Well, two dancers won their trial last March. So, now Tiffany’s Cabaret has settled with the remaining dancers. I previously wrote about this case and trial here. The dancers sought a collective action, which is the name for a class action under the Fair Labor Standards Act. About half the dancers could not join the collective action because they had previously signed arbitration agreements. But, the rest of the dancers, about half of the 45 who asked to join, were allowed to join the collective action. They settled their claims after the Magistrate Judge denied the employer’s motion to dismiss. See San Antonio Express News report here.

It looks like the employer realized it should settle. The two dancers who went to trial last March, after all, were awarded $250,000, plus attorney’s fees. At the time, Tiffany’s Cabaret said they would appeal. But, I expect a more sober assessment has changed that plan, as well,

In one recent case, the employer did not move for summary judgment or otherwise seek to dismiss. The case was filed by Jamel Blanton, Arica-American, and alleged racial and sexual discrimination. The female restaurant manager was accused of saying such things as: “do all black guys have big penises?” “What I would do for you if you were well endowed.” She made some rather graphic comments.

Mr. Blanton said he complained to various lower level managers, but nothing was done. Later, he complained to the owner of the Pizza Hut restaurant, and the offending manager was fired. Later, Mr. Blanton had to become a cook, because it was found his driver’s license had expired. His hours as a cook were reduced and he felt he had to quit. The jury found he was subjected to racial and sex based discrimination by the female manager. But, found the jury, the employer took prompt action regarding his complaint. The jury also found that the employee did not take advantage of the complaint procedure. So, they found in favor of the employer. The trial lasted three days.

After the jury verdict, the plaintiff moved for a judgment notwithstanding the verdict (meaning that the verdict was simply wrong and not supported by the evidence), arguing that Pizza Hut failed to show its anti-discrimination policy was effective. There was no evidence of any training regarding the policy. The employer simply provided a copy of the policy at trial and no evidence regarding its effectiveness. But, the court disagreed, saying there is no authority for a requirement that there be more to a policy than the fact of its existence. The plaintiff also argued there was no evidence of training on the policy. Training would be wise, said the court, but there is no authority requiring training on anti-harassment policies. And, since the restaurant did fire the manager soon after the complaint, the jury could find that the policy was effective. And, while the plaintiff delayed reporting the harassment to persons higher than his manager, for fear of retaliation, the jury could find that his delay was not warranted. See Blanton v. Pizza Hut of San Antonio, No. 12-CV-1103, 2014 WL 888344 (W.D. Tex. 1/14/2014).

The jury did submit one note to the court, suggesting it was engaging in active deliberations. It did award the Plaintiff $1500 in compensatory (emotional suffering) damages. That award had no legal effect since the jury had already found the employer took prompt remedial action regarding Mr. Blanton’s complaint. But, it helps show the conservative tendencies of juries in federal court. Even when they award compensatory damages, the amounts are very low.

The result highlights the difficult of quitting a job when you may have a discrimination lawsuit. Title VII and the Texas Commission on Human Rights Act both provide for lost back pay if a worker is fired or suffers some adverse personnel action. Caselaw finds that voluntary quitting is not an adverse personnel action. Yes, there are times when a worker must quit or thinks s/he must quit. But, courts generally view those sorts of resignations skeptically. Here, the employer never moved for dismissal or for summary judgment. So, the court’s skepticism was not tested. But, the jury was essentially asked if Mr. Blanton had to quit and in general terms, the jury said no.

The trial also highlights the benefit of prompt remedial action. The employee delayed reporting to any significant level due to his fear of reprisal. The jury was not persuaded that his fear was well-founded. Federal juries are rather conservative. Juries in general prefer not be at the courthouse. They live busy lives. So, if you keep them in trial, you need to persuade them first that you have a very good reason.

Large employers and corporations have been pushing arbitration as the panacea for a host of consumer issues, from purchasing phone plans and automobiles to applying for jobs. But, there are some things arbitration just cannot do. In 2012, Lance Armstrong admitted he had used drugs as part of his training regimen. But, for years before his admission, he had successfully fought those allegations. In fact, he even took to arbitration in 2006 one sponsor, SCA Promotions, for a $5 million bonus saying there was no proof that he had doped. The sponsor had refused to pay the bonus because the allegations were so strong. The arbitration panel eventually awarded the cyclist a total of $7.5 million – based on a settlement reached by SCA and Mr. Armstrong.

After Mr. Armstrong’s admissions in 2012, SCA asked the same arbitration panel to re-convene and order Armstrong to pay back the money. The panel did so and awarded SCA Promotions $10 million as a sanction. But, the panel of arbitrators is not a court. There is a very complicated, robust scheme for awarding sanctions in the judicial system. Arbitration is not part of the judicial system. Arbitration is based on contract. The parties must agree to arbitration. Arbitrations are supposed to be limited to the terms of the parties’ agreement. Lance Armstrong did not sign any agreement allowing possible sanctions as part of an arbitration award. It would be rare for any arbitration agreement to address even the remotest possibility of sanctions.

The panel found jurisdiction based on Mr. Armstrong coming to them twice before seeking relief. The majority panel pointed to the decision in Nielsen S.A. v. Animal Feeds International Corp., 130 S.Ct. 1758 (2010) for the finding that prior use of the panel amounts to continued use of the panel. The majority also pointed to an “implied covenant to cooperate” and to Mr. Armstrong’s bad faith. So, the majority awarded that the $7.5 million be repaid to SCA, $2 million in attorney fees, and $500,000 in “additional costs insusceptible of precise calculations” (say what? I can just imagine if I tried to ask a court for $5,000 in “additional costs insusceptible of precise calculations”).

One arbitrator on the panel dissented. Ted Lyon pointed to the 2006 settlement agreement between the parties that specifically provided the intent of the parties was to “fully and forever” resolve their differences. See Louisiana Bar Journal, vol. 63, no. 2 (Aug./Sept., 2015).

And, now SCA is seeking a declaratory action in a Texas court seeking recognition of the award. There is no legal precedent for this reconsideration of a prior award. In a traditional court, SCA would seek reconsideration based on new evidence. The new evidence would be Lance Armstrong’s very public confessions. The party would have a good chance of getting the settlement reversed. But, what happens when the “judicial system” is based on contract? The parties did not agree to sanctions. Arbitration was created in the nineteenth century for shipping companies to deal with the vagaries of international courts – or the lack of any courts. Now, these parties are trying to morph a system based on contract into a judicial system.

This reminds me of the old saw often heard in criminal court, “if you can’t do the time, don’t do the crime.” The saw refers to defendants who whine about his/her punishment. It means do not whine. We need a new saw for arbitration agreements, “if you don’t like the result, don’t sign the agreement.” SCA paid the bonus under the original agreement. SCA drafted the agreement to pay the bonus to Lance Armstrong. It was SCA who chose arbitration initially, not Lance Armstrong. But, now SCA is trying to turn arbitration into a full-blown court of law. Now,the company has second thoughts…..

There are some areas in which Texas does not want to be the national leader. But, Texas is the national leader in work place deaths. The state had 524 work place deaths in 2014. That was an increase from the 508 deaths in 2013. Texas has been the national leader in work place deaths 11 of the last 14 years.

The next highest state in 2014 is California, which has a larger population that our state. California had 334 work place deaths last year. In the 2010 census, California had 35 million people, compared to Texas’ 25 million. So, despite having about a 40% larger population, the no. 2 state had some 30% fewer deaths.

Texas is the only state not to require worker’s compensation coverage. See Texas Tribune report. I am sure there is a connection. Without worker’s compensation, some employers may lack financial incentive to focus on safety as they should. A very young man once came to see me because he had been fired from his job after he sustained a serious injury at a bar. He was very concerned about his medical bills. The bar was supposedly self-insured and it refused to pay the young man’s hospital bills. He was afraid his father, who lived out of town, would be upset with him. Before I could decide to accept his case or not, he lost control and went to the bar and took a hostage or two. He ended up in jail.

Such is the state of worker’s compensation in Texas.

I previously wrote about an employer who fired a female employee when she became pregnant. The Houston office of Wayne Wright, LLP then sued her after she filed a charge with the EEOC. See my prior post here. At about the same time as those events unfolded, the same law firm, Wayne Wright, LLP, who demands respect and justice for its clients, fired another female paralegal when she became pregnant. In the El Paso office of Wayne Wright, the law firm fired Erika Hernandez when she became pregnant. Ms. Hernandez filed suit, but the firm invoked an arbitration agreement. On appeal, the El Paso Court of Appeals reversed the trial court and found the existence of a valid arbitration agreement. So, the matter will proceed to arbitration. See Wayne Wright, LLP v. Hernandez, Mo. 14-00303, 2015 WL 4389582 (Tex.App. El Paso 7/17/2015).

Some employers just will not tolerate pregnancy…..

Many years ago, when I was a captain in the Texas National Guard, I was involved in a new military unit. It is not often in one’s career that you are involved in “standing up” a brand new unit from scratch. Our RCPOC (Rear CP Operations Cell) had a new paragraph and line number on the TOE (Table of Organization and Equipment). It was a great challenge. You need the best non-commissioned officers and officers at a time like that, because the beginning of an organization affects so much. I was just a Captain, one of four or five in this staff section. We had a major and a Lieutenant-Colonel. The LTC was outstanding, my old mentor, Dan Densford. You also have to be careful at times like that, because some units will shove off their malcontents or trouble-makers on you.

LTC Densford was very sharp and well-informed about personnel issues across the former 49th Armored Division. We got this one Sergeant First Class Gravier. “Rumor control” said SFC Gravier was a problem child. He was Active Guard Reserve, which meant he served everyday, not just on weekends like the rest of us. The AGR guys had informal influence on the unit, disproportionate to his/her rank. If SFC Gravier was a problem, then that would have a ripple effect on all of us. But, I remember also hearing that he was treated badly at his old unit. Whoa. That changes everything. In the military, much like the civilian world, you can have a wonderful unit, right next door to shiftless, lazy, point-the-finger dirtbag unit.

As time went on, I noticed SFC Gravier was very competent. He was abrasive. In the first few months, he was testy with me and others – as if he expected us to be hyper-critical or unfair in some way. But, we were not. We all appreciated his direct answers and his helpful suggestions. As the months passed, his prickliness went away. We all realized what an excellent sergeant SFC Gravier was. It was obvious he had been mis-treated at his former unit. Our senior sergeant was MSGT Reeve. MSGT Reeve came with a stellar reputation and he was very competent. MSGT Reeve out-ranked SFC Gravier. Those two became fast friends. They both shared the same level of dedication and attention to detail.

I learned a valuable lesson from this dynamic. We all bring different qualities to an organization. What some perceive as problems may be nothing more than a lack of polish. If that lack of polish comes with dedication and sincere caring for soldiers, polish means nothing. All organizations must bring out the best in each member and learn to use each member to his/her fullest capacity to flourish. Within a couple of years, our Rear Operations Cell did very well. In our second year, we participated in the Warfighter Exercise, in which division level staffs are tested by a computer exercise over five days. We were evaluated by active component officers and NCO’s from Ft. Leavenworth. We excelled. Success in any military unit means the non-commissions officers, including SFC Gravier, did very well. Our third year, I was gone, but I was told that the NCO’s worked hard on the coffee that Summer Camp. They perfected various coffee blends….

So, now, 20 years later, when I see corporate America or federal civil service relegate someone to the rear simply because s/he has a disability, I think back to SFC Gravier. SFC Gravier had no disability. But, he was perceived to have some fundamental flaw. Yet, in reality, he became one of the go-to persons in our small, 15 person staff section, because we gave him the opportunity to fail or succeed. He took the opportunity and showed what he could do. Next time you have a person with a disability in your work area, ask yourself, what does s/he bring to the table? If s/he brings the right stuff to the table, then whatever disability might be present matters not one whit.

The Texas worker’s compensation system has been broken for many years, ever since the state passed a pack full of so-called reforms in the late 1980’s. Now, we learn that Texas Mutual Insurance Company, one of the largest providers of worker’s compensation insurance in the state, has a sweetheart deal with the Travis County District Attorney’s Office. Texas Mutual refers cases to the Travis County D.A. In return, Texas Mutual pays the salaries of prosecutors and investigators within the DA’s office. As Roy Kyees found out when he was prosecuted for alleged worker’s compensation fraud, the prosecutor and investigators essentially accept whatever cases Texas Mutual refers. Mr. Kyees won his criminal case for alleged fraud. He then sued Texas Mutual for malicious prosecution. He settled his case for less than $10,000. See Texas Tribune report.

According to the news report, many insurance companies enter into deals like that with District Attorneys in various states. But, in all other states, the insurance companies enter a pooled arrangement in which their funds are pooled and then contributed to the D.A. These units prosecute complicated fraud claims, for which the local D.A. lacks resources. When Ronnie Earle first signed the contract with Texas Mutual, the agreement was to prosecute major fraud cases, not low dollar cases like worker’s compensation claims. Typically, worker’s compensation claims may involve only some $5,000 in restitution. But, unaware of the contract terms, the Travis County D.A. unit prosecutes any and all claims referred by Texas Mutual. It truly is justice for hire. The unit is called the Travis County Worker’s Compensation Fraud Unit.

I have only infrequent first-hand contact with worker’s compensation claimants. But, when I do, I notice 1) it is extremely hard to find a lawyer who represents claimants and 2) the worker’s compensation rates are incredibly low. For someone injured in the cause of his/her employer, it is very difficult to live on half your former income. And, often the claimant has to fight with the doctor’s hired by the insurance company to obtain that one-half income.

The Worker’s Compensation Fraud unit has never taken a case against Texas Mutual itself. Nor has it ever prosecuted a case involving an insurance company other than Texas Mutual. Yes, that sounds a lot like justice for hire.

Mr. Kyees settled his claim with Texas Mutual for less than $10,000. He refused to agree to a provision that would have kept the agreement confidential. Today, Texas Mutual says the system worked the way it should have. The prosecutor dropped the case when Mr. Kyees’ lawyer produced a letter showing he had had indeed reported his income from a new job. But, the scary part is that the senior prosecutor says she would not have dropped the case. The senior prosecutor says she had actually told the junior prosecutor not to drop the case against Mr. Kyees.

In February, 2015, the Texas Supreme Court ruled that persons cannot sue worker’s compensation companies for malicious prosecution. See that decision in In Re Crawford and Co., No. 14-0256 (Tex. 2/27/15) here. The decision is per curiam, meaning it was not even assigned to an author. So, there will be no more lawsuits like Roy Kyees’ lawsuit. Texas Mutual can enjoy virtual immunity from future disregard of the facts of a case.

County Clerk Kim Davis has gone to jail rather than enforce the Supreme Court’s ruling that gay persons can marry. See CBS news report. She claims she is acting on her conscience. But, in my opinion, if she was following the dictates of her conscience, she would simply resign. Law enforcement officials face these sorts of quandaries all the time, should they enforce laws with which they disagree? Back in the 1980’s, I clerked for a state district judge in rural Louisiana. Judge Robert Jackson had been a judge for some 20 years and a prosecutor some ten years before that. I remember when the seat belt laws first went into effect in Louisiana. Many of us considered strapping on a seat belt an aggravation, especially for short in-town trips. But, Judge Jackson always put his belt on. He complained. He grumbled. But, he always put on his seat belt. He knew he was a judge and would have to enforce this law if that sort of issue came into court.

I think its more than her conscience. If it was just her conscience, she could just resign.

Target has reached a settlement with the Equal Employment Opportunity Commission for $2.8 million regarding Target’s use of personality tests in hiring. It no longer uses the tests. But, it formerly used the tests for executive and professional level hiring. Target dropped the tests when the EEOC started its investigation in 2006. The EEOC’s investigation resulted in a cause finding that use of the tests resulted in discrimination against women and minorities. The tests were not sufficiently related to the jobs for which the applicants were being tested, said the EEOC. One of the three tests was performed by psychologists. The ADA prohibits medical exams before a job offer.See Fortune news report.

The EEOC also found that Target did not maintain adequate records with which to assess the impact of those tests. The EEOC believes the personality tests affected the non-hiring of thousands of applicants.

Robin Shea at Employment and Labor Insider, who has a wicked sense of humor, has penned an instructive piece on Human Resources departments. Robin generally represents employers. So, she comes to this issue with much experience. Should we trust HR or not, she asks? Well, the answer is mixed. She cut and pasted posts from other internet commentators who clearly find HR to be the source of much trouble in the corporate world. . . .  And, she admits there is some justification for that view. Employees who think HR might be an advocate for the average worker in the same way a friend or family member would be are unrealistic. But, she closes with “true” examples of HR persons doing the right thing at least once in regard to one employee. Keep in mind her explanation: HR employees are employees and their mission is largely recruiting and retaining good workers. That gibes with my experience, as well. There are many HR workers who seek to fulfill the greater good of recruiting and retaining good employees – and that does sometimes mean “squaring away” (as we say in the Army) some manager who needs education. See Robin’s post here.