State Law

State Employment Law Update

by

Robert B. Fitzpatrick, Esq.

Robert B. Fitzpatrick, PLLC

Universal Building South

1825 Connecticut Avenue, N.W.

Suite 640

Washington, D.C. 20009-5728

(202) 588-5300

(202) 588-5023 (fax)

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THE INFORMATION CONTAINED HEREIN IS BASED UPON SOURCES BELIEVED TO BE ACCURATE AND RELIABLE – INCLUDING SECONDARY SOURCES.  DILIGENT EFFORT WAS MADE TO ENSURE THE ACCURACY OF THESE MATERIALS, BUT THE AUTHOR ASSUMES NO RESPONSIBILITY FOR ANY READER’S RELIANCE ON THEM AND ENCOURAGES READERS TO VERIFY ALL ITEMS BY REVIEWING PRIMARY SOURCES WHERE APPROPRIATE AND BY USING TRADITIONAL LEGAL RESEARCH TECHNIQUES TO ENSURE THAT THE INFORMATION HAS NOT BEEN AFFECTED OR CHANGED BY RECENT DEVELOPMENTS. 

THIS PAPER IS PRESENTED AS AN INFORMATIONAL SOURCE ONLY. IT IS INTENDED TO ASSIST READERS AS A LEARNING AID; IT DOES NOT CONSTITUTE LEGAL, ACCOUNTING, OR OTHER PROFESSIONAL ADVICE. IT IS NOT WRITTEN (NOR IS IT INTENDED TO BE USED) FOR PURPOSES OF ASSISTING CLIENTS, NOR TO PROMOTE, MARKET, OR RECOMMEND ANY TRANSACTION OR MATTER ADDRESSED; AND, GIVEN THE PURPOSE OF THE PAPER, IT MAY OMIT DISCUSSION OF EXCEPTIONS, QUALIFICATIONS, OR OTHER RELEVANT INFORMATION THAT MAY AFFECT ITS UTILITY IN ANY LEGAL SITUATION. THIS PAPER DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP BETWEEN THE AUTHOR AND ANY READER. DUE TO THE RAPIDLY CHANGING NATURE OF THE LAW, INFORMATION CONTAINED IN THIS PAPER MAY BECOME OUTDATED.  IN NO EVENT WILL THE AUTHOR BE LIABLE FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, OR OTHER DAMAGES RESULTING FROM AND/OR RELATED TO THE USE OF THIS MATERIAL.

Domestic Worker Bill of Rights

• The New York “Domestic Workers Bill of Rights” went into effect on November 29, 2010.

• The Law grants certain employment protections to household domestic workers such as housekeepers, domestic caregivers, and nannies.

• During the 1930’s, southern members of congress were willing to provide crucial votes in favor of the FLSA and NLRA only if these laws did not protect the most widespread categories of black employment, farmworkers and maids.– Katznelson, Ira When Affirmative Action Was White: An Untold

History of Racial Inequality in Twentieth-Century America (New York: W.W. Norton, 2005), pp. 53-56.

Proposed Anti-Workplace Bullying Statute

• “Conduct, with malice, taken against an employee by an employer or another employee in the workplace that a reasonable person would find to be hostile, offensive and unrelated to the employer’s legitimate business interests. In considering whether such conduct is occurring, the trier of fact should weigh the severity, nature and frequency of the conduct. Abusive conduct shall include, but not be limited to, repeated infliction of verbal abuse, such as the use of derogatory remarks, insults and epithets; verbal or physical conduct that a reasonable person would find threatening, intimidating or humiliating; or the gratuitous sabotage or undermining of an employee’s work performance. A single act shall not constitute abusive conduct, unless the trier of fact finds such act to be especially severe or egregious.”

Sample Anti-Workplace Bullying Policy

Choice of Forum Clauses

• Simonoff v. Expedia, Inc., 2011 U.S. App. LEXIS 10374 (9th Cir. May 24, 2011) (Court discusses the semantic significance of the use of the word “in” rather than “of.” A forum selection clause that provides for exclusive jurisdiction in the courts of a particular jurisdiction limits jurisdiction to that state’s courts; whereas the phrase “courts in” a state only imposes a geographic limitation, not one of sovereignty) (emphasis added).

• Ruifrok v. White Glove Rest. Servs., LLC, No. DKC 10-2111, 2010 U.S. Dist. LEXIS 110369 (D.Md. Oct. 18, 2010) (Court found that the forum-selection clause constituted a waiver of the right to remove to federal court).

Calling Boss a Slimebag is not Disparagement in Ohio

• Ohio Educ. Ass’n v. Lopez, 2010 Ohio 5079 (Ohio Ct. App. Oct. 19, 2010) (the Court finds that a voicemail message from former General Counsel of the Ohio Education Association to outside counsel for the Association, referring to the Executive Director of the Association as a slimebag, did not constitute a material breach of a nondisparagement clause in the former General Counsel’s severance agreement. The Court found that the term “slimebag” is a “trifling figure of speech… of so little consequence [that] it cannot be said to be material…” The Court explained that it was a “slang expression [that] is such a part of modern casual speech as to be almost meaningless” and that the Association “could not demonstrate that the message caused any damage…”)

Non-Disparagement: No Recovery of Damages Based on Humiliation or Injury to

Feelings• Isle of Wight Cnty. v. Nogiec, 704 S.E.2d 83 (Va.

2011) (Virginia Supreme Court reverses an award of $45,000.00 in compensatory damages on a breach of contract claim where defendant, after agreeing to a non-disparagement clause in a severance agreement, stated at a televised board meeting that plaintiff “suppressed” information and that his conduct bordered on “negligence.” The Court held that damages for humiliation or injury to feelings are not recoverable in an action for breach of contract.)

Definition of “Disparage”• Sohal v. Mich. State Univ. Bd. of Trs., No. 295557, 2011

Mich. App. LEXIS 915 (Mich. Ct. App. May 17, 2011) (the Court held that the term “disparage” is not ambiguous, and looked to the definition in the American Heritage Dictionary as well as Webster’s New World Dictionary, rejecting the definition in Black’s Law Dictionary. See also Halco v. Davey, 919 Atl. 2d. 626, 630 (Me. 2007); Eichelkraut v. Camp, 513 S.E.2d 267 (Ga. 1999))

• Disparage(2): To depreciate by indirect means (as invidious comparison) : speak slightingly about. (Merriam-Webster Online, accessed 7/26/2011).

• Disparage(1): To speak of or treat slightingly; depreciate; belittle: Do not disparage good manners. (American Heritage Dictionary of the English Language, Fourth Edition, 2006).

Defamation Predicated on U5: Absolute or Qualified Immunity?• Rosenberg v. Metlife, Inc., 866 N.E.2d 439, 8 N.Y.3d

359 (2007) (Court finds absolute immunity)• Wietecha v. Ameritas Life Ins. Corp., 2006 U.S. Dist.

LEXIS 70320, 2006 WL 2772838 (D. Ariz. 2006) (Court finds qualified immunity). – accord Dickinson v. Merrill Lynch, Pierce, Fenner & Smith,

Inc., 431 F. Supp. 2d 247, 261-62 (D. Conn. 2006); Smith-Johnson v. Thrivent Fin. For Lutherans, 2005 U.S. Dist. LEXIS 36715, 2005 WL 1705471 (M.D. Fla. 2005); Dawson v. New York Life Ins. Co., 135 F.3d 1158 (7th Cir. 1998); Andrews v. Prudential Sec., Inc., 160 F.3d 304, 307 (6th Cir. 1998); Prudential Sec. Inc. v. Dalton, 929 F. Supp. 1411 (N.D. Okla. 1996)

Connecticut: First State to Mandate Paid Sick Leave

• In Connecticut, service workers will accrue one hour of paid sick time for every 40 hours worked that can be used after having been employed a certain amount of time. They must work, on average, at least 10 hours a week and can accrue up to five days of sick leave.

• Some estimates show the cost to employers that currently provide no sick days would be a small fraction of sales. Proponents note that studies show typical workers will use far fewer than their allotted sick days.– Keiper, Lauren “Connecticut Becomes First State to Mandate

Paid Sick Time”, Reuters, Sunday Jul. 10, 2011.

Local Government Tort Claims Act: Notice Provision

• Hansen v. City of Laurel, Md., 193 Md. App. 80, 996 A.2d 882 (2010); aff’d by Hansen v. City of Laurel, 2011 Md. LEXIS 445 (Md. 2011) (In a suit under for age and disability discrimination under § 2-222 of the Prince George’s County Code, failure to affirmatively plead fulfillment of the notice provision of the Local Government Tort Claims Act in the complaint resulted in the dismissal, with prejudice, of plaintiff’s case).

• Owens v. District of Columbia, No. 08-CV-1647 (D.C. Apr. 29, 2010) (Dismissing an action under the D.C. Human Rights Act for failure to comply with the notice provision of the Local Government Tort Claims Act, the Court held that notice is satisfied by a police report, but not by an EEOC or DCOHR complaint).

Excessive Review of Privileged Materials

• Clark v. Superior Court, 196 Cal. App. 4th 37, 2011 Cal. App. LEXIS 680 (Cal. Ct. App. 2011) (employee’s counsel was disqualified for excessively reviewing privileged documents when the employee did not return the documents upon demand and conceded that he was relying upon one of them to support a claim. The receiving attorney was obligated not to review the documents more than reasonably necessary to make the determination that they were privileged.)

Ratio of Compensatory to Punitive Damages

• Howard Univ. v. Wilkins, 2011 D.C. App. LEXIS 367 (D.C. Ct. App. June 30, 2011) (the ratio between punitive and compensatory damages is only one factor in an excessiveness analysis. Here, the Court found that a compensatory damages award of $1 and a punitive damages award in excess of $42,000 was justified by D.C.’s strong interest in deterring DCHRA violations.)

Social Media Background Checks: Fair Credit Reporting Act

• Federal Trade Commission investigates Social Intelligence, a social media background check company, for compliance with the FCRA.

• While the FTC determined that Social Intelligence Corp. was in compliance with the Fair Credit Reporting Act, the investigation serves as a warning to employers and similar companies that the FCRA applies to social media checks.

• http://www.ftc.gov/os/closings/110509socialintelligenceletter.pdf.

Mackelprang v. Fid. Nat’l Title Agency of Nev., Inc.

• 2007 U.S. Dist. LEXIS 2379 at *25 (D.Nev. Jan. 9, 2007) (the Court found that seeking a release for all private e-mails on plaintiff’s two Myspace accounts “cast too wide a net” absent some indication that relevant information existed. The Court did allow “properly limited requests for production of relevant email communications” related to plaintiff’s sexual harassment allegations.)

EEOC v. Simply Storage Mgmt., LLC

• 270 F.R.D. 430 (S.D. Ind. 2010) • The Defendants sought discovery of information from plaintiffs’

internet social networking sites in context of a workplace sexual harassment claim which included allegations of severe emotional distress.

• The Court allowed discovery of “any profiles, postings, or messages (including status updates, wall comments, causes joined, groups joined, activity streams, blog entries)” and social networking site applications related to “any emotion, feeling, or mental state” or “events that could reasonably be expected to produce a significant emotion, feeling, or mental state.” 270 F.R.D. at 436.

• A person’s expectation that communications would remain private is not a legitimate basis for shielding them from discovery – any privacy concerns can be addressed with a protective order.

• Plaintiff’s privacy interest is further compromised in this case because the claimant had already shared the information with another person.

Bass v. Miss Porter’s Sch.

• 2009 U.S. Dist. LEXIS 99916 (D.Conn. 2009)• “Facebook usage depicts a snapshot of the user’s

relationships and state of mind at the time of the content’s posting. Therefore, relevance of the content of Plaintiff’s Facebook usage as to both liability and damages in this case is more in the eye of the beholder than subject to strict legal demarcations, and production should not be limited to Plaintiff’s own determination of what may be “reasonably calculated to lead to the discovery of admissible evidence.” 2009 U.S. Dist. LEXIS 99916 at *3.

Crispin v. Christian Audigier, Inc.

• 717 F.Supp.2d 965 (C.D.Cal. 2010) • District Court quashed subpoena duces tecum for

plaintiff’s private messages on Myspace and Facebook accounts and ordered additional factual development to determine whether access “wall” postings and comments was sufficiently restricted to bring them under the protections of the Stored Communications Act.

• The number of users who can view a stored message is of no legal significance under the Stored Communications Act so long as it is not public.

Romano v. Steelcase Inc.

• 907 N.Y.S.2d 650 (N.Y. Sup. Ct. 2010) • Because public portions of the social networking sites

contained material contrary to plaintiff’s claimed injuries, the court held that defendant must be allowed to access plaintiff’s private postings.

• Court found that users of social media do not have a reasonable expectation of privacy about the information they post or share.

• Court ordered plaintiff to provide “properly executed consent and authorization as may be required by the operators of Facebook and MySpace to gain access” to Plaintiff’s records.

McMillen v. Hummingbird Speedway, Inc.

• No. 113-2010 CD, 2010 Pa. Dist. & Cnty. Dec. LEXIS 270 (Sept. 9, 2010)

• Defendant reviewed the public portion of plaintiff’s Facebook account and discovered statements inconsistent with his claimed injuries.

• “Complete access” provided to Facebook and Myspace operators defeated plaintiff’s claim that the communications were confidential.

• Court held that “[w]here there is an indication that a person’s social network sites contain information relevant to…a lawsuit…access to those sites should be freely granted.” 2010 Pa. Dist. & Cnty. Dec. LEXIS 270 at *12.

• Court ordered plaintiff to produce user names and passwords to his social network accounts.

Social Media - Facebook and Myspace: Court Orders Plaintiff to Provide All Passwords and not Alter Information

• Zimmerman v. Weis Mkts., Inc., 2011 WL 2065410 (Pa. Com. Pl. May 19, 2011) (upon discovery of posts on plaintiff’s public Facebook and MySpace pages which contradicted his claimed injuries, the Court ordered plaintiff to provide defendant with all passwords, user names, and log-in names for any and all MySpace and Facebook accounts. The Court further ordered that plaintiff was to take no steps to delete or alter those pages. The Court held that no privilege from disclosure exists in Pennsylvania for information posted on non-public portions of social websites.)

Causation: The Meaning of “Because Of” in Iowa

• DeBoom v. Raining Rose, Inc., 772 N.W.2d 1 (Iowa 2009) (Although the Iowa Civil Rights Act uses phrase “because of”, just like the ADEA, the Iowa Supreme Court holds that a “motivating factor” instruction is appropriate)

Texas Non-Compete Upheld Where Consideration is Stock Options

• Marsh U.S.A., Inc. v. Cook, 2011 Tex. LEXIS 465 (Tex. June 24, 2011) (Court held that stock options, as consideration for a noncompete agreement, were reasonably related to the company’s interest in protecting its goodwill, a business interest the Act recognizes as worthy of protection.)

Lost Wages Recoverable Even Though No Finding of Constructive Discharge

• Donelson v. DuPont Chambers Works, 2011 N.J. LEXIS 638 (June 9, 2011) (the Court awarded lost wages to an employee who brought suit under New Jersey’s Conscientious Employee Protection Act (CEPA) when he evidence showed that he was mentally disabled by the retaliation, but was not constructively discharged. The Court found that constructive discharge was only one ground for recovery of lost wages under CEPA.)

The Limits of Golden Parachutes

• Martinez v. Regions Fin. Corp., 2009 Del. Ch. LEXIS 162 (Del. Ch. August 6, 2009) (where executive was discharged without cause after refusing to enter into a new employment agreement, the chancery court found she was entitled to her “golden parachute” severance payment, but not entitled to salary and benefits for the remainder of her employment agreement)

Due Process: Termination of Police Chief

• Sullivan v. Mayor of Elsmere, 2011 Del. LEXIS 307 (Del., June 17, 2011) (en banc) (Appellee, a town’s panel, held a public hearing to determine whether it should terminate appellant. Appellant showed by unrebutted testimony that one member of the seven-member panel was biased against him. The Supreme Court of Delaware held that the single biased panel member tainted the entire tribunal’s decision and deprived Appellant of due process, irrespective of whether that member’s vote was necessary to the judgment.)

Agreements to Maintain Confidential Information

• News American Mktg. In-Store, LLC v. Emmel, 2011 U.S. App. LEXIS 11810 (11th Cir. June 8, 2011) (The Court, based on the verb tense used in the non-disclosure agreement [NDA] which provided that Emmel “will not disparage…”, held that the NDA did not cover any of Emmel’s conduct which predated his signing of the NDA.)

• On August 17, 2011, The Guardian printed a story describing the personal and financial consequences that Mr. Emmel has suffered in connection with his legal disputes with his former employer. Ed Pilkington, A Life Unravelled, The Guardian, Aug. 17, 2011, at 14-15, cite online at http://www.guardian.co.uk/media/2011/aug/17/whistleblower-murdoch-empire, accessed 8/8/2011.

Overly Broad Non-Compete

• Lampman v. DeWolff, Boberg & Associates, Inc., 319 Fed. Appx. 293 (4th Cir. 2009) (the Court found a South Carolina covenant not to compete to be unreasonable when it lacked geographic restrictions, thus prohibiting plaintiff from working for a “competitor” in Zimbabwe; the non-compete’s use of the terms “indirect” and “similar” could lead to absurd results.)

Has Your Representation Agreement Anticipated Counterclaims?

• If not, and if the existing representation agreement is silent on the subject, you may be required to defend counterclaims under the terms of the existing agreement.– Woodbury v. Andrew Jergens, Co., 61 F.2d

736, 739-40 (2d Cir 1932).– See “Anticipating Counterclaims in

Representation Agreements” by Robert B. Fitzpatrick.

Sufficient Likelihood That Defendant Will Disclose Trade Secret

• Bimbo Bakeries U.S.A., Inc. v. Botticella 613 F.3d 102, 116 (3d Cir. 2010) (the Court of Appeals explained that “the ‘proper inquiry’…is not whether a defendant inevitably will disclose a trade secret in the absence of injunctive relief, but instead whether there ‘is sufficient likelihood, or substantial threat, of defendant doing so in the future.’”)

Tortious Interference and Improper Means

• Dunn, McCormack & MacPherson v. Connolly, 708 S.E.2d 867 (Va. 2011); Lewis-Gale Medical Center, LLC v. Alldredge, 2011 Va. LEXIS 121 (Va. 2011) (declining to expand the parameters of “improper methods” to include “‘actions solely motivated by spite, ill-will, and malice’” toward the plaintiff.) (quoting Connolly, 708 S.E.2d at 871)

Tortious Interference

• Faucette v. Chantos, 322 S.W.3d 901 (Tex. Ct. App. Sept. 23, 2010) (holding that it is not unlawful for a person to induce an entity to exercise its legal rights. However, Texas law still allows recovery for tortious interference with prospective business relationships if plaintiff can show that the defendant engaged in independently tortious conduct).

Settlement Agreement: Breach of Reference Request Clause

• Matthews v. Wis. Energy Corp., 2011 U.S. App. LEXIS 10927 (7th Cir June 1, 2011) (the court awarded over $563,000 in fees to the defense in a breach action where plaintiff argued that the reference request clause of the underlying settlement agreement had been breached.)

Repudiation of an Employment Contract Not Found

• DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104 (2d Cir. 2010) (the Court found that the defendant had failed to establish that plaintiff had repudiated her employment contract finding that “although DiFolco wrote in her e-mail…that she wished to ‘discuss [her] exit from the shows’ and to give MSNBC ‘ample time to replace [her],’ these statements can be taken as indicative of her desire to get out from under the direction of the people with whom she had problems rather than leaving MSNBC altogether.”)

Chutzpa Award for 2011!

• Cantor, Fitzgerald & Co. v. Am. Airlines, Inc., 2011 U.S. Dist. LEXIS 5291 (S.D.N.Y. Jan 19, 2011) (employer whose employees were killed in the Twin Tower 9/11 attack is not entitled to damages for American Airlines’ alleged negligence)