Employer Law Report : Employment and Labor Relations Lawyer & Attorney : Porter Wright's Employer Law Report : Employment Litigation, Non-Compete, Trade Secrets

While attending a Mixed Martial Arts event in Miami, New York Jets head coach, Rex Ryan, apparently made an obscene gesture at some Miami Dolphin fans who were taunting him. Yesterday, the Jets fined Ryan $50,000. Ryan was attending the event, which was neither team nor NFL-sponsored, on his own time, but the team obviously felt that as head coach, Ryan is their representative even when he is "off duty" and that he must conduct himself accordingly.

In the real world, most employees are not celebrities that the general public will try to egg on until they do or say something stupid. Nevertheless, it is important for all of us to remember that the world is now filled with opportunists with camera phones and easy access to YouTube and other media outlets. Though we should not be expecting to see a rash of employers firing factory workers for flipping off a bunch of bar patrons after work, there are real world lessons to be learned from this episode. First, employees need to recognize when they are out in public that there is a significant risk that anything that they do or say that either embarrasses or otherwise reflects poorly on their employer ultimately may get back to the employer. On the other hand, employers should exercise restraint before taking disciplinary action against employees for their off duty conduct to make sure that the conduct truly does negatively impact the company's business or reputation.

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As concerns about the potential scope of the H1N1 flu continue to grow, one question we keep hearing from clients is whether employees who believe they have contracted H1N1 in the workplace may have compensable workers' compensation claims. In the vast majority of cases, we believe the answer will be a resounding "No."

Ohio defines an occupational disease as:

"a disease contracted in the course of employment, which by its causes and the characteristics of its manifestation or the condition of the employment results in a hazard which distinguishes the employment in character from employment generally, and the employment creates a risk of contracting the disease in greater degree and in a different manner from the public in general."

Therefore, for instance, the office worker who contracts H1N1 because somebody in the next cubicle had it does not have a compensable claim. The situation is no different than the seasonal flu from year to year.

One likely exception to my general proposition come to mind:  healthcare workers, who by the nature of their work may be exposed to H1N1 in a greater and different manner than members of the general public. Childcare workers also may have an outside chance at establishing a viable claim. Even then, however, most healthcare and childcare workers will still have a difficult time proving actual causation; that is, that they actually contracted H1N1 as a result of their work rather than from a sick family member, at a restaurant or some other public place.

The H1N1 vaccine may also pose a potential risk if it ever becomes widely available. Workers who experience side effects from getting an H1N1 vaccine may claim they are entitled to workers' compensation benefits. In the absence of evidence that the employer actually required its employees to get vaccinated and demonstrated illness based on any known side effects, these claims should be rejected.

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Sports fans, you can breath easier about your fantasy football lineups -- Michael Vick is out of the doghouse with the U.S. Department of Labor, presuming he complies with a consent judgment. We had cautioned in an earlier post that Vick’s release from prison did not necessarily mark the end of his government obligations, given DOL allegations of ERISA violations. As explained in the DOL’s press release, the DOL’s complaint alleged that Vick and others improperly removed $1.35 million of pension plan assets to help pay the criminal restitution imposed on Vick after his conviction for unlawful dog fighting, and to help pay his attorney in his bankruptcy cases. Vick and his company, MV7 LLC, agreed to repay at least $416,461.10, pay a fiduciary to manage the plan until its termination, and pay a monetary penalty. The $933,539 difference between the amount alleged in the complaint and the repayment amount is not explained in the press release, though perhaps that is because Vick agreed to forfeit his share of the pension benefits. Vick can play football, but he is permanently barred from being an ERISA plan fiduciary.

Hopefully we don’t need to caution our readers to refrain from participating in unlawful dog fighting, and from “improperly removing” pension plan assets to buy their way out of trouble. But there is one sentence in both this press release and another press release about an Ohio mortgage broker that hits closer to home: “In fiscal year 2008, [DOL] achieved monetary results of $1.2 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.” If someone out there is essentially stealing well over $1.2 billion per year of employee money (since this is just the amount recovered), shouldn’t we be appalled at the systemic flaw that allows this to happen? But is that really what is happening, or do employers need to be more worried about how DOL is getting to this $1.2 billion per year figure? A significant portion of this large dollar figure is related to participant contributions that EBSA argues “were not timely contributed” to a benefit plan.

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Generally, the firing of a professional sports team's general manager is not going to raise my interest as an employment lawyer, but the comments made by the owner of the Chicago Blackhawks after Dale Tallon was fired certainly piqued my interest. Those hockey fans in the audience may know that Tallon's firing came shortly after the NHLPA filed a grievance claiming that he failed to send out timely qualifying offers to players that were restricted free agents. Rather than risking those players becoming unrestricted free agents, Tallon quickly signed them to long term contracts that probably aggravates the team's salary cap issues in the near term and ultimately may cost the team more money.

In an effort likely designed to deflect attention from this blunder, Rocky Wirtz, the Blackhawks owner, is quoted by MSNBC.com as follows regarding Tallon's replacement: Asked what Bowman, who's in his ninth year with the Blackhawks, brings to the job that Tallon didn't, Wirtz said: "He's 36, Dale is 58. We always want younger people. What he brings is a system in place to get better," Uh oh.

Fortunately for the Blackhawks as it relates to Tallon's situation, the recent Supreme Court decision in Gross v. FBL Financial Services probably saves them from a potential claim of age discrimination. As reported previously, Gross holds that a plaintiff bringing an ADEA disparate-treatment claim must prove, by a preponderance of the evidence, that age was the “but-for” cause of the challenged adverse employment action. Here, John McDonough, the Blackhawks president who appears to have been the driving force behind the termination, acknowledged that Tallon probably would not have been fired if not for the free agent incident. For future reference, however, the Blackhawks may want to keep tabs on Congress, which already has announced that it will hold hearings directed at overturning the Gross decision.

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It's hard to believe that fewer than 10 years ago, there was widespread concern that our computers were all going to blow up and there would be anarchy in the streets. Since the clock struck midnight on January 1, 2000, we have seen an unprecedented technology boom that has had a widespread impact on the workplace. Remember the anxiety caused by cameras on our cell phones due to their impact on protecting trade secrets and our privacy in the locker rooms? Since then, we have grown comfortable with workers using laptops offsite though we still need to concentrate better on keeping track of them and what is on them!

Now, the social media craze -- Facebook, Linked-In, Twitter, etc. -- seems to be causing employers the most recent concern. As editor of employerlawreport.com, I have come to achieve a certain comfort level with social media, but I think that what primarily is keeping many employers up at night is fear of the unknown. That is why I'm going to summer camp! Starting this past Tuesday and running through the second Tuesday in August, I will be attending Social Media Summer Camp, a Columbus Business First initiative. The first session, "Social Media 101," provided a nice overview of everything that is out there and how businesses have been and could be using social media to market their services and products. The attractiveness of social media from a marketing perspective is often easy to see and hopefully we will be able to use some of what we learn at camp to improve our blog and to otherwise better communicate with our clients and friends.

In addition, I'm keeping my employment lawyer hat on to identify potential issues for employers that are encouraging their employees to "friend" others or to "tweet" or are attempting to regulate how and when they do it. This past Tuesday's session left me with one particular impression: Whether or not companies choose to use social media to foster their business, they would be wise to monitor the various social media outlets to make sure that others, including disgruntled and former employees, are not messing with their messages or creating unwanted ones.

So that's why I'm going to summer camp. I'm taking my laptop with me, but fortunately for all involved, I'm leaving my bathing suit at home.

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In wage and hour news, the TLC show “Jon & Kate Plus 8” may be in some hot water for violations of state child labor laws. Troy Thompson, Spokesman for the Pennsylvania Department of Labor and Industry, has been widely quoted as confirming that the agency received a complaint and is conducting an investigation.  

Many people don’t realize that the child actors on their favorite television show are protected by state child labor laws. While state requirements vary, many have restrictions on the number of hours a child actor can work in a day or week, require special permits, or even require a teacher to be present on the set. At this point, it’s unclear what alleged violations may (or may not) have occurred on the set of Jon & Kate Plus 8. Regardless, this seems to be yet another hurdle in the controversial show’s path this season.

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We just ran across a wage and hour case out of Texas with a unique twist on the usual overtime claim. Bustamente, an undocumented immigrant, alleged that the El Palenque Mexican Restaurant and Cantina forced him to work under another identity to avoid overtime.  

According to Bustamente, the kitchen manager realized he lacked the documentation to work legally in the country but told him it wouldn’t be a problem if he had some documents. Bustamente began working under his brother’s identity. (He actually brought the case as Jesus Bustamente, the brother– he only confessed that his real name is Cristoforo one week prior to trial). Soon after, Bustamente alleged that the restaurant had him fill out an application using his nephew’s identity in order to avoid overtime pay. He worked the early shift as his brother, the evening shift as his nephew. Bustamente testified that he received two separate paychecks. 

The restaurant’s defense was straightforward – Bustamente and his nephew were both employees. The company used a fingerprint timekeeping system, making it difficult to impersonate someone. Witnesses remembered the nephew as taller than Bustamente. The company did pay overtime to other employees.  Most important, the company produced payroll records showing that Bustamente and his nephew actually worked the same shift on one occasion. In light of the conflicting testimony and confusing payroll records, the court found that Bustamente could not prove his claims. 

While the facts of this case are amusing and hopefully not likely to repeat themselves often, it serves as a good reminder that clear, accurate payroll records can be an employer’s best friend in a wage and hour case.   Cristoforo Bustamente, a/k/a Jesus Bustamente, a/k/a Angel Bustamente, v. El Palenque Mexican Restaurant and Cantina, Inc., Case No. No. H-07-2506, (S.D. Tex, February 3, 2009).

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A good illustration of why managers should regularly review their employees’ timesheets comes courtesy of The Day.com.

Lisa Bloomer worked for the Connecticut Department of Developmental Services. A few years ago, Ms. Bloomer’s former boss invited her to a casino. That first trip was all that it took: Ms. Bloomer became addicted to gambling. 

Fortunately for Ms. Bloomer, she made $210,000 over the course of the next three years working for the state – an income that easily fueled her addiction. The only problem was that she reported many working hours that were actually hours spent at the casino, rather than at her job. In short, the State of Connecticut was paying Ms. Bloomer almost $70,000  per year to play the slots. 

Upon discovery, Ms. Bloomer resigned her position and her supervisor was fired for failing to catch the problem. Although this is an extreme example, it is a perfect illustration of why it’s crucial for employers – especially in difficult economic times – to review timesheets and other records with a critical eye. 

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Class actions, of course. California courts have preliminarily approved class-action settlements in two wage-and-hour lawsuits against the television networks and production companies responsible for such entertainment gems as “The Bachelor,” “The Bachelorette,” “Trading Spouses,” “Joe Millionaire,” and “My Big Fat Obnoxious Fiancee.” 

The lawsuits accused the companies of failing to pay overtime wages, denying meal and rest periods, falsifying pay stubs, and forcing employees to falsify time records. The companies will pay more than $4 million to settle the claims. A hearing for final approval of both settlements should take place in May 2009. 

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This case exemplifies our reason for creating the Employment Outtakes category. 

A California (where else?)appellate court (see Orlando v. Alarm One) has overturned a jury award of $500,000 in compensatory and $1 million in punitive damages to a 52 year old female on sexual battery and sex harassment claims that  arose out of spankings that she received during the course of "motivational meetings" to encourage the sale of security systems. Apparently, the spankings, among other rather unique motivational techniques, were administered to both male and female employees who performed poorly (for instance, by arriving at work late or not selling enough product) in front of their peers to motivate them  -- and all other employees --  to perform better. According to testimony, the spankings of females typically were accompanied by sexual comments, while male spankings were not. 

Therefore, with respect to the sex harassment claim, the appellate court, noting that males and females were both spankers and spankees, so to speak, held that the trial court's jury instructions were misguided because the jury was not instructed that one of the elements of sexual harassment was that plaintiff was harassed "because she was female." As a result, the court stated that the jury, in reaching its verdict, may have considered all offensive conduct, including conduct that was not gender-related. According to the court, if the jury had considered only conduct that occurred because the plaintiff was female, it might have concluded that that conduct was not “sufficiently severe or pervasive to alter the conditions of her employment and create an abusive work environment.” So, this case heads back to the trial court, hopefully to provide us with additional amusement.

Now you know where "The Office" gets its inspiration.

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Employers certainly have the right to comment about alleged employee misconduct in a grievance proceeding, right? Not so fast. A recent Ohio court of appeals decision suggests that Ohio employers may want to be even more careful regarding what they say about alleged employee misconduct. In Gintert v. WCI Steel, Inc., 2007-Ohio-6737 (11th Dist. Trumbull County 2007), a union employee was fired, in part because three fellow employees said they heard him use a racial slur toward another employee. Denying that he used the slur, the terminated employee sued the company, his supervisors, and two employees for defamation.

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Even in the chaotic world of Ohio workers’ compensation, crime still doesn’t pay – at least not for one enterprising Ohio claimant. Finding that the sale of crack cocaine over a three-year timeframe amounted to an exchange of labor for pay over a sustained period, the Ohio Supreme Court upheld the Industrial Commission’s determination that an injured worker was not entitled to permanent total disability compensation.   In reaching this rather obvious conclusion in State ex rel. Lynch v. Indus. Comm., 2007-Ohio-6668, the Ohio Supreme Court rejected the injured worker’s inspired argument that his activity could not be considered sustained remunerative employment because it was illegal.  

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As the Writers Guild of America’s strike against the Association of Motion Picture and Television Producers moves into its seventh week, cracks are beginning to appear in the union’s armor. Until this week, late night television staples such as Leno, O’Brien, Letterman, Stewart and Colbert were mired in “classic” episodes (read: reruns) without any end in sight. Now, it looks as if all but Letterman will be returning – albeit without writers – beginning in early January.  For its part, Letterman’s production company is seeking a separate, interim deal with the Guild to facilitate the return of new episodes of the Late Show.

As usual, the sticking points in the negotiations are monetary.  But, not surprisingly in Hollywood, the cost of health insurance is not at the top of the list. Instead, the writers primarily are seeking a greater share of DVD and “new media” (e.g. internet) revenues as a means of protecting their interests in ever-changing media markets. 

Until original network programming returns, we’ll have to make do with a number of humorous websites, blogs and youtube videos created by the writers themselves and spawned by the strike. For instance, check out:

Lateshowwritersonstrike.com
youtube.com/watch?v-PzRHIpEmr0w

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The importance of leaving your personal life at home–particularly if it involves a penchant for pornography–is amply highlighted by the Second Circuit’s decision in Patane v. Clark, No. 06-3446 (2nd Cir. Nov. 28, 2007).  In Patane, the court upheld a female college secretary’s right to pursue a hostile work environment claim under Title VII and state discrimination laws based on her male supervisor’s pornographic video and website viewing habits.  Apparently oblivious to the development of sexual harassment law over the last 40 years or so, the supervisor–who happened to be the chair of the college’s Classics Department–allegedly viewed sexually-explicit videotapes for one to two hours every day on his office television, which was visible to his secretary through a glass partition.  He also left pornographic videos scattered across his office floor, viewed pornographic websites on his secretary’s work computer, and required her, as a part of her secretarial duties, to open his mail, which–you guessed it–included pornographic videotapes that the supervisor had delivered to his office.

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