Donald Trump is involved in many lawsuits. He lost one of them. Mr. Trump purchased a golf course in 2012 ago for $5 million. That was a good price, but part of the deal was that he had to accept the liabilities then pending. Some 65 members were trying to withdraw from their membership. There was some $41 million owed to them as refundable deposits. Under the terms of their agreement, the resignation process was complicated and lengthy. It could take ten years to resign one’s membership. Mr. Trump named the golf course, Trump Golf Course. It is in Jupiter, Florida.

A couple of months after assuming control, Mr. Trump said if they wanted to resign, then they could not have access to the club. Yet, they were still required to pay dues of some $8,000 to $20,000 per year. The members then said well, if they were losing access to the course, then their resignation was final and they were entitled to a refund of their deposits. Mr. Trump’s company refused to issue refunds or to otherwise speed up the resignation process. The members filed a class action lawsuit, saying the new owners were unilaterally changing the terms of their agreement. Eric Trump was the operations person for the golf course and he admitted on the witness stand that paying dues without access to the club violated a fundamental principle of life. Donald Trump testified via videotaped deposition.

The trial was held in federal court last August. This week, the judge issued his ruling in favor of the members. He awarded the members $5.6 million for refunds of their dues and deposits. As always, Mr. Trump said he would appeal. See CBS news report.

But, Mr. Trump’s hardball business tactics did work well in one sense. During the four years of the lawsuit, about half the members changed their mind and withdrew from the resignation list. That saved him tens of millions in refunds he would have owed. See NPR news report. Whether these many lawsuits are good politics is beyond the scope of this blog. But, one must wonder.

I have written here a few times that the life experiences a judge brings to the table are important. Pres. Trump’s nomination of Neil Gorsuch illustrates that maxim. Judge Gorsuch, prior to assuming his chair at the Tenth Circuit Court of Appeals represented big business, often opposing attempts to seek class action certification on behalf of workers. His decision in Hwang v. Kansas State University, 753 F.3d 1159 (10th Cir. 2014), is an unnecessarily harsh decision for American workers. Professor Hwang requested a six month leave of absence for recovery from her cancer treatment. She had already received one six month leave and needed another six months off. Kansas State said no, relying on an inflexible, supposedly “no-fault” leave policy.The judge speaks in broad terms that a six month leave could never work. Six months is so long that such a worker is simply not qualified for the job, said the conservative jurist. “It’s difficult to conceive how an employee’s absence for six months . . .  could be consistent with discharging the essential functions of most any job . . . ” Hwang, at 1162. I have written about so-called fixed leave policies here. That is poorly worded by any judge, when precision is called for.

Yes, it is unusual for any worker to miss work for six months and remain employed. Yet, it happens frequently for a wide variety of reasons at many employers. The critical question is whether a particular job function is a true job function. Is it a true job function that the worker return to work within a certain amount of time? See Holly v. Clarion Industries, LLC, 492 F.3d 1247 (11th Cir. 2007) (Applying a multi factor test to determine whether a claimed job function of arriving timely each day is truly required by the employer); Barber v. Nabors Drilling U.S.A., Inc. 130 F. 3d 702, 707 (5th Cir. 1997) (Rehabilitation Act) (whether a job function is truly required is fact intensive); Ralph v. Lucent Technologies, Inc., 135 F.3d 166 (1st Cir. 1998) (court upholds preliminary injunction requiring four-week trial return to part-time work for employee recovering from posttraumatic stress disorder); Carmona v. Southwest Airlines Co., 604 F.3d 848 (5th Cir. 2010) (although regular attendance may be an essential function of many jobs, plaintiff’s ability to meet employer’s “extremely lenient” attendance policy indicated that he was qualified). The key question is what happens if a person does not arrive timely, said the court in Holly. What is missing from Gorsuch’s analysis is the question, what would happen to the university if  Prof. Hwang was gone another six months?

Judge Gorsuch arrives at the critical question after spending some time disregarding the value of EEOC guidance and explaining why the denial of an accommodation actually benefits persons with disabilities. Hwang, at 1164. He then rejects Hwang’s suggestions that some faculty members receive sabbaticals of a year or longer. The reasoning is that if non-disabled persons are allowed extended leaves it would be discriminatory to not allow her an extended leave. The judge dismisses those examples as not sufficiently detailed. Hwang, at 1164. Are they tenured faculty, he asks? Are those professors on year-to-year contracts? But, those distinctions do not make a difference. The question is what would happen to the university employer if Prof. Hwang missed an additional six months. Would the business of the employer come to screeching halt? Would it offer some loss of income? What would happen? That the employer might allow extended leave for a year-to-year professor and not for a full tenured faculty member does not address that question. It does appear the judge was trying to reach a specific result.

The Judge could have simply said that under the facts of this case, Ms. Hwang has not shown that non-disabled workers are being treated differently. or, he could have said under the facts of this case, it appears the employer could not function if one professor took extended leave and that, therefore, the claimed job function of no extended leave is appropriate. Instead, he spoke much more broadly, suggesting a worker could never or almost never show that an employer can do without one worker for six months. He based that over broad assertion on nothing more than his personal knowledge of the working world.

Judge Gorsuch famously says a good judge is one who disagrees from time to time with his own decisions. He is right. A good judge follows precedent or the statute regardless of outcome. It just does not appear that he did so in his Hwang decision.

In another case, TransAm Trucking v. Admin. Review Board, Dept. of Labor, 833 F.3d 1206 (10th Cir. 2016), Judge Grouch dissented from a decision about a truck driver. The truck driver was stranded when his brakes froze in Illinois. The temperature was below zero at about 11 p.m. He asked his company what he should do. The tank was nearly out gas and he could not locate the fuel station required by his employer. The company told him to wait for the repair person. Then he noticed his heater was not functioning. Wishing a couple of hours, he noticed his was slurred. He fell asleep and woke up realizing after a few hours he could not feel his torso or his feet. He called the company again. The dispatcher told him to “hang in there.” After about 30 minutes of “hanging in there,” he unhitched the trailer. His supervisor told him to stay with the trailer. The boss kept telling the driver to turn on the heater and the driver kept telling his supervisor the heater was not working. The supervisor told him to drag the trailer with frozen brakes with him or stay with the trailer. That was his choice. The driver said he would go find some help and leave the trailer behind. TransAm fired him and he sued. The majority decision found he was fired because he wanted to comply with the Surface Transportation Assistance Act’s requirement to operate the truck safely.

Judge Gorsuch dissented. He admitted the employer’s decision was perhaps not wise or kind. (Gee, you think??) He pointed out that the statute protects someone who refuses to operate his vehicle out of safety concerns. But, in this situation, the driver was told to leave the trailer with the frozen brakes by the side of the road. He does admit after some protracted discussion about the meaning of “operate” that the statute is designed to protect the health and safety of the driver. But, the judge insists the statute applies to persons who “refuse to operate,” not to persons who actually operate the truck.

The judge’s focus on not operating the truck is curious. The last direction from his boss was to drive the truck with the broken trailer or stay with the trailer. His direction included both operating or not operating the truck. Yet, the judge focused on the direction to stay with the trailer by the side of the road – which meant not operating the truck. That focus does suggest the judge wanted to reach a certain result. He ignored the possibility that the driver was asked to operate the truck in an unsafe manner.

And, worse, the judge indicated the truck driver should have remained with the trailer in subzero conditions trying to to tell his boss the heater does not work. Simply to protect the cargo in the trailer. As a lawyer, I am gratified any judge is so committed to the precise wording of a statute. But, if you are a truck driver stuck out in the freezing temperatures at 11 at night, and your heater does not work, you do not really want to hear about “strict construction.” Your needs are more basic. And, I think, the rest of us do not want a judge who does not appreciate that distinction.

 

There are many issues with Pres. Trump’s travel ban. One important consideration is the risk it poses to U.S. troops serving in Iraq and Afghanistan. We still have several thousand soldiers in Afghanistan and a few hundred in Iraq. Add to that the thousands of U.S. civilians in support of the soldiers serving in those two countries and you have a good many Americans who serve as handy targets for ISIS and Al Qaeda. Political issues that affect the Middle East reverberate in Iraq and Afghanistan. The jihadis are motivated when they hear the U.S. or Western nations supposedly oppressing Moslems.

When I served in Iraq, every staff tracked attacks on Coalition (i.e., U.S.) forces. The statistics were part of the daily briefing presented to every commander. We knew there would be a spike in attacks anytime Middle East or Israel issues became part of the public debate in America. It was part of our intel or “enemy situation” briefing. It is without doubt that right now as we speak, soldiers in Iraq and Afghanistan are scaling back their activities to some degree to avoid the large spike in attacks. For your average revenge minded terrorist, mainland U.S. is a long way to go. But, northern Iraq and central Afghanistan not so much. See the Brian Chasnoff column in the San Antonio Express News in which Rep. Will Hurd speaks to that concern. Congressman Hurd is a former CIA officer. He would know. As a former U.S. Army officer, I also know. Talk tough here. But, over there, they pay the price.

Yes, some lawyers have a conscience. Like the “Saturday night massacre” a generation ago, Pres. Trump fired Sally Yates, the acting Attorney General because she refused to defend a questionable ban on travel for seven Moslem countries. See one description of the Saturday Night Massacre in 1973 here. Elliot Richardson and William Ruckleshaus refused to carry out what they believed was an unlawful order to fire Archibald Cox, the Watergate prosecutor. Ms. Yates refused to defend Pres. Trump’s ban on seven Moslem countries. She explained that she questioned whether that travel ban was lawful. See CBS news report.

The White House did not clear its ban with government agencies. It issued the ban with no prior coordination with the Department of Justice.  The travel ban obviously surprised the Attorney General’s office. As Ms. Yates indicated, she had serious doubts about its legality and she wrestled with what to do over the weekend.  She considered resigning rather than dealing with the problem, but she felt that leaving the office would just push the problem off on someone else.

Like 1973, this could portend further trouble for the president. When Nixon fired those two lawyers in 1973, that action very likely started his long journey toward eventual resignation. Firing the Attorney General and his first assistant was seen by many as unnecessary on Pres. Nixon’s part and clearly intended to protect himself. That was a shock to the country, just as today firing the acting Attorney General is quite surprising today. Ms. Yates is the only person at DOJ who is authorized to sign off on requests for warrants for foreign investigations. Her absence will surely cause further problems.

Many employees find themselves in a real quandary when the employer asks them to commit an illegal or unethical act. Texas law protects a worker who is asked to break a criminal statute. But, some employees become so vexed about their situation that s/he goes to the media. That is what happened in Peine v. HIT Services L.P., 479 S.W.3d 445,  2015 WL 6490290 (Tex.App. Hou. 2015). Joseph Peine was a CPA working as a CFO for HIT Services, a heavy turbine business group. According to Peine’s evidence, the company was in financial trouble. It had a history of inflating earnings in the past. He was hired to help turn things around, he alleged. This concerns a motion for summary judgment, so Mr. Peine’s allegations should be assumed as correct. The CFO alleged he was asked to inflate earnings for the year. He was told to claim a project had been completed, when it had not been completed. Mr. Peine refused. His boss, Durg Kumar threatened him and others in the CFO office if the CFO did not follow orders. He said he would “clean house” if the CFO did not comply with his order.

Mr. Peine went around Kumar to talk to higher-ups. Mr. Kumar went around Peine to get things included in the quarterly financial statement. The parent company placed Mr. Peine on leave with pay while it investigated claims made about him. About the same time, Mr. Peine contacted a Thomson Reuters reporter and provided documents. He suggested they wait to see if HIT would fix the problems before going forward with any news report. Soon, the company investigation uncovered the email from Peine to the reporter. The investigator, an in-house attorney, recommended that Mr. Peine be fired for violating the company’s confidentiality policy. Within a couple of months of his initial complaint to the parent company, Mr. Peine was fired.

The CFO filed a lawsuit based on Sabine Pilot Services, Inc. v. Hauck, 687 S.W.2d 733 (Tex.1985). Sabine Pilot is that rare case of judge-made law. That decision recognized an action to sue for a termination resulting from a worker’s refusal to follow an illegal order. The employer moved for traditional summary judgment alleging that Mr. Peine violated the confidentiality policy. The employee responded that there was a genuine issue of fact regarding why he was fired. The court of appeals discussed the standard of proof for a Sabine Pilot case. Sabine Pilot actions require a showing that the “sole cause” of the termination was the order to commit an illegal act. The Plaintiff pointed to statement by Kumar that he would “clean house” if the CFO did not do as he wished and a statement by the parent company that Mr. Peine was a “liability.” Those statements represent direct evidence, said the plaintiff. But, the court of appeals did not accept these statements as direct evidence. The court found they were circumstantial evidence, since there was no indication the persons making those statements had a direct role in Mr. Peine’s termination.

The court did not seem to be aware that in acknowledging the possibility of two different motivations, it was implicitly agreeing that that a jury should decide this issue, not a judge. If there is more than one possible interpretation of the evidence, then under the rules, the decision belongs to the jury, not a judge. But, this irony does not help the plaintiff. Since, few, perhaps no, plaintiffs will survive an appeal to the Texas Supreme Court.

The Plaintiff also presented an expert witness in the area of government compliance. That expert testified that this was a classic case of retaliation. But, the court was still troubled by the fact that he might have been fired for violating the confidentiality policy. The expert could not speak to that possible motivation. Mr. Peine then argued that he expressed concerns to a public forum and should be protected. But, no, said the court, Texas does not recognize freedom to report illegal activities in a private work place. That is true. The Texas whistle blower law only applies to government employees, not private sector workers.

So, the court affirmed the grant of summary judgment. Based on the decision, it does not appear the plaintiff contested whether he truly violated the confidentiality clause. Some employers claim to have such a policy, but upon closer examination, it turns out they often ignore it. It is also unfortunate he went to a reporter. Otherwise, his case should have been solid. Many employees, faced with an unjust termination, reach out to any possible avenue of protection. People who are facing the end of their financial well-being do desperate things. See decision here.

In a per curiam decision, the Fifth Circuit reversed summary judgment for the employer. In Stennett v. Tupelo Public School District, No. 13-60783 (5th Cir. 7/30/2015), Ms. Stennett argued she was more qualified than the persons chosen for various district jobs. Ms. Stennett had formerly worked for the Tupelo Public School District for some 30 years, gradually rising up through the ranks. She was laid off and told she could re-apply for various jobs. She did apply for three different positions for the 2010-11 school year. She was not even interviewed. She was then 64 years old. TPSD then re-hired several former TPSD employees, who were much younger. Ms. Stennett was the only former administrator who was not re-hired by TPSD. The next school year, the plaintiff applied for seven different positions with TPSD and was not hired. She was only interviewed for two of the positions. Yet, the district court granted summary judgment. The employer argued that the teachers who were chosen were more qualified.

The Fifth Circuit reversed summary judgment. It found that in looking at the evidence as a whole, she was much more qualified than the persons who were selected for the positions. On that basis, it found there was sufficient issue of material fact. It said a reasonable jury could conclude Ms. Stennett was more qualified than the persons who were chosen. She was not even interviewed for a position as an Administrative Intern. The court also noted that the employer relied on subjective qualifications that were not included in the job postings. One principal, for example, was looking for someone “to kind of complement him.” Another wanted someone who could provide instructions to the teachers. As the court mentioned, reliance on previously undisclosed job requirements itself can raise a genuine issue of material fact.

This is an unusual case. The court even noted that unlike most cases involving one particular job, Ms. Stennett was turned down for multiple positions. It is difficult to accuse several different persons of discrimination. People just do not generally believe discrimination can occur across different persons. But, Ms. Stennett was able to show undisclosed job requirements, and a lack of explanation by one principal regarding why he did not even interview Ms. Stennett. The plaintiff also showed that the Superintendent had promised to help her find a new position, but did nothing to help her. The superintendent himself did not interview the plaintiff for one position for which he was the hiring official. All this, said the court, amounted to genuine issue of material fact. See decision here. The decision is not published. But, it should be. It goes into substantial detail regarding how to analyze pretextual explanations.

 

People in public life have to be careful about they say and do. Pres. Bill Clinton was sued by several women during the last couple of years of his administration. Pres. Trump appears headed toward those same troubled waters. During the campaign a former Apprentice contestant, Summer Zervos, accused Mr. Trump of groping her and assaulting her. The candidate denied it. Now, she has sued the soon-to-be President. Her attorney is the celebrity lawyer, Gloria Allred of Los Angeles. See CBS news report. Ms. Zervos says she will drop the lawsuit if Pres. Trump will simply acknowledge the truth of her claims. That does not seem likely. Mr. Trump enters office already a party to several lawsuits. It looks like his tally will only increase.

But, the President-Elect did settle his Trump University lawsuit. He agreed to pay the victims of his fraud $25 million. See CNN news report.

Sometimes, employers who are sued for discrimination in turn file their own lawsuit against an employee. I wrote about Wayne Wright and Schlumberger doing this here and here. In Wayne Wright’s case, the employer sued the former employee after she filed with the EEOC. The law firm sued for a declaration that it was justified in firing her. Schlumberger sued its former employee saying she had downloaded confidential information. Schlumbereger was found  to have fabricated its story and was sanctioned.

But, some courts are not convinced that counter-lawsuits amount to retaliation. In Jones v. Frank Kent Motor Co., 2015 WL 4965798 (Tex.App. Ft. Worth 2015 (unpublished), the employee sued Kent Motor Co. The former employer then counter-sued claiming Mr. Jones had participated in a scheme to fraudulently increase bonuses for himself based on customer satisfaction surveys. Kent Motor Co. moved for partial summary judgment. The partial judgment was granted. Kent Motor Co. then non-suited its counter-claims. The court then reinstated Mr. Jones’ retaliation claim. Kent Motor Co. then reinstated its counter-claims. Mr. Jones then amended his Petition to claim the counter-claims were retaliation in themselves. The employer filed an exception to that allegation. The court granted that special exception and the retaliation claim based on the counter-claims as dismissed. After a bench trial, the court found in favor of the defendant.

On appeal, Plaintiff Jones argued that the district court erred in not recognizing a claim of retaliation based on a frivolous counter-claim. Kent Motor Co. had counter-claimed for civil theft, common law fraud, mail fraud, breach of fiduciary duty, and for money received. The court said there was “ample” evidence for Kent Motor Co.’s claims and would not find them to frivolous. Although, it did not explain what that evidence was. It mentioned that eight or nine surveys were sent to Mr. Jones’ home address. But, it did not explain if that meant they were fraudulent, or a common mistake, or what.

The court of appeals made the remarkable claim that in general, Texas does not recognize post-employment retaliation for filing counter-claims. It notes the decision in Burlington Northern &Santa Fe RR v. White, 548 U.S. 53 (2006), which expressly finds that any action can amount to retaliation so long as the action dissuades a reasonable person from filing or supporting a charge of discrimination. It instead relied on a Fifth Circuit case, Hernandez v. Crawford Bldg Material Co., 321 F.3d 528, 532-33 (5th Cir. 2003). Hernandez was almost certainly overruled by White. The Jones court claims three subsequent cases continue to cite Hernandez. But, it does not mention that those three cases cite Hernandez for holdings not related to whether post-termination retaliation can include counter-claims. See Jones, at note 3. See decision here.

This ruling appears to be result-oriented.

So, if you are at work, thinking you might be fired, you might think about taking some documents home with you. Some documents might help later if you have to file suit. Taking documents from your employer is problematic conduct. Yes, the documents might help your case, but they could also give your employer a basis for suing you. In Highland Capital Management, LP v. Looper Reed & McGraw, No. 15-000055, 2016 WL 164528 (Tex.App. Dallas 2016), the employee took home some 60,000 documents. Highland Capital sued its former employee, Patrick Daugherty, for violating his employment agreement, misusing confidential information and other causes of action. While that lawsuit was still pending, it also sued Mr. Daugherty’s law firm, Looper, Reed and McGraw, accusing the law firm of everything from refusing to return those documents to using those documents to threatening to use those document if certain sums were not paid to lying to the plaintiff about the scope of those documents.

Looper Read filed a motion for summary judgment. Looper Reed relied on the attorney immunity doctrine and on the fact that Mr. Daugherty prevailed in the original lawsuit. The attorney immunity doctrine apples to suits by third parties against lawyers for action taken during the course of representation. The trial court granted summary judgment.

The Dallas Court of Appeals found that Looper Reed was indeed protected by the attorney immunity doctrine. The former employer argued that the law firm acted in a criminal, tortious way in using the documents. But, the court of appeals noted that the law firm’s use of the papers, accepting them, reviewing them, advising a client to reject a counter-demand, speaking about an opposing party in a negative light, etc. are the sort of duties required of any lawyer. So, accepting Highland Capital’s allegations as true, they still do not rise to the level of actionable conduct. See decision here.

Lamar Austin spent six months in Iraq in 2006 as an Ammunition Specialist. At the end of 2016, the Army veteran was working for Salerno Protective Services in Concord, New Hampshire. He had worked previously at a series of jobs, Target, Pitco, a New Hampshire based company that makes fryers for fast food businesses. He was still in his 90 day probation period at Salerno when his wife went into labor on Dec. 30. He called in to work telling them about his wife’s labor. The labor went a second day. The boss warned him that he had to come to work by 8:00 a.m. the next day, or else. When Mr. Austin did not appear for work on New Year’s Day, he was fired. They texted him that he was terminated.

His story appeared in the Concord, New Hampshire newspaper. See Concord Monitor news report. In the story, he mentioned that he would hope to find work in the electrical trades. He had had bouts of unemployment in the past. The International Brotherhood of Electrical Workers saw the story and offered him a job. See Task and Purpose report here about Mr. Austin. It worked out for the young Army veteran, this time. But, I wonder if the Family Medical Leave Act applied to him. if Salerno had over 50 employees, he would have been protected. But, otherwise, yes, they could have fired him for trying to take care of his wife.