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SPRING 2008 NEWSLETTER
EMPLOYMENT LAW UPDATE
by Joshua Skinner and John Husted
UNITED STATES SUPREME COURT - Federal Express Corp. v.
Holowecki, __ U.S. __, 128 S. Ct. 1147, 170 L. Ed. 2d 10 (February 27, 2008)
The proper test for determining whether a filing with the Equal Employment
Opportunity Commission (EEOC) is a charge of discrimination under the Age
Discrimination in Employment Act of 1967 (ADEA) is whether the filing, taken as
a whole, should be construed as a request by the employee for the agency to take
whatever action is necessary to vindicate his or her rights. This is referred
to as the “request-to-act requirement.”
The plaintiff filled out an intake questionnaire with the EEOC, but the EEOC did
not interpret the questionnaire as a charge under the ADEA. The defendant
moved for dismissal of the case arguing that the intake questionnaire was not a
charge under the ADEA because the EEOC did not treat it as a charge. The
plaintiff contended that it was a charge because it listed the name of the
employer and generally identified the alleged discrimination. The EEOC
contended that the EEOC should have treated the intake questionnaire in this
case as a charge because it contained a “request-to-act” by the plaintiff.
Contrary to the plaintiff, however, the EEOC contended that merely listing the
name of the employer and generally identifying the alleged discrimination would
not be sufficient. The Supreme Court held that an employee must provide
more than the minimal information mentioned by the plaintiff, but that the
central question was whether the document submitted contained a
“request-to-act.”
- Sprint/United Management Co.
v. Mendelsohn, __ U.S. __, 128 S. Ct. 1140, 170 L. Ed. 2d 1 (February 26, 2008)
Evidence by nonparties alleging discrimination at the hands of supervisors of
the defendant company who played no role in the adverse employment decision
challenged by the plaintiff is neither per se admissible nor per se
inadmissible.
In this age discrimination case, the district court excluded testimony by
nonparties alleging discrimination at the hands of supervisors of the defendant
company who played no role in the adverse employment decision challenged by the
plaintiff. The court of appeals interpreted the district’s decision as a
per se exclusion of such evidence. The Supreme Court granted certiorari on
the question of whether the Federal Rules of Evidence require admission of the
testimony. The Supreme Court held that there is no per se rule of
admissibility or inadmissibility and that the appropriate standard is fact-based
and depends on many factors, including how closely related the evidence is to
the plaintiff’s circumstances and theory of the case. Because it was not
entirely clear that the district court applied a per se rule, the Supreme Court
remanded the case for further consideration.
- LaRue v. DeWolff, Boberg &
Assoc., Inc., __ U.S. __, 128 S. Ct. 1020, 169 L. Ed. 2d 847 (February 20, 2008)
Section 502(a)(2) of the Employee Retirement Income Security Act of 1974 (ERISA)
authorizes a participant in a defined contribution pension plan to sue a
fiduciary whose alleged misconduct impaired the value of plan assets in the
participant’s individual account.
The plaintiff alleged that, pursuant to the terms of his ERISA-regulated 401k,
he directed the plan administrator to make certain changes to the investments in
his individual account, but those changes were not made. The plaintiff
alleged that the failure to make those changes lost him approximately $150,000.
Section 502(a) identifies six types of civil actions that may be brought by
various parties. The one at issue in this case is the second, which
authorizes the Secretary of Labor, as well as plan participants, beneficiaries,
and fiduciaries, to bring actions on behalf of a plan to recover for violations
of the obligations defined by Section 409(a). The principal statutory
duties imposed on fiduciaries by Section 409(a) relate to the proper management,
administration, and investment of fund assets, with an eye towards ensuring that
the benefits authorized by the plan are ultimately paid to participants and
beneficiaries. As a result, while Section 502(a)(2) does not provide a
remedy for individual injuries distinct from plan injuries (e.g., consequential
damages), that provision does authorize recovery for fiduciary breaches that
impair the value of plan assets in a participant’s individual account.
FIFTH CIRCUIT
- McClain v. Lufkin Indus.,
Inc., __ F.3d __, 2008 U.S. App. Lexis 4451 (5th Cir. February 29, 2008, as
revised March 10, 2008)
A Title VII lawsuit may include allegations like or related to allegations
contained in the EEOC charge and growing out of such allegations during the
pendency of the case before the EEOC. An employee fails to exhaust a
disparate-impact claim when the EEOC charge alleges only individual disparate
treatment and identifies no neutral employment policy.
McClain and Thomas brought suit against their employer Lufkin for race
discrimination in employment practices. The district court certified their
disparate-impact claims as a class action. The district court declined to
certify their disparate-treatment claims as a class action. The case went to
trial and the district court awarded $3.4 million to the class, as well as
attorney’s fees and an injunction. McClain’s and Thomas’ disparate-impact
claims relate to Lufkin’s practice of delegating subjective decision-making
authority to its white managers with respect to initial assignments and
promotions. McClain’s EEOC charge only alleged individual disparate treatment
and did not identify a neutral employment policy.
The district court held that the plaintiffs exhausted their disparate-impact
claim through a vague letter from McClain to the EEOC and a concurrent
investigation by the Office of Federal Contract Compliance Programs (OFCCP).
The Fifth Circuit rejected both of the district court’s arguments, but held that
the plaintiffs had exhausted their disparate-impact claim through Thomas’ EEOC
charge, which states that he was constructively discharged, denied promotional
and training opportunities, and overloaded with work because of his race.
More specifically, Thomas stated that Lufkin “has similarly discriminated
against other black African Americans.” The Fifth Circuit ultimately
remanded, however, because the scope of the class certification was overly broad
by allowing long-time employees to represent disparate-impact claims of new
hires.
- Davis v. McKinney, __ F.3d __,
2008 U.S. App. Lexis 3705 (5th Cir. February 21, 2008)
While speech made by an employee pursuant to the employee’s official duties is
not protected by the First Amendment, speech made by an employee that does not
relate to the employee’s official duties is entitled to further consideration
under the First Amendment – even if it is made in conjunction with speech that
is not protected. That the employee’s speech is made to someone outside
the employee’s chain of command or to third-parties is evidence that it does not
relate to the employee’s official duties.
Davis was an internal auditor with the UT System. Her supervisor requested
that she conduct an investigation into the possibility that other employees were
intentionally accessing pornography on UT computers. Davis’ investigation
concluded that other employees were intentionally accessing pornography, some of
which was probably child pornography. Davis alleged that as a result of
her discoveries, her supervisors and other employees caused her working
conditions to deteriorate and she was constructively discharged. Davis
alleged that the conditions became markedly worse after she sent a complaint
letter to various administrators in the UT System stating that she had filed
complaints with the FBI concerning the child pornography evidence and with the
EEOC regarding disparate treatment of African-American and female employees.
Davis brought suit against two supervisors for allegedly retaliating against her
for engaging in protected speech in violation of the First Amendment. The
supervisors moved for dismissal of Davis’ claims, alleging that Davis’ alleged
speech was made pursuant to her official duties, and therefore not protected by
the First Amendment. See Garcetti v. Ceballos, 547 U.S. 410 (2006). The
Fifth Circuit held that the inquiry into whether the employee’s speech is
constitutionally protected involves three considerations: First it must be
determined whether the employee’s speech is pursuant to his or her official
duties. If it is, then the speech is not protected by the First Amendment.
Second, if the speech is not pursuant to official duties, then it must be
determined whether the speech is on a matter of public concern. Third, if the
speech is on a matter of public concern, the Pickering test must be applied to
balance the employee’s interest in expressing such a concern with the employer’s
interest in promoting the efficiency of the public services it performs through
its employees. In a case involving a statement that includes speech, some
of which is pursuant to official duties and some of which is not, the court must
separate out the various aspects of the speech and proceed with the analysis on
a section by section basis. In this case, the Fifth Circuit held that
portions of Davis’ complaint letter not relating to her official duties, as well
as her complaints to the FBI and EEOC are entitled to proceed to the second
stage of analysis (viz., whether the speech is on a matter of public concern).
- McAteer v. Silverleaf
Resorts, Inc., 514 F.3d 411 (5th Cir. January 15, 2008)
State law negligence claims for failing to maintain a safe workplace are not
preempted by ERISA, even if the employee signed a waiver of such claims in order
to participate in an ERISA plan.
Silverleaf is a non-subscriber to Texas workers’ compensation insurance,
choosing instead to provide benefits to its employees through an ERISA-governed
plan. The plan gives no-fault benefits to employees in the event of a
job-related injury and requires arbitration of any disputes regarding benefits.
McAteer enrolled in the plan and signed an agreement that the plan would provide
the exclusive avenue of relief for on-the-job injuries. After termination,
McAteer filed a claim for a job-related injury. The claim was denied and
McAteer brought suit in state court alleging negligence on the part of
Silverleaf in connection with McAteer’s alleged injury. Silverleaf removed
the case claiming ERISA preemption.
The Fifth Circuit’s decision in Hook v. Morrison Milling Co., 38 F.3d 776 (5th
Cir. 1994), held that ERISA does not preempt state law negligence claims. Silverleaf contended that Hooks was no longer good law in light of the Supreme
Court’s decision in Aetna Health Inc. v. Davila, 542 U.S. 200 (2004). The
Fifth Circuit rejected Silverleaf’s argument, noting that Davila related to
claims to enforce the terms of an ERISA plan through a state law cause of
action, whereas the duty to maintain a safe work environment is independent of
Silverleaf’s ERISA plan.
- Abner v. Kansas City S. Ry.
Co., 513 F.3d 154 (5th Cir. January 2, 2008)
Punitive damages can be awarded under Title VII absent an award of compensatory
or nominal damages. An award of punitive damages under Title VII is not so
excessive that it violates the defendant’s due process rights if it is within
the statutory caps imposed by Title VII.
Eight African American employees of Kansas City Southern Railway Company (KCSR)
sued the company in district court for creating an environment hostile to race.
A jury found the company liable and awarded no compensatory damages, but awarded
each plaintiff $ 125,000 in punitive damages. The district court entered
judgment on the verdict, adding $ 1 in nominal damages. KCSR appealed. The
Fifth Circuit held that punitive damages may be awarded under Title VII, even if
there is no award of compensatory or nominal damages. So long as the
punitive damages award does not exceed the damages caps imposed by Title VII,
the Court will not hold that it violates the defendant’s due process rights.
As the result, the district court’s judgment was affirmed.
- Lauderdale v. Tex. Dep’t of
Crim. Justice, 512 F.3d 157 (5th Cir. December 21, 2007)
In establishing a hostile work environment claim against a supervisor, the
employee must show that the harassment was sufficiently severe or pervasive to
alter the conditions of the victim’s employment. If the harassment in
sufficiently pervasive, it need not be as severe. A public official cannot
receive qualified immunity on a sexual harassment claim if a constitutional
violation has been alleged because sexual harassment is defined as being
objectively offensive and therefore cannot be objectively reasonable.
Lauderdale alleged she was sexually harassed by her ultimate supervisor, Arthur,
over the period of almost four months during which she worked as a correctional
officer for the Texas Department of Criminal Justice (TDCJ). Lauderdale
made a complaint with her immediate supervisor, but did not pursue any other
options for redress under TDCJ policy when her immediate supervisor would not
act. Lauderdale sued the TDCJ under Title VII and sued Arthur under 42
U.S.C. § 1983. The district court granted summary judgment for both
defendants. The Fifth Circuit affirmed as to the TDCJ and reversed as to
Arthur.
Where the claim of harassment is against a supervisor, there are four elements
of a hostile work environment claim: (1) that the employee belongs to a
protected class; (2) that the employee was subject to unwelcome sexual
harassment; (3) that the harassment was based on sex; and (4) that the
harassment affected a “term, condition, or privilege” of employment. To
satisfy the fourth element, the harassment must be sufficiently severe or
pervasive to alter the conditions of the victim’s employment and create an
abusive working environment. If the harassment is sufficiently pervasive,
it does not need to be as severe. If an employee establishes that a
supervisor created a hostile work environment, however, the employer is entitled
to an affirmative defense if the employee did not take reasonable steps to
rectify the problem under the employer’s policies or procedures. When a
first complaint is not acted upon, a reasonable employee would file a second
complaint if it is permitted by the employer. Finally, if the alleged
behavior is sexual harassment, a public official is foreclosed from qualified
immunity because the conduct is, by definition, objectively reasonable.
Sexual harassment is defined as being objectively offensive.
- Nixon v. City of Houston, 511
F.3d 494 (5th Cir. December 19, 2007), petition for cert. filed (March 18, 2008)
When a police officer speaks to the media about an accident while in uniform,
on-duty and working at the scene of an accident, the officer’s speech is not
protected by the First Amendment. It is not protected by the First
Amendment even if speaking with the press is not part of the regular duties of
the officer and if speaking with the press was unauthorized. Statements
made subsequently regarding the same event while the officer is off-duty to
other media outlets (including talk shows) are also not protected by the First
Amendment because they are a continuation of the earlier unprotected speech.
Nixon made critical remarks to the media about the police handling of a
high-speed chase while he was in uniform, on-duty and working at the scene of
the accident that resulted from the chase. Nixon also made subsequent,
off-duty statements on radio talk shows about the incident. Nixon was not
authorized to make statements to the media. The Fifth Circuit held that
Nixon’s speech was not protected by the First Amendment because it was made
pursuant to his official duties. In addition, it did not matter whether
Nixon was authorized to speak to the media and his subsequent, off-duty
statements were merely a continuation of his on-duty statements. Finally,
even if the subsequent statements were protected speech, Nixon’s First Amendment
rights were not violated because the harm resulting from his statements
outweighed his right to make them.
- Stotter v. Univ. of Texas at San Antonio, 508 F.3d 812 (5th Cir. November 27,
2007)
A governmental entity or public official cannot cure a procedural due process
deprivation of personal property by a post-deprivation hearing unless the
deprivation was unauthorized.
Stotter was a tenured professor at the University of Texas at San Antonio
(UTSA). He received a series of reprimands regarding the dangerous
condition of his laboratory, and, despite repeated promises to rectify the
problems, failed to do so. Stotter was sent a letter notifying him that
UTSA was going to do the clean-up and that he needed to notify them if there
were any personal belongings that he needed to get from the lab. Stotter
did not get the notice until two days after UTSA cleaned the lab. Also,
during the course of these events, Stotter submitted a grievance that was
primarily about personal issues, but also included a minor reference to a matter
of public concern. Stotter brough suit alleging, among other things, that
his procedural due process rights were violated by the deprivation of his
property without a pre-deprivation hearing and that his employment was
terminated in retaliation for the exercise of his free speech rights under the
First Amendment.
The Fifth Circuit held that Stotter had stated a valid procedural due process
claim because he was not provided an adequate pre-deprivation hearing.
Moreover, the defendants could not cure the lack of a pre-deprivation hearing by
providing a post-deprivation hearing because the deprivation of Stotter’s
personal property was authorized and UTSA could have permitted an adequate
pre-deprivation hearing. The Fifth Circuit also held that Stotter had
stated a valid First Amendment claim, even though his grievance contained only a
“mere scintilla of speech regarding a matter of public concern.”
- Berquist v. Washington Mutual Bank, 500 F.3d 344 (5th Cir. August 31, 2007),
cert. denied, __ U.S. __, 128 S. Ct. 1124, 169 L. Ed. 2d 950 (2008)
For a wrongful termination claim under the ADEA, a plaintiff fails to establish
a prima facie case when the proffered evidence that he was “otherwise discharged
because of his age” is no more than vague, remote comments, and when he cannot
show “nearly identical” situated employees being treated more favorably.
Washington Mutual undertook a major reorganization that eliminated Berquist’s
position, and Berquist failed to raise a genuine issue of material fact
regarding this legitimate, non-discriminatory reason for termination.
Berquist appealed the grant of summary judgment in favor of his employer
Washington Mutual for his wrongful termination claim under the Age
Discrimination in Employment Act (ADEA). Though Berquist, a credit review
officer, showed that he was discharged, qualified for the position, and was
within the protected class at the time of discharge, he did not show that he was
“otherwise discharged because of his age,” and thus failed to establish a prima
facie case. His employer’s comments regarding a desire to “attract younger
talent,” and referencing other credit review officers as “younger” did not
evince unlawful discrimination. The comments were too vague, remote, not
directed to any particular employee, and unrelated to any unlawful
discriminatory animus. Berquist’s example of other employees being treated
more favorably failed because he did not show “nearly identical” circumstances
for employees to be considered similarly situated. Also, Berquist admitted
that he lacked the skills necessary to perform the work assigned to the younger
employees and that he refused to cooperate with his employer in helping him find
a position that better suited his skills.
- Alvarado v. Texas Rangers, 492 F.3d 605 (5th Cir. July 16, 2007)
The denial of a transfer may qualify as an adverse employment action under Title
VII, even if the new position would not have entailed an increase in pay or
other tangible benefits. If the position sought was objectively better,
then the failure to award the position may be an adverse employment action.
Alvarado, a Sergeant in the Special Crimes Service of the Texas Department of
Public Safety (DPS), applied for a position with the Texas Rangers, the most
prestigious division within the DPS. She was one of 146 applicants for ten
positions. The Court held that the district court erred when it found that
Alvarado could not establish a prima facie case of discrimination based on the
fact that the move was a lateral move and not a promotion. The court
concluded that “the denial of a transfer may be the objective equivalent of the
denial of a promotion, and thus qualify as an adverse employment action, even if
the new position would not have entailed an increase in pay or other tangible
benefits.” The court gave a non-exhaustive list of factors of the job
transfer, including greater responsibility, greater opportunities for
advancement, greater hiring requirements, a competitive selection process; or
otherwise objectively more prestigious, that may be relevant in determining
whether the job is objectively better. Considering the Texas Ranger
position in light of these factors, the court found that, in this case, there
was evidence sufficient to raise a genuine issue of material fact.
Therefore, the district court erred in holding that Alvarado failed to show an
adverse employment action for purposes of her Title VII gender discrimination
claim where she was denied transfer to the Texas Rangers position.
- Nasti v. CIBA Specialty Chems., 492 F.3d 589 (5th Cir. July 12, 2007)
For a Title VII discrimination claim, a plausible argument in the plaintiff’s
brief showing pretext is not enough to sustain a denial of the defendant’s
motion for summary judgment if the facts in the record do not support the
argument in the brief.
A plaintiff’s prima facie case, combined with sufficient evidence to find that
the employer’s asserted justification is false, may permit the trier of
fact to conclude that the employer unlawfully discriminated. While the
plaintiff’s version of the facts in the briefing reveals a plausible argument,
the record must actually reflect this version of the facts to deny summary
judgment. Here, the Court found that, in spite of plaintiff’s plausible
argument, the record actually demonstrated that the defendant thought the
plaintiff turned in a false report and that the defendant terminated the
plaintiff for that reason, not for a discriminatory reason.
Therefore, the employer was entitled to summary judgment on former employee’s
gender discrimination claim under Title VII, because, though she asserted a
prima facie case, she failed to raise a genuine issue of material fact as to
whether the employer’s explanation for termination due to falsification of
reports was merely pretext.
- Jenkins v. Cleco Power, LLC, 487 F.3d 309 (5th Cir. May
18, 2007)
The offer of a desk job to a company lineman who fractured his leg while working
was a reasonable accommodation under the Americans with Disabilities Act (ADA),
even though the worker was unable to sit for extended periods.
Jenkins worked for Cleco, a power company, as a lineman for fourteen years until
a pole that he was climbing broke and he fell and broke his leg. This
injury limited his physical capacity to perform several job-related tasks,
including the ability to sit for extended periods. Jenkins remained
employed with Cleco for seven more years, in various office-type positions with
periods of disability leave. Jenkins was offered a call center position
that required extensive periods of sitting at a desk. Jenkins declined
stating that he could not meet the physical job requirements because of the
sitting. He was terminated a few months later and the insurance company
denied his claim for continuing disability benefits soon thereafter.
Jenkins brought suit asserting among other things, a claim under the ADA.
Though the Court determined that sitting qualified as a major life activity
under the ADA and that Jenkins was substantially limited in this major life
activity, the Court found that Cleco did not fail to accommodate Jenkins.
First, Cleco engaged in an “interactive process” with Jenkins to find a
reasonable accommodation. Second, it had placed him in several different
positions in an effort to find an optimal accommodation. Also, though
Cleco was aware of Jenkins’ limitation when it offered him the call center
position, it was a sufficient accommodation.
- McCoy v. City of
Shreveport, 492 F.3d 551 (5th Cir. May 18, 2007)
Placement on paid administrative leave does not necessarily constitute an
adverse employment action in a Title VII retaliation claim. In addition,
an employee cannot prove that an employer’s stated reason for an adverse
employment action is pretext by merely showing that the employer was aware of
the employee’s protected activity.
McCoy, a black female, was a lieutenant with the City’s police department.
She filed a grievance with her employer alleging that a subordinate officer, who
is white, harassed her twice. Her employer concluded that the conduct did
not constitute harassment, and that the two officers be counseled about
workplace “horseplay.” Distressed, McCoy complained and eventually asked
to be relieved to see a doctor about emotional distress. Considering her
comments and a concern for safety, her employer concluded that her gun should be
retrieved before she was placed on administrative leave. Months later,
Plaintiff informed her employer that she had decided to retire.
The Supreme Court’s standard for Title VII retaliation claims defines an adverse
employment action as any action that “might well have dissuaded a reasonable
worker from making or supporting a charge of discrimination.” Placing
plaintiff on administrative leave might not be an adverse employment action,
particularly under the circumstances of this case. Regardless, McCoy could
not prove that the City’s proffered legitimate, non-retaliatory reasons for
collecting her gun and badge and placing her on administrative leave were
pretextual. One cannot prove pretext simply by showing that the defendant knew
of the plaintiff’s complaints and that it took adverse employment action shortly
thereafter.
- Strong v. Univ. Health Care
Sys., L.L.C., 482 F.3d 802 (5th Cir. March 26, 2007)
In order to succeed on a Title VII retaliation claim, an employee must prove
that “but for” the employee’s protected conduct, the employee would not have
suffered an adverse employment action. Close temporal proximity between an
employee’s complaint and an adverse employment action is insufficient, on its
own, to prove the requisite “but for” causation.
On December 15, 2003, Strong, a nurse at UHS, complained to her supervisor that
Dr. Douglas Slakey, a surgeon at the hospital, discriminated against her because
she was a woman. Before and after Strong made this complaint, numerous reports
against her were filed by fellow employees, patients and her supervisors, most
pertaining to the disruptiveness of her negative attitude. These led to
Strong’s eventual suspension with pay on March 11, 2004. Strong alleged that
she was being retaliated against. After further investigation and
consideration, UHS fired Strong on March 31, 2004, citing numerous incidents.
The decision was made collectively by her many supervisors. On November 24,
2004, Strong filed a complaint against UHS based on Title VII retaliation. The
district court granted summary judgment for UHS and Strong appealed.
To survive summary judgment, Strong had to prove that UHS’s stated reason for
the adverse action was merely a pretext for the real, retaliatory purpose.
After a discussion about whether the Fifth Circuit used a “but for” or “causal
connection” standard, the court determined that Strong was required to put forth
a legally sufficient showing that she would not have been fired but for her
complaint against Dr. Slakey. Strong argued that the three and a half
month time between her complaint and termination was solid evidence of
retaliation. The Court held that temporal proximity standing alone is
insufficient to prove but for causation, noting that such a rule would tie the
hands of employers. The court affirmed the district court’s grant of
summary judgment in favor of UHS dismissing Strong’s retaliation claims.
- Burrell v. Dr. Pepper, 482
F.3d 408 (5th Cir. March 20, 2007, as revised March 22, 2007)
In a Title VII race discrimination case, summary judgment is inappropriate when
the facts reveal that a defendant may be acting dishonestly when giving its
proposed justification for the adverse employment action. The fact finder
is entitled to consider a party’s dishonesty about a material fact as
affirmative evidence of guilt.
Burrell was a black employee of Dr. Pepper who applied for a better position
within the company. The evidence showed that Burrell’s qualifications may
have exceeded those of Taszarek, the Caucasian male who was hired for the
position. Furthermore, Dr. Pepper’s rationale for its hiring decision was
suspect, because it had not remained consistent. The reason offered to the
EEOC for promoting the Caucasian over Burrell was “purchasing experience”, but
the one offered to the courts was “purchasing experience in the bottling
industry.” From the evidence, a reasonable jury could conclude that Taszarek’s
experience did not exceed Burrell’s and that Dr. Pepper was aware of this fact,
so a reasonable fact finder could conclude that Dr. Pepper’s justification for
hiring was pretext for intentional discrimination.
The Fifth Circuit Court held that on the record presented, a jury could conclude
that Dr. Pepper’s proffered reason for failing to promote Burrell is false, and
that intentional discrimination was the real motive. Therefore, summary
judgment was inappropriate.
TEXAS SUPREME COURT- Fairfield v. Stephens Martin Paving, 51 Tex. Sup. J. 491 (Tex. February 15,
2008) (publication status pending)
On a certified question from the United States Court of Appeals for the Fifth
Circuit, the Texas Supreme Court held that Texas public policy does not prohibit
a liability insurance provider from indemnifying an award for punitive damages
imposed on its insured because of gross negligence in the workers’ compensation
context.
- Morales v. Liberty Mut. Ins. Co., 241 S.W.3d 514 (Tex. December 7, 2007)
The Texas Workers’ Compensation Act provides alternative avenues for judicial
review of a Texas Workers’ Compensation Commission appeals panel decision
depending upon whether the nature of the dispute regards “compensability or
eligibility for … benefits” or something else. The question of a workers’
employment status is one of compensability and is therefore entitled to modified
de novo review.
Morales suffered an on-the-job injury. In the administrative dispute over
his claim, the question arose whether Morales was an employee or an independent
contractor. The TWC Commission appeals panel held that Morales was an
independent contractor. On appeal in the courts, Morales argued that the
TWC’s determination is subject to modified-de novo review as a dispute regarding
“compensability or eligibility for … benefits.” The defendants contended
that it was a dispute regarding coverage and only entitled to substantial
evidence review.
The Supreme Court held that the question of a workers’ employment status is one
of compensability. It explained that the existence of a compensable injury
is the threshold requirement for payment of benefits under the Act. There
are various elements that affect whether an injury is compensable, including the
worker’s employment status as an employee or independent contractor at the time
of injury, whether the worker was injured in the course and scope of employment,
who controlled the employee’s work when the injury occurred, and whether a
particular employer has an insurance policy in effect. All of these issues are
issues of compensability entitled to modified-de novo review.
- Igal v. Brightstar Info. Tech. Group, Inc., __ S.W.3d __, 51 Tex. Sup. J. 184
(Tex. December 7, 2007)
In 1989, the Legislature amended the Texas Payday Law to create an
administrative procedure for a claimant to file a wage claim with the Texas
Workforce Commission (TWC). The administrative procedure provided by the
Texas Payday Law is not the exclusive remedy for claimants. Claimants are
still permitted to bring common law claims for unpaid wages. However, when
a claimant pursues a wage claim to a final adjudication before the TWC, res
judicata bars the claimant from later filing a lawsuit for the same damages in a
Texas court of law. Res judicata bars the timely common law claim even
when the TWC made its final determination on the basis that the claimant failed
to file a timely claim under the Texas Payday Law.
- Montgomery County v. Park, 51 Tex. Sup. J. 160 (Tex. November 30, 2007)
(publication status pending)
Under the Texas Whistleblower Act, an employee can establish that his or her
employer took an adverse personnel action against the employee if the personnel
action is material, and thus likely to deter a reasonable, similarly situated
employee from reporting a violation of the law. See Burlington N. & Santa Fe
Ry. Co. v. White, 548 U.S. 53 (2006).
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