Kentucky Employment Law Blog

Damages Recoverable under RICO for Fraudulent Deprivation of Workers Compensation Benefits

The Sixth Circuit's recent decision in Brown v. Cassens Transport, No. 10-2334 (April 6, 2012), recognized both that a claim for workers compensation benefits as well as the expectation of a fair process for a workers compensation claim were "property" under RICO. This is the second time that the Sixth Circuit has reversed a district court's dismissal of the case. It has been the subject of to prior post on the Kentucky Employment Law Blog: A Claim for Workers Compensation Benefits Is Property Under RICO, Sixth Circuit Rules and Injured Workers May Sue Under Racketeering Law Based On Scheme To Deny Them Workers Compensation Benefits.

The court also explained the determination of damages that could be recovered under RICO for the fraudulent deprivation of workers compensation benefits:

... a person is injured and "property" under RICO when the value of the statutory benefits that she receives is artificially decreased by reason of the fraud complained of. "The compensable injury necessarily is the harm caused by predicate acts sufficiently related to constitute a pattern." Calculating such differences is rarely an exact science, but the plaintiffs should be able to put on proof of how much compensation they would have received under the [Michigan workers compensation law's] rigid schedule of compensation but for the defendants' allegedly fraudulent medical testimony. The difference between that amount and the amount they received in settlement is neither speculative nor too difficult to surmise.

Robert L. Abell
www.RobertAbellLaw.com

A Claim for Workers Compensation Benefits Is Property Under RICO, Sixth Circuit Rules

A claim for workers compensation benefits is property under RICO, and injury to that property is properly sued for under the statute. This ruling by the Sixth Circuit in Brown v. Cassens Transport, No 10-2334 (April 6, 2012), is the latest development in a very interesting suit claiming that an employer and a doctor it recruited systematically diminished the value of injured workers claims for workers compensation by means of fraud. The Sixth Circuit's prior ruling, Brown v. Cassens Transport, No 05-2089 (Oct. 23, 2008), was previously discussed on the Kentucky Employment Law Blog: Injured Workers May Sue Under Racketeering Law Based On Scheme To Deny Them Workers Compensation Benefits.

The plaintiffs claim they were injured on the job for Cassens. Cassens self-insures its workers compensation and contracts with Crawford & Company for claims administration. The plaintiffs claim that Cassens and Crawford solicited "fraudulent medical reports" from a third defendant, Dr. Saul Margules and used them as a fraudulent means to diminish the value of the plaintiffs' claims for workers compensation benefits. Interestingly, all of the plaintiffs but one had settled their workers compensation claims with Cassens; the other was subject of an undisclosed adjudication in the Michigan workers compensation scheme.

Reversing a dismissal by the district court for the second time the Sixth Circuit held "that the plaintiffs have alleged an injury to property because they allege the devaluation of either their expectancy of or claim for workers' compensation benefits." First, the court ruled that "applicants for workers' compensation benefits have a property interest in those benefits at the time that their employer becomes aware of the injury." This holding rests on language in the Michigan workers compensation law stating that "employees injured in the course of employment 'shall be paid compensation,' which is calculated according to a rigid schedule." The court rejected the argument that a property interest in the benefits did not accrue until the injured worker had proved their entitlement noting that "Michigan state law does not require injured employees to make such an initial showing before they receive benefits."

Second, the court further held that even if the expectation of workers compensation benefits is not a property interest, "the plaintiffs in this case may proceed by alleging injury to property in that their claim to benefits under the workers compensation scheme was damaged by the defendants' actions." Citing a prior Michigan decision, Williams v. Hofley Mfg. Co., 424 N.W.2d 278 (Mich. 1988), the court observed "the plaintiffs' claim is not necessarily about particular payments themselves, but also about the defendants' deception ... that deprived the plaintiffs of the ability to assert their claim for benefits under the statute in a fair forum."

Finally, the Sixth Circuit rejected the argument that an unfavorable adjudication or settlement by plaintiffs precluded their loss of a property interest, explaining as follows:

... losing or settling a case due to fraudulent medical reports does not extinguish the plaintiffs' property interest in bringing a claim free of fraud. ... plaintiffs should be allowed to proceed on their RICO claim and put on evidence that they would have received a better result in the underlying state agency proceedings had the defendants not submitted the fraudulent medical reports. The fact that the plaintiffs lost or settled in tainted proceedings is not evidence that the plaintiffs would have lost or settled if the proceedings had been fair.

Robert L. Abell
www.RobertAbellLaw.com

No "Inherent Incompatibility" Between FLSA Collective Action & State Law Class Action In Same Suit, Third Circuit Rules

The Fair Labor Standards Act (FLSA) requires in a collective action that each claimant affirmatively opt-in to the suit to join the action and obtain relief. A state law class action under the Class Action Fairness Act (CAFA) and Federal Rule of Civil Procedure 23(b)(3), on the other hand, has an affirmative opt-out procedure. Are these conflicting procedures inherently incompatible in the same suit? Does a FLSA collective action pre-empt a state law class action based on the same conduct and facts? "No" to both questions answered the Third Circuit recently in Knepper v. Rite Aid Corporation, Nos. 11-1684 & 11-1685 (March 27, 2012). 

The suits were filed by assistant managers of Rite-Aid claiming that they were misclassified as exempt from overtime pay requirements. After a collective action suit was filed under the FLSA in the Middle District of Pennsylvania, a separate class action suit was filed in federal district court in Maryland claiming that the misclassification violated Maryland's state wage and hour law; it was dismissed and then refiled in the Middle District of Pennsylvania. Another class action suit was filed in federal district court in Ohio claiming that the misclassification violated Ohio's state wage and hour law; this case was transferred to the Middle District of Pennsylvania.  The district court then dismissed both suits reasoning that the opt-in procedures for an FLSA collective action and the opt-out procedures for a Rule 23(b)(3) class action were "inherently incompatible."

The Third Circuit reversed. First, the Court observed that the plain statutory language of the FLSA applied its affirmative opt-in procedures only to claims brought under the FLSA, saying nothing about causes of action for relief under state employment law. The Third Circuit joined the Second, Seventh, Ninth and DC Circuits in this ruling. 

Second, the Third Circuit held that the FLSA does not preempt the state wage and hour laws. The FLSA's savings clause, the court noted, "evinces a clear intent to preserve rather than supplant state law."  The court also rejected Rite Aid's argument that the FLSA's opt-in procedure preempted the opt-out procedures under CAFA observing that "federal law cannot preempt another federal law, and a statute from 1947 cannot impliedly repeal a law from 2005[.]"

Robert L. Abell
www.RobertAbellLaw.com 

 

Supreme Court Limits State Employees' Protections Under FMLA

The Supreme Court has limited state employees' protections under the Family Medical Leave Act (FMLA) in its recent decision, Coleman v. Court of Appeals, No. 10-1016 (March 20, 2012). The Court was predictably divided 5-4 with all five Republican appointees (Roberts, Scalia, Thomas, Kennedy & Alito) voting against the employee, whil all four Democratic appointees (Ginsburg, Breyer, Kagan & Sotomayor) voting in favor of the employee.  

The Court ruled in 2003 in Nevada Dept. of Human Resources v. Hibbs, 538 U.S. 1, that states did not have sovereign immunity against damages suits under the FMLA premised on a violation of 29 U.S.C. 2612(a)(1)(C), which regards care for a family member suffering from a "serious health condition." The ruling was premised on the reality that women by far most often took leave from work to care for ailing family members; thus, the Court ruled that Congress had properly abrogated the states' sovereign immunity from damages suits.

The Coleman case involved what the Court majority called the "self-care" provision under 29 USC 2612(a)(1)(D), which allows for unpaid leave for an employee to take care of themself, i.e., recover from their own illness or injury.  The Court majority was utterly unmoved by the acknowledged reality that the FMLA's "self care" provision allowed single parents, who are disproportionately women, to retain their jobs:

       The petitioner’s last defense of the self-care provision is that the provision helps single parents retain their jobs when they become ill.  This, however, does not explain how the provision remedies or prevents constitutional violations. The fact that most single parents happen to be women demonstrates, at most, that the self-care provision was directed at remedying employers’ neutral leave restrictions which have a disparate effect on women. “Although disparate impactmay be relevant evidence of . . . discrimination . . . such evidence alone is insufficient [to prove a constitutional violation] even where the Fourteenth Amendment subjects state action to strict scrutiny.”  To the extent, then, that the self-care provision addresses neutral leave policies with a disparate impact on women, it is not directed at a pattern of constitutional violations. Because, moreover, it is “unlikely that many of the [neutral leave policies] . . . affected by” the self-care provision are unconstitutional, “the scope of the[self-care provision is] out of proportion to its supposed remedial or preventive objectives.”   

Robert L. Abell
www.RobertAbellLaw.com 

Race Discrimination Class Action by Merrill Lynch Brokers Approved by Seventh Circuit

Reversing a district court's denial of class certification to some 700 black brokers in a race discrimination case against Merrill Lynch the Seventh Circuit has shown the limited scope and application of the Supreme Court's Wal-Mart v. Dukes ruling by its recent decision in McReynolds v. Merrill Lynch, No 11-3639 (February 24, 2012).

The main plaintiffs' claim before the court was that two Merrill Lynch policies, the "teaming" and "account distribution" policies, had racially disparate impacts. The "teaming" policy allowed but did not require brokers in the same office to form teams that would share clients and accounts.  The "account distribution" policy regarded the passing out of the accounts of a broker that left Merrill, a procedure that was driven principally by past performance and success.

The plaintiffs claimed team membership was advantageous and that the procedure for team selection and formation had a racially discriminatory impact. The Seventh Circuit, in an opinion authored by Judge Richard Posner, explained this dynamic as follows:

The teams, they say, are little fraternities (our term but their meaning), and as in fraternities the brokers choose as team members people who are like themselves. If they are white, they, or some of them anyway, are more comfortable teaming with other white brokers. Obviously they have their eyes on the bottom line; they will join a team only if they think it will result in their getting paid more, and they would doubtless ask a superstar broker to join their team regardless of his or her race. But there is bound to be uncertainty about who will be effective in brining and keeping shared clients; and when there is uncertainty people tend to base decisions on emotions and preconceptions, for want of objective criteria. 

The "account distribution" policy could likewise have racially disparate impacts in fact perpetuating the discriminatory effects of the "teaming" policy, as the court described:

If as a result of racial preference at the team level black brokers employed by Merrill Lynch find it hard to join teams, or at least good teams, and as a result don’t generate as much revenue or attract   and retain as many clients as white brokers do, then they will not do well in the competition for account distributions either; and a kind of  vicious cycle will  set in.  A portion of  a team’s   pre-existing revenues   are   transferred within a team to a new recruit, who thus starts out with that much “new” revenue credited to him or her—an advantage, over anyone who is not on a team and thus must generate all of his own “new” revenue, that translates into a larger share of account distributions, which in turn helps the broker do well in the next round of such distributions. This spiral effect attributable to companywide policy and arguably disadvantageous to black brokers presents another question common to the class, along with the question whether, if the team-inflected account distribution system does have this disparate impact, it nevertheless is justified by business necessity.

Robert L. Abell
www.RobertAbellLaw.com 

 

 

Deputies' Report of Sheriff's Eavesdropping Addressed Matter of Public Concern and Was Protected by First Amendment

"[W]hen public employees allege that government officials break the law, their speech addresses a matter of public concern" and is entitled to First Amendment protection the Sixth Circuit recently reiterated in Kiessel v. Leelaneau County, No. 10-2602 (January 31, 2012).  The court affirmed the denial of qualified immunity to a sheriff sued by three former deputy sheriffs, who claimed they were fired in retaliation for reporting to the FBI and Michigan state police that the sheriff was eavesdropping illegally on their phone calls.

Events unfolded as follows. In January 2008, two deputy sheriffs, Kiessel and Lamb, reported to the FBI and state police that the sheriff, Mike Oltersdorf, was eavesdropping on their phone calls. In response, the sheriff got an opinion from the Michigan Attorney General stating that his actions were not illegal. In the public debate that followed, two of the deputy sheriffs wrote a letter to the editor stating the sheriff committed "misconduct" and "unlawful actions" in eavesdropping. Sixth months later the sheriff suspended them for making "false public accusations." Another six months later, the sheriff fired the deputies. They, in turn, sued claiming among other things violation of their First Amendment rights. A district court denied qualified immunity to the sheriff, who appealed.

The Sixth Circuit, in an opinion written by district judge Amul R. Thapar, affirmed and noted the First Amendment protections that attached to the deputies' letter to the editor:

• "Statements exposing possible corruption in a police department are exactly the type of statements that demand strong First Amendment protection." See v. City of Elyria, 502 F3d 484, 493 (6th Cir. 2007)
  
  
• "Certainly speech which questions the credibility of the Sheriff's Department ... is a matter of public concern." Lucas v. Monroe County, 203 F3d 964, 974 n. 5 (6th Cir. 2000)
  
  
• "Public interest is near its zenith when ensuring that public organizations are being operated in accordance with the law." Marohnic v. Walker, 800 F.2d 613, 616 (6th Cir. 1986)
  
  
• "accusations of corruption in a police department are 'exactly the type of statements that demand strong First Amendment protections.'" Elyria, 502 F.3d at 493.

Interestingly, the court gave short shrift to the sheriff's argument that he could reasonably have believed that the deputy sheriffs knowingly or recklessly made false statements in their newspaper letter, since the Michigan Attorney General said the sheriff's eavesdropping was legal: "The sheriff knew the plaintiffs had reported the eavesdropping to the FBI as well as to the Michigan State Police, suggesting the plaintiffs believed that the Sheriff's Office broke both federal and state laws. The Attorney General's opinion dealt only with the legality of the eavesdropping under state law, so a reasonable official could not have relied on the opinion to conclude that the plaintiffs falsely accused the sheriff of violating federal law."

Robert L. Abell
www.RobertAbellLaw.com 

 

 

McDonnell Douglas Burden-Shifting Framework Applicable to False Claims Act Retaliation Claims, First Circuit Rules

The False Claims Act was amended by Congress in 2009 and its anti-retaliation provision expanded. It provides as follows:  

Any employee . . . shall be entitled to all relief necessary to make [him] . . . whole, if that employee . . . is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against . . . because of lawful acts done by the employee . . . in furtherance of an action under this section. 31 USC sec. 3730(h)(1).

The First Circuit ruled recently in Harrington v. Aggregate Resources, No. 11-1511 (Feb. 7, 2012), that the McDonnell Douglas burden-shifting framework applied to retaliation claims under the False Claims Act. This was the first officially reported appellate decision on this point. The Sixth Circuit made a similar ruling in an unpublished decision,  Scott v. Metro. Health Corp., 234 F.App'x 341, 346 (6th Cir. 2007).

Robert L. Abell
www.RobertAbellLaw.com 

What Is Pretext? An Amalgam of Irregularities, Inconsistencies and Implausibilities

"Pretext" in employment discrimination and retaliation cases is the term applicable to whether the explanation offered by the employer for its adverse action toward the employee can be credited. Where that explanation is shown to be pretextual, a powerful inference of unlawful motive and purpose arises as the Supreme Court explained in Reeves v. Sanderson Plumbing:

Proof that the defendant’s explanation is unworthy of credence is simply one form of circumstantial evidence that is probative of intentional discrimination, and it may be quite persuasive.  … the trier of fact can reasonable infer from the falsity of the explanation that the employer is dissembling to cover up a discriminatory purpose.  Such an inference is consistent with the general principle of evidence law that the factfinder is entitled to consider a party’s dishonesty about a material fact as "affirmative evidence of guilt." 

 Most often, pretext is shown by an amalgam of irregularities, inconsistencies and impossibilities that arise from and attached to the employer's explanation. The recent First Circuit decision in Harrington v. Aggregate Resources, No 11-1511 (Feb. 7, 2012), illustrates aptly this point.

The plaintiff, Harrington, was a truck driver for Aggregate Resources, which was a concrete supplier to Boston's "Big Dig" project. Harrington learned that the company was providing substandard concrete. Harrington and another employee filed a sealed action under the False Claims Act regarding this fraudulent conduct. For reasons unexplained in the decision Harrington's identity as a whistleblower became known to the company. Eventually, the Justice Department reached a negotiated settlement for several million dollars, one to which Harrington was a party as a False Claims Act whistleblower.

The First Circuit's opinion suggests that Harrington's relationship with his employer deterioriated once his whistleblower status became known to it. Harrington, upon returning to work after an absence on account of illness, was immediately confronted with the demand that he submit to a "return-to-work" physical and drug test. The company dropped the demand after Harrington cited his union contract. Then the company asserted that Harrington had to take a drug test, because he had tested positive for cocaine some years earlier. A union business agent interceded and the company backed down again.

Amazingly or coincidentally, Harrington was informed when he next reported to work that his name appeared on a third-party generated list to take a random drug test. Harrington complied and went on with his work. A few days later, he was told that his urine sample had yielded an inconclusive result and that he was required to submit to another test. Standard practice required that a urine sample the "split" with one part being tested and the other part being held in reserve. Harrington asked that his "split" sample be used. Again amazingly or coincidentally, he was told that "split" sample had been lost and was unavailable. Harrington then declined to submit to another drug test. The next day he signed the settlement agreement in the False Claims Act case. The day after that the employer fired him for refusing to take a drug test. After he was fired, Harrington filed suit claiming that his termination violated the anti-retaliation provisions of the False Claims Act, 31 USC § 3730. The district court granted the employer summary judgment and Harrington appeal.

The First Circuit determined that the case turned on the issue of pretext. It concluded that the amalgam of inconsistencies, implausibilities and irregularities yielded a fact issue and reversal of the summary judgment as the Court explained:

• “[W]eaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer's proffer [ ]” can give rise to an inference of pretext. So can deviations from standard procedures, the sequence of occurrences leading up to a challenged decision, and close temporal proximity between relevant events.
  
  
•  "To begin, the ink was still wet on the settlement agreement" when Harrington was fired. "Such close temporal proximity strongly suggests retaliation."
  
  
• "The record casts substantial doubt on whether Aggregate, at several points, was following its own drug testing protocol."
  
  
• When Harrington "sought to return to work after several days off, Aggregate insisted that he take a drug test. The appellant objected, citing the union contract. Aggregate did not press the matter, and the record contains no explanation for this."
  
  
• "Following its initial botched attempt to get a drug test, Aggregate tried a new approach. This time, it told [Harrington] that he needed to take a follow-up drug test because of a positive test result in 2005. [Harrington] again challenged Aggregate's demand and brought the matter to the attention of the union's business agent. Aggregate relented, and there is no clear evidence indicating that it had a right to impose this requirement."
  
  
• "The events that occurred on the day that the appellant returned to work also lend sustenance to an inference of pretext. On that day, the appellant was singled out for a drug test. Aggregate avers that he was selected at random by a third-party testing company. Coincidences happen, but this sequence of events raises eyebrows. This eyebrow-raising effect is heightened by the fact that Aggregate never produced an affidavit or other statement from its third-party contractor as to when or how the appellant was chosen. Moreover, the record contains a data sheet showing the test results. This data sheet did not describe the test as “random,” but as a “follow-up” drug test."
  
  
• The whereabouts of Harrington's "split" sample "contributes to the air of mystery." The employer's human resources director testified that "he did not know whether the split was lost. He added that standard testing procedures made that eventuality highly unlikely. To compound the uncertainty, the record contains no evidence about the split from the third-party testing firm."
  
  
• "In retaliation cases, the whole is sometimes greater than the sum of the parts. Here, for example, the bits and pieces of evidence recounted above, taken collectively, have significant probative value. After all, irregularities in an employer's dealings with an employee who has fallen out of favor can support a reasonable inference of pretext. See, e.g., Collazo, 617 F.3d at 52; Hurlbert v. St. Mary's Health Care Sys., Inc., 439 F.3d 1286, 1299 (11th Cir.2006); Garrett v. Hewlett–Packard Co., 305 F.3d 1210, 1220 (10th Cir.2002). Moreover, the fact that Aggregate repeatedly insisted on a drug test for spurious reasons contributes to the inference of pretext. Because the appellant had tested positive for cocaine in 2005, a jury could infer that Aggregate focused on this weak point in his employment history as a convenient way of getting rid of him."
  
  

Robert L. Abell
www.RobertAbellLaw.com 

 

 

Is Driving A Major Life Activity Under the ADA?

Driving in the vast majority of the United States is almost essential to getting to work, to shop, for recreation and to access most of the things and services that individuals find necessary in everyday life. Sure, mass transit fills some of the gaps but a medical condition that leaves one unable to drive imposes a substantial hardship, one that would seem easily to qualify one as disabled under the Americans With Disabilities Act (ADA).  The answer, however, varies depending on the court and when the condition arose.

The amendments to the ADA and its implementing regulations provide more explicit recognition that inability to drive imposes a disability under the ADA. The ADAAA regs issued by the EEOC speak to the inability to drive as disqualifying one from a broad class of jobs thereby making one disabled:

"A class of jobs may be determined by reference to the nature of the work that an individual is limited in performing (such as commercial truck driving ...) or by reference to job-related requirements that an individual is limited in meeting (for example, jobs requiring ... driving ...)." 

The caselaw prior to the ADAA is more mixed. There are a number of cases indicating that driving is a major life activity: Weiss-Clark v. Kaiser Foundation Health Plan of the Northwest, 2001 WL 204823 (D. Or. 2001); U.S. v. City and County of Denver, 49 F. Supp. 2d 1233 (D. Colo. 1999), aff'd on other grounds sub nom Davoll v. Webb, 194 F.3d 1116 (10th Cir. 1999); Norris v. Allied-Sysco Food Services, Inc., 948 F. Supp. 1418, 1434 n.13 (N.D. Cal. 1996), aff'd on other grounds, 191 F.3d 1043 (9th Cir. 1999)(“The jury also could have concluded that Norris's back injury substantially limited her ability to drive, and the jury could have reasonably felt that, at least in California, driving is a major life activity.”). See also Brady v. Wal-Mart Stores, Inc., 455 F. Supp. 2d 157, 168 (E.D.N.Y. 2006).

Similarly, a number of cases hold that driving limitations may substantially limit working: Brady v. Wal-Mart Stores, Inc., 531 F.3d 127 (2d Cir. 2008) (may preclude a “broad range of jobs”); Black v. Roadway Express, Inc., 297 F.3d 445, 453 n.12 (6th Cir. 2002) (recognizing truck driving as a class of jobs); Tate v. Farmland Industries, Inc., 268 F.3d 989, 1000 (10th Cir. 2001); Best v. Shell Oil Co., 107 F.3d 544, 548 (7th Cir. 1997) (statements by employer's agents that plaintiff was restricted from a wide variety of truck-driving jobs was sufficient to suggest employer regarded plaintiff as substantially limited in working); Irizarry v. Mid Florida Community Services, Inc., 2009 WL 2135113, at *4 (M.D. Fla. 2009); Broughton v. City of Jacksonville, 2008 WL 2704420, at *3 (M.D. Fla. 2008) (passenger driving is a class of jobs); Russo v. Sysco Food Services of Albany, L.L.C., 488 F. Supp. 2d 228, 235 N.D.N.Y. 2007) (belief that plaintiff with epilepsy could not safely drive a variety of vehicles); Skomsky v. Speedway SuperAmerica, L.L.C., 267 F. Supp. 2d 995, 1003 (D. Minn. 2003) (truck driving is a class of jobs). See also Winsley v. Cook County, 563 F.3d 598 (7th Cir. 2009) (although inability to drive might interfere with the major life activity of working, employee failed to demonstrate that it foreclosed her from class or broad range of jobs). 

There are, of course, a few courts that flatly reject the notion that driving is a major life activity including the Eleventh Circuit Court of Appeals, which is headquartered in Atlanta, a place where hundreds of thousands of daily commuters might question the notion that driving is not a major life activity. Nonetheless, see Chenoweth v. Hillsborough County, 250 F.3d 1328 (11th Cir. 2001).  

Robert L. Abell
www.RobertAbellLaw.com 

Employer's Pretextual Reasons For Discharge Warranted Liquidated Damages for FMLA Violation, Sixth Circuit Rules

"Pretextual reasons for discharge manufactured after the fact in order to justify an earlier wrong are not consistent with good faith" stated the Sixth Circuit in Thom v. American Standard, Inc., Nos. 09-3507/3508 (6th Cir., January 20, 2012). The Court reversed a district court judgment not awarding liquidated damages where the Family Medical Leave Act (FMLA) was violated.

Liquidated damages -- in an amount double the amount of any compensatory damages -- are a presumed remedy under the FMLA, as the Sixth Circuit explained: "There is a strong presumption in favor of awarding liquidated damages that are double the amount of any compensatory damages." The burden is on the employer to show, despite a proved FMLA violation, it acted in good faith to comply with the FMLA. Hite v. Vermeer Mfg. Co., 446 F3d 858, 868 (6th Cir. 2006). 

In this case, as noted in an earlier post, FMLA Violated by Employee's Termination, Sixth Circuit Rules, American Standard claimed that it had long used a "rolling" method for calculating an employee's FMLA leave, a position that it first raised after it had fired Thom, a 36-year employee, and he had filed suit. The company got no further with this argument as proof of its good faith, as the Sixth Circuit pointedly rejected it and observed:

• Pretextual reasons for discharge manufactured after the fact in order to justify an earlier wrong are not consistent with good faith.
  
  
• Pretextual excuses are equivalent to reasons "not held in good faith." See, e.g., Thornley v. Penton Publishing, 104 F3d 26, 30 (2d Cir. 1997)("the jury is certainly entitled to reject the standards [for terminating employees] claimed by the employer on the grounds that these standards were pretextual -- i.e., they were not held in good faith.").
  
  
•  American Standard cannot demonstrate good faith by pointing to its reliance on a policy that Thom did not know about and was not used in Thom's case.
  
  
• Furthermore, after Thom was fired, his doctor wrote American Standard explaining how matters had developed with Thom's shoulder and requesting that he be reinstated to employment, a request that the company ignored, a stonewalling that caused the Sixth Circuit to observe that its "obdurate refusal to correct an obvious mistake that constituted a wrongful discharge of this 36-year employee reinforces the case for liquidated damages.

Robert L. Abell
www.RobertAbellLaw.com