employment discrimination

The Family and Medical Leave Act (FMLA) turned 20 this year, with enforcement first taking effect on August 5, 1993. Sure, the FMLA is a “burden” on employers in the same way that weekends, lunch breaks, and the minimum wage are a “burden,” but it’s hard to argue with the basic precept that employees who work 1,250 hours a year at a company with the resources to handle employees calling out shouldn’t be entitled to a little bit of unpaid time off when they’re too sick to work or when they need to be good spouses, children, and parents by caring for their immediate family members.

 

But there’s always someone to complain about people doing the right thing instead of grinding themselves down making money for a big company. Thus, there’s been no shortage of complaints by begrumpled management-side lawyers about the “Friday-Monday Leave Act.” The Department of Labor looked into these concerns and found them mostly unfounded — few employees ever take out intermittent leave for self-care conditions like chronic pain, and few business can credibly report a loss in productivity or profitability — but that hasn’t stopped calls to weaken the FMLA.

 

I don’t tend to litigate FMLA cases, but I most certainly need Continuing Legal Education credits to remain a licensed attorney, so last week I went to a seminar on the FMLA hosted by a bunch of defense lawyers and, the lone employee-side lawyer, Ari Karpf of Karpf & Karpf out in Bensalem. What struck me most was how many employers just plain didn’t get it, and didn’t seem to recognize when they were doing something prohibited by the FMLA. So, as part of my real continuing legal education — i.e., reading up on new cases and discussing the law with other attorneys, instead of just sitting through a PowerPoint in a subzero, windowless conference room — I thought I’d do a brief survey of some recent FMLA cases to see how well businesses are doing in actually complying with the law. Continue Reading 20 Years Later, Employers Still Don’t Understand Family And Medical Leave

Via Eric B. Mayer’s Twitter feed, I saw that a few days ago the Wall Street Journal’s blog for working parents, The Juggle, posted on a hot legal issue these days, “Should Pregnancy Be Treated as a Disability?”

A recent study by a University of Dayton law professor, Jeannette Cox, asserts that pregnant women should be covered by the Americans with Disabilities Act, to protect them from being fired or forced to perform labor that could be harmful to mother or child. (The paper is forthcoming in March in  the Boston College Law Review.)

The ADA doesn’t recognize pregnancy as a disability, leaving pregnant women physically and financially vulnerable on the job, concluded Cox, who studies employment discrimination. She found that pregnant women are at risk for losing their jobs when “reasonable adjustments” aren’t made, such as retail workers fired for drinking water at work or pregnant police officers forced to perform rigorous assignments (while injured officers were given lighter duty).

She’s not kidding about “water at work” — I’ve heard of plenty of cases about pregnant women whose employers denied them basic necessities like water or chairs or bathroom breaks. Professor Cox’s idea is eminently sensible, of course, because there’s really no difference between a complicated pregnancy and the types of permanent disabilities covered by the ADA, except that the former is usually temporary.

In general, a woman with an uncomplicated pregnancy is unlikely to need anything more than the types of “accommodations” most of us take for granted, like drinking water when we’re thirsty or sitting down when we need to rest our legs. Pregnancy usually becomes an issue in the workplace in two circumstances: either the employer started imposing extra restrictions on the pregnant employee (sometimes as a means to force the pregnant employee out and thereby avoid Family and Medical Leave Act duties, and sometimes just out irrational prejudice in violation of the Pregnancy Discrimination Act (PDA), an amendment to Title VII of the Civil Rights Act of 1964) or the pregnant employee developed a complication like pre-eclampsia, placenta previa, or gestational diabetes, and so has a weight/lifting restriction imposed upon them by their doctor.

At that point, the employer can either accommodate the pregnant woman, force her to take whatever family leave is available to her (often exhausting it before the birth of her child), or try to fire her. A disturbing number of employers do the latter two.

Continue Reading Pregnancy Is (Legally) Like A Disability If Employers Accommodate Temporarily Disabled Workers

I complained back when the Supreme Court’s Perdue v. Kenny A. opinion first came out more than a year ago, knocking down attorney’s fees awarded to a set of extraordinary children’s rights lawyers:

It’s no stretch to say those lawyers single-handedly reformed the foster care system in metropolitan Atlanta.

And they did that by spending their own money and putting in their own time, with no guarantee they would recoup any of their out-of-pocket costs, much less get paid a fee for their services. Had they been paid by the hour as they went along, their services would have been worth more than $7 million.

But they weren’t paid by the hour to pursue the case. They were paid nothing at all; instead, they paid money — $1.65 million — for the privilege of cleaning up abuse and neglect in the foster care system.

As Blawgletter explains, there’s a big difference between getting paid to defend a case and paying to pursue one. The former is safe and simple and can be done in perpetuity. The latter is risky and complicated and can only be done for as long as funds are available.

Class actions are, by their nature, extraordinary, more expensive and riskier than even ordinary contingent fee representation. The District Court that oversaw the Perdue litigation recognized that and awarded the plaintiffs’ attorneys their costs, their $7 million or so in hourly fees, and then gave them an “enhancement” of $4.5 million.

The Supreme Court — the Justices of which have a combined experience in contingent fee litigation of exactly 0.0 hours — reversed, holding the plaintiffs’ lawyers, who fought for years without being paid a dime and indeed paying out their own money to fund the case, were entitled only to a fee “that roughly approximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case.”

It was a phony and vindictive legal fiction designed to dissuade plaintiffs’ lawyers from taking these cases, part of a long campaign against class actions in general that culminated in the Wal-Mart v. Dukes opinion.

Last week, the opinion came back around again to bite a group of employment discrimination lawyers who had been litigating a Title VII class action since 1997. Via the Workplace Class Action Blog comes McClain, et al. v. Lufkin Industries, Inc., No. 10-40036 (5th Cir. Aug. 8, 2011). As they describe:

Plaintiffs had filed a class action in the U.S. District Court for the Eastern District of Texas under Title VII alleging that defendant engaged in unlawful employment practices, including disparate treatment and disparate impact. Id. at *2. The district court certified a class. Id. at *3. After realizing that defendant was not going to settle the case and that they did not have the resources to prosecute an employment class action through trial, plaintiffs’ counsel sought the assistance of another law firm. Id. However, plaintiffs’ counsel was not able to find another law firm in Texas that was willing or able to commit the time and resources necessary to assist in the prosecution of the class action, so plaintiffs’ counsel was forced to turn to an Oakland, California firm with a nationwide reputation as a plaintiffs’ employment discrimination class action firm. Id. at *3-5.

The opinion (here’s the copy at the Workplace Class Action Blog) includes at footnote 4 some remarkable comments about how risky and unprofitable it is to take on these types of cases:

J.  Derek Braziel,  an  experienced Texas litigator in  labor and
employment law, explained: “I do not work on employment discrimination class action cases for largely financial reasons, even though I am competent and have the resources to do so. . . . Employment discrimination class actions usually take much longer to litigate than the average employment discrimination  or wage and hour  case.  Defendant companies often use their substantial  financial advantage  to  outstaff  and  outwork plaintiffs with  limited  personal resources.  …

Steven B. Thorpe, an experienced litigator in Dallas, declared: “My practice focuses in large part on employment civil rights cases in which I represent plaintiffs. . . . [T]he greatest portion of my practice prior to approximately 1985 was in the representation of plaintiffs in class action discrimination suits.  At that time I and the firm with which I was associated largely abandoned that area of practice because we found it to be financially infeasible. At this time and for more than a decade I have done no class action employment litigation.

All of that hesitation despite the extraordinary facts that the plaintiff’s lawyer, Timothy Garrigan, had discovered and proven in front of the court during class certification:

During the class certification hearing, one allegation was that African American employees were disproportionately sent to Lufkin’s foundry to work under horrible conditions. The company officials were testifying that the conditions there weren’t so bad. Judge [Howell] Cobb immediately recessed the class certification hearing and ordered everyone to take a tour of the foundry when no one was expecting us to be there.

It was actually the first time I’d been there. The descriptions I’d heard of the place were like something out of Charles Dickens or the Dark Ages, and they turned out to be accurate. It was hot, dark, dirty, ankle deep in dust, with flames leaping out of the darkness just a few feet away from you. It was everything the plaintiffs had been describing. I do think that was a significant point in the case. It confirmed what many of the plaintiffs had been saying and contradicted much of what the company had been saying.

Literally unable to find anyone in Texas willing to take the case, Garrigan reached out across the nation and found Goldstein, Demchak, Baller, Borgen & Dardarian in California, which has long fought these sorts of battles. As Garrigan described back in 2008, while the case was still going on: Continue Reading Perdue v. Kenny A. Keeps On Punishing Class Action Lawyers

At Blawgletter:

The U.S. Supreme Court today granted review of a Ninth Circuit ruling that allowed a class of California women to pursue sex discrimination claims against Walmart. 

Of course, if you’re reading this legal blog, you probably already knew that. So let’s dive a bit deeper, per Blawgletter:

The Court both limited and expanded review.  Walmart’s petition presented two questions, only the first of which the Court will address:

I.  Whether claims for monetary relief can be certified under Federal Rule of Civil Procedures 23(b)(2) — which by its terms is limited to injunctive or corresponding declaratory relief — and, if so, under what circumstances.

II.  Whether the certification order conforms to the requirements of Title VII, the Due Process Claus, the Seventh Amendment, the Rules Enabling Act, and Federal Rule of Civil Procedure 23.

The Court added the following question:  "Whether the class certification ordered under Rule 23(b)(2) is consistent with Rule 23(a)."

You can see Walmart’s cert petition here, courtesy of Scotusblog.com.

The Court’s ruling in Dukes will likely settle a split in the courts of appeals over whether and when courts may certify class actions that seek money together with injunctive or declaratory relief.  Some circuit courts, such as the Second and the Ninth, tend to hold that even a claim for big monetary relief can fit within the Rule 23(b)(2) framework so long as the class also seeks serious injunctive and declaratory relief.  Other circuits, notably the Fifth, almost categorically disallow classes where the plaintiffs ask for any cash other than as purely incidental relief.

Drug and Device Law has a long explanation of the Rule 23(b)(2) "equity" versus "law" issue. I recommend you read their post, too.

As a general matter, plaintiffs’ lawyers do not like to see the Supreme Court grant certiorari of Ninth Circuit orders, particularly not those orders which affirmed certification of a class action. Four members of the Supreme Court are outright hostile to the rights of employees and consumers; all they need is one Justice on their side (typically Justice Kennedy) and they can dramatically shaped the law to deny relief.

So we’re not excited about this development, though I’m sure the Drug and Device Law folks are, since they represent big businesses, typically pharmaceutical manufacturers.

But there’s some hope here. Note this part of Drug and Device Law’s argument:

This section of Rule 23 is relatively old, dating from 1966, so it frames the injunctive vs. money distinction somewhat archaicly in terms of the distinction between "law" and "equity."  In the olden days, almost a century ago, there were two different sets of courts, one for telling people what they could and couldn’t do, and the other for telling them what they had to pay, if anything.  The first courts were "equity" and the second set was "law."

I must respectfully dissent; some form of money damages are indeed "equitable." Let me give you an example.

For years, the Supreme Court has struggled with a part of the Employee Retirement Income Security Act (ERISA) which allows for equitable damages. § 502(a)(3) of ERISA states, in pertinent parts:

Persons empowered to bring a civil action. A civil action may be brought … by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this title or the terms of the plan;

The Supreme Court has twice affirmed that “the term ‘equitable relief’ in § 502(a)(3) must refer to ‘those categories of relief that were typically available in equity.’” Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210 (2002)(quoting Mertens v. Hewitt Associates, 508 U.S. 248, 256 (1993), emphasis in Mertens).

But what was "typically" available in equity? Consider Sereboff v. Mid Atlantic Medical Services, 547 U.S. 356 (2006):

 

In Mertens v. Hewitt Associates, 508 U. S. 248 (1993), we construed the provision to authorize only "those categories of relief that were typically available in equity," and thus rejected a claim that we found sought "nothing other than compensatory damages." Id., at 256, 255. We elaborated on this construction of § 502(a)(3)(B) in 362*362 Great-West Life & Annuity Ins. Co. v. Knudson, 534 U. S. 204 (2002), which involved facts similar to those in this case. Much like the "Acts of Third Parties" provision in the Sereboffs’ plan, the plan in Knudson reserved "`a first lien upon any recovery, whether by settlement, judgment or otherwise,’ that the beneficiary receives from [a] third party." Id., at 207. After Knudson was involved in a car accident, Great-West paid medical bills on her behalf and, when she recovered in tort from a third party for her injuries, Great-West sought to collect from her for the medical bills it had paid. Id., at 207-209.

In response to the argument that Great-West’s claim in Knudson was for "restitution" and thus equitable under § 502(a)(3)(B) and Mertens, we noted that "not all relief falling under the rubric of restitution [was] available in equity." 534 U. S., at 212. To decide whether the restitutionary relief sought by Great-West was equitable or legal, we examined cases and secondary legal materials to determine if the relief would have been equitable "[i]n the days of the divided bench." Ibid. We explained that one feature of equitable restitution was that it sought to impose a constructive trust or equitable lien on "particular funds or property in the defendant’s possession." Id., at 213. That requirement was not met in Knudson, because "the funds to which petitioners claim[ed] an entitlement" were not in Knudson’s possession, but had instead been placed in a "Special Needs Trust" under California law. Id., at 214, 207. The kind of relief Great-West sought, therefore, was "not equitable—the imposition of a constructive trust or equitable lien on particular property—but legal—the imposition of personal liability for the benefits that [Great-West] conferred upon [Knudson]." Id., at 214. We accordingly determined that the suit could not proceed under § 502(a)(3). Ibid.

That impediment to characterizing the relief in Knudson as equitable is not present here. As the Fourth Circuit explained below, in this case Mid Atlantic sought "specifically 363*363 identifiable" funds that were "within the possession and control of the Sereboffs"—that portion of the tort settlement due Mid Atlantic under the terms of the ERISA plan, set aside and "preserved [in the Sereboffs’] investment accounts." 407 F. 3d, at 218. Unlike Great-West, Mid Atlantic did not simply seek "to impose personal liability . . . for a contractual obligation to pay money." Knudson, 534 U. S., at 210. It alleged breach of contract and sought money, to be sure, but it sought its recovery through a constructive trust or equitable lien on a specifically identified fund, not from the Sereboffs’ assets generally, as would be the case with a contract action at law. ERISA provides for equitable remedies to enforce plan terms, so the fact that the action involves a breach of contract can hardly be enough to prove relief is not equitable; that would make § 502(a)(3)(B)(ii) an empty promise.

 

(Emphasis added). As the Third Circuit interpreted that, although “some forms of equitable relief — such as constructive trusts, equitable liens, or accounting for the profits derived from wrongly held property — include the payment of money . . ., these forms of relief are available in limited circumstances.” Eichorn v. AT&T Corp., 484 F.3d 644, 655 n.6 (3d Cir. 2007).

In short, If the plaintiff can show an equitable basis for the payment of money damages — such as by showing an entitlement to a constructive trust, equitable lien, or accounting for wrongfully gained profits — then they can compel the payment of money damages in equity.

Could the Dukes plaintiffs show an equitable basis for money damages against Wal-Mart? 

I don’t know — that’s a heck of a complicated question — but it’s surely a possibility if the Supreme Court applies to Rule 23(b)(2) the same analysis as it has applied in the ERISA context.  That would be a good thing for employees and consumers nationwide.

I’ve written before about the need for lawyers to create a "paper trail" to protect themselves from later accusations of malfeasance or negligence. Yesterday the New Jersey Law Journal gave a vivid example of where the lack of a paper trail can go:

Ex-employees of Prudential Life Insurance who say the company bribed their lawyers to keep their bias claims out of court are seeking access to thousands of documents the company asserts are privileged.

The request was made in a motion by Stephen Snyder, the attorney for 73 of the 234 plaintiffs, who told Bergen County Judge Brian Martinotti at a hearing Wednesday that the alleged collusion between Prudential and Leeds Morelli & Brown, of Carle Place, N.Y., was unprecedented.

"It is unheard of for an adversary to pay a contingency fee up front," he said, especially when $4 million of it is nonrefundable and the amount of the payment is laid out in a separate agreement not signed by the clients and allegedly hidden from them. Snyder made repeated references to Prudential’s conversion to a publicly traded company, which he said made it extra important to keep the claims — which included allegations of red-lining minorities — out of court and the public eye. …

Leeds Morelli signed an agreement with Prudential on May 5, 1999, to send the plaintiffs’ claims to alternative dispute resolution. Prudential was to pay the firm, as legal fees, a third of everything recovered. Each of the 359 claimants signed the ADR agreement on a separate page.

They were not parties, however, to a second agreement executed the same day between Prudential and Leeds Morelli, which provided that the company would pay the firm up-front fees of $5 million, with $4 million nonrefundable.

I don’t think there is anything inherently unethical about the fee agreement itself. As Prudential’s lawyer noted at the oral argument, it is not entirely unheard of for a settlement to provide plaintiff’s counsel with an initial upfront payment that functions as a "war chest" to support the counsel and their clients through what could be a very lengthy alternative dispute resolution process, but there are two problems with that analysis in this case.

First, the payment was apparently not used as a war chest:

The defendants here made a similar war-chest argument, but the plaintiffs have denied it, pointing out the claimants had to pay the out-of-pocket cost for the ADR process.

Second, and more importantly, there is no clear documentary evidence that the clients were told of this arrangement when it was made.

Let’s assume that the prior plaintiff’s lawyers (i.e., the ones getting sued here) are correct that many of the clients knew about the upfront guaranteed payment to the plaintiff’s lawyers.

If so, why is there no paper trail? The lawyer for the accused argues they didn’t want the mediators to find out about the implied value of the overall settlements, but, well, I think plaintiffs’ lawyer Kenneth Thyne is right on that one:

Thyne pointed out that Appellate Division Judge Paulette Sapp-Peterson, during argument on an appeal in the case, said that explanation did not make sense. "It still doesn’t," said Thyne, scoffing at the notion that if there were signatures, the mediators would somehow get hold of the agreement.

Frankly, the whole situation doesn’t make sense. The overall settlement — including the upfront fee paid to the plaintiffs’ lawyers — doesn’t strike me as inherently unethical or unfair, and I wonder how the former clients will be able to prove non-speculative damages at trial, since there are few numbers more subjective and amorphous than the value of a zealous lawyer versus a merely competent one. Their argument now about "the loss of their lawyers’ economic incentive" holds some water, but it’s no slamdunk. Notably, the plaintiffs’ lawyers still recovered enough through ADR to break through the guaranteed $4 million and grab another $1 million. That certainly shows some degree of incentive and zealous advocacy.

That said, if there wasn’t malfeasance, then why didn’t the prior plaintiffs’ lawyers simply communicate better with their clients about the arrangement? If they had nothing more than a single letter to each of the clients describing the settlement agreement – or even just attaching a copy of it, without explanation – they wouldn’t be in the predicament they’re in today.

At the WSJ Law Blog, The Rising Tide of Job Bias Claims:

There’s often a debate about whether litigation in counter-cyclical. Do lawsuits increase when the economy heads south?

In one area of litigation, there’s no debate: employment discrimination claims. A lot of folks have been fired, and many of them are are claiming that they were let go because of their race, age, gender, or because of a disability.

Job bias claims, to put it mildly, are through the roof, according to this WSJ article.

For the six months that ended April 30, more than 70,000 people filed claims with the Equal Employment Opportunity Commission saying they had suffered job discrimination, a 60% increase in bias claims compared with the same period a year earlier. Not all of these complainants will sue, but plenty will.

"Plenty" will, but the EEOC’s own statistics show that most of those claims will go nowhere.

A little under 1 in 5 of them will be closed for "administrative" reasons, like if the claimant fails to timely prosecute the claim, if the claimant withdraws the claim without a settlement, or if the EEOC thinks the claim is outside its jurisdiction.

The bulk of them — more than 3 in 5 — will be dismissed by the EEOC after an investigation for "no reasonable cause." After the dismissal, the employees can, in theory, still bring a lawsuit, but they likely won’t. Most employment discrimination lawyers won’t touch a claim that has been dismissed.

Most of the remaining 1 in 5 claimants, about 17% of the overall claims, will reach some sort of favorable settlement (i.e., formal settlement, withdrawal with benefits, or successful conciliation). Dividing the total value of the merits resolutions (~$290 million annually) by the number of merits resolutions (~17,500 annually) gives us an average settlement of about $16,500.

The last little bit remaining — 3% of overall claims, fewer than 3,000 claims nationwide — will have a "reasonable cause" determination that isn’t settled thereafter, leading to litigation. I suppose that’s "plenty," as the WSJ Law Blog says, but not in the big picture. 3,000 lawsuits nationwide is a tiny fraction of the civil justice system.

They are right about this part:

“In a down economy, companies look to replace older workers with younger workers who they can hire at lower salaries,” said Cliff Palefsky, a San Francisco plaintiffs’ attorney.

In other words, young lawyers, forget bankruptcy law. That’s so 2009. Employment litigation is where it’s at.

True, but most of the action is, unfortunately, on the defense side, in front of the EEOC and the state agencies. I’ve seen modestly-valued employment discrimination claims in the agency process that turned into endless paper wars, with the employer’s lawyers submitting dozens, sometimes hundreds, of pages of repetitive letters to the investigator raising preposterous and contradictory arguments. There is indeed money to be made engaging in a flame war against someone who just lost their job.

I don’t know if most lawyers are cut out to do employment discrimination defense work, though. The lawyers don’t get much control over which cases they take or when to settle them, and the cases can turn personal — we’re talking about discrimination after all, not some contract dispute between business — really quickly. That’s even harder to swallow when, in a lot of the cases, the claim has a substantial merit.

From the plaintiff’s side, there can be money in employment discrimination claims, and the EEOC statistics only tell part of the story, since there are state agencies, too. But unless you can get a class action certified — tricky, but possible, like in Dukes v. Wal-Mart, 603 F.3d 571 (9th Cir. 2010), which the largest companies in America have asked the Supreme Court to reverse — these claims are tough to win, even tougher to make a living doing, moreso since Ashcroft v. Iqbal made them even harder to file, much less win.

When I first saw the headline in The Philadelphia Inquirer —  “Greene suit says PHA ruined reputation” — I thought: has Carl Greene lost his mind?

I interpreted the “ruined reputation” as referring to a defamation claim, and I could not see how Greene could possibly sue the Board of the Philadelphia Housing Authority for defamation. The primary allegations are indisputable: Greene was accused of several instances of sexual harassment, the accusers brought suit, and Greene authorized the PHA and their insurer to settle those cases. The PHA Board is now investigating how those claims were handled and has not reached any conclusions. Without more detail, there’s nothing defamatory there.

More to the point, as John M. Elliott said with a bit more color:

“I’d like to get Carl Greene under oath in court as soon as possible. It’s absolutely incredible that someone who engages in a pattern of predatory sexual misconduct . . . would have the chutzpah to file that kind of lawsuit.”

If Greene is a “predator,” then it’s like the lawsuit over the Facebook movie — if you have something to hide, the last thing you want to do is bring a defamation lawsuit.

But the Complaint isn’t about Greene’s reputation, at least not directly. Instead, it’s over his employment agreement, which includes:

8. TERMINATION.

(a) Termination by PHA for Cause. This Agreement may be terminated immediately for cause upon written notice to MR. GREENE to such effect. Cause as used in this Section is defined to mean only:

(i) A material act or acts of dishonesty on MR. GREENE’S part, which is criminal in nature, intended to result directly or indirectly to MR. GREENE’S substantial gain or personal enrichment at PHA’S expense, and which results in demonstrable material injury and damage to PHA;

(ii) MR. GREENE’S willful and intentional misconduct, recklessness, gross negligence and failure to substantially perform his duties hereunder, other than a failure resulting from MR. GREENE’S incapacity or illness, if MR. GREENE’S willful and intentional misconduct, recklessness, gross negligence and failure results in demonstrable material injury and damage to PHA; or

(iii) Lack of funding.

(c) Termination Without Cause. Either party to this Agreement may terminate the Agreement without cause, but only upon ninety (90) days’ notice to the other party.

Greene’s complaint alleges in essence that, even if he did sexually harass someone, that doesn’t give PHA “cause” to fire him, and so can only be terminated without cause, entitling him to two more years of his salary, pursuant to this section:

(a) In the event MR. GREENE terminates the Agreement under Section 8(b), or PHA terminates the Agreement under Section 8(c), PHA shall pay MR. GREENE for twenty-four (24) months worth of the base salary and benefits set forth in paragraphs 2 through 5 of this Agreement. PHA will also provide MR. GREENE with any vested or accrued benefits to which he would otherwise be entitled. It is understood and agreed that in the event MR. GREENE applies for and receives unemployment compensation, the amount of severance due to MR. GREENE shall be reduced on a dollar-for-dollar basis by the amount of unemployment compensation received by MR. GREENE. Such severance pay shall not be reduced, however, by any compensation MR. GREENE receives from other sources, including employment by another Employer after termination.

Before we discuss the merits, an important issue needs to be raised: the lawyers who represented the PHA in negotiating Greene’s employment agreement plainly dropped the ball. Let’s assume the PHA knew they were giving Greene a sweetheart deal that made him essentially impossible to fire unless he outright stole money from the organization or deliberately stopped coming to work, a contract so sweet that Greene could potentially harass employees without consequence.

Even if that’s the case, I guarantee you PHA did not mean to agree that Greene could only be fired for “willful and intentional misconduct, recklessness, gross negligence and failure to substantially perform his duties.” That word was most certainly supposed to be an “or” — you can’t both intentionally “and” negligently do something.

But now they’re stuck with it. There’s good odds a court will interpret the contract to mean “or” instead of “and” because it’s a patent ambiguity (here’s an example of the law on that), but, really, the issue could be avoided by a little bit more diligence in preparation.

Once we get to the merits of the case, Greene first claim is for a violation of his right to due process. It’s common for government employees to allege due process claims alongside ordinary breach of contract claims arising from their employment agreements, because, in essence, the breach involved the government taking their property interest in the contract.

That said, I don’t know if his claim has any legs just yet. Although he was suspended, he was suspended with pay, and he deliberately removed himself from any involvement with the investigation by going on leave to pursue unspecified medical treatment. He can’t just stop the PHA Board from doing its normal work by making himself unavailable.

That leaves us with Greene’s other claim, for breach of contract. Assuming that Greene either will be fired or has been effectively fired by way of the suspension, would the harassment itself constitute “willful and intentional misconduct, recklessness, gross negligence [or] failure to substantially perform his duties?”

Greene’s employment agreement twice spells out his job only as “leading and managing PHA to achieve those certain goals and objectives set forth in PHA’s Strategic Operating Plan (“SOP”)” and “serv[ing] as Executive Director of PHA and lead[ing] PHA in the accomplishing the goals and objectives of the PHA’s SOP.” There’s nothing about any Code of Conduct or the like he should follow. The complaint nonetheless eludes past the question as to whether “cause” includes sexual harassment, and emphases that the clause also requires Greene’s wrongdoing “result[ ] in demonstrable material injury and damage to PHA.”

Frankly, I don’t think that will be too hard to show: in addition to the institutional harm caused by sexual harassment, there’s also the harm to PHA’s reputation.

But let’s step back for a moment. One would think his “duties” as an Executive Director include not harassing employees. Indeed, if Greene was merely an employee of the PHA, and not its Executive Director, there would be no question that the PHA could fire him “for cause” if he sexually harassed a co-worker. Only a few years back the Pennsylvania Commonwealth Court decided a case that’s exactly on point, in which the PHA was sued by an employee it fired for sexually harassing a co-worker:

[T]he employer’s unfettered right to discharge an employee for certain types of misconduct does not necessarily hinge on whether the employee’s job responsibilities are critical to the performance of an important governmental responsibility, or whether the actual misconduct was criminal or caused harm to a party that the government entity sought to protect. Rather, the focus of the inquiry is whether the misconduct at issue interferes with the public employer’s “control over its enterprise” or impedes the public employer’s powers, which are essential to its ability to accomplish its functions. In other words, if the employee’s misconduct interferes with the public employer’s ability to ensure proper operation of its organization, then it cannot bargain away the ability to terminate an employee for such misconduct.

The application of these principles in the above described cases direct us to a multi-part test. First, where serious misconduct is of a sort which has a direct negative impact on the public function of the employing agency, such as preying upon or otherwise putting at risk those persons the agency is charged to serve, there is no question that the core function test has been satisfied. On the other hand, where the conduct is of a type which will have only an indirect or potential impact on the agency’s public duties, such as embezzlement or a breach of trust, two conditions must be met. The misconduct must be work-related and must involve dishonesty or other misconduct so egregious that if the agency is unable to curtail such behavior it risks relinquishing control of the orderly functioning of its operations. As in cases like ISSU, City of Easton or Allegheny County, it is not necessary that the particular act(s) of the discharged employee, standing alone, impairs or threatens the agency’s operation, but rather that it is the type of conduct which, if left unchecked, may lead to such a result.

We believe that sexual harassment of the sort involved here, at least where it involves physical assaults, falls into this category. It is difficult to imagine how an agency can maintain orderly operations if its employees cannot be assured of a safe workplace in which their duties are not impeded by the fear, or actuality, of unrestrained sexual assaults. Moreover, as the Authority points out, to allow such behavior would place the agency itself in violation of both state and federal law. It is simply not rational to conclude that the Authority bargained for such a result; indeed, it lacks the power to bargain away its duty to protect its workforce from the type of conduct found by the arbitrator to have occurred here.

Philadelphia Hous. Auth. v. AM. FED., 900 A.2d 1043 (Pa. Commw. Ct. 2006)(emphasis added).

That last line deserves another look. It may not even matter if Greene’s employment agreement didn’t include sexual harassment — the precedent out there suggests that the PHA couldn’t bargain away its right to fire people for sexual harassment even if it wanted to:

Both the Pennsylvania Supreme Court and this court have held that a government employer cannot bargain away its power to fire for misconduct bearing directly upon the performance of its essential functions; this incapacity (referred to as contractual incapacity) imposes a legal restriction on an arbitrator’s interpretation as to what the parties meant by “just cause.”

Id.

And it gets worse for Greene. The PHA already has a response:

Suspended Philadelphia Housing Authority chief Carl R. Greene undertook a deliberate “cover-up” to hide four sexual harassment complaints filed against him, the agency’s board chairman, John F. Street, said today.

Deceiving the PHA Board would most certainly amount to “willful and intentional misconduct, recklessness, gross negligence [or] failure to substantially perform his duties.”

One more question, too: this story says two of the sexual harassment cases settled in 2004, three years before Greene’s latest employment agreement. If Greene had a duty to disclose those allegations and settlements to the Board but didn’t, then his whole contract might be void as having been fraudulently induced. Indeed, the Board could sue Greene to get back their money paid under the contract.

Read more about our Philadelphia injury lawyers.

Via Atrios, we have Stanley Fish’s recent NYTimes column, The Rise and Fall of Academic Abstention:

As recently as 1979, legal academics Virginia Nordin and Harry Edwards were able to say that “historically American courts have adhered fairly consistently to the doctrine of academic abstention in order to avoid excessive judicial oversight of academic institutions” (Higher Education and the Law). Academic abstention is the doctrine (never formally promulgated) that courts should defer to colleges and universities when it comes to matters like promotions, curricula, admission policies, grading, tenure, etc. The reasoning is that courts lack the competence to monitor academic behavior; they should get out of the way and let the professionals do the job. “Courts are particularly ill-equipped,” Chief Justice Rehnquist declared in 1978, “to evaluate academic performance.” (Board of Curators of the University of Missouri v. Horowitz)

In 2009, courts still pay lip service to this doctrine but in practice, Amy Gajda tells us in her terrific new book, “The Trials of Academe,” they now boldly go where their predecessors feared to tread. Once, “if a student or faculty member had the temerity to bring a grievance to court, is was likely to be bounced out in short order.” Now, however, “courts feel free to enter . . . from the ground up, parceling out the right and obligations of each disputant down to the last dollar.” Indeed, “litigation and ‘rights talk’ have permeated every crease and wrinkle of academic life.”

Fish concludes,

When I began teaching in 1962 at the University of California in Berkeley, I asked older colleagues about the decorums and rules of the classroom. In response, I was given the Myron Brightfield rule. Brightfield was then a very senior member of the department. His rule (and I paraphrase) was, When you close the door, there’s nothing they can do to you. Those were the days, and they had their injustices as well as their advantages. Now we have justice, or at least the demand for justice, all the time and it may, Gajda suggests, be killing us.

Rubbish.

Fish highlights several cases to make his argument-by-anecdote. Let’s look at his “favorite:”

My favorite (and Gajda’s, too) involves a student in osteopathic medicine who, after failing an important rotation, was dismissed because “he didn’t have the basic understanding that he should have as a fourth-year medical student.” The student sued on the grounds that he had been promised a degree by a phrase in a student handbook that described the program he was enrolled in as “a four-year curriculum leading to the DO degree.”

Anyone with the slightest familiarity with the way universities work would know that ‘”leading to” included the qualification “provided that the requirements for graduating were met” — a medical degree is not equivalent to the certificate you get for having completed six weeks of a summer camp — but the courts were persuaded to a more literal (and perverse) reading and awarded the plaintiff a partial tuition reimbursement. But he wanted more and he got it by arguing that he should receive an amount commensurate with the earnings he would have accumulated had the “promised” degree been conferred. Jurors ordered the medical school to pay him $4.3 million.

The case is Sharick v. Southeastern Univ. of the Health Scis., 780 So. 2d 136, (Fla. Dist. Ct. App. 3d Dist. 2000).

Indeed, as Fish says, anyone with “the slightest familiarity” with academia knows that the award of a degree is predicated on meeting the school’s requirements — except, of course, for the school in question, which argued the student “contracted with [the school] solely to provide an education in exchange for payment of tuition.” Id., 139 (emphasis added).

Got that? The school’s argument was that, regardless of whether the student met the requirements, all the school contracted to do was “provide an education” and not actually award the degree. That is to say, the school argued that it was free to destroy the student’s career for any reason, a bad reason, or no reason, so long as it had “educated” him in a way the student couldn’t possibly use without the actual degree. The court disagreed. So do I. So, too, apparently, does Fish.

Contrary to Fish and Gadja’s description, the student didn’t allege the school “promised” a degree but didn’t give it because he failed, he alleged that “Southeastern’s decision to dismiss him [two months before his graduation] was arbitrary, capricious, and/or lacking any discernable rational basis.” Id., 138. It’s the only way he could recover under Florida law, in light of the “academic abstention” doctrine that Fish claims has been “increasingly narrowed to the point that it is in danger of vanishing.”

A jury agreed with the student. In fact, the evidence against the school was so overwhelming that Southeastern didn’t even appeal the jury’s findings. The school only appealed the trial judge’s rejection of their ridiculous and insulting “solely to provide an education” argument.

Let me tell you, as a plaintiff it’s not easy to prove “arbitrary and capricious” behavior. It’s one of the highest bars a plaintiff can ever face, and typically results in the plaintiff losing. Do you have any doubt that, if Southeastern had any credible defense at all, it would have appealed the jury’s findings? All they had to show was some reason — any reason — justifying the student’s dismissal and the verdict would have been overturned.

Yet, they didn’t even try, presumably because they knew they couldn’t. Rather than making things right, however, they forced him into over fifteen years of litigation, litigation which is still going on. See the most recent appeal, Nova Southeastern Univ. of the Health Scis., Inc. v. Sharick, 2009 Fla. App. LEXIS 12494 (Fla. Dist. Ct. App. 3d Dist. Aug. 26, 2009)

How are we to take Fish or Gadja seriously when their “favorite” example shows why academic institutions should not be above the law?

As you may already know (Google News already lists 300+ articles on it):

A state investigation found that a Montgomery County swim club racially discriminated in June when it revoked an agreement to allow a Northeast Philadelphia day camp to use its pool after 56 African American and Hispanic children made their first visit.

“The racial animus . . . and the racially coded comments” by club members at the Valley Club in Huntingdon Valley were the reasons the club revoked Creative Steps Inc.’s contract, according to a 33-page report by the Human Relations Commission that was released last night by an attorney for four of the campers.

The situation elicited a national media firestorm during the summer over allegations that members of a swim club in a historically white suburb withdrew permission to allow minority children into their pool – even after a $1,950 check had been delivered to pay for the children to have weekly swimming trips.

We’ve discussed the case twice before on this site. As I wrote before,

Let’s assume, for the moment, that everything the Club said is true. There’s still a big unanswered question: once they realized they were overbooked, how did they choose which money to refund?

The most recent members? Did they do that for individual white members, too? What about predominantly white day camps?

On its face, the Storybrook Day Camp story sounds favorable to the Valley Swim Club’s position, but upon closer inspection it’s another diverse day camp whose money was refunded after they showed up. Like the “statistics” described by the Pennsylvania Supreme Court, the presence of another minority Day Camp which was excluded might be very damaging to the Swim Club’s defense, unless they can show similar exclusions / refunds of white camps or members.

But I think they’ve got an even bigger problem: we’re having a debate they obviously did not have when they refunded the money. The concern stated at the time was over “complexion” and “atmosphere.”

A copy of the PHRC’s findings are available on Scribd. Let me highlight a few of them (excuse any typos; I had to perform OCR to copy the text):

31. In 2009, the Respondent employed eight persons as life guards and seven persons as grounds crew. All of the life guards and grounds crew employees are race, Caucasian.

33. In 2009; the Respondent had a total of 155 paid memberships of whom none were African American.

34. In 2008, the Respondent had a total of 179 paid memberships of whom none were African American.

109. Approximately 30-45 minutes after their arrival, ________and ____________, Creative Steps campers, left the swimming pool and walked to the Respondent’s concession stand to get a snack.

110. As they returned to the swimming pool area, ____________ heard Michelle Flynn (race, Caucasian), a Respondent member and a teacher at Laura H.Carnell Elementary School, state the following: “What are all of these black kids doing here?” and “I am scared they might do something to my child. ”

130. Immediately after the Creative Steps campers departed, Mr. Duesler stated that Meg Wescott, a Respondent member, spoke to him on behalf of 5 or 6 women who were in favor of the ·summer day camps, including Creative Steps. Mr. Duesler also stated that Yasmin Adib, Amy Goldman, Walter Poukish, Respondent members, spoke to him in favor of Creative Steps.

131. On or about June 29, 2009 ill the early evening, Mr. Duesler received a telephone call from Mary Beth DeGeorge, a Respondent member, who indicated that she was at the pool earlier in the day. She ‘told Mr. Duesler that she felt that the Respondent was not prepared to host the camps due to the volmne of children in the shaIlowend of the swimming pool and that it was beyond the Respondent’s capacity.

132. On or about June 29, 2009 at 9:45 p.m., Ms. Flynn sent an e-mail to the Respondent members explaining that she was “‘very upset” that when she arrived at the swim club at 4:00, there was a bus emptying off a group of kids.She explained that while it is a community pool, “‘this is not the community where these kids live.” She also noted that she was especiaijy annoyed “‘because there was no notice ahead of time like there is for the swim team.”

133. Ms. Flynn also stated: “‘, .. since I personally know some of these kids because I teach at their school and I have seen first hand what at least one of these children is capable of I don’t feel comfortable with my children even going to the bathroom during this time.” She also stated: “Thank you for your time and I needed to write something because I felt I was being treated as if because the kids were African American it was an issue.. That could not be further than the truth.”

138. On or about June 29, 2009 at 11:17 p.m., Walt Slowinski, a Respondent member, sent an e-mail to the Respondent members with a subject line of “bussing.” Mr. Slowinski stated that he was a “little upset” at the news “about the bussing of kid (sic) to the pool every Monday.” He explained that “[w]hen we joined we assumed that this was a private club not a club for hire or some sort of social program.” He concluded that “[w]e like Valley and would love to stay but after hearing what transpired today I guess we will be looking for somewhere else to go next year. ”

144. Just over twelve hours after Mr. Duesler defended his decision to invite the campers in an e-mail to Mr. Slowinski, on or about June 30, 2009 at 12:40 p.m., Mr. Duesler sent an e-mail to” the members of the Responqent’s Board of Directors with a subject line of “Feedback from our Summer Camp Program” recommending the cancellation of Creative Steps.

145. Mr. Duesler explained that “[w]hat ultimately is holding sway with me is the tension that will linger throughout every hour of the club, essentially pitting member against member, as we are forced to take sides in this debate. This is no way to spend the summer for anyone, and, believe me, its all people are talking about at the club.” With that in mind, Mr. Duesler recommended to the Respoiu:lent Board of Directors the following: “we refund out Monday summer campers’ money, and inform Wednesday’s camp that things are not going to work out this summer. Our Summer Bible Camp will conclude this week.” Mr. Duesler concluded by explaining he welcomed feedback from the members of the Respondent Board of Directors but requested such feedback be quick as he needed to contact the campers to let them know.

150. On or about June 30, 2009 at 3:54 p.m., Steve Korolyk, a Respondent member, e-mailed the Respondent members with a subject line of “LET THE MEMBERS KNOW.” He stated: “I hear the Valley Swim Club is becoming a day camp pool, I see nothing posted on your website or at the board at the bottom of the fill.” He also voiced complaints regarding the Wexler Plumbing party and asked when the party would be occurring this year. He concluded by stating that it was not right not letting members know when the pool was rented out and that he might have to rethink his membership.

151. On or about June 30,2009 at 4:01 p.m.• Mr. Duesler responded to Mr. Korolyk’s e-mail stating that it was a mistake on his part not telling the club about the summer camps. He also stated: “I will also tell you that after this week, we are pulling the plug on the camps, since 1 have been receiving many emails similar to yours. ”

152. On or about June 30, 2009 in the late afternoon, Mr. Duesler called Ms. Wright and informed her that the Respondent was discontinuing its relationship with Creative Steps Summer Day Camp and that it would refund the $1,950.00 payment.

Assuming the correctness of the findings, it seems clear that “safety” had nothing to do with the decision to refund the day camp’s money. Ironically, it seems that the “atmosphere” and “complexion” remarks by Mr. Duesler that inflamed this controversy really summed up what happened: after receiving multiple complaints with implicit, but not explicit, references to the campers’ race, Mr. Duesler “pulled the plug on the camps” not necessarily out of any personal racial animus he felt against the campers, but rather to assuage the complaints of those who appeared to feel racial animus towards the campers. Ergo, the campers were rejected due to their race.

Although the PHRC findings have been described as finding, for example, “racial discrimination did play a role in the rejection of campers from a local swim club,” that’s not quite what the findings mean. Rather, as the findings conclude:

WHEREFORE, probable cause exists to credit the Complainant’s allegations that the Respondent refused and denied Complainant’s child the accommodations, advantages, facilities or privileges of its public accommodation and commercial property, including the use of its swimming pool, due to the child’s race, Black/African American in violation of Section 5 of the Pennsylvania Human Relations Act, 43 P.S. 955 …

Which is to say, the Pennsylvania Human Relations Commission found probable cause to believe discrimination occurred, rather than a actually finding discrimination. As described by my second post, the next step involves the Commission sitting down with the parties to encourage a settlement. If that doesn’t work, then the Commission will hold a formal hearing on the matter, after which the factual and legal findings will be made.

Interestingly, the finding awarded “actual damages, including damages caused by humiliation and embarrassment.” That doesn’t line up with the statute itself, which allows damages for “humiliation and embarrassment” only for employment and housing cases, but not for public accommodation cases. See 43 P.S. § 959(f)(1) and Mechensky v. Commonwealth, Pennsylvania Human Relations Comm’n, 134 Pa. Commw. 192, 205, 578 A.2d 589, 595–96 (1990)(describing Midland Heights Homes, Inc. v. Pennsylvania Human Relations Commission, 478 Pa. 625, 387 A.2d 664 (1978), as holding “the Commission was without authority to award compensatory damages”).

The AmLaw Daily reports:

When news broke Wednesday that guitar virtuoso Joe Satriani’s copyright suit against the band Coldplay had been settled, the Litigation Daily raced to Pacer to download the documents. After all, it’s not every day that a copyright dispute between an aging guitar god and one of the biggest rock bands on the planet settles. (Granted, it’s a bit of a stretch to call Coldplay a "rock" band.) But it turns out that the settlement is as opaque as a Coldplay lyrics sheet.

Satriani filed suit in December 2008, alleging that Coldplay’s monster hit of 2008, "Viva La Vida," ripped off "substantial, original portions" of his 2004 song "If I Could Fly." (To compare the two, scroll to the bottom of this RollingStone.com post.)

On Monday, Los Angeles federal district court judge Dean Pregerson issued an order dismissing Satriani’s suit. We were hard-pressed, however, to find details of the settlement between Satriani and the band in the judge’s one-page filing. The only nugget: Each side will cover its own costs and attorneys’ fees.

(YouTube also has an excellent analysis of the two songs by a guitar instructor.)

I must point out a technical note. The order for dismissal says:

Each party shall bear its own costs and attorney fees.

For those of you who can read English, you may be surprised to learn that the above language does not mean that each side will cover its own costs and attorney fees. Indeed, as part of the settlement, it’s possible that Coldplay agreed to pay all of Satriani’s costs and fees.

Here’s why: in actions for copyright infringement (like actions for patent infringement and employment discrimination), a plaintiff can recover, as part of their damages, the costs and attorney’s fees incurred in bringing the suit. In such a situation, once the trial was concluded favorably for the plaintiff, the plaintiff would submit a petition for fees to the court, after which the Court would evaluate the reasonableness of the fees and then award those fees which were appropriate.

In some cases, the parties settle the merits of the action, but expressly reserve the issue of costs and attorneys’ fees for the Court to decide, after which the case is over. All the language in the Satriani v. Coldplay cases means is that the parties have decided to resolve the costs and fees issue themselves, rather than letting the court rule on it. It’s likely Coldplay is indeed paying them, since otherwise Satrinani wouldn’t recover anything on balance after paying his attorneys.