The Fair Labor Standards Act (FLSA) requires that non-exempt employees who work more than forty hours in a work week by paid an overtime rate of one and one-half times their regular rate of pay. In suits for unpaid overtime compensation, a central issue, therefore, is determining the employee's "regular" wage rate. In Gagnon v. United Technisource, Inc., No 09-20098 (May 27, 2010), the Fifth Circuit decided whether "per diem" payments to an employee should be included in calculating his regular wage rate.
Gagnon, a skilled and experienced craftsman, contracted with United Technsource, Inc. (UTI) to perform prepping and painting work on aircraft for $5.50 per hour "straight time" plus a "per diem" of $12.50 per hour for each hour worked each week up to 40 and an overtime rate of $20.00 per hour. After about a year, Gagnon's "per diem" and "overtime" rates were raised by $1 per hour. Gagnon later sued for unpaid overtime and the issue was whether the "per diem" payments should be included in and considered as part of his regular wage rate.
The court ruled that the "per diem" payments must be considered part of Gagnon's regular hourly wage rate. First, both federal regulations and precedent require that determination of an employee's regular wage rate be determined by what actually happens, not by the parties' agreed designations. Second, the Department of Labor has recognized that when the amount of per diem varies with the amount of hours worked, the per diem payments are part of the regular rate in their entirety. Third, the structure of the straight time, per diem and overtime payments were suspicious since Gagnon's "straight" time rate was so close to the minimum wage rate when similar craftsmen were being paid $20 per hour and over. Finally, the court observed that the ruse was similar to schemes where part of an employee's wage rate was considered a "bonus" or where employees were paid low "straight rates" for the first hour or two worked, then paid one and one-half times the so-called straight rate after that and, as a consequence, paid no overtime.
Where the attorney-client and work product privileges are waived, are the privileges waived as to all communications and matters or limited to just the subject of the waivers? The Ninth Circuit ruled in Hernandez v Tanninen, No 09-35085 (May 12, 2010), that the privileges were waived only as to the subject matter of the waiver.
Rolando Hernandez, a fire department employee, filed suit against the City of Vancouver and a supervisor, Mark Tanninen, alleging claims of race and national origin discrimination. He was initially represented by attorney Gregory Ferguson. Before suit was filed, Ferguson interviewed Tanninen, who corroborated Hernandez's claims and agreed to provide a signed statement. Tanninen, however, backed up and then said he would be involved because of loyalty to the employer and the fire department. Ferguson, realizing that he would likely be a witness, then had to refer Hernandez to another lawyer, who filed suit on his behalf and added a claim of conspiracy to cover up wrongdoing in the fire department.
During discovery Hernandez produced a privilege log listing 35 documents privileged by either the attorney-client privilege or work product privilege or both. In response to the city's motion for summary judgment, Hernandez submitted his own affidavit, an affidavit from Ferguson and some of Ferguson's hand-written notes from his interviews of Tanninen. The city later moved to compel production of Ferguson's entire file, arguing that "because Hernandez relied on Ferguson as a witness to Tanninen's conduct, fairness mandated that any privilege that was once existed with respect to Ferguson was waived entirely." The district court agreed and ordered Ferguson's entire file produced.
The Ninth Circuit reversed and ruled that the privileges were waived only with regard to the subject matter of the communications and materials actually disclosed or the subject of testimony. The waiver of the attorney-client privilege by Hernandez reached only "his communications with Ferguson about Tanninen." As to the work product privilege, "Hernandez produced notes from Ferguson's communications with Tanninen that were protected work product, [but] that constituted a waiver of work product privilege only as to that subject." In sum, "the district court clearly erred in finding a blanket waiver of the attorney-client and work product privileges as to the entire case."
A common and repeated error made by trial court judges in employment discrimination cases is undue fixation on the elements of the plaintiff employee's prima facie case where the court is employing a burden-shifting analysis under the McDonnell Douglas framework established by the Supreme Court's decision.
The elements are flexible and context-specific, the burden-shifting analysis a mere analytical tool and the determinative question is whether the plaintiff-employee can prove discrimination. Both the Fourth and Sixth Circuit Courts of Appeals have been called upon recently to emphasize this oft-repeated point:
Notwithstanding the intricacies of proof schemes, the core of every Title VII case remains the same, necessitating resolution of "the ultimate question of discrimination vel non." As the Supreme Court has explained, "the ultimate question in every employment discrimination case involving a claim of disparate treatment is whether the plaintiff was a victim of intentional discrimination." Thus, "courts must ... resist the temptation to become so into wine in the intricacies of the [McDonnell Douglas] scheme that they forget that the scheme exists solely to facilitate determination of 'the ultimate question of discrimination vel non.'" Merritt v Old Dominion Freight Line, No 09-1498 (4th Circuit, April 9, 2010).
The Sixth Circuit in a "failure to transfer" case was moved to observe in reversing a summary judgment erroneously granted by the district court:
Thompson's claim need not fit perfectly within one of our enumerated tests in order to survive summary judgment. The requirements for establishing a prima facie case of discrimination are always context-dependent, and "the key question is always whether, under the particular facts and context of the case at hand, the plaintiff has presented sufficient evidence that he or she suffered an adverse employment action under circumstances which give rise to an inference of unlawful discrimination." Thompson v Richmond Heights Hospital, No 08-4435 (6th Circuit, April 12, 2010).
In Grzyb v. Evans, 700 S.W.2d 399 (Ky. 1985), the Kentucky Supreme Court further defined the parameters of the tort of wrongful discharge. Unfortunately, in so doing, the Court spawned a frequently misapplied "preemption" doctrine. The Court's analysis and discussion in its recent decision, Hill v. Kentucky Lottery Corp., 2006-SC-000748-DG (April 22, 2010), clarifies and should trim misapplication of the Grzyb "preemption" doctrine.
To review: the Kentucky Supreme Court recognized in Firestone Textile Co. v. Meadows, 666 S.W.2d 730 (Ky 1984), the tort of wrongful discharge, holding that a wrongful discharge claim arose where an employment termination was contrary to public policy as evidenced by a constitutional provision or statute. A year later, in Grzyb, the Court further advised that a wrongful discharge could arise where the discharge was motivated by (1) the employee's failure or refusal to violate the law in the course of employment, or (2) by the employee's exercise of a right conferred by statute.
The plaintiff in Grzyb sought to advance two claims: wrongful discharge and gender discrimination in violation of KRS 344.040. The Court ruled that his wrongful discharge claim "was preempted by the statutory remedies afforded under KRS Chapter 344 for civil rights violations." The rule actually stated in Grzyb was simple: "where the statute both declares the unlawful act and specifies the civil remedies available to the aggrieved party, the aggrieved party is limited to the remedy provided by the statute." Nonetheless, this point had been frequently misapplied and the case came before the Court presenting this error, among others, by the Court of Appeals.
The Hills were employees of the Kentucky Lottery Corporation (KLC). They protested the unlawful disability discrimination directed at a coworker. A jury found that KLC pressured Kim Hill to testify falsely at the (former) co-worker's unemployment hearing. The Hills were later fired and advanced two claims directly arising from their discharge: (1) that it violated KRS 344.280, which prohibits the discharge of an employee because the employee opposes an unlawful employment practice such as disability discrimination, and (2) wrongful discharge because their terminations were motivated by Kim Hill's refusal to perjure herself at the unemployment hearing. After two trials where the Hills prevailed, the Court of Appeals ruled that the Hills' wrongful discharge claim was preempted by their KRS 344.280 claim, because "both claims arose out of the same set of facts" and were "predicated on the same conduct" by KLC.
Both the Hills' wrongful discharge and KRS 344.280 claims did arise from the same facts: Kim Hill's testimony at the unemployment hearing, which opposed and protested the discriminatory treatment of a co-worker and in which she refused the employer's demand that she violate the laws prohibiting perjury. But the ruling in Grzyb did not preempt the wrongful discharge claim, the Supreme Court ruled:
Grzybdoes not hold that preemption is triggered when the same set of facts that establishes a common-law wrongful discharge claim also constitutes a claim under KRS Chapter 344.
The Court further explained as follows:
Because the statutes that declare the unlawful act of perjury are not the same statutes that declare and remedy civil rights violations, the Hills' claims under KRS Chapter 344 do not preempt the Hills' claims for wrongful discharge based on the public policy against perjured testimony. To further illustrate the distinct legal nature of the two claims, this Court notes that if KLC had requested Kim Hill to testify falsely regarding her co-worker, Gilmore, and she had refused but also did not affirmatively testify on Gilmore's behalf, any subsequent termination would potentially give rise to a common-law wrongful discharge claim but not an action under KRS Chapter 344. Similarly, had KLC never approached Kim Hill about her testimony in the Gilmore matter and the only conduct at issue was her eventual testimony on his behalf, a KRS Chapter 344 claim could be stated upon termination but there would be no basis for a common law wrongful discharge claim, i.e., no request for perjured testimony.
