In a remarkable decision, the Fifth Circuit affirmed the grant of a 12(b)(6) motion to dismiss. In Meadows v. City of Crowley, No. 10752 (5th Cir. 5/3/2018), the plaintiff submitted a 36 page complaint detailing how an African-American police officer was passed for promotion five times. On appeal, the plaintiff alleged that the district court had used an evidentiary standard, not a pleading standard. That is, the plaintiff argued that the district court required the employee to make out a prima facie case to avoid dismissal. The majority opinion said the plaintiff needed to plead sufficient facts to avoid dismissal, regardless of the existence of evidence for each element of the prima facie case. In a footnote, the majority opinion took issue with the dissent, saying the employee did not always surpass the qualifications of other employees when she was passed over.

The majority opinion does not explain how a court can look at facts supporting the prima facie elements without actually discussing the prima facie elements themselves.

The rejoinder by the majority, which included the new Judge Ho, is concerning. A motion to dismiss should be based on possibilities in the facts, not certainties. If the applicant even occasionally had better credentials than her rivals, that does suggest the dismissal is not proper. A motion to dismiss should address pleadings, not the merits. In his dissent, Judge Graves notes that the lower court clearly applied the wrong standard for a 12(b)(6) motion. In a footnote, the dissent noted that in Swierkiewicz v. Sorema N. A., 534 U.S. 506 (2002), the Supreme Court unanimously held that a plaintiff does not need to satisfy the McDonnell Douglas test at the 12(b)(6) stage. Id. at 511 (rejecting the notion that “the requirements for establishing a prima facie case under McDonnell Douglas also apply to the pleading standard that plaintiffs must satisfy in order to survive a motion to dismiss”).  The applicant was turned down four times in a 1.5 year period. Each time, she was the only minority candidate. 

The majority opinion pointed to five applications. But, noted the dissent, that fifth application was removed in plaintiff’s amended complaint. The majority opinion relied on an application for promotion that was no longer part of the live pleadings. The majority opinion failed to consider the facts liberally in favor of the non-movant. See the opinion here.

In a recent decision, the Fifth Circuit overruled Judge Lynn Hughes, again. The Fifth Circuit reversed Judge Hughes’ grant of summary judgment on several claims. The claims started when Karen D’Onofrio left Vacations to Go, the largest seller of ocean-going cruises in the world. Karen was a sales representative for Vacations. After a couple of years with Vacations. Karen’s husband sustained an injury to his back. About that same time, Michael, her husband, decided he would purchase a franchise with OneCruise, a competitor of Vacations. Karen took some time off to care for Michael. While she was out, she attended a training for OneCruise. She had planned to service her customers while out on FMLA leave. But, she failed to respond to emails. Customers complained. So, Vacations moved her customers to in-house sales reps.

Vacations then erroneously sent an email to customers, including Michael, that Karen no longer worked for Vacations. She had in fact been locked out of her online customer accounts. Karen, believing she had been fired applied for unemployment benefits. After several months, Vacations emailed Karen asking when she would return to work. Karen replied that she would not return, because she thought she had been fired.

Karen sued Vacations in state court for FMLA violations and hostile work envfironment. Vacations counter-sued for breach of a non-compete agreement and added Michael as a defendant. Vacations also sued for fraud, conversion of confidential information, and tortious interference with existing and prospective business relations. The company also removed the suit to federal court and Judge Hughes. Karen moved to voluntarily dismiss her FMLA claims, which Vacations opposed. The district court denied her motion to dismiss. Michael moved to be dismissed form the case, which motion the judge never addressed. Judge Hughes stayed discovery, as he often does. Vacations then moved for summary judgment, which the district court granted.

On appeal, the Fifth Circuit first addressed the evidence for the motion for summary judgment. The employer’s affidavits, noted the appellate court, were conclusory. Various Vacations employees submitted affidavits that concluded Karen had a valid non-compete agreement in place and she had violated it. That was a legal conclusion, said the court. Employees also speculated as to the damages, and did not explain how they arrived at their assessment of the damages. The employees did not even claim to have firsthand knowledge of the damages. The plaintiff’s objections to the affidavits should have been sustained, said the court. They were not competent evidence for summary judgment.

The Fifth Circuit found the district court had granted summary judgment on Karen’s hostile work environment claim without giving her notice that such a claim was before the court. The distrioct court granted summary judgment as to her hostile work environment claim sue sponte from the bench.

The district court quashed discovery, but would allow discovery by specific order. There was no order in which Judge Hughes allowed Karen to conduct discovery as to her hostile work environment claim. With no discovery on the claim, she was not prepared when the court ruled from the bench that it would grant summary judgment as to her hostile work environment claim. The court reversed the granting of summary judgment as to Karen’s hostile work environment claim.

The appellate court did affirm summary judgment as to Karen’s FMLA claim. Vacations had given her a choice. She could work from home and service existing customers or she could take a straight FMLA leave with no work. She chose to work from home. That choice prevents any claim that Vacations interfered with her FMLA rights.

Regarding the breach of a non-compete agreement, the Fifth Circuit found the agreement to be overbroad. The agreement had no limits, which means it was, in effect an industry wide agreement. Texas law forbids industry wide non-compete agreements. It had no geographic limit and it applied to any job for any competitor. The agreement would apply not just to any other cruise line, but to any travel company. The non-compete agreement applied too broadly, said the Fifth Circuit. The Fifth Circuit remanded this claim back to the district court for proceedings to determine the geographic limits Karen worked and the customers she serviced. The court could not determine what the limitations of the non-compete agreement were without more information about to whom she sold the product.

Regarding Vacations’ other claims, the Fifth Circuit found there was substantial issue of fact, such that summary judgment was not appropriate. The district court also incredibly awarded attorney’s fees against the D’Onofrios in the amount of $174,000. The higher court reversed that award. Judge Hughes has been reversed yet again.

See the decision in D’Onofrio v. Vacation Publications, No. 16-20628 (4/23/2018) here.

Yes, shifting explanations alone can show pretext. A changing explanation for a firing can serve as evidence of lying. Numerous courts have so held. See, e.g., Henderson v. AT&T Corp., 939 F.Supp. 1326, 1338 (S.D. Tex. 1996); Burton v. Freescale Semiconductor, Inc., 798 F.3d 222, 238-239 (5th Cir. 2015). So, when Pres. Trump initially said he knew nothing about payments to Stormy Daniels and that reporters should ask his lawyer Michael Cohen about those payments, that was one explanation. And, now a month later, he says he did know about the payment of $130,000 to Stormy Daniels and it was not a campaign contribution. This is a new explanation. Now, this is a shifting explanation. As the Fifth Circuit said in Burton, a jury can infer pretext from shifting explanations. Burton, 798 F.3d at 236. A jury need not draw that inference. But, it can do so.

And, as lawyers around the country are saying at this moment, Pres. Trump just made his defense much more difficult.

As often happens with serious injuries, the recovery period is hard to predict. In Severson v. Heartland Woodcraft, Inc., 872 F.3d 476 (7th Cir. 2017), Raymond Severson took his full 12 weeks of leave under the Family Medical Leave Act. He was addressing his serious back pain. On the last day of his leave, he went through back surgery. He asked for an additional 2-3 months of leave. The company said no and fired him when he did not return to work. The employee then sued for a violation of the Americans with Disabilities Act. Mr. Severson said the company failed to accommodate his need for time off.  Three months later, the plaintiff was cleared to return to work.

The employer was granted summary judgment. On appeal, the Seventh Circuit affirmed. Without any explanation, the court decided that Mr. Severson’s request was for “extended” leave. The court did not explain how it came to decide that 2-3 months was extended leave, as opposed to 6-7 months, or 9-10 months.

The court rightly noted that the ADA does not allow for extended leave. But, it did not explain why 3 months would constitute extended leave. The court found that leave involving “multiple” months would be too long. That period of time allows a person not to work, not help him work, said the court.

The Equal Employment Opportunity Commission filed an amicus brief. It argued that effective accommodation means reasonable accommodation. The Seventh Circuit disagreed, saying that the Supreme Court said in U.S. Airways v. Barnett, 535 US 391, 122 S.Ct. 1516, 152 L.Ed.2d 589 (2002), that reasonable accommodation does not require that accommodations be effective. In a confusing sentence, the court concluded that “effectiveness is a necessary but not sufficient condition for a reasonable accommodation under the ADA.” But, to be fair to the Seventh Circuit, the decision in Barnett is confusing. Justice Breyer seems to conflate accommodation with undue hardship. The Justice strains to explain that accommodation needs to be effective, which would render the use of the word “reasonable” superfluous.

In the end, the Seventh Circuit concluded that if the court read the ADA as the EEOC argued, then the ADA would become a medical leave statute. If employees are entitled to extended leave under the ADA, then the ADA becomes a medical leave statute, or an “open-ended” version of the FMLA. At this point, the court has abandoned legal scholarship and now relies on cliches. The court presents no evidence that Congress intended the ADA not to include medical leave. And, indeed, the language of the ADA indicates otherwise. See the decision here.

Mandatory arbitration clauses have become an accepted part of many contracts, when we buy cars, open bank accounts and when we apply for jobs. The mandatory arbitration clauses block employees and consumers from their day in court. But, those clauses are increasingly under attack, according to a recent story in the San Antonio Express News. Arbitration clauses are criticized by the #metoo movement because they are used to hide sexual harassment.

They were also used by Wells Fargo to shield complaints by customers when the bank abused customer data and opened bogus accounts. One state, California, passed a law preventing financial services companies from using arbitration clauses in cases of fraud.

Some companies are re-thinking the use of mandatory arbitration clauses altogether. Microsoft has dropped mandatory arbitration clauses in cases of sexual harassment. Some lawyers here in Texas are advising their corporate clients that mandatory arbitration clauses are not wise. One Dallas lawyer told about a client who lost an arbitration with a supplier. The company then had no avenue for appeal. The losing company was then hit with an arbitration bill of $200,000. Yes, in arbitration, the loser generally pays the expenses of the arbitration. AAA has rules for employment arbitrations in which the employee will not pay the expenses even if s/he loses. But, in most arbitrations, the loser pays the expenses of the arbitration. We tend to think of a lawsuit being free, more or less. The loser in a lawsuit will not be expected to pay the salary of the judge, the court reporter, the court clerk and the bailiff. The losing party will not have to pay for the use of the court room. But, in most arbitrations, someone has to pay those expenses.

One Houston lawyer who advises small automobile dealerships advises his clients to avoid arbitration clauses. He says in the judicial process, you know what to expect. With an arbitrator, you never know quite what to expect. See San Antonio Express News report.

 

The question arrises in many discrimination cases how far back can the plaintiff go in presenting relevant evidence? Title VII itself provides that a complainant must file his/her complaint within 300 days of the act of discrimination. Can the plaintiff present evidence of harassing conduct before that 300 days started? Yes, of course. The theory of “continuing violation” has been around a long time.In Heath v. Board of Supervisors for Southern University, 850 F.3d 731 (5th Cir. 2017), Prof. Heath was a professor at Southern University. In her lawsuit, she alleged a male supervisor had harassed her for ten years before she field her complaint. in her lawsuit, the district court refused to allow evidence of harassment older than 300 days.

The court noted that in cases alleging hostile work environment, a plaintiff can generally present evidence of harassment older than 300 days, so long as one act of harassment does fall within the 300 day window. But, the lower court refused to treat Prof. Heath’s situation as continuing. Prof. Heath left the school on a sabbatical. So, said the lower court, harassment prior to the sabbatical could not be included in her lawsuit.

In looking at continuing violation, the lower court applied a three part test: 1) whether the alleged acts involve the same type of discrimination, tending to connect them in a continuing violation; 2) whether the alleged acts are recurring or more in the nature of an isolated work assignment or incident; and 3) whether the act has the degree of permanence which should trigger an employee’s awareness of and duty to assert his or her rights. The district court focused on the third factor when it granted the defendant’s motion for summary judgment.

But, this test was used by Fifth Circuit decisions prior to the decision in National R.R. Corp. v. Morgan, 536 U.S. 101, 117, 122 S.Ct. 2061, 153 L.Ed.2d 106 (2002). Pre-Morgan caselaw noted that the third factor was the most important. The Morgan case make an important distinction. It distinguishes discrete acts of traditional discrimination from hostile work environment claims. The human dynamics of harassment by a co-worker are different from those of a supervisor. Claims based on traditional discrete acts of discrimination are not subject to the continuing violation theory. Claims based on hostile work environment are.

As the Heath court noted, a hostile work environment claim is one based on death by a thousand cuts, not by one discrete act. In a hostile work environment, no one act can be pointed to as the one “unlawful employment practice.”

More importantly, the decision in Morgan rejected the view of circuits like the Fifth Circuit that formerly held that “the plaintiff may not base a suit on individual acts that occurred outside the statute of limitations unless it would have been unreasonable to expect the plaintiff to sue before the statute ran on such conduct.” So, the Fifth Circuit recognized that the Fifth Circuit’s pre-Morgan test for the continuing violation doctrine was implicitly overruled to the extent prior cases held that the continuing violation doctrine does not apply when an employee was or should have been aware earlier of a duty to assert her rights. That the employee was on notice or not that an act of harassment gave rise to a valid claim is not relevant.

See the Fifth Circuit decision here.

Well, the San Antonio court of appeals recognized same sex harassment in Alamo Heights ISD v. Clark and now the Texas Supreme Court has overruled that decision. This has long been a difficult area of law for courts. In the federal court system, the Supreme Court reached a compromise of sorts. It recognized that harassment can be based on gender stereotypes, even if the harassers are not homosexual. See the decision in Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75 (1998). The Fourth Court of Appeals in Alamo Heights ISD v. Clark reached a similar result. The Fourth Court found there could be harassment under the state version of Title VII based on gender stereotypes that did not involve apparent homosexual conduct or desire.

I previously wrote about the Fourth Court’s decision here. As I noted then, the harassment by Coach Monterrubio included non-stop comments about Coach Clark’s buttocks and breasts. Coach Monterrubio discussed sexual intercourse frequently with Coach Clark and discussed her breasts almost daily. A second coach often joined in. The appeal concerns a plea to the jurisdiction. So, the issue is not whether Coach Clark can win her case, but whether she can simply advance a claim based on gender stereotyping. The Texas Supreme Court gets the last word and they say no, she cannot advance such a claim.

During the oral argument, Justice Guzman was troubled by the lack of obvious homosexual intent by Coach Monterrubio. Justice Guzman claims the jokes and bullying were not based on Coach Clark’s gender. The judge pointed out that Monterrubio’s remarks also suggested Coach Clark should be a stay-at-home mom where she could be “smug, wealthy and snotty.” But, it is disingenuous to argue that comments like these could not be linked to the plaintiff’s gender: “Wow, Coach, I think your boobs are going to pop out of your shirt!” Telling her that her thong underwear and the dimples on her buttocks were visible. And, upon receiving a candle from Coach Clark, Coach Monterrubio said she would make love next to her candle and think about Coach Clark. To claim these sorts of comments are not linked to her gender is a big stretch. This claim concerns a plea to the jurisdiction. The issue is not who wins at trial, but whether the plaintiff advance the claim.

The Texas Supreme Court rightly noted that courts which follow Oncale are divided regarding whether homosexual motive by the harasser is required. But, the Texas Supreme Court found it did not matter whether Coach Monterrubio was motivated by homosexual desire or not. The majority decision finds a paragraph in Oncale to provide two different methods of proof. Although, I read the same paragraph and do not see any sort of proscriptive injunction to lower courts. It is simply the Oncale court providing two possible examples of how a plaintiff could show same sex harassment under Title VII. They are examples, not rules.

The court is then troubled by the lack of any allegation on Coach Clark’s EEOC charge or in her lawsuit that Coach Monterrubio was motivated by homosexual desire. But, really, that was the point of Oncale, that a man could harass another man even though there was no homosexual desire on the part of either man. The Court claims that Oncale says a claim of homosexuality must be “credible.” But, the Oncale court was simply providing one example of how a person could allege same sex harassment and still be protected by Title VII. Indeed, in Oncale, there was no evidence or claim that the harassing men were homosexual. There was no evidence that the male victim was homosexual. Justice Guzman has found a requirement in Oncale that simply is not present.

Yet, there is ample evidence that the female harasser in Alamo Heights ISD v. Clark was focused on the victim’s gender, which is indeed a requirement of Oncale. Justice Guzman has completely mis-interpreted the decision on Oncale. The majority decision also fails to interpret the evidence in the light most favorable to the non-movant. It explicitly looks at the evidence in ways detrimental to her case. It looks for comments that do not suggest sexual motivation. In the end, this is yet another result-oriented decision from the Texas Supreme Court.

The majority decision is quite long, some 66 pages. Any decision that requires those many pages to make a point is stretching credulity. The majority decision devotes some 15 of those 66 pages to rebutting the dissent. See the majority decision here.

The minority decision makes a good point. If a male coach had said those same things to Coach Clark, there would be no doubt he was sexually harassing the young coach. But, because the harasser was female, the employer gets a pass. The dissent also noted that the majority decision fails to construe the facts in favor of the non-movant. It pointed to an incident in which Coach Monterrubio grabbed Clark’s buttocks during a photo shoot. That sort of incident does tend to show possible lesbian behavior. Yet, the majority decision dismissed it as “horseplay.” Justice Guzman drew conclusions when she should have simply allowed this created a factual issue. See the dissent here.

 

For decades, there has been such a thing as the attorney client privilege. In our system of justice, we depend on lawyers who represent clients zealously. To protect that representation, we have developed this attorney client privilege. Until Watergate, the privilege applied to every communication between a lawyer and his/her client. But, the Watergate conspiracy had many facets, one of which was some lawyers refusing to answer questions based on the attorney client privilege. Many of the Watergate actors were lawyers, so the privilege was invoked many times. So, among the many Watergate reforms, the American bar Association re-looked the attorney client privilege.

The ABA researchers modified the privilege. They recommended that it not apply to planned or future crimes. Yes, zealous representation is still critical to our judicial system. But, said, the ABA committee, zealous representation is not as important as preventing crime and harm to others.

So, when Pres. Trump says the attorney client privilege is dead, he is wrong. He exaggerates, of course, but even allowing for hyperbole, he is wrong. The attorney client privilege has not included crimes yet to be committed for several decades. We do not know yet what supported the search warrant for Michael Cohen. But, with all the multiple layers of review it received, it is very likely the U.S. Attorney for the Southern District of New York is looking at possible crimes, yet to be committed. See Politico news report.

And, by the way, it is not unheard of for law enforcement agencies to seize documents from successful criminal defense attorneys. It is rare to do so, but it happens. Some law enforcement agencies become convinced that some defense lawyer, especially after winning a few trials, are committing crimes him or herself. So, sure, they might investigate some criminal defense lawyers by conducting a raid at his/her office.

Pres. Trump says he has no no idea why a lawyer representing him paid $130,000 to Stormy Daniels. See CBS news report. He was asked if he knew about Michael Cohen’s payment of $130,000 to Stormy. The President answered, “no.” He added the reporter should ask his lawyer, Michael Cohen, about the payment. “Michael Cohen is my attorney,” the President added.

Those are extraordinary things to say. His lawyer, Michael Cohen, used the Trump campaign email address when he communicated with he Daniels attorney. In disclaiming any knowledge of the payment, Pres. Trump has suggested Michael Cohen took some action without his client’s consent. That exposes Mr. Cohen to ethical issues with the bar association. It also means Michael Cohen becomes a witness.

Mr. Cohen is now a witness who can be deposed about his discussions with then Candidate Trump and questioned about why he would make payments for the benefit of Trump without his consent. In fact, the President said to ask his lawyer about the payment. That makes Mr. Cohen a witness, not a lawyer any longer, in regard to that $130,000 payment. And, this answer makes Pres. Trump a key witness, as well. He will surely be deposed about what he knew or did not know about the payment to Stormy.

It was a difficult question for the President to answer. Answering yes would have caused him as many problems as no. The only safe answer would have  been to ignore the question. But, Pres. Trump cannot ignore questions. His instinct is to always push back in some way. This “push back,” however, will likely haunt him for weeks and months as Stormy’s lawsuit progresses.

Incredibly, it appears the settlements concerning Bill O’Reilly and his sexual harassment required his victims to lie about the evidence. According to a CNN report, a settlement agreement with Andrea Mackris, a former Fox News producer, required her to lie even under oath by referring to the allegations as “counterfeit” or as “forgeries.” According to this same CNN report, the lawyer who claimed to represent Ms. Mackris switched sides in the midst of the negotiations for the settlement agreement and then represented Bill O’Reilly.

As Ms. Mackris’ current lawyer mentions, if true, that is a profoundly unethical step for any lawyer in any state. There is no situation in which it would be proper for a lawyer to switch sides during a lawsuit or during a negotiation. The ethical rules emphasize the appearance of impropriety. Even if the lawyer, Benedict Morelli, could offer some explanation for switching sides, changing sides would simply look improper.

These are serious legal allegations, the kind any lawyer would lose his license for. I am sure all these legal problems helped persuade the judge to allow three of Mr. O”Reilly’s settlement agreements to become public. Mr. O’Reilly asked the judge to seal the settlement agreements. But, the federal judge denied his motion. See CNN news report.