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So, You Want to Sue Our Client? (Chapter 2)

So, You Want to Sue Our Client? (Chapter 2)

Oh, what a tangled web we weave, when first we practice to deceive! –Walter Scott

Bill Pilchak – 8/12/14

           We started this series as a public service to our friends and relatives and those of our clients who call us for a reference to a plaintiff-side employment lawyer and to the population in general thinking of suing…especially if they are thinking of suing our clients.

          Today’s topic is the nearly-inevitable prospect that as a plaintiff in employment litigation, you will end up lying under oath. It’s better that you realize now that the awful moment is approaching, rather than on the eve of your deposition.

          Let me explain how it happens. You visit a lawyer, outraged because you have been let go. You think your separation is unfair because your side of the story hasn’t been considered. Or, maybe the boss is: 1) a jerk, 2) unsympathetic to your problem, 3) proceeding on mistaken facts or beliefs, 4) feels your chaotic life episodes are not a good excuse for your many absences; or 5) just doesn’t like you. Maybe this job is like several others that ended in a dispute with supervision. The lawyer tells you that because your employment is “at will,” you cannot contest the wisdom or general fairness of the discharge. Rather, she pulls out a menu of about 43 causes of action, most of which involve discrimination, harassment or retaliation on the basis of race, sex, age, national origin, disability, or whistleblower status. To sue, you have to fit your case into one of those legal theories. If you can’t fit your scenario into a theory, you have no case.

          Going through the menu, the attorney decides if your situation can be recast as involving some protected status. Sometimes choosing a legal theory is relatively easy, if you are of a minority race or obvious ethnicity. Other times, it requires a stretch. We’ve seen employees claim the ribbing they took after disclosing their penile enlargement surgery (no pun intended) was actually national origin harassment because they were Canadian. We’ve seen employees named “Smith” (or something equally Anglo-Saxon) attempt to assert ethnic discrimination because their mother was Lebanese. One of the last of the industrial wood model makers had to contend that he was not laid-off because no one uses wood models anymore and because he had failed to learn the new technology, but because his employer somehow, magically discerned that he was “about to” to complain about a safety issue he once observed in the shop…months ago.

          In other words, to make a case at the outset, the lawyer has to pound a square peg into a round hole.

          When you leave the lawyer’s office, you are on the path to suing over an issue that was not even in mind when you arrived. You will spend the next days and weeks trying to remember comments that relate to race, age, ethnicity, etc., so you can now present them as important, when they earlier passed virtually without notice. Your need to “spin” the scenario in racial, gender, ethnic or other terms, when that had not been an issue previously, is the first subtle form of lying. From our standpoint, you are “spinning” something else: a tangled web that will almost certainly ensnare you and make you the prey not the predator.

          The “square peg in a round hole” analogy mentioned above is not quite accurate. A plaintiff’s task is not as elementary as putting a discriminatory spin on the facts. Rather, every plaintiff must steer through a gauntlet of defenses. For example, being let go for an unprecedented act usually spells defeat because a plaintiff must usually show that others of a different race, age, etc. were treated differently. So, a plaintiff must contort facts to claim earlier episodes involving others were “nearly identical” to their situation. Or, because each plaintiff has a legal obligation to “mitigate damages” by diligently seeking substitute employment, but cannot claim wage loss damages if they do find a job, most plaintiffs have to lie about their job search. Or, because an employee experiencing harassment is generally obligated to use a company’s harassment complaint procedure, if the chosen legal theory is “harassment,” plaintiffs sometimes have to invent facts that place them within one of the narrow exceptions that excuse the need for complaints. Every case might involve six or seven defenses. Now, you have to avoid the truth on seven or eight fronts, or your case will be dismissed. The square peg in a round hole has just become a star-shaped peg. Moreover, this second hurdle traps not just those who belatedly claim discrimination, etc., but even those who felt that way from the beginning, because the myriad of defenses apply to “real” as well as invented cases of discrimination.

          The fun begins once you arrive for deposition and testify under oath. Even if you haven’t decided to blatantly lie (as some do, as indicated below), you cannot “undo” the facts. Modern society teaches moral relativism, where there is no right or wrong or black and white and everything is a shade of gray. But the truth is the truth, and while memories may fade, the truth doesn’t change. Our attorneys have spent decades studying investigative techniques, business processes and how employees react in certain situations. We are professional bloodhounds, sniffing out the truth. Facts do not occur in a vacuum. If something occurred as you say, there should be consequences. If a rock is thrown into a pond, there will be ripples. For example, unless you believed at the time that you were subject to discrimination, your past conduct will be inconsistent with your present contentions. Let’s say that after discerning that you are on the verge of separation for performance your attorney has decided you should walk off the job and claim you were harassed. If that thought did not occur until you visited the lawyer, your company e-mails, texts or social media posts will usually be inconsistent with those claims. In a recent case, a plaintiff’s e-mail to a former colleague leaving the company who was later recast as a chief harasser showed their actual, friendly relationship, with the plaintiff promising to keep in touch as the supposed harasser moved on to another job. Another claimant’s texts showed her very blatantly flirting on multiple occasions with the person she later alleged to have been a sexual harasser. Another’s e-mails to friends outside the company predicted his future would dim because of a change in management and corporate politics, not the whistle-blower issue he belatedly sought to raise.

          Even where electronic messages do not survive, you will be surprised at the independent witnesses and former employees that we track down or who step forth to dispute your claim. If you failed to discuss your belief that you were being harassed because of your religion with a close colleague of the same religion, that stands out. If you never mentioned the subject of discrimination to the union officials who spent weeks or months disputing your discharge, that too is inconsistent. You would be surprised at the array of individuals who have blown up plaintiffs’ cases by revealing the truth when interviewed: Ex-boyfriends and girlfriends, former spouses of your best friends, landlords, neighbors, police officers, union officials, business partners, former bosses and co-workers at prior jobs. You see, a fundamental principle underlying basic human greed is that nobody wants to see you get rich from a verdict – especially on the basis of lies.

          Of course, as alluded to in prior BLawg posts, some plaintiffs flagrantly lie. We’ve seen some doozies. “No, I haven’t worked for nor do I know anyone who owns or operates a competing staffing company” as the employer had suggested in the termination letter as a reason for the plaintiff’s frequent and unexplained absences – then poof, we find checks deposited in the plaintiff’s account from a staffing company affiliated with his fiancé-now-wife and established by his current attorney. Or, “I always wear the hijab (Muslim head covering) when I leave the house,” and the detectives in your home town reveal that you never wore it during their surveillance of you. Another: “the termination ruined my marriage,” and it comes out that after the crucial argument with her husband-supposedly about losing her job- the plaintiff ran off to spend the night with someone she first denied and then admitted under oath had been her lover before the argument. Or, “I left my job in heavy industry due to same-sex harassment after being called a ‘homo’ by fellow steelworkers,” but the plaintiff’s landlord and girlfriend reported he actually left to chase after grandchildren taken from him by their reportedly drug-abusing mother.

          If we are the sort of attorneys who will contact the detectives in your home town in another state, we will ferret out the truth in your case.

          So, what’s the downside for you if caught in a lie? First, lying under oath is perjury, a felony. Our clients always hope that a county prosecutor will go after those who seek to line their pockets on the basis of lies in the way Kim Worthy prosecuted Kwame Kilpatrick. We also mention that bearing false witness violates the 8th or 9th Commandment (depending on differing religions), but don’t have any illusions that many plaintiffs care about that.   Sometimes, it can lead to sanctions awards reflecting the costs and attorney fees our clients paid to defend the case. (Our largest in-hand, actually-collected sanctions awards to date are $21,000 and $17,000+). Frequently, it means that your attorney won’t continue on your case, because pressing a case built on fabricated facts hurts your attorney’s reputation at the courthouse. Almost always it means the end of the case and sometimes, it leads to a published opinion that all the world might see. (See Chapter 1.)   At the very least, it leads to at least a handful of witnesses who will step forth at your next effort to sue another boss in the future that you have a poor reputation for truth and veracity in the community.

          Just wanted you to be informed.

Is Your Employment Application The Best It Can Be?

Is Your Employment Application The Best It Can Be?

By Dan Cohen – 8/6/14

In the past two weeks, I have had occasion to review several employment applications. On each occasion, I was specifically asked to recommend upgrades.   Each of the applications was well designed for collecting information about the applicant’s qualifications. I would give them all high marks in this regard. But when it came to protecting the business against failure to hire claims and the full panoply of claims that employees assert, each application scored a “needs to improve.” This is not surprising to me as many businesses need to improve in the area of risk management. So, what were the common provisions missing from the applications?

  1. The At-Will Disclaimer—I don’t know of any employer these days that doesnot have an at-will disclaimer in their employment application, but I do know some that do not state that both employment and compensation can be terminated at will. I also know of others that do not have a non-modification clause and a superseding clause. The ability to terminate compensation at will allows you to reduce pay and benefits when necessary without facing the argument whether you can or not. The non-modification/non-superseding language is needed to prevent claims that someone modified the at-will nature of the employment relationship as well as claims that someone had made previous promises inconsistent with at will employment. The NLRB has gone as far as to reject at-will disclaimers where they are not subject to modification so it is important that the at-will provision contain a statement that it can be modified. You just want to make sure that modifications can only occur in writing, directed to the applicant/employee personally and only by the President of the Company.
  2. The Shortened Statute of Limitations—We have been able to get clients out of litigation early and on the cheap because of a reduced limitations period in the application. Most jurisdictions enforce these provisions. In Michigan, courts have repeatedly enforced provisions requiring applicants and/or employees to bring any and all claims against the employer within 180 days of the events giving rise to the claims. I say: why let an applicant or employee wait three years to pursue a discrimination case and up to six years to pursue a wrongful discharge case when you can reduce their opportunity to 180 days? If you choose to adopt this recommendation, make sure you require the applicant to bring suit within 180 days or any shorter limitations period so you don’t increase the 90 day limitations period for whistleblowers.
  3. The Jury Waiver—The days of significantly reducing your legal fees and greatly expediting the proceeding by arbitrating rather than litigating are likely behind us withthe advent of prolonged discovery and e-discovery in the arbitration forum. Keeping the case from a jury appears to be the remaining advantage of arbitration and because you give up your appeal rights in arbitration, I question whether arbitration is the answer these days. As I indicated in my April 22, 2014 Blog article about jury waivers, courts around the country and in Michigan have enforced them. The jury waiver accomplishes much that arbitration has to offer, without giving up your opportunity for summary dismissal at the front end and your appeal rights at the back-end.
  4. The Class Action Waiver—The Supreme Court has twice in recent years looked at the question of whether a class action waiver is enforceable and both times said they are. Although both cases involved a class action waiver in an arbitration agreement, lower court opinions have enforced similar provisions outside the arbitration context. As one federal judge noted, “there is no logical reason to distinguish a waiver in the context of an arbitration agreement from a waiver in the context of any other contract.” Palmer v. Convergys Corp., 2012 U.S. Dist. LEXIS 16200, *7 (M.D. Ga 2012). Opponents of such waivers undoubtedly will look to the D.R. Horton case where the NLRB found a class action waiver violated Section 7 of the NLRA. D.R. Horton, however, was rejected by the Fifth Circuit Court of Appeals. Although a decision on class action waivers has yet to reach Michigan, there is no reason to believe a Michigan court will reject them.

We have always preached that an ounce of medicine is worth a pound of cure. How hard is it to add a few more sentences to your certification? Be smart and upgrade your employment application sooner than later. It will take you less than an hour to do it and will save you a lot of money in the long run.

The First Thirty Years Went Pretty Well

The First Thirty Years Went Pretty Well

         “It Could Have Been Worse”

By:  Bill Pilchak – 8/5/14

           As it turns out, Friday, August 1, was the 30th anniversary of my entry into the practice of labor and employment law. On July 31, 1984, I spent my last day as a Senior Trial Attorney with the Oakland County Prosecutor’s Office. The next day I joined a boutique labor and employment firm that produced an alumni group of some of the finest management lawyers (and perhaps a plaintiff’s lawyer or two) in the city, Dan Cohen and Rhonda Armstrong, included.

          I thought it fitting to look back on “the first thirty years.” (Fans of quirky films will recognize the above photo and italicized quote from So I Married An Axe Murderer, as Mike Meyers’ father- also played by Meyers- looks back over his 30-year marriage: https://www.youtube.com/watch?v=-f696J1NuAU)

          First, I remain honored that so many capable business owners, executives and district courts come to us for advice and guidance, especially when the wolf is at the door and litigation is served. We work with an amazing array of brilliant, talented and hard-working people. We know from the few occasions where we have served individuals without business experience, that the challenge of practicing law is made easier by our clients’ knowledge and understanding.

          Second, as other boutique firms disappear or merge into silk stocking firms – almost certainly to gain clients the principals could not attract on their own- and as we hear of attorneys with little work on their desk, we (but maybe not our spouses) are constantly grateful that our to-do lists are always long. But, we do wonder why at times. Looking back, I think that taking a deep breath, accepting higher levels of responsibility, tackling new challenges and navigating uncharted waters accounts for some of that. We have taken on some incredibly complex tasks over the years: Illustrating the surprisingly important role that a history of childhood sexual abuse plays in sexual harassment cases during potentially million dollar litigation; [1] Dan’s defense of litigation on behalf of a prominent regional bakery where he preserved the miscellaneous overtime exemptions under the FLSA for Michigan employers despite an adverse federal decision to the contrary; [2] Mapping compliance with the European Data Directive for clients with overseas operations; flowcharting the FMLA back when few understood the cross-hatch of regulations; unravelling hidden profits in a shareholder dispute. As the younger sibling, often reminded of how bright my brother was, I am proud of the level of sophistication we have achieved.

          Third, I am personally thankful that some benevolent higher power has sent people my way that have had a profound impact on my life and career: Certainly my wife, Toni, who has the patience of a saint and is still awaiting her proper share of my time; Dan Cohen, who I was smart enough to recognize as an exceptional legal talent in the first two years of his career, and who soon joined me after I moved on from that first firm; Dawn Burke, our office manager – who easily could have been an attorney herself, who has a farm-girl work ethic, runs the entire business side of our practice, and is actually an angel though she does not know it; and finally, a certain general counsel, who would be embarrassed to be mentioned by name, who started using us for his employment litigation matters in 1990 in each successive company he served, most of whom remain clients today, and from which many of the brilliant, talented and hard-working people we serve emerged and spread throughout the Detroit business community.

          Finally, I am grateful and proud of our outstanding record of success in contested matters and in avoiding litigation or at least liability though our assistance on discipline and discharge matters. For years, we had an unblemished record where no client had been sued on a discharge where we assisted with the termination paperwork. That perfect record fell, we later learned at deposition, when one plaintiff stopped showing the termination letter to attorneys after the first four refused to take his case. Although now a few cases have been filed, no client has ever taken an adverse verdict (and we don’t recall having to settle litigation) on the basis of a termination upon which we consulted.

          With regard to contested matters, those clients who have faced litigation will know our job is to employ a gauntlet of defensive tactics to end the case long before our clients face a jury. Part of that gauntlet is tracking down easily-overlooked witnesses and records that illustrate the falsity of an opponent’s factual representations. Increasingly in the past few years, such gumshoe efforts have blown up cases in progress by confirming that: Indeed, the plaintiff was running a competing company on the side, as suspected; The suspected disloyal officer had set up a post-office box to which payment for diverted deals were sent; The recently resigned recruiter’s trash showed she had indeed taken and was copying her employer’s secret procedure manual; The records that the plaintiff entered into the company’s database about a candidate’s qualifications were completely false; The phone calls recorded by the allegedly-sexually-harassed employee included her discussion of cultivating the harasser as a “sugar daddy.” Most cases have a thread, which if pulled, unravel the facts.

          Given our caseload of contested employment matters per year (Charges, state/federal litigation, discrimination, etc. claims in arbitration), it’s reasonable to assume that we have handled at least 400+ over the years. Many, and possibly most, were dismissed on motion, and on appeal we made some important law for employers: That temporal proximity between whistleblowing and termination is not enough to make a plaintiff’s case;[3] That a person who violates a rule after being told of the rule is not similarly situated to someone who merely violates the rule; Delineating the fine distinction as to when vacation becomes “vested” and illustrating how arbitration decisions on pure questions of law are reviewable on appeal.[4] Some plaintiffs, especially over the past two years, folded their tents after we uncovered evidence that plaintiffs had lied in discovery or fabricated evidence. Occasionally, a wrongful decision was reversed on appeal. All but one of the others were resolved on terms that were a good business decision for the client.

          But it’s that one case that got through to an award that bothers me. I could take heart in the fact that the arbitrator awarded about $100,000 less than the settlement demand, or that the client was insured. However, because of our loyalty to all clients and that client in particular, the decision still bothers me…and causes me to resolve not to repeat the experience.

          So, with the daily interaction with bright and interesting people, a constant flow of intriguing problems crossing the desk and a record of about 400 to 1, the first 30 years have been a pretty good start to the practice. I can’t wait to see what the next 30 years bring.

 

[1] Though my 1997 American Bar Assn. article is no longer available on-line, it was quoted in 2012, in the Journal of Sexual Compulsivity:   http://www.adenabanklees.com/wp-content/uploads/2014/05/Sexual-Harassment-as-Cycles-of-Trauma-Reenactment-and-Sexual-Compulsivity.pdf

[2] http://www.michbar.org/opinions/appeals/2005/062805/27860.pdf

[3] http://caselaw.findlaw.com/mi-court-of-appeals/1170079.html

[4] http://www.michbar.org/opinions/appeals/2012/052212/51726.pdf