Supporting our AAPI employees in their time of crisis

The stats are jarring, disturbing, and scary. During the past year of the COVID-19 pandemic, there have been nearly 3,800 reported anti-Asian hate incidents, including shunning, slurs, and physical attacks. That number represents a stunning 46 percent increase over the prior year, and still just a small percentage of the actual number that has occurred. These incidents culminated last week in Robert Aaron Long shooting and killing eight people at three Atlanta-area massage parlor.

Your AAPI (Asian Americans and Pacific Islanders) employees are hurting. Here are some thoughts on how we, as their employers, can best support them. 

25 million reasons to tell a good story

Trying an employment case to a jury is an art. You are limited by a jury’s attention span (which, by the way, is getting worse as a result of 1,000 channel cable systems and 140 character tweets) to convey your message as quickly and as simply as possible. Complex legal arguments are out; creative storytelling built around a unified theme is in.

The allegations of racial harassment in Turley v. ISG Lackawanna Inc. are horrible. They involve graffiti about King Kong and the KKK, a toy monkey with a noose around its neck tied to the plaintiff’s car, and death threats. For the full flavor, I recommend reading the court’s opinion denying (in part) the employer’s motion for summary judgment.

Yesterday, the jury returned a $25 million verdict in favor of Mr. Turley on his claims of racial harassment and intentional infliction of emotional distress. According to the Buffalo News, one of the employer’s themes at trial was that “much of what happened at the steel plant is the kind of ‘trash-talking’ that’s common in manufacturing facilities.”

I once handled a case with similarly egregious allegations of racial harassment (KKK graffiti, liberal n-bombs, threats to drag the plaintiff tied to a truck, and a fistfight with his allegedly racist supervisor). The case settled on the eve of trial for several decimal points less than $25 million.

At trial, I was not planning on debasing the plaintiff’s allegations by challenging their veracity (there were too many witnesses that would verify most of them), or by portraying the events as something they were not—such as horseplay or trash-talking. Instead, I built my case around the fact that the plaintiff had resigned in the face of these allegations and voluntarily chose to return to the same workplace a few months later. He only sued (I would argue) out of embarrassment after losing a fight. In other words, I was planning to try the case by challenging the plaintiff’s perception of the workplace and the harm it caused him, not the racial motivation of his co-workers.

I know nothing about Turley v. ISG Lackawanna other than what I’ve read in the above-linked opinion and news story. But, it strikes me that likening KKK graffiti and a toy monkey with a noose around its neck as common “trash talking” is a recipe for a disaster, even if $25 million strikes me as excessive.

When office pranks attack

Read these facts, from Slasinski v. Confirma, Inc. (6th Cir. 1/24/12) [pdf], and I’ll be back to discuss:

In July 2007, members of Confirma’s sales team, including Mr. Slasinski, attended a week-long seminar in Bellevue, Washington.  On the evening of July 25, 2007, Mr. Slasinski and others … attended a dinner cruise….

Near the end of the cruise, but before the boat docked, Mr. Slasinski proceeded toward the ship’s lavatory on the aft end of the boat. Before he reached his destination, Mr. Slasinski observed a colleague named Kris Daw enter the lavatory. Several other Confirma employees were standing nearby, and Mr. Slasinski observed Bickford engage an external lock on the lavatory door, thereby locking Daw inside. A few moments later, Bickford unlocked the door and released Daw to the laughter of those standing nearby.

Mr. Slasinski then entered the lavatory and shortly thereafter discovered that he also had been locked inside … approximately 20 to 25 minutes. During that time, the boat docked and the other Confirma employees disembarked. After some time had passed, Mr. Slasinski began making phone calls to colleagues on his cell phone to request assistance…. Mr. Slasinski then resorted to kicking the door in an attempt to free himself, at which point the boat’s crew discovered and released him.

Like any embarrassed employee, what did Slasinski do? He sued, for false imprisonment. After a four-day trial, the jury returned a verdict in favor of Confirma, which the appellate court upheld:

If the jury accepted Confirma’s version of the facts, and drew all inferences in Confirma’s favor, it could easily have found that Mr. Slasinski entered the lavatory knowing he would be locked inside as part of the prank, and thus initially consented to the confinement. Moreover, for at least part of the duration of his confinement, Mr. Slasinski did not knock, call out to, or otherwise beseech any of the Confirma employees standing nearby to release him. A reasonable jury could conclude, therefore, that any confinement Mr. Slasinski experienced began with his consent, and only after the passage of time became against his will. A jury could further conclude, based on the evidence, that the period of unconsented-to confinement was of such brief duration as to be only momentary or fleeting.

What does this case mean? I could draw a great lesson about or the risks of lawsuits coming from anyone at any time, or the importance of workplace training to avoid similar problems, or the synergy between employee morale and having a good laugh, but instead, watch this:

See you tomorrow.

The “when” of counting employees for damage caps in federal discrimination cases

Counting is wonderful,
Counting is marvelous,
Counting’s the best thing to do.
Counting is happiness,
Counting is ecstasy,
I love to count, don’t you?
– Counting Is Wonderful, Sesame Street

Under the Civil Rights of 1991, the sum of the non-economic damages (future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, other non-pecuniary losses, and punitive damages) in Title VII, ADA, and GINA cases is capped between $50,000 to $300,000, depending on how many employees a defendant “has … in each of 20 or more calendar weeks in the current or preceding calendar year.” According to Hernandez-Miranda v. Empresas Díaz Massó, Inc. (1st Cir. 6/29/11), when you count employees for purposes of determining the number of employees depends on how you define “current.”

In that case, a jury awarded the plaintiff $300,000 in damages in her sexual harassment lawsuit, in which she proved that during her employment as a construction worker, she was forced to perform oral sex on a supervisor multiple times and was also subjected to extreme, continuing sexual abuse by coworkers and supervisors, all of which her employer ignored. The district court reduced the jury award to $50,000, using the year of the verdict to measure the number of employees.

The 1st Circuit, falling in line with other cases from the 4th, 5th, and 7th Circuits, concluded that the “current” year is the year the discrimination occurred, not the year of the verdict. In doing so, the court examined the policies behind the statute’s caps on damages:

It is clear that Congress did intend to protect …smaller employers … from ruinously large awards…. Congress, we believe, intended such protection for those who were small employers at the time of the discrimination, and not those who by happenstance or design became smaller employers between the time of discrimination and the time of the verdict.

This construction best serves Title VII’s purpose of encouraging resolution of disputes before litigation commences. This purpose … is best advanced by providing clarity and certainty as to the size of potential damage awards from the outset of a dispute. [Non-economic damages] are inherently more difficult to value precisely than the back pay damages traditionally available under Title VII, rendering this type of clarity and certainty all the more important in allowing litigants to make informed decisions about settlement.

Clarity and certainty of potential liability also allows for both sides to set realistic litigation budgets and evaluate whether cases are worth bringing and defending. Such clarity and certainty allows businesses to set adequate reserves, disclose those reserves in annual reports as necessary, and make assessments about whether and how much to insure against the risk of litigation.

Therefore, a court must count the number of people employed when the discrimination took place. The number of employees at the time of the verdict is irrelevant.

The court also concluded that because an employer must affirmatively move to apply the damage caps, it is the employer’s burden to prove the number of employees during the relevant time period.

This case has three important takeaways for businesses:

1. Depending on a business’s size, these caps can have sizeable implications. For example, the ruling in Hernandez-Miranda increased the recovery from $50,000 to $200,000. If you are a small employer (500 or fewer employees) defending a Title VII, ADA, or GINA lawsuit, you omit evidence of the number of employees at your peril.
2. If it makes a difference, introduce evidence of the number of employees both during the year of the discrimination and during the year of the trial. Until the Supreme Court weighs in on this issue, the law is in flux. There is no guarantee that this court will have the final say on this issue, and a different circuit can reach a different result.
3. Ohio’s tort reform statute, which also provides caps for punitive damages, but which lacks the same language as its federal counterpart, is likely unaffected by Hernandez-Miranda. Ohio small employers defending state-law claims should not necessarily look to the Hernandez-Miranda ruling for relief.

Firing by voicemail isn’t illegal, but…

Joyce Gaskins sued The Mentor Network-REM following her termination. REM’s cardinal sin that led to the filing of this lawsuit was that it notified Gaskins of her termination by voicemail. In short order, the court of appeals affirmed the trial court’s dismissal of Gaskins’s claim for intentional infliction of emotional distress:

Gaskins’s intentional infliction of emotional distress claim is based on the fact that REM terminated her via voicemail, which she argues is not standard procedure. This is simply not the sort of outrageous or egregious behavior contemplated for this intentional tort.

As this opinion illustrates, there is nothing illegal about terminating an employee by voicemail, email, text message, Facebook, Twitter, or the like. But, as this case also illustrates, employers nevertheless often pay a price for not treating terminated employees with decency. No matter the ills that led to Gaskins’s termination, she deserved to be told of her fate in person. Treating an employee poorly at termination might not be illegal, but it may lead to the bad feelings that cause lawsuits to be filed. It is not unheard of for a company to pay upwards of $50,000 to have even the most meritless employment disputes dismissed. How much is it worth to you to avoid the uncomfortableness of a face-to-face termination?

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Ohio Supreme Court upholds constitutionality of tort reform legislation

Arbino v. Johnson & Johnson, decided today by the Ohio Supreme Court, upheld the constitutionality of legislation that caps the amount of non-economic and punitive damages available in Ohio tort actions. The at-issue legislation applies to all "tort" claims except medical, dental, optometric, and chiropractic claims, and civil actions for damages for a breach of contract or another agreement. There is no exception for employment-related claims, such as intentional infliction of emotional distress, defamation, or wrongful discharge public policy claims.

The tort reform statute caps non-economic damages at the greater of $250,000, or 3 times the economic loss, to a maximum of $350,000 for each plaintiff or $500,000 for each occurrence that is the basis for the claim. There is no statutory cap for economic losses. Punitive damages are capped at 2 times the total amount of compensatory damages. However, for small employers (5o0 or less employees for manufacturing companies, and 100 or less employees for all others) and individuals, punitive damages are capped at the lesser of 2 times the total compensatory damages, or 10% of the small employer's or individual's net worth measured at the time the tort was committed, up to a maximum of $350,000.

No court has yet to rule whether this tort reform legislation specifically applies to statutory employment discrimination claims. While there is a clear distinction between common law tort claim, and statutory claims, one could certainly argue that discrimination claims, which are claims for harm to the person, are tort claims covered by the statute. Most likely, however, these claims are not covered by this tort reform because of their statutory nature. Regardless, this case marks another milestone in what has become a very business-friendly Supreme Court.

Lord of the pants - When is the right time to countersue?

This morning's USA Today is reporting that famed Irish dancer Michael Flatley has won an $11 million judgment against a woman who had accused him of raping her in a Las Vegas hotel room. According to the article, the woman threatened to sue Flatley unless he agreed to a "seven figure" settlement. When he refused, she sued him, but the case was dismissed. Flatley responded with a lawsuit against the woman and her lawyer, alleging extortion, intentional infliction of emotional distress, and defamation.

While the Flatley case does not involve an employer/employee relationship, it is nevertheless interesting to look at in relation to the Ohio Supreme Court's decision last week in Greer-Burger v. Temesi. I cautioned that employers should tread lightly in filing lawsuits against employees who have engaged in protected activity. Flatley illustrates one situation where it might make sense to file a lawsuit against an employee - where the value of one's personal reputation is harmed by the mere filing of the employee's claim. For example, a CEO or celebrity accused of sexual harassment has a lot to lose even by having a meritless claim alleging sexual misconduct filed against him or her. Another example that comes to mind, although not implicated by the Flatley case, is where an employee has stolen trade secrets. In those examples, the individual or the company has something of value to gain other than mere retribution.

The decision of whether to file a claim against an employee or ex-employee is not an easy one, and should not be undertaken without careful thought, a clear strategy of the goals to be achieved, and consideration of whether those goals are worth the risk of defending against a likely retaliation claim or the perception in court that the counter-suit is merely retaliatory. For Michael Flatley, the decision was a no-brainer, as he was being accused of rape and being extorted. For your company, the decision should be of the same degree of certainty before a similar decision is reached.

Why I love being an employment lawyer

This article, courtesy of the Wall Street Journal's Law Blog, needs no further explanation: The Best Dentist Related Lawsuit Ever. You'd think after 10 years of this I would stop being surprised or entertained at what goes on in places of employment. The biggest surprise is that the dentist was sued for outrage, battery, invasion of privacy, false light, public disclosure of private acts, medical negligence, lack of informed consent, affliction of emotional distress, and retaliation, but not sexual harassment.

And for the Seinfeld fans:

Elaine: Maybe you were still under the gas.Maybe you were hallucinating you're coming out of the gas but you were still under the gas.

Jerry: I don't think so. I think they were getting dressed and not only that - my shirt was out!!!

Elaine: Your shirt was out?

Jerry: I think so.

Elaine: Well, what kind of shirt was it?

Jerry: You know! Like a tennis shirt.

Elaine: Oh! Well - You don't tuck those in?

Jerry: Sometimes I tuck 'em sometimes I don't

Elaine: Well. Were you tucked?

Jerry: I think I was tucked!

Elaine: All right then say you were. I mean - what do you think could have happened?

Jerry: I don't know but I was spitting out and rinsing like there was no tomorrow.

Elaine: Ughhhh!

Jerry: Is this guy a dentist or Caligula?

The Jimmy, Seinfeld Episode 105 (original air date March 16, 1995).

Emotional distress damages are taxable

In rehearing Murphy v. IRS, decided 11 months ago, the same three-judge panel of the D.C. Circuit has reversed itself and held that damages for non-physical injuries such as emotional distress and mental anguish are taxable. Last August, that Court ruled that Marrita Murphy's $70,000, awarded for emotional distress and loss of reputation by the Department of Labor Administrative Review Board in a whistleblower case against her employer, was akin to an award for physical injuries and therefore tax exempt. This week, the Court held that the money should have been included in her gross income:

Murphy no doubt suffered from certain physical manifestations of emotional distress, but the record clearly indicates the Board awarded her compensation only “for mental pain and anguish” and “for injury to professional reputation.” Although the Board cited her psychologist, who had mentioned her physical aliments, in support of Murphy’s “description of her mental anguish,” we cannot say the Board, notwithstanding its clear statements to the contrary, actually awarded damages because of Murphy’s bruxism and other physical manifestations of stress.... At best — and this is doubtful — at best the Board and the ALJ may have considered her physical injuries indicative of the severity of the emotional distress for which the damages were awarded, but her physical injuries themselves were not the reason for the award.

Thus, it is not enough that the emotional distress has some physical symptoms (such as sleeplessness, loss of appetite, etc.), and it appears that unless physical injuries are the reason for the award or settlement, emotional distress damages will be taxable. Because discrimination and other employment-related cases rarely involve physical injuries, it is safe to assume that all non-economic damages will be taxable in most employment cases.