Company Defeats $6 Million Whistleblower Claim at Trial

A California jury in Superior Court of the State of California, County of Los Angeles, has ruled against an avionics technician, who filed a $6 million whistleblower claim against SpaceX – Elon Musk’s rocket startup company. Blasdell v. Space Exploration Technologies Corp., et al., No. BC615112.

Plaintiff Jason Blasdell alleged that his employment with SpaceX was terminated after he informed company officials, including Elon Musk, that SpaceX technicians were instructed to cut corners, and sign off on improper testing, in order to produce rocket ships more quickly and cheaply. According to Blasdell, these alleged corner-cutting and improper testing constituted fraud against consumers of aircraft and space craft parts, a violation of 18 U.S.C. § 38.

The court permitted the case to go to trial, but refused to let Blasdell testify regarding some of his allegations because Blasdell did not have substantial knowledge (or other basis to testify) of the actions and testing of other technicians. Although Blasdell told the jury he was a dedicated employee who received strong performance reviews, and was terminated only after whistleblowing on fraudulent practices, other witnesses testified Blasdell was a paranoid, disruptive, and unproductive employee who did not engage in any alleged whistleblowing until after he was fired. Significantly, Blasdell’s own expert testified that Blasdell suffered from paranoia. Further, SpaceX produced significant evidence demonstrating that Blasdell was terminated for performance reasons. The 12-person jury deliberated for a few hours before returning a 9-3 verdict in favor of SpaceX.

Whistleblower and retaliation claims present unique challenges to employers. Some steps employers can take to limit such claims include:

  1. Implementing clear policies prohibiting unlawful retaliation.
  2. Providing training that helps supervisors understand what sort of conduct constitutes retaliation.
  3. Encourage supervisors to engage with subordinates who raise complaints to work with those subordinates to determine whether there is merit/substance to the complaint, and to follow up with those subordinates to ensure that there have been no further incidents.
  4. When appropriate, restructuring the work environment so a subordinate is no longer reporting to a supervisor he or she complained about, as this may reduce the odds of supervisor retaliation against that subordinate.
  5. Carefully reviewing subsequent employment actions to ensure all decisions regarding a complaining subordinate are well-documented, well-supported, and appear to be reasonable and consistent with the employer’s policies and practices.

Jury Awards $6.45 Million To Two Plaintiffs for Hostile Work Environment Claims

A jury in the Northern District of Illinois has awarded two plaintiffs $6.45 million in damages, $6 million of which was allocated to punitive damages, clearly signaling that, regardless of statutory caps, juries do not look favorably upon employers who ignore employee complaints of sexual harassment.

In Davis v. Packer Engineering, Inc., No. 1:11-cv-07923, Danya Davis, Bernessa Wilson, and Shannon Webb alleged, among other things, that their employers subjected them to a hostile work environment and retaliated against them for complaining about such environment by terminating their employment in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000 et seq. The plaintiffs complained that despite their repeated complaints, the defendants ignored them. The jury awarded Davis and Wilson each $3 million in punitive damages and $150,000 and $300,000, respectively, in compensatory damages. Of course, these numbers far exceed the statutory caps imposed by Title VII.

An award in which there is such a great disparity between the amounts allocated to punitive and compensatory damages clearly signals that the jury intended to punish the employer for disregarding its employees’ complaints. Moreover, while Title VII imposes statutory caps, other federal and state laws do not, and verdicts of this size could be upheld and enforced under similar laws.

Nearly 20 years ago, the U.S. Supreme Court held that an employer is vicariously liable under Title VII when a supervisor creates a sexually hostile work environment that results in a tangible job action, unless the employer can show that (1) it exercised reasonable care to prevent and promptly correct the harassing behavior, and (2) the employee failed to act reasonably under the employer’s non-harassment policy “or to avoid harm otherwise” (the “Ellerth/Faragher defense”). Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 765 (1998); Faragher v. Boca Raton, 524 U.S. 775, 807 (1998).

Employers must make sure their employees are well-trained and understand how to handle employee harassment complaints. Employers should keep these tips in mind:

  • Train employees on the company’s EEO and non-harassment policies;
  • Consistently enforce the policies;
  • Take every complaint seriously, no matter how trivial it may appear;
  • Keep the investigation confidential and involve only those individuals who “need to know”;
  • Be objective and stick to the facts; and
  • Lead by example.

 

Jackson Lewis attorneys are available to answer inquiries regarding this case and assist employers in the risk of litigation.

Trial Court Finds Nothing Reasonable about Employee’s ADA Accommodation Request

A plaintiff’s demand that her supervisor adopt a less overbearing management style was an unreasonable accommodation request under the Americans with Disabilities Act, a federal district court in Florida has found. Hargett v. Florida Atlantic Univ. Board of Trustees, 2016 U.S. Dist. LEXIS 154822 (S.D. Fla. Nov. 8, 2016).

The plaintiff, who suffered from epileptic seizures since childhood, worked for the defendant-university as a librarian. She informed the university her seizures were linked to high tension and stress and she considered her job to be a stressful work environment that could cause her to have seizures. She complained that her supervisor was “becoming uniquely rough or harsh” in his treatment of her. The plaintiff alleged her supervisor’s bullying and harassment caused her to have frequent seizures at work. As a result, the plaintiff requested the following accommodations: (1) the supervisor “cease his hostile confrontations” with the plaintiff; (2) her supervisor undergo sensitivity training; and (3) to reduce risk of injury from seizure, the university ensure the plaintiff’s cubicle did not contain sharp corners. The university accommodated only the third request.

Among several other claims, the plaintiff filed suit alleging the university discriminated against her based on her disability in violation of the ADA because it allegedly failed to provide reasonable accommodations. The university asserted that it accommodated some of her requests and denied only those that were vague and/or unreasonable. The trial court agreed with the university and granted summary judgment for the university on the plaintiff’s failure to accommodate claim. It concluded that since some of the plaintiff’s requests were vague, the university was not required to consider the requests.

Further, the court stated that the plaintiff could not “immunize herself from stress and criticism” in general and that appeals to work in a more nurturing work environment, not directed at any particular person, are not sufficient. Since the plaintiff merely characterized her supervisor’s management style as a “series of hostile confrontations” and did not identify any specific stressors caused by the supervisor, the court found her request unreasonable and granted the university summary judgment motion on the plaintiff’s failure to accommodate claim.

Key to the court’s decision was the plaintiff’s inability to identify specific actions taken by her supervisor that allegedly caused her to have frequent seizures at work. This case shows the importance to employers (through their counsel during a plaintiff’s deposition and at trial) of questioning a plaintiff for specifics regarding any requests for accommodation. Vague or conclusory statements, instead of specific actions an employer can take, could be unreasonable.

Jury Waiver Unenforceable For Inadequate Notice of Claims Covered

A New Jersey appeals court has declined to enforce a jury waiver as to statutorily protected whistleblower rights because the provision at issue failed to state adequately the right being surrendered and the claims that were affected.

A former employee argued that the jury waiver in his employment contract did not preempt his statutory right to a jury trial under the New Jersey Conscientious Employee Protection Act (“CEPA”), N.J.S.A. 34:19-1 to -14.1. The relevant provision provided, “[employer] and [employee] irrevocably waive any right to trial by jury in any suit, action or proceeding under, in connection with or to enforce this Agreement.” Noren v. Heartland Payment Sys., 2017 N.J. Super. LEXIS 12 (Feb. 6, 2017).

Based on the waiver, the trial court denied the employee’s demand for a jury trial on breach of contract and CEPA claims. After a bench trial, the court dismissed the employee’s claims and awarded the employer more than $2 million in fees and costs. The merits of the claims were not before the court on appeal.

The appeals court noted the waiver at issue made no reference to statutory claims and did not define the scope of claims to include all such claims that pertained to the employee’s employment. The Court concluded that the jury-waiver was enforceable as to the employee’s breach of contract claim, but was not enforceable as to his right to a jury trial for his CEPA claim.

A valid jury-waiver provision must include plain language that makes clear – either expressly or by general reference – that specific rights are being waived. Accordingly, employees waiving their statutory right to a jury trial under CEPA and/or the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-12, must be apprised of their legal rights and must indicate a clear intent to surrender those rights.

In reaching its conclusion, the Court referenced various waiver provisions in the arbitration context. For instance, in Garfinkel v. Morristown Obstetrics & Gynecology Associates, P.A., 168 N.J. 124 (2001), a provision that provided “any controversy or claim” to arise from the agreement would be settled by arbitration was too ambiguous. In contrast, the arbitration provision in Jaworski v. Ernst & Young US LLP, 441 N.J. Super. 464 (App. Div.), cert. denied, 223 N.J. 406 (2015), was upheld as enforceable because it specifically referenced “state statutes and local ordinances, including state and local anti-discrimination laws.”

While there are no magic phrases, employers must provide adequate notice of the claims that are covered and the nature of the right that is surrendered if they expect a waiver to be upheld in court.

 

Who is the Similarly Situated Comparator?

To prove claims of employment discrimination and retaliation, plaintiffs frequently rely on the similarly situated comparator — a coworker who engaged in the same misconduct alleged against the plaintiff, but without the same adverse consequences. Indeed, employers defending such claims often receive exceptionally broad pretrial discovery requests for information about coworkers who engaged in similar misconduct.

Such discovery requests from plaintiffs are overbroad and the concept of the similarly situated comparator is much narrower, the Court of Appeals for the Eleventh Circuit, in Atlanta, has confirmed. Feise v. North Broward Hosp. Dist., No. 15-15261 (11th Cir. Mar. 24, 2017).

Stacie Feise was a registered nurse for North Broward Hospital District (“NBHD”). She claimed that, while on a break, she had closed her eyes at the nurses’ station, but never fell asleep. Her supervisor contended she witnessed Feise sleeping at the nurses’ station and saw surveillance footage showing Feise sleeping intermittently for three minutes and continuously for another three minutes. NBHD policy prohibited sleeping on breaks and Feise was terminated.

Feise had returned from Family and Medical Leave Act leave (“FMLA”) Shortly before this incident. Thus, she sued NBHD for FMLA retaliation. Feise identified several comparators who engaged in similar misconduct, but were not terminated by NBHD. On appeal, only two of them remained relevant: (1) a medical technician who engaged in misconduct that, in Feise’s view, was more serious than sleeping on the job (repeatedly abandoning a child patient under close observation because he had threatened self-harm), but was referred only to an employee assistance program and required to undergo re-training; and (2) a Senior Medical Technologist caught sleeping in a chemistry lab, who was suspended only for two days. The district court was not persuaded by Feise’s comparators and she appealed.

The Eleventh Circuit affirmed the district court’s ruling that these were not appropriate comparators.

The Court quickly dispensed with Feise’s first purported comparator, explaining that courts are not permitted to evaluate different types of misconduct and determine which is worse. Indeed, “on the ground determinations of the severity of different types of workplace misconduct and how best to deal with them are exactly the sort of judgments about which [courts] defer to employers.” Thus, the appropriate question is whether the alleged misconduct was sufficiently similar. Here, it was not.

Regarding the second purported comparator, the Court explained that misconduct that “might be tolerated or treated with progressive discipline” in one position need not be “similarly accepted in other positions.” The district court had reasonably concluded that there were sufficient differences between the duties of a nurse and a technologist so as to render the technologist an unsuitable comparator. Nurses (unlike technologists) have a responsibility to respond with immediacy to patient needs and a nurse sleeping in a public area could undermine the public’s confidence in the hospital.

 

Third Circuit: No Direct Evidence Needed for Mixed-Motive Jury Instruction in FMLA Retaliation Cases

A former employee alleges that he was terminated because he exercised his right to take intermittent leave under the Family and Medical Leave Act. His former employer asserts that his FMLA leave had nothing to do with his termination. Rather, the employer claims, he was let go simply because his position was eliminated. At trial, the employee fails to present any direct evidence that his use of FMLA leave was a motivating factor for his termination. Is the employer in the clear?

According to the U.S. Court of Appeals for the Third Circuit, in Philadelphia, the answer is “no.” In Egan v. Delaware River Port Authority, a former employee alleged that he was terminated in retaliation for exercising his right to take intermittent FMLA leave for migraine headaches. The employer countered that he was terminated (along with another employee) because his position was eliminated, and that his use of leave had nothing to do with that decision.

At trial, plaintiff did not present any direct evidence that his use of leave motivated the employer’s termination decision. Nonetheless, at the close of trial, the plaintiff requested that a “mixed-motive instruction” be given to the jury. This instruction would allow the jury to find for the plaintiff if it determined the employer relied at all on an unlawful reason (i.e., plaintiff’s use of leave) when making the termination decision — even if there was another, lawful reason for the decision. The district court refused to issue such an instruction because there was no direct evidence the employer’s decision was motivated, even in part, by the plaintiff’s use of leave. After the jury returned a verdict for the defense, the plaintiff appealed.

The Third Circuit reversed. It held that a plaintiff “does not need to prove that invoking FMLA rights was the sole or most important factor” motivating the adverse action. The employee needs to show only “that his or her use of FMLA leave was a ‘negative factor’ in the employer’s adverse employment action.”

The Court went on to hold that, to be entitled to the mixed-motive instruction, the plaintiff “was not required to produce direct evidence” that his use of leave was a negative factor. Instead, such an instruction was warranted if there was any evidence “from which a reasonable jury could conclude that … [the plaintiff’s] use of FMLA leave was a negative factor in the employment decision” — even if that evidence was circumstantial.

This rule is not applied uniformly throughout the country. Some jurisdictions recognize “mixed-motive” claims, while others continue to require plaintiffs to prove “but for” causation to prevail in FMLA retaliation cases. Egan highlights the need for employers (and their counsel) to be mindful of the applicable law in any jurisdiction(s) in which they are located and to plan accordingly, including when proposing jury instructions at trial.

 

$4.5 Million Disability Discrimination Verdict Against Auto Dealer Who Failed to Investigate

Florida-300x300 A federal jury in Florida has awarded $4.5 million against an auto dealer for claims of disability discrimination under the Florida Civil Rights Act (FCRA). Axel v. Fields Motorcars of Florida, Inc., No. 8:15-cv-893-17JSS (M.D. Fla. Feb. 22, 2017). The verdict consisted of $680,000 in lost wages and benefits, $600,000 for emotional pain and mental anguish, and $3,220,220 in punitive damages. The jury found the employer discriminated against Michael Fields after he returned from a medical absence for treatment of kidney cancer. The jury rejected the plaintiff’s claims of age discrimination pursuant to the Age Discrimination in Employment Act.

Axel was employed by Fields Motorcars of Florida, Inc. for approximately 10 years. According to court records, he had not received any disciplinary or corrective action in that time. To the contrary, he had received awards for his performance. After Fields was diagnosed with kidney cancer, he underwent experimental treatment and was able to return to work where he was capable of performing all of his duties. Axel further claimed that he was on pace to have the most productive year at Fields. However, he was repeatedly passed up for promotions, and was demoted and terminated for failure to follow company policies and processes.

In its decision to terminate Axel, the employer relied upon a letter that dated back to the beginning of his employment, approximately 10 years earlier. A Vice President and General Manager claimed that Axel had forged a document that provided his son access to auto auctions without authorization. He performed no independent investigation and never spoke to Axel prior to his termination. Axel claimed that while he signed the letter, he had authorization to do so from management. There was no suggestion that Axel’s son improperly used his authority to purchase cars on behalf of Fields.

This case highlights the importance of thorough investigations by management prior terminations, especially with respect to employees with a protected status or disability and those who bring an internal complaint of discrimination. When a company lacks the expertise to conduct an investigation on its own and fails to enlist assistance, it can pay the price at trial.

 

 

 

Using Electronically Stored Information in Employment Trials

tablet          In employment litigation, evidence now admitted during most trials routinely includes electronically stored information (ESI), including email communications and documents the receipt of which is often acknowledged with a mouse click. Trial counsel must know how to authenticate such ESI to ensure the court will allow it into evidence. Counsel also should be aware of the pitfalls when ESI has been intentionally or unintentionally altered, thus impairing admissibility.

Unfortunately, in addition to hacking and cyberattacks, we have seen that technology can be abused by an unscrupulous litigant: Email communications can be falsified, sometimes requiring  expert testimony to uncover the wrongdoing. Similarly, audio-recorded telephone conversations can be “spoofed,” reflecting a call that was actually made by another person. This falsely misrepresents the caller’s identity in commercial transactions. Likewise, video-recorded events can be digitally-edited to portray events in a deceptive context.

In addition, ESI can be damaged in storage or mangled in transmission with inadvertent computer-generated changes in spelling, punctuation, layout, or deletion. Viruses and malware can wreak havoc with ESI by creating or transmitting bogus documents, or by altering or deleting legitimate business records.

ESI is often a crucial component of evidence that comes to light during pretrial discovery. Federal Rules of Evidence 901 and 902 provide time-tested standards for assessing authenticity that courts in recent years have applied to determine whether the proponent of ESI has produced “evidence sufficient to support a finding that the item is what the proponent claims it is.” FRE 901(a). Examples of successful authentication methods include testimony of the person who created, transmitted, or received the ESI that the contents is what it purports to be. FRE 901(b)(1).

Traditional methods of authenticating evidence are not sufficient in litigation where only forensic experts are competent to testify to issues beyond the ken of lay factfinders. Examples include whether a person or virus created or transmitted a particular document, whether a particular document was backdated, edited, or deleted, or indeed whether viruses lodged within an electronic device are capable of creating or transmitting a disputed document. United States v. Browne, 834 F.3d 403, 415-16 (3d Cir. 2016), cert. denied, 196 L.Ed.2d 572 (2017) (no reversible error due to proper authentication through extrinsic evidence from other chat participants).

Jackson Lewis attorneys are available to answer inquiries regarding trial strategy and other concerns on use of evidence in workplace litigation.

 

 

How Big Data Can Predict The Outcome of An Employment Trial

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             The legal industry has turned to data analytics to keep litigation costs down. Companies can analyze litigation data on courts, judges, opposing counsel, and substantive evidentiary materials that affect liability. They are then better positioned to spot trends, predict exposure, and make strategic litigation decisions with greater efficiency.

            In the Digital Age, a company’s data footprint can provide a treasure trove of information. Employees, contractors, and vendors create data. Even more data is created in a gig economy that includes part-time, remote workers, and independent contractors. The task of mining the data will only become more challenging. Companies need to understand not only data preservation, confidentiality, and privacy, but also the effect of data that will become evidence at trial.

            This territory was pioneered by companies such as Lex Machina, https://lexmachina.com/, which focused primarily on intellectual property cases. After the company was acquired by LexisNexis in 2016, it expanded its reach to include securities and antitrust cases, with plans for employment applications. Legal analytic applications for the existing areas provide early case assessments, the prospects of success on motions, and similar analyses. Bloomberg Law has also introduced Litigation Analytics to provide insights on federal judges and law firms in the federal courts. Significantly, the ability to mine litigation dockets, e-discovery databases, and other documents through analytics can provide quick and efficient information regarding outcomes.

              With the formation of its Data Analytics Resource Group, https://www.jacksonlewis.com/practice/data-analytics, Jackson Lewis is well-positioned to provide clients with an array of analytics services. Eric Felsberg, a Principal in the firm’s Melville, Long Island office, and the National Director of the Group, leads a multidisciplinary team of lawyers, data scientists, and statisticians that offers clients many services, including compliance assessments, litigation support, and talent analytics. These services provide clients with enhanced efficiency and exposure prediction. For example, in wage and hour cases, the firm regularly provides liability assessments by mining and analyzing digital footprint data, such as GPS logs, CPU usage, and door card swipe information. Leveraging the power of detailed data analysis in a privileged and confidential process allows companies to drill down on the evidentiary issues and proofs that matter at trial.

           Such processes are regularly used to determine exposure in class actions and single plaintiff cases, providing invaluable and actionable information.

 

 

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