Articles Posted in Labor & Employment Law

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After its appointment as receiver for Valley Bank Illinois, the Federal Deposit Insurance Corporation (FDIC) disaffirmed a benefits agreement between Valley Bank and Bunn, a bank executive. Bunn sued the FDIC to recover a “change of control termination benefit” he claims he is entitled to receive pursuant to that agreement. The district court granted the FDIC summary judgment, finding the benefit Bunn sought was a “golden parachute payment” prohibited by federal law, 12 U.S.C. 1828(k)(4)(A)(i). The Seventh Circuit affirmed. The benefit is a contingent payment that Bunn could only receive upon his termination of employment with Valley Bank; any payment of the benefit would be after a receiver was appointed for Valley Bank. Bunn presented no evidence sufficient to establish the benefit qualifies for the bona fide deferred compensation plan exception to such a golden parachute payment. View "Bunn v. Federal Deposit Insurance Corp." on Justia Law

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Gallo was a dermatologist at the Mayo Clinic. Less than a year into her employment, she resigned and entered into a separation agreement to prevent Mayo from saying anything negative about her to prospective employers. Years later, her former supervisor rated her performance as “fair” on two criteria in a credentialing form sent to Mayo after Gallo had been offered a contract to work in New York. That employment offer was rescinded. Gallo sued Mayo for breach of the separation agreement. The Seventh Circuit affirmed summary judgment in favor of Mayo. The separation agreement does not apply to every potential employer but limits itself to a potential employer seeking a reference. Even if the separation agreement did apply to the request, Gallo cannot prove causation. The decision to not hire Gallo was [N]ot based, in any way, on any credentialing decision by any other party; rather, the decision was based upon the combination of Dr. Gallo’s continued efforts to re-negotiate her employment contract, her demand to make changes to the contract that were unacceptable … and the ability to fulfill [the employer’s] staffing needs with a dermatologist who was already providing dermatological services [for the employer]. View "Gallo v. Mayo Clinic Health System-Franciscan Medical Center, Inc." on Justia Law

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Allstate investigated suspicious trading on its equity desk and unearthed email evidence that portfolio managers might be timing trades to inflate their bonuses at the expense of portfolios, including pension funds to which Allstate owed fiduciary duties. Allstate retained attorneys, who hired consultants to calculate potential losses. Because actual losses could not be established, the consultants used an algorithm to estimate a potential adverse impact of $91 million. Allstate poured $91 million into the portfolios. Allstate determined that four portfolio managers had violated company policy and fired them. Allstate's 2009 Form 10-K explained these events and an internal memo described the same information. Neither document mentioned the fired portfolio managers. The former employees sued, alleging defamation based on those documents and alleged that Allstate violated 15 U.S.C. 1681a(y)(2), the Fair Credit Reporting Act, by failing to give them a summary of the attorneys' findings after they were fired. A jury awarded more than $27 million in damages. The judge added punitive damages and attorney’s fees under the Act. The Seventh Circuit vacated. The 10-K and internal memo were not defamatory per se and are actionable (if at all) only on a theory of defamation per quod, which requires proof of special damages causally connected to the publication. The plaintiffs testified that they could not find comparable work after being fired, but presented no evidence that any prospective employer declined to hire them as a consequence of Allstate’s statements in the documents. The four lacked standing for the FCRA claims. View "Rivera v. Allstate Insurance Co." on Justia Law

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In 2011, Abrego began work as a dental assistant at a VA clinic, with Dr. Strampe. According to Abrego, Strampe “harassed” him, was “short-tempered,” and did not allow him to schedule patients, use computer resources, or make ward visits. In 2012, Abrego was assigned to a new dentist. Abrego claims that Strampe treated his new female assistant more favorably. Abrego received a letter of counseling that referenced three instances of inappropriate conduct; he filed an EEO complaint, alleging race and sex discrimination amounting to a hostile work environment. Although Abrego received “fully successful” ratings on his 2011-2013 performance evaluations, the reviews discussed Abrego’s combative workplace behavior. In 2014, the VA suspended Abrego for illegally recording his supervisor. Abrego filed another EEO complaint, alleging retaliation. In 2014, Abrego had several incidents with his new supervisor, primarily concerning Abrego’s absences and disruptive behavior. Abrego filed another EEO complaint and was terminated. In 2015, the Office of Employment Discrimination Complaint Adjudication rejected the three EEO complaints. The Seventh Circuit affirmed the summary judgment rejection of Abrego’s suit. Abrego failed to exhaust administrative remedies on some claims. The evidence “as a whole” does not “permit a reasonable factfinder to conclude that [Abrego’s] race [and] sex … caused … [his] adverse employment action. Abrego was terminated for legitimate reasons. The workplace conditions described by Abrego are not objectively offensive, severe, or pervasive. View "Abrego v. Wilkie" on Justia Law

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The Seventh Circuit reversed the district court's grant of summary judgment for Stryker in an action filed by plaintiff, a former employee, alleging a claim of retaliation under Title VII of the Civil Rights Act of 1964. The court, giving plaintiff as the non-moving party the benefit of conflicts in the evidence and any reasonable inferences in her favor, held that there was a genuine issue of material fact about the reason Stryker fired her. In this case, a reasonable jury could interpret the suspicious timing of her firing as evidence that one or both decision‐makers initially found plaintiff's actions in the Vail incident to be tolerable, and that they decided only later, after she had filed her internal complaint, to use that incident as a pretext to fire her for retaliatory reasons. Accordingly, the court remanded for further proceedings. View "Donley v. Stryker Corporation" on Justia Law

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Plaintiff filed suit against her former employer, Pearson, alleging claims of Title VII sex discrimination and other claims, after she allegedly did not get the same chance to resign with severance pay that three male employees received. Plaintiff also claimed that Pearson lost a key email exchange. The Seventh Circuit affirmed the district court's overruling of plaintiff's objection about the emails and the district court's cure -- barring plaintiff from disputing her description of the emails but declining to grant further sanctions -- was sufficient. The court also affirmed the district court's grant of summary judgment on the severance-pay discrimination claim where the three proposed comparators were not similarly situated to plaintiff. The court held that there was no evidence of pretext and the misstatement of the standard of review was harmless because the court's review was de novo. View "Barbera v. Pearson Education, Inc." on Justia Law

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The employer sought review by the federal district court and obtained a judicial order vacating an award on the ground that the arbitrator improperly applied external law to contradict the terms of the collective bargaining agreement (CBA). The Seventh Circuit reversed the judgment of the district court and upheld the arbitrator's award, holding that the text of the CBA permitted the arbitrator to look to external law in interpreting the agreement. The court held that the language contained in the preamble of the CBA suspended any part of the CBA that either the company or union believed to conflict with state law. In this case, while the court would have preferred that the arbitrator cite to that language before applying the Concealed Carry Act to reinstate the employee, the extraordinarily deferential standard of review compelled the court to uphold the award. View "Ameren Illinois Co. v. International Brotherhood of Electrical Workers" on Justia Law

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The Seventh Circuit affirmed defendant's motion to dismiss an action alleging that defendant tortiously interfered with plaintiff's employment contract and knowingly misrepresented company policy, both of which resulted in plaintiff's termination. The court held that the corporate officer privilege was inapplicable here; plaintiff failed to allege facts sufficient to establish the element of intentional inducement; the district court accurately held that plaintiff failed to state a claim for tortious interference with contract; plaintiff failed to allege a common law fraud claim; plaintiff was not entitled to leave to amend at this stage; and plaintiff's counsel's actions did not warrant sanctions under Judicial Code 1927. View "Webb v. Frawley" on Justia Law

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Gray worked in maintenance for the Vigo County Parks and Recreation Department, cleaning restrooms and directing volunteers. Some volunteers were completing court‐mandated community service; Gray was responsible for signing off on their time‐logs. Gray performed his job with a high degree of autonomy and worked independently of another maintenance specialist assigned to his park. Doe volunteered at that park to complete her court‐ordered community service. She alleges that Gray took her to the park’s restroom and told her that it required cleaning. After locking the door, Gray allegedly forced Doe to perform oral sex and digitally penetrated her vagina. Gray pleaded guilty to criminal confinement and official misconduct. There were a few prior incidents of misconduct by county employees over the past two decades. Some involved sexual misconduct but, apparently, none resulted in coerced sexual activity. One incident involved a vague comment about Gray made by a park visitor; Vigo County could not substantiate the allegation. Another involved inappropriate comments that Gray made to a coworker; Gray received a written reprimand, which caused him to correct his behavior. Doe sued Gray and Vigo County for damages under 42 U.S.C. 1983. The district court entered a default against Gray and granted the county summary judgment. The Seventh Circuit affirmed, finding that the county was neither vicariously liable for Gray’s wrongs nor directly liable for permitting them to occur. View "Doe v. Vigo County" on Justia Law

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Lincolnshire's Ordinance 15-3389-116 Section 4 bans union-security agreements within the village by forbidding any requirement that workers join a union, compensate a union financially or make payments to third parties in lieu of such contributions and bars any requirement that employees “be recommended, approved, referred, or cleared for employment by or through a labor organization.” Section 5 prohibits employers from making payments to unions on a worker’s behalf except under a “signed written authorization” that may be revoked by the employee at any time by written notice. The Ordinance provides civil remedies and criminal penalties for its violation. Unions sued, asserting preemption by the National Labor Relations Act (NLRA). The district court entered summary judgment, finding that all of the unions had standing to challenge the membership and fee provisions and the checkoff regulation (section 5), but that only one union could challenge the section 4 prohibition of hiring halls. The Seventh Circuit agreed. The district court also held that all three provisions were preempted and that the unions failed to state a claim under 42 U.S.C. 1983. The Seventh Circuit affirmed. Localities may not address the subjects of hiring halls or dues checkoffs. The authority conferred in 29 U.S.C. 14(b)), allowing states to bar compulsory union membership as a condition of employment, does not extend to political subdivisions. View "International Union of Operating Engineers v. Village of Lincolnshire" on Justia Law