I will refrain from representing other individuals in legal matters against his client. By way of background, during the course of depositions taken in the case, it became apparent to myself, as well as opposing counsel, that other current employees at the company may also have legal claims against the company.

I have only had this come up once before in my practice. Strangely, this was also a recent topic on an attorney list serve that I am a member of.

Fortunately, there is an ethical rule on point, which forbids such attempts at restricting an attorney’s right to represent whoever the attorney chooses to represent. Click here.

As you can see, TRPC 5.6(b) provides, quite clearly I might add, that “[a] lawyer shall not participate in offering or making . . . an agreement in which a restriction on the lawyer’s right to practice is part of the settlement of a controversy between private parties.” Comment [2] to TRPC 5.6 further states that “[p]aragraph (b) prohibits a lawyer from agreeing not to represent other persons in connection with settling a claim on behalf of a client.”

When advised of this rule, opposing counsel deleted the proposed language and we moved on to argue about other matters! In any event, it is worth noting that attempting to refrain an attorney from representing other persons is forbidden in Tennessee.

I am presently representing a client claiming national origin discrimination. My client, who is originally from Asia and for whom English is his second language, alleges he was demoted from a position in part because his superiors believed his accent would make it difficult for him to deal with customers.

In researching this matter, I have learned that the 6th Circuit has recognized that linguistic discrimination constitutes national origin discrimination. In re Rodriguez, 487 F.3d 1001, 1008 (6th Cir. 2007). In this case, the 6th Circuit held that an employer’s comments concerning the plaintiff’s accent constituted direct evidence of national-origin discrimination. Id. at 1009.

The Rodriguez case also tracks the EEOC’s position, which “defines national origin discrimination broadly as including, but not limited to, the denial of equal employment opportunity because of an individual’s, or his or her ancestor’s, place of origin; or because an individual has the physical, cultural or linguistic characteristics of a national origin group.” See 29 C.F.R. § 1606.1. 29cfr1606.1

Click here for additional guidance on national origin discrimination from the EEOC.

April 15, 2010 is not far away and as most folks know that is the deadline for filing your federal income tax return. I have been busy lately dealing with a number of tax issues affecting my employment clients. One issue in particular is worth mentioning.

First, as an initial matter, monies received in the settlement of an employment case are almost always taxable. The exception is monies that can be said to have been paid on account of personal injuries. These monies are not taxable. See 26 U.S.C. 104(a)(2). Click here. Accordingly, unless monies are paid to the client on account of personal injuries, the monies received will be subject to income tax.

When one of my employment clients settles a case and receives money in exchange for dismissing the case, a portion of the money is generally allocated as payment of back wages and a portion of the money is generally allocated as compensatory damages or liquidated damages. When money paid to the client represents back wages, a Form W-2 is issued by the company to my client. When money paid to the client represents compensatory or liquidated damages, a Form 1099 is issued by the company to my client.

Often, the Form 1099 issued to my clients is incorrectly completed by the company. Form 1099-misc. By this I mean that Box 7 “nonemployee compensation” on the Form 1099 is checked, rather than Box 3 “other income”, which is the correct box that should be checked on Form 1099 for payments of compensatory damages or liquidated damages. Box 7 is for payments made to independent contractors.

The impact of Box 7 being checked is that the client is erroneously subjected to the self-employment tax. Click here. Accordingly, to avoid this negative consequence I try to include language in all settlements agreements that Box 3 “other income” should be checked when monies are being paid as compensatory damages or liquidated damages.