It seems a lawyer in New York sat by while his client lied about whether she was working at a deposition. When the court found out, it showed its displeasure by sanctioning the lawyer $15,000.

Have a great Memorial Day holiday.

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Judge Michael Davis of the U.S. District Court in Minneapolis recently spent 35 pages sorting through various issues in a race, national origin and age discrimination case brought by a Nigerian-born professor against St. Cloud State University in Onyiah v. St. Cloud State University. Ultimately, Judge Davis granted summary judgment on plaintiff’s claims. Without providing a thorough analysis of his very interesting opinion, I can tell you that Judge Davis reached the following conclusions:

• That a proposed expert witness on salaries was not qualified under a Daubert analysis, and that his opinions were speculative and not reliable because they did not explain why it started where it started;
• That various affidavits offered by plaintiff would not be stricken because they complied with the personal knowledge requirement of Rule 56;
• The elements of a prima facie case of salary discrimination under Title VII;
• That simply making general statements about how much unidentified white professors were paid is insufficient to establish that employees outside of plaintiff’s protected class were paid more for equal work;
• That evidence that other black professors from Nigeria were paid higher starting salaries also undercuts a prima facie showing of discrimination;
• That the plaintiff’s failure to allege religious or tribal discrimination in his Complaint and in his EEOC charge meant that he could not raise it at summary judgment;
• That plaintiff’s age discrimination claim failed because none of the employee to which plaintiff compared himself were actually similarly situated, and because SCSU’s reason for the differences in pay was not pretextual.
If you are interested in understanding how Daubert applies to certain types of experts, or how to evaluate and prove a salary discrimination claim, you will want to review this opinion.

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The Equal Employment Opportunity Commission has sued Starbucks Coffee Company for allegedly denying a reasonable accommodation to a barista with dwarfism at its El Paso café and then firing her because of her disability.

According to the EEOC’s suit, Elsa Sallard has a physical impairment, dwarfism. She was hired by Starbucks to work in a customer service position in July 2009, but was only allowed to train for 3 days before she was fired. Soon after being hired, Sallard asked to use a stool or small stepladder to prepare orders and serve customers at the counter. Starbucks allegedly disregarded Sallard’s request. Later that day, it terminated her employment, claiming that she could pose a danger to customers and employees. The EEOC filed suit after first attempting to reach a pre-litigation settlement through its conciliation process.

“Starbucks has become a virtual icon of modern American culture, appealing to an incredibly diverse customer base,” said Robert A. Canino, regional attorney for the Dallas District Office of the EEOC. “We’d hope that when considering hiring a person with a disability, Starbucks would choose to enhance its brand with the mark of equal opportunity and access.”

The EEOC has done much good work over the years to reduce the amount of discrimination in the workplace. I’m not sure that this case, however, represents the best use of the agency’s resources.

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A decision last week by Judge Ann Montgomery in RSM McGladrey v. Epp should be required reading for all attorneys who draft employment agreements, especially those with non-competition and arbitration provisions.

The defendants were managing directors of RSM, working out of its New York office, specializing in RSM’s health care practice. As a condition of their employment, each signed a Managing Director Employment Agreement, which includes covenants restricting the solicitation and servicing of certain RSM clients for a period of two years after termination of employment.  The Employment Agreement also has provisions regarding enforcement, preliminary equitable relief, and arbitration.

RSM terminated Defendants as employees in January 2011.  Defendants then joined a competitor of RSM, and have allegedly breached the covenants in the Employment Agreement by servicing and soliciting RSM clients.  RSM obtained an ex-parte Temporary Restraining Order against Defendants in state court. Defendants then removed this action to federal court.

The parties dispute whether their agreement to arbitrate disputes under the Employment Agreements deprives the Federal Court of authority to grant a preliminary injunction. Under Eighth Circuit precedent, a preliminary injunction may be granted in a case subject to arbitration only where “the contract terms contemplate such relief and it can be granted without addressing the merits.”  Therefore, injunctive relief is appropriate only if a contract has “qualifying contractual language”; i.e.,  language that provides the Court with clear grounds to grant injunctive relief without addressing the merits of the underlying arbitrable dispute. Without qualifying contractual language, courts must necessarily pass on the merits of a claim because the Dataphase standard for granting a preliminary injunction requires consideration of: the merits of the case.  However, a preliminary injunction pending arbitration may be granted without considering “the probability that the movant will succeed on the merits” because courts may disregard the Dataphase criteria in deference to the arbitrators.

Judge Montgomery then considered just what constitutes “qualifying contractual language” by examining two previous 8^th Circuit cases on the topic.  In one, Manion v. Nagin,  while the contract between the parties stated that the agreement to arbitrate “is without prejudice to the right of a party to request interim relief directly from any court  of competent jurisdiction without prior authorization of the arbitrator(s),” that language was not “qualifying contractual language” because it merely authorized a party to request relief, as opposed to being entitled to relief, which would necessarily embroil the court in the merits of the dispute.   

In the second case, Peabody Coalsales Co. v. Tampa Electric Co., the Eighth Circuit found qualifying contractual language and allowed injunctive relief notwithstanding the agreement to arbitrate. There, the parties’ agreement expressly stated that “performance of [the parties’] respective obligations under this Agreement shall be continued in full by the parties during the dispute resolution process.”  Based on that language, the Court ruled that it could grant the injunction without delaying arbitration and without considering the merits of the case.

Applying these standards to the RSM case, Judge Montgomery held that the preliminary injunction was appropriate because the Employment Agreements include “qualifying contractual language.” The terms of the Employment Agreements provide the Court with clear grounds to grant injunctive relief without addressing the merits of the underlying arbitrable dispute. Specifically, Defendants agreed to waive arguments relating to irreparable injury and with respect to enforceability of the contract. Therefore, unlike cases where the contract language only allowed the parties to request injunctive relief by embroiling the court in the merits of this case, the RSM Employment Agreement evinces an intent to avoid addressing the merits of the dispute by waiving any arguments relating to irreparable injury or enforceability. By waiving those arguments, the parties clearly intended that the first Dataphase factor not be reached.

There are many advantages to choosing arbitration of disputes over employment agreements, but lawyers drafting those agreements should make sure to include the requisite language allowing their client to seek immediate injunctive relief where necessary.  Judge Montgomery’s decision provides a template for how to do that.

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As any defense lawyer can tell you, retaliation cases are some of the most problematic to deal with.  Further evidence of that arrived this week with news that a jury awarded $361,000 to a former employee of G&K Services for workers’ compensation retaliation.

Dubiel was injured on the job in a car accident.  He filed a report of injury for workers’ compensation purposes, after which G&K fired him.  G&K claimed that Dubiel had lied in a preemployment physical exam.  A Hennepin County jury disagreed, finding that Dubiel’s filing for work comp benefits was a motivating factor in his discharge, and awarding him $111,000 in lost wages and emotional distress, and another $250,000 in punitive damages.

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I have written about religious accommodation issues before here  and here.   Usually, these are tough cases for employees/plaintiffs to make.  In a decision earlier this week, however, federal judge Richard Kyle has denied a motion for summary judgment on a religious accommodation case  in a decision that suggests that obtaining summary judgment in these types of cases could become more difficult.  

Maroko is a Seventh Day Adventist who went to work for Werner, a trucking company.  After his position was terminated, he sued for religious discrimination.

To establish a prima facie case of religious discrimination for failure to accommodate, a plaintiff must show that he (1) has a bona fide religious belief that conflicts with an employment requirement, (2) informed the employer of this belief, and (3) was disciplined for failing to comply with the conflicting requirement.  Werner challenged the third element, arguing that Maroko voluntarily abandoned his job. The Court rejected this argument as “disingenuous”, however, because it was the company that decided not to assign him any work, not Maroko who turned them down.

With a prima facie case established, the burden shifts to Werner to show that (1) it offered Maroko a reasonable accommodation, or (2) could not do so without undue hardship.   In this case,  Judge Kyle found that there was an issue of fact as to whether Werner actually offered Maroko a reasonable accommodation, as well as whether its proposed accommodation was “reasonable.”   The Court also rejected Werner’s attempt to show that accommodating Maroko would have resulted in an undue hardship. 

Most troubling for employers, Judge Kyle concluded that the question of whether an employer offered an employee a reasonable accommodation, or faced undue hardship, ultimately boils down to whether the employer has acted reasonably, and that these are factual questions that do not lend themselves to dismissal at the summary judgment stage.  Therefore, the Court allowed Maroko’s case to proceed to trial.

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From Mike Greco  and Chris Stief  at Fisher & Phillips:  Seven signs your employees are poachable.

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A St. Paul pharmacist will receive a $2.6 million settlement payment from CVS Pharmacy after she blew the whistle on Medicaid co-pay overpayments.

The retail pharmacy division of CVS Caremark Corp. agreed last week to pay $17.5 million to settle allegations that it routinely overbilled the government’s Medicaid prescription programs in 10 states, including Minnesota. CVS was allegedly inflating claims for the prescription co-pays that Medicaid picks up for those patients who are primarily covered by private health insurance.

Whistleblower Stephani LeFlore, who started as an overnight pharmacist in 2008, alerted authorities to the alleged overbilling after noticing billing discrepancies in CVS’ customized pharmacy computer system. She called the private health insurers covering the prescriptions to determine the actual co-pay Medicaid patients were supposed to pay. In one example, CVS submitted a claim for $26.75 for a co-pay that was supposed to be $25.

CVS will pay $17.5 million to settle the lawsuit; $7.9 million to the feds and $9.5 million to Alabama, California, Florida, Indiana, Massachusetts, Michigan, Minnesota, New Hampshire, Nevada and Rhode Island. The case was filed in 2008 under the federal False Claims Act.

Hat Tip:  MinnLawyer Blog

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Thanks to the Lowering the Bar blog, we have more evidence to support Judge Quam’s observations about lawyers behaving badly and hurting their own cause.

A case was scheduled to go to trial when the defense requested a postponement because the wife of one of its lawyer’s  was due to have a baby about two weeks after trial started.  Plaitiff would not agree to delay, bringing the issue before the judge.  ”Well, every party is entitled to file an opposition to a motion,” the court wrote in this order, saying it had been hoping that the rumors it had been hearing of said opposition were exaggerated. But the brief arrived on Monday, the court said, “and it was, sadly, as advertised.”

The lowlights of the opposition: (1) it argued that “utilizing simple math,” the due date should have been known some time ago (the court declined to speculate on the date of conception for “reasons of good taste which should be (though, apparently, are not) too obvious to explain”; and (2) it pointed out that the movant’s side had five attorneys (and so could spare one), which would have been a better argument if the opposing side did not also have five attorneys.  (Which raises the obvious question: why are five lawyers needed to try a case?)

Thankfully, this judge has his priorities in order: “Defendants’ Motion is GRANTED. The [new parents] are CONGRATULATED.”

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