SJC Recognizes 151B Action for Associational Discrimination

It is not every day that the SJC, Massachusetts' highest court, creates a new cause of action.  Indeed, it is quite rare that facts present themselves so outside the usual claims to necessitate a totally novel analysis.  However Flaggg v. Alimed Inc.,  presented just such a case, allowing the SJC to expand the reach of Chapter 151B to include associational discrimination.  

Flagg alleged that his employment was terminated because his wife's illness was costing the Company a lot of money in medical bills through its insurance and not because, as Alimed claimed, he was not clocking out when picking up his daughter during work hours.  Essentially, Flagg argued that Alimed was discriminating against him because of his wife's severe disability.  The Company had the case dismissed based on the argument that Mass. G. L 151B does not address the alleged discrimination.  And because of Alimed, now it does.  The SJC ruled that an employer cannot discriminate against an employee based on his association with a handicapped person and remanded the case for trial.  Employer's take heed, association discrimination will be popping up as the new category to watch for!      

Executives Must "Keep Calm and Carry On" While a Suit is Pending

 Despite best efforts to avoid lawsuits, at some time or another, most employers find themselves defending themselves in court or at an administrative agency.  How executives behave while a lawsuit is pending however, can make the difference between the company being able to continue to function effectively or not - and wehther the employer may end up defending itself in more than one lawsuit. Of course, by now everyone knows not to retaliate against an employee for filing a lawsuit. But even firing an employee who has engaged in a terminable offense is made difficult when executives mouth off about the employee's lawsuit.  And this is true even if the executive has nothing to do with the decision to terminate! 

In Travers v. Flight Services. and Systems, Inc., decided December 12, 2013, the First Circuit Court of Appeals reversed a lower court's grant of summary judgment in favor of the employer.  In that case, the plaintiff had been lead plaintiff in a class action FLSA suit against the company.  The CEO, who was rather upset about the case, frequently made comments about Travers and the lawsuit to his supervisor and stated he wanted him fired.  Travers' supervisor was subsequently terminated.  Later, Travers' new supervisor terminated his employment after a customer complained that he had engaged in tip solicitation, a terminable offense. 

Although there was no evidence tying the termination to the CEO's comments to Travers' previous supervisor, because the big-mouthed actor was the CEO, and executive attitudes can permeate a company and become known to others, the Court determined that a reasonable jury could find that the employer would not have fired Travers absent retaliatory animus (Travers denied engaging in the conduct) and reversed the summary judgment. 

The simple lesson is that outside protected conversations with counsel, executives should not express any negative comments about an employee's filing of an action against the Company.  Instead, CEOs and other executives should stay calm and carry on the business at hand, as if the lawsuit were unknown to them - and that means no comments even to other managers.  This is the only way employers can protect themselves from a charge that legitimate work-related decisions are motivated by retaliatory animus.

But treating employees the same does not mean giving them a free pass.  If the employee continues behaviors for which he has been disciplined in the past, or engages in conduct that merits termination and there have been no evidence of any animus based on particpation in the lawsuit, employers may and should protect their employment environment and discipline/terminate the offending employee as it would anyone else.   (See Karatihy v. Commonwealth Flats Dev. Corp., 83 Mass. App. Ct. 253 (2013)(affirming summary judgment against hotel employee terminated for excessive tardiness after he served as lead plainitff in wage case.) 

First Circuit Upholds Dismissal of Attack on Employment Termination of Sales Employee

On the day before Thanksgiving, the First Circuit Court of Appeals affirmed a lower court's summary judgment against a plaintiff sales employee who believed that his employment termination denied him the rightful fruits of his labors.  In an absurd twist on employee rights and showing some serious chutzpah, the employee sued his printing company employer for terminating his employment, claiming tortious interference, unjust enrichment, breach of contract, breach of an implied covenant of good faith and fair dealing, and misrepresentation (and the kitchen sink).  In fact, the employer had terminated his employment because his biggest client, CVS, decided it refused to deal with him after it learned that, while at his prior employer, he had acted unethically in his relationship with one of CVS's employees.  The First Circuit gave his employer much to be thankful for.

In Bisbano v. Strine Printing Co., the First Circuit batted down the plaintiffs attempt to blame his employer for his downfall and upheld the dismissal of the suit on summary judgment. The court pointed out that because the client ended the relationship with the plaintiff, the plaintiff could not claim any future relationship with which the employer could have interfered.  Further, the Court found that reliance on oral promises of continued employment that were contrary to a written at-will employment statement in the handbook was unreasonable. Finally, the First Circuit rejected the claims of misrepresentation because it could find no misrepresentation when he remained employed for the duration of his ability to work with CVS.

While there still is nothing keeping employees from suing employers for terminating their employment, even when there is no question that the employee was to blame, the Court's willingness to uphold the defeat of a frivolous claim before trial is a win not only for employers, but for tax payers as well.  And employers would be wise to take this as a reminder of the importance of the at-will statement in employee handbooks as well as in all written communications with employees regarding terms of employment.

Non-Solicitation Provisions Alive and Well in Massachusetts

In a world in which restrictive covenants are being openly flouted more than not, the First Circuit Court of Appeals dealt a blow to renegade employees and the employers who encourage them, siding with a former employer and finding that non-solicitation agreements could be enforced, regardless of whether the employee in question initiated the contact with the client in question.  

In Corporate Technologies Inc, v. Harnett, the First Circuit Court of Appeals affirmed the lower court ruling granting a preliminary injunction  order and allowed the former employer to step in and stop the former employee from closing deals with its former customers, even though the customers at issue had contacted the former employee.

The agreement in question prohibited Harnett from "solicit[ing], divert[ing] or entic[ing] away existing [former employer's] customers or business" for a period of twelve months following the cessation of his employment.   Harnett argued that he did not "solicit" the business, but rather accepted the business once the former customers in question contacted him. However, the evidence showed that Harnett sent a targeted email announcing his new employment to a wide group, 40% of whom were former clients.  The clients in question allegedly reached out to him after having their interest piqued by that email.  Although no clear rule was drawn, the Court found that relying exclusively on technical definitions of "solicitation" and "initial contact" in cases in which products are non-fungible and complex was not appropriate and instead put in place a rule which considered it only as one factor in determining liability. The extent of dealings between Harnett and the former clients led the First Circuit to determine that the Non-Solicitation provision was breached.

Unlike non-compete provisions generally, courts are routinely willing to enforce non-solicitation agreements against employees who play fast and loose with their obligations.  Employers hiring employees with such agreements in place with competitive companies should be careful to understand the limits of those employees.  Considering the case of a newly hired employee who solicits and gets her former clients' prohibited business only to be thwarted by court action and forced to drop the client - demonstrates the rare 4-way loss: both former(1) and current(2) employers; misbehaving employee (3); and client (4) lose. Best to avoid it altogether.   

Supreme Cout Gives Employers A Break -- Times Two!

June 24 was a good day for employers.  The Supreme Court, after much delay, handed down two opinions clarifying standards under Title VII.  In both cases limiting employees' ability to make Title VII claims.  

Not Every Superior Is A Supervisor

In the first case, the Supreme Court gave employers a break by limiting the number of people who can be personally liable in a Title VII discrimination suit.  Specifically, the Supreme Court held in Vance v. Ball State that a supervisor must be able to make hiring and firing decisions to make the employer liable.  In the same case, previously, the Seventh Circuit Court of Appeals had ruled that a supervisor must have the power to take formal employment actions against the victim (i.e., hire, fire, demote, promote, transfer, or discipline) -- as opposed to just having the ability to exercise direction over the victim's daily work.  Now, in a 5-4 decision, the Supreme Court adopted the Seventh Circuit test and held that an employee is a "supervisor" for purposes of vicarious liability under Title VII only if he or she is empowered by the employer to take tangible employment actions against the victim. You can find a copy of the Supreme Court opinion here.

Retaliation Needs To Be THE Reason the plaintiff was harmed

In University of Texas Southwest Medical Center v. Nassar, Nassar alleged that a job offer made to him was rescinded after he complained to the University about discrimination. The Fifth Circuit Court of Appeals had held that, to prove Title VII retaliation, Nassar need only show that the retaliation motivating the decision to rescind the job offer. The Fifth Circuit declined to require the plaintiff to show that retaliation was the "but for" reason he didn't get the job.

On appeal, the Supreme Court in another 5-4 decision, reversed the Fifth Circuit's decision and ruled that a plaintiff alleging retaliation under Title VII must prove that the employer's conduct did in fact cause the plaintiff's injury. 

Thankfully, this new clarity will allow plaintiffs and defendants to better assess their claims and allow lower courts to apply known standards to assess employer actions.  As always, employers should contact employment counsel immediately whenever an employee management issue raises any discrimination or retaliation issues.