Stone Balanced.jpgIt is no understatement that celebrity chef Paula Dean has seen her world fall apart after it was reported that she had used the “N-word.”

Her use of this racial slur came out when she testified (PDF) in an employment discrimination lawsuit filed by a former employee against Ms. Dean, her brother Bubba Hiers, and companies they both own. 

The employment discrimination lawsuit filed against Ms. Dean is a lengthy text-book example of how not to run a business when it comes to managing employees.

But for purposes of this post, Ms. Dean’s testimony offers two very important lessons for any individual, manager, or business owner who may be required to testify in any legal proceeding – Tell the truth but only to the question asked and then shut-up.      

Telling the Truth – No Exceptions

As to the first point, Ms. Dean was asked in her deposition: 

Q. Have you ever used the N word yourself?

A. Yes, of course.

To Ms. Dean’s credit, she answered the question truthfully. And while truth does not condone Ms. Dean’s use of a such a hurtful racial slur, it is worth noting that she told the truth presumably with some appreciation that her admission would have significant negative consequences to her celebrity and business interests.

In contrast, how many times have political “leaders” said one thing, under oath or otherwise, only to later recant their testimony often after having gotten caught lying?

Similarly, but with less headlines, individuals routinely testify as to one thing in lawsuits only to have documents or other evidence prove that testimony is patently false. Worse and even more troubling, such questionable testimony is often offered under circumstances that call into question the integrity of the opposing attorney under whose watch the testimony was originally offered. More often than I would prefer I’ve had an opposing lawyer remind me of Bess Myerson‘s observation that “The accomplice to the crime of corruption is frequently our own indifference.”  

Be Truthful But Only to the Question Asked

The second take-away from Ms. Dean’s testimony is the importance of saying as little as possible in response to a question while still being truthful. 

In this regard, a little background is necessary: As noted above, Ms. Dean was testifying in an employment discrimination lawsuit against her and her brother. Evidence and testimony against Ms. Dean’s brother, Bubba, showed or at least suggested that he frequently used the “N word” to refer to staff, as well as frequently viewed and shared pornography at work.

When questioned about such misconduct, instead of simply answering the questions, Ms. Dean offered a long-winded confessional-like explanation:

Attorney: Well, have you done anything about what you heard him admit to doing?

Ms. Dean: My brother and I have had conversations. My brother is not a bad person. Do humans behave inappropriately? At times, yes. I don’t know one person that has not. My brother is a good man. Have we told jokes? Have we said things that we should not have said, that — yes, we all have. We all have done that, every one of us.

This all may be true, but the answer has nothing to with the question asked and offers so many paths for the opposing lawyer to go down. But Ms. Dean, like most people, wanted to explain. And this is especially likely to happen where the actual answer may not be entirely favorable.

A deposition, however, is not the time to offer an explanation. In fact, it is almost always true that no good can come from offering any extended commentary in response to an adverse lawyer’s question. This is because you must understand the ultimate purpose for why that lawyer is asking you questions at a deposition. 

To put it bluntly, if your words were a rope, that lawyer is hoping you give him or her enough rope so that at some point in the lawsuit those words can be twisted around your neck in order to hang you or your company. In other words, you should always expect that if your words can be used against you, they will. So give as few words as you can while still truthfully answering the question actually asked.

Conclusion

The Dean debacle is an all too common snapshot of situations employers and employees often find themselves in when it comes to employment discrimination claim. But when it comes to “game-day” if you can only remember two things, make sure it is to always tell the truth but only to the question asked and then shut-up.

For more information about employment discrimination, contact Jason Shinn who is a Michigan employment attorney. He has represented individuals and Michigan businesses since 2001 in the areas of complying with federal and Michigan employment laws, noncompete agreements and litigation, as well as business lawsuit.    

Lying Employee.jpg[T]he Lie, as a recreation, a solace, a refuge in time of need …  man’s best and surest friend, is immortal, and cannot perish from the earth … My complaint simply concerns the decay of the art of lying. 

From the Art of Lying by Mark Twain.

Mr. Twain’s concern about the decay of lying played out last week when CBS reported that a Southfield, Michigan woman lied (very poorly) about being abducted. Originally the woman did not call the police, but a co-worker insisted that they should be called. After they investigated the abduction report, including video surveillance showing no abduction whatsoever, it became apparent that the abduction was made up. After being confronted with the evidence, the woman admitted that she made it up because she was late in returning to work after lunch. She was arrested for giving a false police report and after the arrest, it was reported that the police discovered a bag of marijuana and some narcotics paraphernalia allegedly belonging to the woman. 

The Take-Away for Employers

While this story is somewhat laughable, it is also an important reminder for employers to have in place appropriate attendance policies that promote attendance and punctuality and provides a framework for enforcing both. Such policies should also provide for a legitimate means for employees and employers to handle unexpected situations that may interrupt an employee’s normal attendance.

An attendance policy depend upon your company’s particular circumstances, however, some general guidelines for absenteeism and tardiness are as follows:

  • It should be explained, in writing, to employees that absences may be designated as either excused or unexcused absences and how this determination will be made;  
  • If an employee is going to be absent or tardy, who must be notified and under what circumstances. For example, ideally such notice should generally be provided prior to the event or as soon afterwards as possible and include the reason for the absence or tardiness, an estimate of when the employee is expected to return to work, and include a description of any unfinished work assignments that may require completion;  
  • It should also be emphasized that the employee may be asked, in the employer’s sole discretion, written verification of the reason given for the absence or tardiness; 
  • Also, employers should expressly note that a failing to report an absence for some determined amount of consecutive scheduled work days may result in disciplinary action up to and including discharge. Similarly, employee should be advised that excessive tardiness may, in the discretion of the employer, be cause for disciplinary action, up to and including discharge.

These are generic examples concerning employee absences. However, more attention and separate policies will likely be needed concerning employee absences for medical related reasons in order to comply with applicable employment law requirements, such as the Family and Medical Leave Act or the Americans With Disabilities Act. 

For more information about these employment law matters or updating your company’s employment policies, contact Jason M. Shinn. Mr. Shinn is an employment attorney who focuses on employment law compliance and litigation. 

Also, feel free to leave a comment about the most outrageous lie given to your company by an employee in order to get time off or to excuse an absence.  

QuestionMarks.jpgIt may sound odd for a noncompete attorney to say this, but when it comes to enforcing a non-compete restriction, the applicable law is often less important than the context in which the noncompete restriction arises.

To better understand this point, consider that noncompete restrictions, sometimes referred to as covenants not to compete, often arise in three broad situations:

  1. A noncompete restriction between an employee and the employee’s employer;
  2. A noncompete restriction between a seller and the buyer in connection with the sale of a business; and
  3. A noncompete restriction given by a member in a limited liability company or corporation, who may also be an employee of that LLC.

Certainly all three of these categories of noncompete agreements will share commonality when it comes to the enforceability of a particular noncompete restriction. But each category will not likely receive the same level of scrutiny from a court responsible for determining whether a particular noncompete restriction is enforceable. Accordingly, it is important to understand these differences in order to draft a noncompete restriction that will likely be enforced

Common Principles Applicable to Noncompete Agreements

As to the commonality, the enforceability of any non-compete restriction under any of the above circumstances will generally depend on whether the restriction protects the reasonable competitive business interest of the party seeking to enforce the restriction, which will in turn generally depend upon the duration, geography, and scope of the covenant.

As with most legal issues, the devil is in the details, and the details of your particular noncompete restriction will need to be reviewed by an experienced noncompete attorney. And because noncompete law is state specific, that noncompete attorney should be licensed in the state whose law applies to the enforceability of the noncompete agreement. But here are few general principles likely to apply to each situation. 

Noncompete Restriction Employee / Employer 

Generally, the reasonableness of non-compete clauses in the context of employee restraints is scrutinized more rigorously than the reasonableness of a covenant not to compete for a sale of business or in connection with acquiring an ownership interest in a company.

While there are many issues that can threaten the enforceability of an employee noncompete agreement, one hotly contested issue is whether the employer’s noncompete agreement impermissibly prevents all competition, which is not a legitimate business interest. Instead, the noncompete agreement must prevent the employee from gaining an unfair advantage in competition with the employer.

Noncompete Restrictions in the Sale of a Business

One the one hand, the reasonableness of a covenant not to compete in the sale of a business is determined under the same rule applicable to an employer-employee non-compete clause. But on the other hand, courts addressing noncompete restrictions arising in the context of a sale of a business recognize the equal bargaining power of freely contracting parties for a covenant not to compete for a sale of business. For this reason, courts almost always focus only on the reasonableness of the application of the restraint to the specific facts of the transaction under discussion. 

Noncompete Restrictions and Acquiring Membership in a Closely Held LLC

Michigan case law analyzing non-compete restrictions between members in a closely held LLC or for that matter, even among shareholders in a closely held corporation is limited. However, the limited case law suggests that broader restrictions are likely to be enforceable in such situations. 

For example, this blog previously discussed the case of Landscape Forms, Inc v William Quinlan (2012), which involved a dispute between William Quinlan, a former employee of a Landscape Forms, Inc., a closely held corporation, challenged a non-compete agreement with Landscape. During his employment, Quinlan received stock pursuant to his employee compensation plan. The stock purchase agreements in which Quinlan received stock all contained noncompetition provisions “forbidding LFI shareholders from competing with LFI for five years after ceasing to be a shareholder.” 

The trial court had evaluated the non-compete clause in the context of an employment agreement between Quinlan and Landscape. Under that evaluation, the court elected to reform the agreement to shave off two years of the post-employment restriction, i.e., restriction reduced from five years to three years. 

The Court of Appeals disagreed, noting that the noncompetition agreement arose out of the stock purchase agreements made between the company and Quinlan rather than the employment agreement. While the Court of Appeals agreed that the trial court may reform the agreement, the Court of Appeals sent the case back to the trial court “to make modifications to the scope and duration of [the] non-competition provision as necessary to render it reasonable.” In other words, the Court of Appeals signaled that because the noncompete restriction did not arise in the context of an employee and employer, shortening the duration of the noncompete agreement may have been improper. 

Conclusion

The above points show that when it comes to noncompete agreements, courts have a certain degree of discretion when it comes to determining whether they are enforceable, i.e., is the scope and duration of the non-compete clause reasonable. That discretion, however, will depend upon the context in which the noncompete agreement arises with noncompete agreements in employment relationships being the most scrutinized and noncompete agreements in the sale of a business or in closely held companies being the least scrutinized. 

For more information on Michigan noncompete law, enforcing or challenging the enforceability of a noncompete agreement, and best practices in drafting an enforceable noncompete agreement, contact Jason Shinn. 

Rejected.jpgBack on March 21, 2013, this blog critically discussed a Michigan Whistleblower Protection Act (WPA) claim, Furhr v Trinity Health Corp., (2013), where the Court of Appeals reversed a jury verdict in favor of a former employee who had filed a lawsuit against her employer. Procedurally, reversing a jury verdict is not normally expected. But what we questioned was the heightened standard the Court essentially imposed on whistleblowing employees.

The Michigan Supreme Court apparently agreed with our concerns: Last week in a separate Whistleblower Protection claim,Whitman v City of Burton, it essentially rejected the reasoning relied upon in the Furhr decision in reversing (yet another) jury verdict in favor of a plaintiff’s Whistleblower Protection Claim. Specifically, the Michigan Supreme Court agreed with a number of points we raised in our prior post, “Employees and Sainthood – Does Michigan’s Whistleblower Protection Require Both?,” (It is good for the confidence to have the Supreme Court agree with you).

Factual Background of the Whistleblower’s Claim

The plaintiff employee was employed by the defendant City as police chief until 2007 when the co-defendant (the Mayor) did not reappoint him. Plaintiff sued under the WPA, claiming that the Mayor’s decision not to reappoint him was prompted by plaintiff’s repeated complaints to the Mayor and city attorney, which included complaints that the City’s refusal to pay his previously accumulated unused sick time and unused personal leave time would violate a City ordinance. In other words the plaintiff employee undisputably based – in part – his whistleblower claim on alleged violations concerning his how financial interests.   

Procedural Background and Dismissal of the Whistleblower Protection Claim

At trial, the jury found plaintiff engaged in protected conduct that made a difference in the Mayor’s decision not to reappoint him as police chief, and awarded the plaintiff damages.

The Court of Appeals reversed with the majority holding that plaintiff’s claim was not actionable under the WPA because plaintiff was motivated by self-interest in engaging in protected activity under the WPA, rather than promoting the public good:

[P]laintiff clearly intended to advance his own financial interests. He did not pursue the matter to inform the public on a matter of public concern.

The Supreme Court Reverses: No Statutory Requirement as to Whistleblowing Employees’ Intent or to be Free of Self-interested Motivations. 

The Michigan Supreme Court curtly rejected the rationale of the Court of Appeals to focus on the perceived self-interested motivation of the plaintiff employee. Specifically, the Michigan Supreme Court noted that nowhere in the WPA (MCL 15.362) is an employee’s “primary motivation” addressed and there is nothing in the statute’s “plain language [to] suggest or imply that any motivation must be proved as a prerequisite for bringing a claim.”

Further, the Act simply did not require that an employee’s protected conduct must be motivated by a “desire to inform the public on matters of public concern” as a prerequisite for bringing a claim. Accordingly, the court reversed the Court of Appeals judgment and remanded to the Court of Appeals for consideration of all remaining issues on which that court did not formally rule, including whether the causation element of MCL 15.362 was met.

Closing Thoughts

This is actually the second week in a row in which a favorable decision involving Michigan’s Whistleblower Protection Act has been issued.

And while employers are not likely to rejoice over either decision, the Michigan Supreme Court “got it right” in stepping in and reversing in the Whitman case because there simply was not any statutorily basis for courts to impose the heightened standard applied by the lower court. This is because there is no “primary motivation” or ‘”desire to inform the public” requirement contained in the express language of the WPA. As such there is simply no statutory basis for imposing a motivation requirement in the WPA and the Michigan Supreme Court was not about to create a judicially imposed motivational requirement.

For more information about Michigan’s wistleblower protection statute or other Michigan employment law questions, contact employment attorney Jason Shinn who works with businesses to comply with state and federal employment law and individuals protected by those employment law statutes. 

Performance ReviewsIn a rare decision favorable to Michigan whistlblower plaintiffs, the Court of Appeals reversed a trial court’s decision to dismiss a whistleblower case against an employer. But the real lesson that employers and their HR professionals should take from the decision is that timely decision making in the termination process is critical, as well as accurately documenting deficiencies during the employment relationship.

In short, if a decision to terminate an employee is made, make sure that decision is supported by facts and then follow through as soon as possible. And if your company’s HR policy is an impediment to swift action, it needs to be revised to avoid situations like that discussed below.

The Factual Time Line Leading up to the Whistleblower Claim 

The case, Furhr v Trinity Health Corp., (2013), involved a plaintiff who was hired by the hospital, a subsidiary of Trinity Health, in 2007. He was promoted to a newly-created position that was to address problems with inconsistent accounting of the hospital’s inventory. His job duties included responsibility for controlling the hospital’s surgical inventory and for supervising a staff of subordinates.

Plaintiff’s tenure with the Hospital was not without issues: On numerous occasions between the time he was hired and April, 2010, plaintiff’s subordinates complained about plaintiff to his supervisor. The hospital responded by hiring a “coach” to work with plaintiff in December, 2009 on the interpersonal issues these subordinates had complained about. During the same time period, the hospital’s inventory continued to fluctuate.

In contrast, Plaintiff’s two annual performance reviews were positive and there was no mention of the fluctuating inventory issues in the reviews.

Fast forward to the beginning of April, 2010 where the process and decision to terminate plaintiff was underway: (i) The employer’s CFO approached another employee in the hospital’s finance department, and asked if she would be interested in assuming plaintiff’s job “if there was a change in staffing.;” (ii) That same employee also testified that the Hospital’s Director of Finance and Budget, told her that a decision had been made to fire plaintiff; (iii) On April 8, 2010, the Hospital’s CEO sent an email to the hospital’s vice president that stated in relevant part: “that [plaintiff] . . . is on the way out and that Amy Moored from finance will be assigned to get the OR inventory corrected.;” and (iv) Consistent with the preceding, the Vice President testified that the decision to terminate plaintiff was made in the first week of April, 2010.

But as of May guess who is still employed? And in between April and May, coincidentally or otherwise, plaintiff testified that he “became aware” of potential significant wrongdoing by one of the hospital’s vendors relative to the inventory and billing for restocking. And prior to plaintiff being terminated on May 10, 2010, he had reported the overbilling issue to the U.S. Attorney’s office.

The Whistleblower Lawsuit

Although the employer had, by all accounts, made the decision to terminate the plaintiff in April, the preceding time line gave plaintiff the factual and legal framework to build a lawsuit alleging that his termination violated Michigan’s Whistleblower Protection Act.

Under the WPA, an employer may not discharge or otherwise discriminate against an employee “because the employee . . . reports or is about to report . . . a violation or a suspected violation of a law or regulation or rule . . . to a public body.” MCL 15.362.

In response to the lawsuit, the employer and its affiliates filed a motion for summary disposition arguing that substantial evidence existed showing that the decision to terminate plaintiff preceded his call to the U.S. Attorney, and therefore plaintiff could not establish that he was terminated because of his whistle blowing activities.

The Court agreed. But the Court of Appeals, almost begrudgingly, took a different view and reversed the dismissal of the plaintiff’s whistleblower protection claim because certain fact issues existed that should be resolved by a jury:

[I]t is possible, perhaps even probable, that  a jury would not find plaintiff’s testimony credible in light of the conflicting evidence … Nonetheless … [i]t is the jury’s role to determine issues of credibility … not the trial court on a motion for summary disposition … credibility issues are for the jury.

The Take-Away

It is important to note that the employer, by its own admission, made the decision to terminate the employee sometime in the beginning of April. Yet, that termination did not take place until approximately a month later and after the plaintiff contacted the U.S. Attorney’s office.

It is easy to criticize the employer’s apparent glacial-like process for terminating employees. But in my experience as an employment law attorney, such a process is very common. Unfortunately, equally common is the danger that what had been clear, unlawful reasons for terminating an employee are called into question by intervening events – legitimate or otherwise.

Accordingly, here are two important considerations every employer should include in the HR strategies:  

  1. Termination decisions rarely happen in a vacuum, i.e., given enough lead time, the individual to be terminated will often have some knowledge that the ax is about to fall. And employers should be very concerned about limiting that lead time in order to limit the risks that the individual can set the stage for events prior to the termination actually taking place. Examples include stealing contact, pricing, or trade secret information, sabotage, or suddenly discovering a good conscious or reason to make a report to law enforcement. 
  2. Additionally, before making the decision to terminate an employee, make sure the basis for the termination is not unlawful and your company should have two or three reasons to support this decision. Yes under Michigan law, like most states, employment is presumed to be at-will, which means an employer does not actually need a reason to terminate an individual. But from a “best practices” and practical stand-point, not having a reason and not being able to document a reason is a recipe for operational and legal disaster.

For more more information about employment law compliance or Michigan’s Whistleblower Protection Act, contact Jason M. Shinn whose legal practice focuses on Michigan employment law compliance and litigation including unlawful discrimination, sexual harassment, and investigating employee misconduct. Also, feel free to connect with Jason on Twitter.

Business Professionals.jpgA proposed amendment to Michigan’s Elliott-Larsen Civil Rights Act was introduced this week. The primary sponsor for this bill is State Representative Gretchen Driskell. This amendment is part of a package of bills intended to promote pay equity in Michigan. For more information about the other bills in this package follow this link.

As to the motivation for this proposed amendment, Representative Driskell noted on her webpage that:

In Michigan, women make about $13,000 less than men on average. That makes our state 44th in pay equity. Too many families are already struggling. Equal pay will help hard-working Michigan women make ends meet.

As to the bill, it would amend Michigan’s Elliott-Larsen Civil Rights Act to include as a violation an employers failure or refusal to provide equal compensation because of religion, race, color, national origin, age, sex, height, weight, or marital status. 

The Persistent Wage Gap Between Men and Women

The need for a statutory enforcement mechanism for equal pay is somewhat remarkable given that efforts to remedy pay discrepancies date back to 1963 when women were paid 59 cents for every dollar paid to men.  In that year, President Kennedy signed the Equal Pay Act, making it illegal for employers to pay lower wages to women doing substantially the same work as their male counterparts.

The next year, Title VII of the Civil Rights Act of 1964 was enacted, making it illegal to discriminate, including in compensation, on the basis of sex, race, color, religion, and national origin. However, almost 50 years after the Equal Pay Act became law, estimates still identify women as being paid an average of 77 cents for every dollar paid to men.

Conclusion

The employment attorneys at Shinn Legal, PLC will continue to monitor this package of amendments. To stay on top of these and other Michigan employment law matters, we encourage you to subscribe to this Blog as well as connect with us on Twitter, Facebook, or on our Google + page.

Or if you are old-fashioned, you can also contact Jason Shinn directly about your particular employment law question. Jason Shinn is an experienced employment law attorney, having worked with national and local companies to address federal and Michigan employment law issues since 2001, as well as defending them against agency charges of discrimination or employment discrimination lawsuits.

Poker.jpgOne of the most frustrating aspects for any employer defending a claim of employment discrimination is that you’re stuck with the cards dealt to you. That is to say, you employers and their lawyers can’t pick the facts. And sometimes no matter what legal defenses you think your company has when it comes to defending a discrimination claim, those facts will intervene, often stubbornly so.

Take for example, a 2012 pregnancy discrimination claim (Chapter 7 Trustee v Gate Gormet, Inc. (PDF)) where the employer was dealt the equivalent of a royal flush of bad facts in terms of defending the pregnancy discrimination claim.

In terms of a pregnancy discrimination claim, as amended by the Pregnancy Discrimination Act, Title VII prohibits employers from discriminating against employees because of pregnancy. 42 U.S.C. § 2000e-2(a)(1)-(2) (prohibiting discrimination “because of . . . sex”); id. § 2000e(k) (“The terms ‘because of sex’ or ‘on the basis of sex’ include, but are not limited to, because of or on the basis of pregnancy . . . .”).

Against the backdrop of this statute, consider the following undisputed facts that were presented in the pregnancy discrimination claim against the employer:  

  • First, the human resource director testified in her deposition that pregnancy was a “substantial or motivating factor” in a manager’s decision to fire the plaintiff.
  • Second, the manager who terminated the pregnant employee was reprimanded for violating the employer’s anti-discrimination policy. 
  • Third, and if there was any doubt about the two preceding points, the employer noted in writing in the manager’s reprimand that by telling the plaintiff she was fired because of her pregnancy-related medical restrictions the manager not only violated the anti-discrimination policy but he had also acted in a way that constituted discrimination in violation of Title VII.

It is not noted in the court record, but based on common courtesy and good manners I hope the plaintiff’s employment attorney sent a thank you card to the company for the testimonial gifts.  

What can employers take away from cases like this?

First, supervisor training must be an ongoing process and not a one time event. While the facts are not clear in the above case as to whether the particular supervisor training underwent any sort of discrimination training, it is clear that the supervisor did not follow the employer’s policy as it relates to discrimination. But for this failure, the employer would have likely been able to avoid a costly legal defense and subsequent damages. 

Second, a company’s managers and supervisors need to assume that everything will end up on the front page of their local paper. While this may be an overused cliche, it is accurate to assume that anything that makes an employer look bad in relation to a discrimination claim will make the top of a plaintiff’s exhibit list to be used at trial. For this reason, employers and management will often benefit from having a second set of eyes that belong to an attorney looking at any correspondence, reprimands, file memorandum, etc. that relate to an employment decision that may relate to prospective litigation. 

Third, one of the most critical and valuable services employers should expect from their legal counsel is a thorough, even brutally honest, assessment of the good, the bad, and the ugly when it comes to the facts and claims involved in discrimination lawsuit. Such an assessment should drive the defense strategy, which may need to shift to conserving legal costs in what is shaping up to be a lost cause and turn to settlement strategy.

Fourth and building on the preceding point, bad facts do not always mean a defense of an employment discrimination claim should be abandoned. As an attorney, I’ve had absolutely horrendous facts in defending a claim, but was able to prevail on the legal-side of the equation. However, by recognizing this and getting the client to agree, we were able to save the client legal fees by foregoing “scorched earth” litigation related activity (i.e., discovery and depositions) that were not likely to produce information to overcome the bad facts involved in the case.       

For more information about pregnancy discrimination or employment discrimination in general, contact Jason Shinn, who focuses on Michigan employment law and federal employment legal issues. This focus includes collaborating with employers in preventative counseling and investigating employee misconduct.  

Facebook and social media policiesThe recent termination of an employee (Adria Richards) after she tweeted her displeasure at off-color jokes told by certain fellow attendees at an industry conference she attended on behalf of her employer has resulted in a lot of good discussion (see here and here for examples) about the increasing intertwining of social media and employment legal issues. 

But employees are not the only ones that face unintended legal consequences when it comes to using social media. Consider for example the results of a president of a chain of bar and restaurants who took to social media – blogging and Facebook – to expound on Karma and an employee being a “b**ch” and asking for the strength to not kill another employee after a wage and other employment lawsuit was filed. Unfortunately, this rant was made while litigation was pending against the employer.  

Specifically, a court allowed the plaintiff employee to amend her Fair Labor Standards Act claim (PDF)to add a claim for retaliation. The plaintiff alleged that after her FLSA claim was filed the defendant’s president posted an entry on a blog maintained on the Coyote Ugly Saloons’ website and this posting was in retaliation for having engaged in activities protected by the FLSA. The blog posting reads as follows: 

This particular case will end up p*ssing me off cause it is coming from someone we terminated for theft. I have to believe in my heart that somewhere down the road, bad people end up facing bad circumstances! I have been reading the basics of Buddhism and am going to a class on Monday. The Buddhist way would be to find beauty in the situation and release anger knowing that peace will come. Obviously, I am still a very new Buddhist cause my thoughts are f***k that b*tch.

The subject of the post had been reinstated by the time the blog post was published. Making matters worse, another supervisor allegedly posted on Facebook (when drunk) about another plaintiff who was still employed but had joined the suit: ”Dear God, please don’t let me kill the girl that is suing me . . . . that is all ….”

It isn’t hard to imagine God and Buddha laughing together at the expense of the Coyote Ugly.  

The Take Away for Employers

The Buddha probably would be the first to say that this president has a long way to go on the Eight Fold Path (a central concept in Buddhist doctrine). And most, if not all, lawyers would be the first to tell an employer and its management to “shut up” when it comes to talking about employment lawsuits, or more eloquently advise companies not to discuss any pending employment related litigation outside of key management personnel. Not only is this zone of silence essential for protecting confidential attorney-client communications, but it is also critical to avoid what happened to the Coyote Ugly employer: The pending lawsuit got even uglier as a result of these social media diatribes in that it gave the plaintiff employees a retaliation claim to pursue in addition to the FLSA claim.   

Additionally, employment counseling and education is a critical component for avoiding or mitigating against employment discrimination and related claims. Equally important is incorporating a non-retaliation mentality throughout the company that must be drilled into management. At a minimum, an employer’s position that retaliation will not be permitted should be reduced to provisions in the employer’s policies and handbooks as well as made clear to managers.

As far as social media policies go, this case and similar instances concerning issues at the intersection of the employment and social media law make it clear that companies need to have a well-thought out and meaningful social media policy in place that balances both the legal compliance and business needs of the equation.

And in light of this particular case, perhaps that social media policy needs to include a provision to the effect that employees and managers should “exercise caution if you use social media to discuss work issues while drunk.”

FishingNet.jpgFor many, sharing on Facebook, Twitter, Linked In, and other social media-related websites is a daily routine. But what happens to that routine when a person becomes involved in litigation? This is a question that almost always has to be answered in the context of employment discrimination lawsuits.  

The answer to this question, however, will often depend on the circumstances. This point recently played out in a lawsuit filed by a former employee based upon her race as well as a hostile work environment and retaliation (Potts v. Dollar Tree Stores, Inc., Mar. 20, 2013 under under Title VII of the Civil Rights Act of 1964 (as amended, 42 U.S.C. § 2000e et seq.) and the Equal Pay Act (29 U.S.C. § 206). 

This lawsuit is still ongoing, but an interesting issue on the issue of social media was recently decided by the trial judge in the litigation phase called “discovery.” Discovery in litigation refers to the phase where parties are permitted to obtain – through written questions, requests to produce information such as documents or digital information, or through deposing a person.

Discovery is intended to be broad and allows a party to obtain “discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense” or that is “reasonably calculated to lead to the discovery of admissible evidence.” 

Relying on the broad scope for discovery, the defendant employer sought access to a number of areas and filed a motion to compel Plaintiff to produce the following:

  • Any relevant documents maintained on any computer in Plaintiff’s possession or control including those documents and/or emails stored in any online email account, such as Plaintiff’s Yahoo! or AOL accounts;
  • Any computers or digital storage devices used by either Plaintiff during and after her employment with Defendant;
  • Emails that pertain in way to this lawsuit;
  • Documents, photographs, or other information concerning Dollar Tree stores or Plaintiff’s claims;
  • Any non-privileged communications or documents exchanged between Plaintiff and Trowery;
  • Facebook and/or other social media data;
  • Plaintiff’s complete tax returns and all attachments thereto from 2007 to the present; and
  • Plaintiff’s application and other materials submitted to the Social Security Administration in connection with her claim for disability benefits.

While Plaintiff produced some information, she contended that her former employer was not entitled to full access to Plaintiff’s Facebook pages. In deciding the issue in favor of the plaintiff, the trial judge first noted that the Sixth Circuit (the jurisdiction that Michigan is in) had to to rule on the scope of discovery of private Facebook pages, but other courts have concluded:

[M]aterial posted on a private Facebook page, that is accessible to a selected group of recipients but not available for viewing by the general public, is generally not privileged, nor is it protected by common law or civil law notions of privacy.  Nevertheless, the Defendant does not have a generalized right to rummage at will through information that Plaintiff has limited from public view. Rather … there must be a threshold showing that the requested information is reasonably calculated to lead to the discovery of admissible evidence. Otherwise, the Defendant would be allowed to engaged in the proverbial fishing expedition, in the hope that there might be something of relevance in Plaintiff’s Facebook account.

Production of plaintiff’s computer was a different story. Specifically, the Court concluded that information stored on the computer could lead reasonably lead to the discovery of admissible evidence and, therefore, would be produced. But that production would take place with court restrictions that included using a third-party neutral to conduct the computer search, which would based on agreed upon key words to assess whether Plaintiff’s computer contains relevant information.

The Take Away

The Potts case is not a binding decision for Michigan employers and employees. But it is a good reminder for both that it is not going to be a good day in court if your judge believes your employment discrimination strategy involves a “fishing expedition” to “rummage” through the opposing party’s digital drawers. 

It is, therefore, important to carefully consider what information you will ask a plaintiff or defendant to provide. This consideration needs to further drill down to the rational basis for asking for such information and being able to articulate a reasonable explanation for why a particular social media repository is likely to be a legitimate source of production relative to the litigation.      

But as the Potts case illustrates, it is mistake to assume that just because discovery is supposed to be “broad” (which often is one of the laziest cliché in all of law) that you’ll be able to get away with pursuing a digital fishing expedition. 

And even if you could, casting a wide discovery net in litigation can be costly. Consider that even a single laptop, an email account, and one or two social media accounts will often yield gigabytes of information that will require attorney time to review and process it. On top of this, you’ll often end up paying all or some of the cost for a computer forensic specialist to conduct the review. This means that if discovery is not intelligently planned you’ll end up with a very expensive fishing expedition with no guaranteed substance to show for it.  

St. Joseph.jpgIn Hays v Lutheran Social Services of Michigan, the Michigan Court of Appeals recently reversed a jury verdict in favor of a former employee who had filed a lawsuit against her employer based on Michigan’s Whistleblower Protection Act (the “WPA”).

The basis for the opinion is important for both Michigan employers and employees with respect to the technical requirements under the WPA for making a “report.” It also suggest that Michigan employees may have to achieve a certain level of virtue normally required of Saints, i.e., acting only for the good of the public and with no concern for the employee’s self-interests.    

Overview of the Michigan Whistleblower Protection Act

Michigan’s Whistleblower Protection Act generally provides a remedy for an employee who suffers retaliation for reporting or planning to report a suspected violation of a law, regulation, or rule to a public body.

Often – as was the situation in the case under discussion – Michigan Whitsleblower Protection claims hinge on the issue of whether a plaintiff establishes that a “report” was made or about to be made, yet the WPA does not define the term “report.”

The WPA, Home-health Care Workers, Illegal Drugs, and the Police

Plaintiff was employed as a home-health care provider for the defendant employer. As a condition of her employment, Plaintiff had signed a client confidentially agreement, consenting to keep information about her clients confidential. During the course of her employment, she worked with an individual client (Client John Doe), who illegally smoked marijuana in his home and in her presence when she was there in the scope of her employment.

Subsequent to this assignment, Plaintiff contacted the police and specifically the Bay Area Narcotics Enforcement Team (“BAYANET”). She inquired about the potential consequences of knowing about the drug use of another and not reporting it. At the end of the conversation, when asked by the BAYANET official if she would like to take any further action, Plaintiff declined to do so.

After this call was made, Plaintiff was informed by her supervisor that a complaint had been lodged against Plaintiff for making a phone call about John Doe. Plaintiff admitted to her supervisor that she called BAYANET and she was subsequently terminated following this meeting. It is not clear the exact timing, but it appears Plaintiff’s call to the police, the complaint, and the termination were in close proximity.

Plaintiff Wins at the Trial level on her Whistleblower Protection Claim

After she was terminated, plaintiff initiated her lawsuit claiming she was terminated in violation of the Michigan Whistleblower Protection Act. A jury came back with a judgment in plaintiff’s favor in the amount of $77,897.50 and the trial court also assessed attorney fees and costs to plaintiff in the amount of $69,385.55. 

Technical and Saintly Requirements for Whistleblower Protection?

On appeal, the Court reversed the trial court’s decision and concluded that Plaintiff failed to establish a prima facie case for her claims under the WPA. Specifically, the Court noted that according to plaintiff’s deposition testimony, she asked the BAYANET officer the following question – “If you’re in a situation where there’s illegal drugs and you happen – and this person happens to get in trouble, what is your consequence?”

The Court characterized Plaintiff’s inquiry as “essentially” her calling the police to inquire about her potential liability if John Doe’s illicit drug behavior was discovered and not to report any illegal behavior for the public good.

Plaintiff’s only concern was to obtain information about her hypothetical liability, not to provide law enforcement officials with any concrete facts from which they could actually investigate or enforce the law.

Ultimately, this perceived self-interest was a substantial factor in the Court’s decision to reverse the jury’s verdict in favor of the individual plaintiff.  

Closing Thoughts on Whistleblower Protection Burdens & Barriers

While this decision is obviously favorable for employers, it is understandable why Michigan employees and their attorneys should be concerned. This is because the Court seems to have essentially erected an absolute barrier to protection under Michigan’s Whistleblower Protection Act by requiring whistleblowers to be motivated solely for the public good and without reference or concern as to how informing the public may impact that particular employee. And this barrier was erected on a set of troubling facts:

  • First, there does not appear to be any dispute that there was some illegal drug use at issue at the time the plaintiff first contacted the police.  
  • Second, one of the underpinnings of Michigan’s Whistleblower Protection Act is that it is to be liberally construed in favor of individuals like the plaintiff and Michigan courts have specifically noted: “Inherent in the WPA is a purpose to protect the public by protecting employees who report violations of laws and regulations. Terzano v. Wayne County, (Mich. Ct. App. 1996). This purpose also reflects the conflict many individuals face with respect to needing to work in order to support themselves and their family versus aspiring to protect the public good. Given this economic reality, what choice would you make? 
  • Third, the court opinion was not clear as to the timeline with respect to plaintiff’s phone call to the police and her termination, but it appears to be within close proximity of the other. And presumably the jury addressed this issue in deciding in Plaintiff’s favor in the first place.

Accordingly, this court opinion arguably encourages an employee to take a “shoot first, aim later” approach when it comes to making a report under the WPA, even where a number of complex factual and legal issues are involved. In this particular case, such issues included criminal drug laws, employment confidentiality agreements, health care information, and personal privacy issues.

For more more information about Michigan’s Whistleblower Protection Act and for complying with this statute as an employer or employee, contact Jason M. Shinn whose legal practice focuses on Michigan employment law compliance and litigation, including unlawful discrimination, sexual harassment, and investigating employee misconduct.