June 2005 Quick Clips

Alleged Independent Contractor Can Sue for Pension Benefits, June 30, 2005

The danger of incorrectly calling an employee an "independent contractor" was illustrated recently in federal court. The individual, whose services were terminated after working as an "independent contractor" for many years, sued for unpaid pension benefits. The court, finding that the individual was an employee for all intents and purposes, allowed the lawsuit to go forward. Nahoun v. Employees' Pension Plan of Credit Suisse First Boston, No. 04 Civ. 9221, (SDNY, June 22, 2005).

Unless you are certain that someone working for your company on a regular basis is really independent, and not just an employee called an independent contractor to save money, you should make sure that the person is treated like an employee for tax and pension purposes. The failure to do so could have economic consequences far beyond the cost savings realized short term.

Handbook Provision Against Union Harassment Found Illegal, June 29, 2005

by Frank L. Kollman

A federal appeals court has agreed with the National Labor Relations Board that a handbook policy urging employees to report acts of harassment in connection with unionization is illegal under the National Labor Relations Act. The NLRB stated, and the Court agreed, that the location of the policy in the handbook section against unionization, as well as other factors, was likely to chill efforts by employees to solicit other employees to join a union or sign a union authorization card. Brandeis Machinery & Supply Co. v. NLRB, No. 04-3156 (7th Cir, June 25, 2005).

Many handbooks have legal statements of the employer's opposition to unionization. You should review your handbook, however, to make sure that your statement on unionization does not contain any language that could be interpreted as preventing employees from exercising their right to seek unionization. Such language could be used against the employer to set aside an employer victory in a union election.

AFL-CIO Increases Organizing Budget, June 28, 2005

by Frank L. Kollman

The Excutive Council of the AFL-CIO has overwhelmingly approved an increase in its budget for recruiting new members. The plan is to increase its efforts to unionize non-union companies. Not surprisingly, the Council also approved an increase in its political budget, designed to elect labor-friendly political candidates.

Personality Tests May Violate ADA, June 24, 2005

by Frank L. Kollman

A federal appeals court in Chicago has ruled that a personality test violates the Americans with Disabilities Act. The company in question had required candidates for promotion to take a management profile, a series of tests that included the Minnesota Multiphasic Personality Inventory. That test, apparently, can also help physicians diagnose certain psychiatric disorders.

The Court said that the test violated the ADA's prohibition against using "medical tests" to screen out people with disabilities. The Court rejected the argument, which the lower court had embraced, that the test was used solely to gauge personality traits.

Lawyers -- Better Than All The Rest, June 15, 2005

by Pete S. Saucier

The American Bar Association likes to whine from time to time about lawyers getting no respect for their noble purity. Maybe that is because lawyers take a little too much care to ensure that they protect themselves. For example, the Rules of Professional Conduct for Attorneys expressly forbid any lawyer from being bound to a non-compete agreement of any kind. It's the law! But, don't let other professionals try that trick. The American Medical Association deemed non- compete agreements unethical for their professionals as well. On June 3, the Kansas Supreme Court had no trouble ignoring the AMA and holding four surgeons to the terms of non-compete agreements. What did they think they were? Lawyers?

I Ain't Sayin' Nothin' Is True, or Nothin', June 13, 2005

by Pete S. Saucier

Officials of the State of Massachusetts allege that certain members of the International Longshoremen's Association in Boston may have put their under-aged, non-working, minor children on the ILA roster years before they actually could work. It seems that the longer one is on the ILA roster, the more one is paid. So, if someone's seniority is "exaggerated" when work does begin, she or he would receive an inflated rate of pay at the expense of the employer. Of course, at present this has not been proved.

Sexiness Requirement Takes Chief Cheerleader by Surprise, June 8, 2005

Courtney Prince was captain of the official ice-skating cheerleader squad for the New York Rangers ice hockey team until her discharge in 2004. She sued on a variety of sex discrimination theories, including an allegation of a hostile atmosphere toward women. It seems that the hockey team encouraged the cheerleaders to become "objects of sexual desire" by staying thin and stuffing their bras. Gee, that's something new: sexy cheerleaders. Who would have predicted that?

The court dismissed this and the plaintiff's other sex-discrimination claim, but preserved a claim for assault and battery against a public relations executive who allegedly propositioned and tried to kiss her at a bar. That single incident, ugly as it was, was not enough to create a sexually hostile atmosphere.

Prince v. Cablevision Sys. Corp., 95 FEP Cases (BNA) 1305 (S.D.N.Y. 2005).

Paramedic Punches Out Patient, Loses Job, June 8, 2005

Clinton Noland, a paramedic, was on duty at the Baltimore-Washington International Airport when a call came in from a police officer, requesting help in transporting a combative psychiatric prisoner who was spitting and drinking toilet water in his cell. With help from police and fellow paramedics, Noland strapped the prisoner to a stretcher and affixed a face shield to the prisoner's face to prevent spitting and biting.

On the way to the ambulance, however, the prisoner dislodged the face shield and spit at Noland, threatening to kill him. Noland balled his latex-gloved hand into a fist and struck the prisoner in the face to subdue him, then reattached the face shield. Once again, however, the prisoner dislodged the shield and spit at Noland, and once again Noland hit him in the face and reattached the shield. None of these fisticuffs made it into his report of the incident.

The state agency that employed Noland fired him for using "excessive force" and not reporting the blows. But Noland then convinced a court to reverse that decision and instruct the agency to consider "substantial mitigating factors," such as the fact that Noland was acting in self-defense.

In the end, Noland lost. An appellate court ruled that the lower court should not have butted in unless the agency was acting arbitrarily or without sufficient evidence. But there was expert testimony at the hearing, by the airport's medical director and the fire chief, that "it is never warranted to strike a patient." That was enough to justify the discharge and prevent the court from meddling.

Maryland Aviation Admin. v. Noland, 22 IER Cases (BNA) 1590 (Md. App. 2005).

No Insurable Interest in Rank-and-File Employees, June 8, 2005

A company called Camelot Music purchased life insurance policies on 1,400 rank-and-file employees, including Mr. Tillman. Supposedly the resulting tax deduction eased the company's tax burden, reducing the cost of providing employee benefits. Unfortunately, the savings weren't enough to prevent the company from going bankrupt.

After the company had been discharged in bankruptcy, and after Mr. Tillman had died, his estate found out about the insurance polices (which had been kept secret) and sued to recover the $340,000 that had gone right into the company's bank account.

In its defense, the company argued that its bankruptcy barred Tillman's claim, but a federal court disagreed. Bankruptcy would have barred the claim if the company had been open and honest about the policies, but the company kept the policies secret. Why? Because, an executive explained, if the news got out, every deceased employee's estate would want to collect the proceeds. Well, duh.

In any event, the court denied Tillman's claim for the $340,000, saying there was no unjust enrichment, since the company had paid the premiums and Tillman had not been prevented from getting insurance of his own.

So, is that the end? Does the company get to keep the $340,000? Well, no. The twist is that Tillman's estate has a claim under Oklahoma insurance law to recover the $340,000. Why? Because the company had no "insurable interest" in Tillman's life. You have to be a really special employee, one whose death would cause extraordinary hardship to the company, for there to be an insurable interest. So, when last seen, Tillman's lawyers were hurrying over to sue under the Oklahoma law.

Tillman v. Camelot Music, Inc., 22 IER Cases (BNA) 1524 (10th Cir. 2005).

Employee Awarded Millions For Employer's Insensitivity To Perfume Allergy, June 3, 2005

by Kelly C. Hoelzer

A "dee-jay" at a country music radio station in Detroit recently won a verdict and damages of approximately $10.6 million on her ADA, Title VII, Equal Pay Act, and state civil rights claims against her employer, Infinity Broadcasting Corporation. The disc jockey, who claimed to be a well-known radio personality, complained that her supervisors refused to accommodate her disability – her allergy to another "sidekick" disc jockey's perfume allegedly made it difficult for her to breathe. Weber sued after her manager refused to comply with Weber's demand that the other disc jockey be required to stay away from Weber and to not come to work until after Weber's shift ended.

Weber also claimed that, even though she was a "ratings superstar," she was paid significantly less than her male counterparts and that her employer refused to put her in more desirable "drive time" positions when they became available. Lastly, she alleged that she was fired after filing her EEOC charge of discrimination in 2001. Apparently, the jury agreed with her, awarding her millions, although damages must be capped at $300,000 under Title VII. Weber v. Infinity Broadcasting Corp., No. 02-74602 (E.D. Mich. May 23, 2005).

Arbitration Policy Distributed By E-Mail Not Valid, June 1, 2005

by Kelly C. Hoelzer

E-mail is useful tool to distribute employer personnel policies, but this medium may not be appropriate for all of them. In particular, a federal appellate court recently held that an employer's mass e-mail to employees about its new policy mandating arbitration of all workplace discrimination claims was not sufficient to create a valid arbitration agreement with employees. See Campbell v. General Dynamics Gov't Sys. Corp., No. 04-1828 (1st Cir. May 23, 2005). The employer, therefore, could not require its employee to arbitrate his disability discrimination claim under the ADA.

The employer's e-mail announced the existence of a new arbitration policy and attached an electronic link to the policy documents. The e-mail did not explain that the arbitration policy was mandatory. The employer could monitor which employees opened the e-mail, but had no way of tracking whether they viewed the policy itself; and employees were not required to reply back with any acknowledgment of their receipt and review of the policy. For these reasons, the First Circuit found that the employer did not sufficiently notify employees that the policy was tantamount to an agreement to arbitrate all workplace disputes (including statutory claims).

Kollman & Saucier, P.A., The Business Law Building, 1823 York Road, Timonium, MD 21093 Phone: 410-727-4300
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