Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

Articles Posted in Labor & Employment Law
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Shell began working at Chicago’s Corwith Rail Yard in 1977. By 2010, BSNF owned Corwith Yard; Shell worked for BNSF's contractor. BNSF assumed the railyard’s operations itself, terminating the employment of those who worked for the contractor. BNSF invited those employees to apply for new positions. Shell applied to work as an intermodal equipment operator, a “safety-sensitive” position, which required the employee to climb on railcars to insert and remove locking devices, drive trucks that move trailers, and operate cranes to load and unload containers. BNSF extended a conditional offer of employment, requiring that Shell pass a medical evaluation. Shell had a body-mass index of 47.5. BNSF does not hire applicants for safety-sensitive positions if their BMI is 40 or greater (class III obesity). BNSF believes that someone with class III obesity could unexpectedly experience a debilitating health episode and lose consciousness while operating dangerous equipment. BNSF informed Shell of his disqualification but told him that his application could be reconsidered if he lost at least 10% of his weight and maintained the weight loss for at least six months. Shell sued under the Americans with Disabilities Act. The district court denied BNSF’s motion for summary judgment. The Seventh Circuit reversed. With only proof that BNSF refused to hire him because of a fear that he would develop an impairment, Shell has not established that BNSF regarded him as having a disability or that he is otherwise disabled. View "Shell v. Burlington Northern Santa Fe Railway Co." on Justia Law

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The Union and the NECA Electrical Contractors Association entered into a collective bargaining agreement (CBA) providing health, welfare, and pension benefits for union workers. The Funds operate as trusts for these benefits. Employers, who are members of NECA, self-report the benefits they owe. Veterans Electric participated in NECA, assented to the CBA, and contributed to the Funds for its union employees. The Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(g), governs benefit plans between labor unions and multiemployer associations. The Funds attempted to audit Veterans’ payroll records. Veterans only provided records for union employees, which accounted for about half of the total reported wages. The Funds requested payroll information for non-union employees. Veterans refused, contending that the records were outside the scope of a proper audit under the CBA. The Funds filed suit. During discovery, Veterans provided the additional payroll information. The district court granted Veterans summary judgment, limiting the scope of the trustees’ audit authority. The Seventh Circuit reversed. Under the CBA, the trustees’ authority to audit payroll records includes “all employees regardless of membership or non-membership in the Union.” In light of the ERISA fiduciary duties imposed on union trustees and the authority under the Trust Agreements, the Funds had the right to conduct random audits on employer payroll records. View "Electrical Construction Industry Prefunding Credit Reimbursement Program v. Veterans Electric, LLC" on Justia Law

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Daza worked for the Indiana Department of Transportation (INDOT) as a geologist for 23 years. In 2011, Daza expressed concerns that another employee was denied promotion because of his political affiliation. In 2013, Daza complained about a commissioner’s misuse of political office. About a month later Daza received his first reprimand, for refusing to answer calls after hours. In 2014, he again complained about the treatment of another employee. A supervisor complained about Daza’s “professionalism.” Daza had multiple disagreements with supervisors and was ultimately terminated “because his behavior consistently defied INDOT culture and expectations.” Daza filed suit, alleging that his firing was unlawful. The Seventh Circuit affirmed summary judgment for the defendants, rejecting claims under 42 U.S.C. 1983 that alleged violation of Daza’s First Amendment rights by discriminating and retaliating against him for his political activities and affiliation. Daza presented a long string of facts occurring over four years but presented no evidence that his alleged political activities or affiliation motivated his firing. The evidence actually shows that management had taken issue with Daza’s conduct for years, and the decision to fire him was made after his offensive comments during a training session. View "Daza v. Indiana" on Justia Law

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School Superintendent Reichhart granted an adult student permission to possess cigarettes on school grounds. Ulrey, the assistant principal, disagreed with that decision. Without approaching Reichhart first, Ulrey called the president of the school board, who emailed Reichhart to express concern about his decision. Reichhart rebuked Ulrey for going over his head, threatening to reprimand her formally. She apologized. Three months later, she resigned during a meeting with Reichhart. Ulrey filed suit under 42 U.S.C. 1983 against Reichhart and the school board, claiming that Reichhart violated her First Amendment rights by retaliating for her speech about a student discipline issue and that the defendants coerced her to resign, depriving her of her property interest in her job without due process of law. The Seventh Circuit affirmed summary judgment in favor of the defendants. Ulrey spoke about the discipline issue in her capacity as an employee, so the First Amendment did not protect her speech. Ulrey failed to present sufficient evidence sufficient that her resignation was involuntary. The test is not whether the employee was happy about resigning or even whether the employer asked for the resignation. Ulrey offered to resign because Reichhart’s “vibes” and “physical demeanor” communicated his desire to fire her. That is not enough to treat the defendants as if they had denied her the extensive procedural protections available if she had wanted to contest a possible termination. View "Ulrey v. Reichhart" on Justia Law

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The Railroad sent Abernathy and Probus to repair a railroad crossing, which required them to transport ties several miles. The Railroad had a “tie crane,” which runs on the railroad tracks but it had been inoperable for years. The employees had two options: a backhoe or a pickup truck, traveling on public roads. Abernathy drove the backhoe. Probus drove the pickup, with the tools. Two ties fell out of the backhoe’s bucket. Abernathy stopped to lift the ties back into the bucket, injuring his back and smashing a finger. Despite the accident, the men finished the job. The following morning, Abernathy reported the injury. Abernathy worked through the pain on lighter duty for a year but was unable to return to his regular work. The Railroad terminated his employment. He had physical therapy, epidural injections, and surgery but continued to experience pain. At the time of trial, his surgeon had not cleared him for any type of work. Abernathy sued under the Federal Employers’ Liability Act, 45 U.S.C 51. A jury found that Abernathy was 30 percent at fault and awarded a net amount, $525,000. The court awarded Abernathy prevailing party costs but declined to award witness fees above the statutory amount. The Seventh Circuit affirmed. The jury could reasonably find that the Railroad did not provide Abernathy with appropriate equipment and that his working environment was not reasonably safe; a reasonable person in the Railroad’s position could have foreseen that transporting ties in a backhoe or pickup could lead to injury. There was sufficient evidence that the Railroad’s negligence played a part in causing Abernathy’s injury. View "Abernathy v. Eastern Illinois Railroad Co." on Justia Law

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Progress Rail, a manufacturer, has Shop Rules; violations result in “disciplinary action ranging from reprimand to immediate discharge.” Progress hired McDaniel in 2005 as a Material Handler. In 2016, McDaniel complained that Howard, his supervisor, was giving overtime to younger workers. Shortly thereafter Howard issued McDaniel a disciplinary notice for using his cell phone while on work equipment in violation of Shop Rules. McDaniel denied talking on his phone but admitted that it was “on top of the truck” in violation of a Rule. McDaniel received a one-day suspension. Weeks later, Howard claimed McDaniel was using his cell phone to take pictures. McDaniel volunteered his phone to confirm he did not take any photographs. There was no discipline. McDaniel alleges that Howard then assigned him to sweeping and general maintenance duties for three weeks. Months later, McDaniel suffered a serious injury while attempting to move a 106-pound piece of machinery by hand. After investigatory interviews, with a Union Representative in attendance, McDaniel, age 55, was terminated. After filing an EEOC complaint, McDaniel sued, alleging discrimination on the basis of age and retaliation for complaining about a superior, citing the Age Discrimination in Employment Act, 29 U.S.C. 621–34. The Seventh Circuit affirmed summary judgment in favor of Progress. McDaniel has not supplied evidence of any similarly situated employee that would allow a fact-finder to determine whether any adverse employment action was the result of age discrimination or retaliation. View "McDaniel v. Progress Rail Locomotive, Inc." on Justia Law

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Biomet employed Yeatts in a role that included implementing compliance policies. In 2008, Biomet terminated its Brazilian distributor Prosintese, run by Galindo, after learning that Galindo had bribed healthcare providers, in violation of the Foreign Corrupt Practices Act, 15 U.S.C. 78dd-1. Prosintese still owned Brazilian registrations for Biomet’s products. Biomet could not quickly obtain new registrations, and, in 2009, agreed to cooperate with Prosintese and Galindo “to implement the new Biomet distributors.” A distributor that replaced Prosintese hired Galindo as a consultant. Yeatts communicated with Galindo in that new role. Biomet entered into a 2012 Deferred Prosecution Agreement with the Department of Justice, which required that Biomet engage an independent corporate compliance monitor. In 2013, Biomet received an anonymous whistleblower tip that Biomet continued to work with Galindo. Biomet informed the DOJ and the Monitor, terminated Yeatts, and included Yeatts on a Restricted Parties List. Biomet entered a second DOJ agreement that references Yeatts’s interactions with Galindo and paid a criminal penalty of $17.4 million. In Yeatts's defamation suit, the court granted Biomet summary judgment because Biomet’s statement that Yeatts posed a compliance risk was an opinion that could not be proven false and presented no defamatory imputation. Yeatts could not establish that Biomet made the statement with malice, so Biomet was protected by the qualified privilege of common interest and the public interest privilege. The Seventh Circuit affirmed, agreeing that inclusion of Yeatts on the Restricted Parties List conveyed no defamatory imputation of objectively verifiable or testable fact. View "Yeatts v. Zimmer Biomet Holdings, Inc." on Justia Law

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Hamilton operates a coal mine near Dahlgren, Illinois. On February 5, 2016, Leeper and 157 other full-time employees received a hand-delivered notice on Hamilton letterhead, stating that Hamilton was placing them “on temporary layoff for the period commencing on February 6, and ending on August 1, 2016.” The notice stated: “On August 1, 2016, you may return to your at-will employment with Hamilton” and explained that “[a] temporary layoff is treated as a termination of employment for purposes of wages and benefits.” Not long after receiving the notice, some mine workers began returning to work. Of the 158 notice recipients, 56 resumed their employment with full pay within six months. Leeper, a full-time Hamilton worker, filed a class action under the Worker Adjustment and Retraining Notification Act (WARN), which requires employers to give affected employees 60 days’ notice before imposing a “mass layoff.” 29 U.S.C. 2102(a)(1). WARN defines a mass layoff as an event in which at least 33% of a site’s full-time workforce suffers an “employment loss.” The Seventh Circuit affirmed summary judgment in favor of Hamilton because the worksite did not experience a “mass layoff.” The term “employment loss” is defined as a permanent termination, a layoff exceeding six months, or an extended reduction of work hours. View "Leeper v. Hamilton County Coal, LLC" on Justia Law

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Tile Shop, a specialty retailer, pays its commissioned sales staff a semimonthly “draw” of $1,000 ($24,000 annually) even if a sales associate earns less than that amount in commissions during the pay period. Tile reconciles and recovers any shortfall between earned commissions and the $1,000 draw in subsequent pay periods, but only from commissions in excess of $1,000. For 10 months Osorio sold products for Tile. When business was slow and his commissions totaled less than $1,000 in a pay period, Tile paid him the guaranteed $1,000 and reconciled the difference in later pay periods when his commissions exceeded $1,000. He quit and filed a class action alleging that Tile’s “recoverable draw” system violates the Illinois Wage Payment and Collection Act, which prohibits employers from deducting more than 15% from an employee’s wages per paycheck as repayment for previous cash advances. The district judge rejected the claim. The Seventh Circuit affirmed. The Act prohibits “deductions by employers from wages or final compensation” unless specified conditions are met. 820 ILCS 115/9. Tile’s draw reconciliations are not “deductions” from wages or final compensation. The reconciliations determine the employee’s gross wages before tax withholding and other deductions are made. Considered in context, the term “deductions” as used in the Act refers to withholdings from an employee’s gross wages, not the formula used to calculate gross wages. View "Osorio v. The Tile Shop, LLC" on Justia Law

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Tracking a fugitive, Deputy Marshal Linder interrogated the fugitive’s father. Another deputy saw Linder punch the father. Linder was indicted for witness tampering and using excessive force and was put on leave. McPherson, the U.S. Marshal for the Northern District of Illinois, instructed other deputies not to communicate with Linder or his lawyers without approval. The indictment was dismissed as a sanction. Linder returned to work. Linder filed a “Bivens action,” against McPherson and a suit against the government under the Federal Tort Claims Act, 28 U.S.C. 1346(b). The district court dismissed all of Linder’s claims. The Seventh Circuit affirmed against the government alone. Section 2680(a) provides that the Act does not apply to “[a]ny claim ... based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.” In deciding when federal employees needed permission to talk with Linder or his lawyer, McPherson exercised a discretionary function. The court rejected arguments that the discretionary function exemption does not apply to malicious prosecution suits. “Congress might have chosen to provide financial relief to all persons who are charged with crimes but never convicted. The Federal Tort Claims Act does not do this.” View "Linder v. McPherson" on Justia Law