Wilke Fleury was pleased to bid its summer clerks-Sarah Scott, Stacy Hunter, and Angie Palmerin-farewell with two fun-filled events. On July 23, partner David Frenznick hosted a boat outing in the Delta near Walnut Grove. Attorneys and clerks wiled away the hours on a houseboat and floating dock before tubing at 40 miles per hour behind a speedboat. Miraculously, only one person was thrown from the tube-a true testament to the aquatic prowess of those involved! On July 31, Dick Hoffelt hosted Wilke Fleury’s annual summer clerk reception at his home overlooking the American River. This annual event takes place during the last Friday in July, and has been a summer fixture for over 25 years. The weather always seems to cooperate for this event, and this year was no exception. Everyone was treated to a relaxing evening . . . a great end to the legal summer season. We appreciate the efforts of Sarah, Stacy, and Angie, and wish them all the best in the coming school year!
Wilke Fleury is pleased to announce that four of its attorneys—Phil Birney, Tom Redmon, Dan Baxter, and Megan Lewis—have received accolades in the recently issued 2009 Northern California Super Lawyers Magazine. Mr. Birney and Mr. Redmon were named as “Super Lawyers” for the fifth and fourth times, respectively, while Mr. Baxter and Ms. Lewis were named as “Rising Stars.” The list of honorees is compiled by Law and Politics through a multiphase process that combines peer nominations and evaluations with third party research. Just five percent of the total lawyers in California are selected for the “Super Lawyer” designation, and no more than 2.5 percent are named as “Rising Stars.”
The achievements of these four outstanding lawyers are emblematic of the quality of services Wilke Fleury provides to all its clients. We look forward to proving it to you.
Most employers are aware that discrimination lawsuits are risky and expensive. A recent case, Lopez v. Bimbo Bakeries, serves as a reminder of just how expensive those cases can be, particularly if the terminated employee can garner a jury’s sympathy.
Recipe for Disaster
Lopez, a single mother of two, worked at Bimbo as a route sales representative. She transported baked goods on 15-pound trays that were stacked on wheeled racks in her truck. The design of the truck and the racks allowed her to load and unload the trays without forcing her to climb in and out of the truck. Lopez became pregnant and was diagnosed with diabetes. Lopez’s perinatal nurse provided her with a certification describing her work restrictions, which included occasionally lifting items ranging from 11 to 20 pounds, taking 15 to 20 minute breaks every two hours, and refraining from climbing. If modified work was not available, Lopez would be unable to work for the duration of her pregnancy. Lopez gave her certification to Laura Thompson-McCann, Bimbo’s HR Manager. Without consulting anyone else, Thompson-McCann told Lopez to go home immediately because Lopez was unable to perform her job duties as required. Thompson-McCann then determined that Bimbo did not have any available positions that could accommodate Lopez’s restrictions, despite Bimbo’s interim work program for employees with industrial injuries. Thompson-McCann refused to allow Lopez to return to her former position or any other Bimbo position, even though Lopez’s nurse assured her that Lopez could perform her job duties. Lopez filed for unemployment and Thompson-McCann responded by sending a letter to Lopez demanding that she confirm her resignation within 48 hours. When Lopez did not respond, Thompson-McCann determined that Lopez had resigned. Lopez sued, claiming gender and pregnancy discrimination. Following a jury trial, Lopez was awarded $340,700 in compensatory damages, $2 million in punitive damages, and over $1 million in attorneys’ fees.
Why Punitive Damages?
A corporate employer may be liable for punitive damages if a managing agent of the corporation acts with fraud, oppression or malice. A managing agent is defined as an employee who exercises substantial independent authority and judgment over decisions that ultimately determine corporate policy. Punitive damages were awarded to Lopez because the jury found that Thompson-McCann was a managing agent and that her actions were fraudulent and oppressive. The jury determined that Thompson-McCain violated the law when she terminated Lopez because of her pregnancy, and that she then attempted to conceal that wrongful act by claiming that Lopez had resigned. If the jury determines that an employer is liable for punitive damages, the amount of punitive damages must then be determined. The amount of punitive damages is based on the reprehensibility of the employer’s conduct and is designed to punish the employer for its wrongful acts. Because Bimbo’s assets were valued at $826 million and its actions were highly reprehensible, the jury determined that $2 million in punitive damages was appropriate.
Why Attorney’s Fees?
In most employment cases, the trial court will award attorneys’ fees to a prevailing plaintiff. Attorneys’ fees are awarded to ensure that the employee is not forced to bear the financial burden of litigation in order to vindicate her statutory rights. In determining the appropriate amount of attorneys’ fees to award, the Court will consider the number of hours spent by the attorney multiplied by a reasonable hourly rate. The court may then multiply that amount by a factor designed to reward the attorney for the risk incurred in taking a case in which he will receive nothing if he loses.
What This Means For You
To avoid falling into the same trap as Bimbo, you should ensure that your managing agents understand their legal obligations. When the managing agent is a human resources professional, she must understand the complex interplay between the ADA, FMLA and California’s FEHA and PDL. Here, Thompson-McCann made one mistake after another. She failed to engage in the interactive process, failed to determine whether the employee could perform her duties with a reasonable accommodation, failed to determine whether an alternative interim position was available even though company policy allowed for it, and failed to determine whether an extended leave of absence would be an appropriate accommodation. Any one of these failures would have resulted in liability for the employer. Together, they cost the employer a lot of dough.
Passed last year and signed into law by President Bush, the Genetic Information Nondiscrimination Act (GINA) will go into effect this November. Title I of GINA prohibits health insurance companies from discriminating against individuals based on their genetic information, and Title II prohibits such discrimination in the workplace. “Genetic information” is defined as an individual’s genetic tests or tests of his or her family members, as well as the medical history of an individual’s family with respect to any diseases or disorders.
Congress passed the Act in response to what it called the “current explosion in the science of genetics.” The hope is that the new law will foster medical research in the burgeoning field by offering protection to potential genetic testing participants who might otherwise be wary of disclosure of their medical records. The new protections may also allow for early detection of medical problems, and reduce the likelihood that at-risk individuals will contract or develop certain medical conditions.
Title II pertains to employers and has four prohibitions. First, employers may not engage in employment discrimination based on genetic information – i.e., employers may not terminate, refuse to hire, or otherwise “discriminate against any employee with respect to the compensation, terms, conditions, or privileges of employment” based on the employee’s genetic information. Furthermore, employers cannot use such information to “limit, segregate, or classify the employees… in any way that would deprive or tend to deprive any employee of employment opportunities or otherwise adversely affect the status of the employee.” Second, employers cannot retaliate against an employee who vocally supports the provisions of GINA or who participates in any investigation or proceeding under the Act. Third, employers cannot disclose any employee’s genetic information to any third party except under very narrow circumstances, such as to comply with certification provisions of family and medical leave laws. Finally, employers may not collect employees’ genetic information, with some exceptions (e.g., if the employer acquired the information inadvertently). If an exception does apply, employers must be careful to keep all such records strictly confidential. It is important to keep in mind that GINA is intended only as a floor of protection – state laws that provide for equal or greater protection are presumably still valid. The Act applies to all employers who have 15 or more employees, and will be enforced by the EEOC. Employees who successfully bring suit under GINA may recover attorney fees, as well as compensatory and punitive damages, if they can prove intentional (rather than negligent) discrimination – though these are subject to dollar caps depending on the size of the employer.
California’s FEHA already prohibits employers from discriminating on the basis of genetic information, and state law goes even further than GINA to prohibit testing for the presence of a genetic characteristic. Since California laws on genetic nondiscrimination were already among the most protective in the country, GINA will likely have a minimal effect on employers in this state. However, it has yet to be determined how courts will treat any disparities between state and federal law in this area, so employers would be wise to ensure compliance with GINA as well as with existing state law.
By Jason Cinq-Mars and Angie Palmerin
Employment attorneys were quite busy in 2008. According to the Equal Employment Opportunity Commission (EEOC), a total of 95,402 discrimination charges were filed by workers against their employers in 2008, as compared to 82,792 in 2007. That is a 15% increase. According to the new report, age discrimination complaints increased 29% from 2007, followed by retaliation complaints up 23% and sex discrimination complaints up 14%. The EEOC also saw an increase in complaints based on national origin discrimination, up 13% from 2007, race discrimination, up 11%, and disability discrimination, up 10%. With the economy in turmoil and a continuing rise in unemployment, it should be no surprise that employment litigation has dramatically increased.
With the number of discrimination filings on the rise, employers must be aware of the risks they face if an employment case is filed against them. Statistics show that if an employer is sued by an employee in federal court, there is a 61% chance that the employer will lose. This number increases to 66% if the suit is filed in state court, where most employment discrimination cases are filed. The chances of an employer losing jumps to 65% if disability discrimination is alleged and to 70% if the suit alleges sex discrimination.
The Bottom Line
If an employer takes an employment case to trial and loses, the verdict can be quite large. Statistics show that in 2008, the average verdict in a federal employment suit was around $627,447. This number was higher in state court, where the average verdict was approximately $852,838. This number increases to approximately $948,018 for state discrimination cases, while state age discrimination verdicts top the list at an average of $1,967,923. There is a 27% chance of a verdict of $500,000 or more and a 45% chance of a verdict of $250,000 or more. In light of this dramatic increase in employment litigation and the high costs associated with lawsuits, the wise employer will be sure to provide effective management training on harassment and discrimination, hire competent human resources professionals and consult counsel before making high risk termination decisions.