Mandatory retirement plans based on age are generally prohibited under the Age Discriminaiton in Employment Act.  But, the ADEA, like Title VII of the Civil Rights Act covers employees, not business owners – including partners.  True partners, those who manage and control a business, are not covered by the ADEA.  Burke v. Freedman, 556 F.2d 867, 869 (7th Cir. 1977).  So, who is a partner or shareholder?

In Clackamas Gastroenterology Assoc., P.C. v. Wells, 538 U.S. 440 (2003) (Americans with Disabilities Act), the U.S. Supreme Court found the following factors were important in deciding who is a partner and who is an employee:

  • whether the organization can hire or fire the individual or set rules for the individual’s work
  • the extent to which the organization supervises the individual’s work
  • whether the individual reports to someone higher in the organization
  • the extent to which the individual can influence the organization
  • whether the organization and individual intend that the individual be an employee, as expressed in agreements, and
  • whether the individual shares in the profits, losses and liabilities of the organization

In 2007, the EEOC sued the law firm of Sidley Austin Brown & Wood for age discrimination when it demoted 32 so-called partners to "of counsel" because of their age.  The law firm settled the case with the EEOC.  In a consent decree, the law firm agreed the 32 "partners" were actually employees.  It agreed to not use age based retirement policies any more and it agreed to pay $27 million.  

In EEOC v. Kelley Drye & Warren, No. 10-CV-0655 (S.D. N.Y. 2010), the EEOC settled a claim regarding a partner who was required to depart equity partner status at age 70.  The law firm agreed to pay the attorney $574,000 and to refrain from basing a lawyer’s status, pay or ownership on the lawyer’s age.  The law firm also agreed to undergo training on age discrimination.  See New York Daily Record report. 

But, in the case of Solon v. Kaplan, 398 F.3d 629, 633 (7th Cir. 2005), the court found that the partner was a true partner.  The law partner was one of four general parners.  He could only be fired by a two-thirds vote of the general partners.  Mr. Solon held one-fourth of the power to allocate the firm’s profits, whether to require additional capital contributions, make financial commitments, amend the partnership agreement, and dissolve the firm.  With that sort of power, Mr. Solon was not an employee for purposes of Title VII of the Civil Rights Act of 1964, said the court. 

Mr. Solon responded that the partnership agreement had no effect since the other partners ignored it.  They met on their own and made decisions without his imput.  But, said the court, Mr. Solon did not call for general meetings to oppose the decisions of the general partners.  And, the court found that Mr. Solon exercised more control over the law firm than he admitted. 

So, beware of those mandatory retirement policies.  Even if the employer wins a lawsuit in the end, they still lose financial resources and time. 

Coach Bev Kearney, the former track and field coach for the women’s team at the University of Texas, was forced out in 2012.  It was discovered that she had once had a relationship with a student-athlete in 2003.  According to her lawyer, Derek Howard, UT has a culture allowing such relationships.  Mr. Howard claims they know of 10 inappropriate relationships between UT staffers and subordinates.  If true and if those employees compare to Bev Kearney’s situation, then that would constitute good evidence that Ms. Kearney was treated differently.  See San Antonio Express News report. 

Title VII does not allow or approve of coaches breaking the rules.  But, if the rule is a rule in name only, then management needs to have a very good reason for a termination.  Otherwise, it will look like discrimination.  The key will be whether the UT "staffers" will compare adequately to Coach Kearney’s situation.  Usually, that means there should be the same supervisor involved – whoever allows these inappropriate relationships to continue should be the same person.  Showing good comparisons between different employees can be complicated.  If the "staffers" are in different departments with different supervisors, then it becomes very complicated.  

Coach Kearney has fled a complaint with the Equal Employment Opportunity Commission.  They must allow the EEOC 6 months to "investigate" (or not) before they can file suit.  This case has a higher profile than others, but a great many EEOC complaints are very much like Coach Kearney’s complaint. 

For some years now, some clever scam artists have bilked many otherwise bright and clever lawyers out of hundreds of thousands of dollars.  I myself have received this same email dozens of times.  They always go like this: "Hi, my ex lives in your jurisdiction (note the scammers never actually name your state or city).  He will pay $500,000 to settle a divorce.  I live in Japan, Malaysia, Hong Kong (always the far Pacific area). We just need an attorney willing to assist us."  They sometimes use poor grammar or mis-spell words.  But, otherwise, this is how the email goes.

The careless lawyer, or sometime the careful lawyer than responds.  Eventually, the scammer sends a fraudulent check for $500,000 or so.  The attorney is expected to take his share from the one big check.  The attorney finds this project appealing because they promise a large share in return for little more than transferring checks.  Attorneys always have a Trust account in which they deposit monies belonging to clients or others.  Client funds go first in the lawyer’s trust account.  The scammer cooks up some reason why they must have their share immediately – before the check hs fully sleared.  Before the lawyer understands what is happening, they have lost, in some cases hundreds of thousands of dollars.  See ABA newsletter.  Note the Houston lawyer who relied on Citibank’s assurance that the forged check was valid. 

On a few occasions, I have received virtually identical emails within a week’s time from supposedly two or three different countries.  These scammer promise tens of thousands of dollars in return for just a few hours of work.  It is too good to be true. This must be "globalization" internet style…..

The Scooter Store is in trouble. The Scooter Store settled a disability discrimination lawsuit just a few months ago.  See my prior post about the Scooter Store settlement.  In January, a CBS News report suggested the power wheelchair companies were "ripping off the government."  In February, the FBI and other agencies executed search warrants at the Scooter Store’s main offices. The federal agencies were apparently looking into allegations of medicaid fraud.  Now, the Scooter Store has placed most of its some 1200 employees on unpaid furlough.  See San Antonio Express News report. 

The Third Court of Appeals in Austin upheld the lower court decision regarding the former museum building.  I wrote about that trial here.  In the trial, it appeared from the newspaper account that one of the defendant’s key witnesses was impeached.  The court of appeals apparently did not agree with my assessment.  See San Antonio Express News report.  As I tell my clients, everything can go right at trial and a party can still lose.  Litigation is art, not science. 

The U.S. Supreme Court heard arguments recently regarding Sec. 5 of the Voting Rights Act of 1965.  The Voting Rights Act requires many states, most of them in the South to seek pre-approval for changes in voting procedures.  The Voting Rights Act has been used to avoid discriminatory actions by local and state governments ranging from re-districting to simply moving polling places at the last minute.  But, some argue that the South has changed and we are no longer any more prejudiced than any other part of the country.  With a mostly conservative Supreme Court, those opposed to Sec. 5 see opportunity to end it or at least, curtail its effects.  

During the oral arguments, Justice Scalia commented that Sec. 5 had become a "racial entitlement" and it would remain in perpetuity unless a court gave it sufficient examination.  See ABA Bar Journal report.  Justice Scalia suggested that discrimination at the polls has decreased over time.  Justice Sotomayor appeared to dis-approve of Justice Scalia’s comment when she later asked the lawyer for Shelby County, the defendant, if he believed the VRA was a racial entitlement."  The lawyer responded no.  See Yahoo news report. 

Justice Scalia may be correct that discrimination at the polls has decreased since 1965.  But, discrimination regarding voting in other ways continues much as it did in 1965.  When Sec. 5 was renewed in 2006, Congress heard some 300 incidents of discrimination regarding voting rights.  Not unlike employment discrimination, voting discrimination is still with us.  And, really, is it an argument for repeal of Sec. 5 that the South is now no more discriminatory than any other place in the U.S.?  Is that the best we can do, argue that now we are no worse than anyone else? 

Under the Texas Payday Statute, terminated employees are not entitled to their vacation pay when they leave their job.  So explains Russ Cawyer in this post. The same statutory provision applies to sick leave or severance pay.  Such benefits are owed to the employee only if the departing employee has a valid contract providing for those benefits.  You can view the Texas Payday statute here.  

 

Be careful with those online dating sites.  The American Academy of Matrimonial Lawyers says a recent survey shows that relationship status is a common source of adverse evidence in divorce cases.  Do not identify yourself as single if you are not.  Do not claim to have no children if you are a parent, warns the AAML. It will be used against you in any subsequent divorce actions.  See ABA Bar Journal report. 

When a person with a disability requests an accommodation, the employer must engage in an "interactive process" to arrive at a workable accommodation.  The Americans with Disabilities Act requires the employer and employee to discuss possible alternatives.  Every disability and every person is different.  So, the possible alternatives will vary greatly.  One thing the employer cannot do is ignore the worker’s request for relief.  Yet, that is what AutoZone did in the case of EEOC v. AutoZone, 2013 WL 561587, No. 12-1017 (7th Cir. 2/15/13).  See opinion here. 

The worker had a back injury that was aggravated by mopping the floors.  But, AutoZone ignored his requests for relief. John Shepherd was required to continue with the mopping.  The mopping made his back worse and he then needed leave from work for treatment.  When Mr. Shepherd tried to return to work after the treatment, AutoZone refused to let him return. 

Yet, the Magistrate Judge granted summary judgment on the accommodation claim.  The other claims went to trial and lost.  The Seventh Circuit reversed the grant of summary judgment.  On remand back at the trial court, a jury found in favor of Mr. Shepherd and awarded him $100,000 in compensatory damages, and $500,000 in punitive damages.  The Magistrate Judge awarded $115,000 in lost pay and benefits.  The punitive damages exceeded the $300,000 cap, so they were reduced.  

On appeal, AutoZone argued that in the first trial, the court found that mopping the floors was an essential function of the job.  Since he could not perform that function, the worker was precluded from coverage under the ADA.  Yet, in the second trial, the jury found just the opposite, that mopping was not an essential function of the job. 

The Seventh Circuit ruled that the two juries looked at two different time periods, one before Mr. Shepherd’s back flared up and one after the flare-up.  His back was in different stages of recovery.  Because the issues in the two trials were different, the employer cannot argue that the issue was decided in the first trial and is binding.

Regarding the punitive damages issues, the employer argued that it had a system in place to address requests for accommodation.  But, said the Court, the system broke down.  The lead disability coordinator’s testimony suggested that she was dismissive of the worker’s requests.  It appeared that she was aware of the disability but only spoke of it as a hypothetical.  The employer wrote a letter excusing Mr. Shepherd from mopping, but only after his back flared up and the condition worsened. 

And, said the court, the jury could conclude that the employer did not act in good faith since any written anti-discrimination policy was not introduced into evidence and the policy talked about by the HR witness was not followed. 

The Texas Civil Rights Project, a civil rights advocacy law firm, has filed a complaint about Judge Lynn Hughes.  I previously wrote about Judge Hughes here and here.  The TCRP filed a complaint with the Fifth Circuit Court of Appeals alleging Judge Hughes uttered racist statements when he discussed a case filed by an Indian-American.  See ABA Bar Journal report.