Tuesday, November 21st, 2006
In today’s global economy, more and more companies employ workers in foreign countries – either non-U.S. citizens, or U.S. citizens employed abroad. These types of employment relationships present unique challenges for employers, including language and cultural differences that can be, or develop into, cultural barriers. Such cultural barriers have the potential to corrupt an employment relationship and lead to litigation. For this reason, it is essential that companies that employ workers abroad understand how U.S. employment laws apply to their foreign or “extraterritorial” employees. This article briefly examines the application of the major federal employment laws – the Fair Labor Standards Act (“FLSA”), Title VII, Equal Pay Act (“EPA”), Americans with Disabilities Act (“ADA”), Age Discrimination in Employment Act (“ADEA”), and Family and Medical Leave Act (“FMLA”) – to extraterritorial employees.
I. FLSA
The FLSA, the principal federal statute regulating wages and hours, including the minimum wage and overtime compensation, has no extraterritorial applicability. The FLSA expressly provides that it “shall not apply with respect to any employee whose services during the workweek are performed in a workplace within a foreign country . . . .” 29 U.S.C. § 213(f). Thus, for example, a company would not be required to comply with the FLSA in compensating an employee who physically works in India during the workweek, whether the employee is a U.S. citizen or not.
II. FEDERAL DISCRIMINATION STATUTES
Federal courts and administrative agencies tasked with enforcing the federal discrimination laws of the United States have determined that the federal discrimination statutes have very limited extraterritorial application.
A. EPA.
The EPA, which prohibits discrimination in wages based on sex, was enacted as an amendment to Section 6 of the FLSA. 29 U.S.C. § 201 et seq. For this reason, the EEOC – the federal administrative agency tasked with enforcing the EPA – interprets the EPA as having no extraterritorial applicability, like the FLSA. See EEOC Enforcement Guidance N-915.039, § B (Mar. 1989).
B. Title VII.
By contrast, Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment based on race, color, religion, sex or national origin, does have some extraterritorial application. Aliens working for U.S. companies abroad are not covered by the Act. See Shekoyan v. Sibley Int’l, 409 F.3d 414 (D.C. Cir. 2005). But, U.S. citizens working abroad are protected. However, Title VII was amended in 1991 to include a “foreign laws defense.” Under this defense, an employer may escape Title VII liability for discrimination against a U.S. citizen employed abroad upon proof that compliance with Title VII would cause it to violate the laws of the country where the employee is stationed. 42 U.S.C. § 2000e-1(b). This defense is only available to U.S. citizens employed abroad by a U.S. company. Id.
C. ADA.
The extraterritorial reach of the ADA is like that of Title VII. U.S. citizens employed by U.S. companies in foreign countries are covered by the Act, but foreign nationals employed by U.S. companies overseas are not within the Act’s definition of “employee.” 42 U.S.C. § 12111(4). Like Title VII, the ADA was amended in 1991 to include a “foreign laws defense” barring causes of action by U.S. citizens working overseas for U.S. companies where compliance with the ADA would violate the laws of the foreign country. 42 U.S.C. § 12112(c).
D. ADEA.
The ADEA, too, has some extraterritorial application. The ADEA applies to U.S. citizens employed abroad; its definition of “employee” includes United States citizens “employed by an employer in a workplace in a foreign country.” 29 U.S.C. § 630(f). However, like Title VII and the ADA, the ADEA includes a “foreign laws defense” that permits an employer to escape liability upon proof that compliance with the ADEA would cause it to violate the laws of a foreign country – e.g., if a country has a mandatory retirement age. 29 U.S.C. § 623(f)(1).
The EEOC does not interpret the Act to have any applicability to aliens employed by U.S. companies in a foreign workplace. See EEOC Enforcement Guidance N-915.039, § A (Mar. 1989). The Act itself is silent as to its application to non-citizens employed with U.S. companies abroad. The legislative history of the ADEA indicates that this omission was intentional. See H.R. Rep. No. 98-1037, 98th Cong., 2d Sess. 28 (1984) (ADEA was “carefully worded to apply only to citizens of the United States who are working for U.S. corporations or their subsidiaries. It does not apply to foreign nationals working for such corporations in a foreign workplace and it does not apply to foreign companies which are not controlled by U.S. firms.”).
III. FAMILY AND MEDICAL LEAVE ACT
The FMLA applies to “employees who are employed within any State of the United States, the District of Columbia or any Territory or possession of the United States.” 29 C.F.R. § 825.105. Both United States citizens and aliens are excluded from coverage under the FMLA if not employed within the territorial boundaries of the U.S. Id. Moreover, employees employed outside the United States are not counted for purposes of determining employer coverage or employee eligibility. Id.
Wednesday, November 1st, 2006
The Commission has addressed the issue of whether a claimant may file for permanent total disability benefits while he/she is still on an open award for temporary total disability benefits. The case law suggests that this procedure is not favored.
“As a matter of practice, the Commission does wait until nearer the expiration of the 500 weeks before converting a temporary-total award to a permanent-total award since by that time, there is frequently no question as to whether the claimant is permanently and totally incapacitated.” Long v. DBR Const., Inc., VWC File No. 164-30-05 (decided July 6, 2000). Further, “an opinion about potential for future improvements is only speculative, especially upon consideration of the possibility of developments in medical technology that might be beneficial to a claimant.” Id. Therefore, an award of permanent total disability benefits “far in advance of the expiration of the 500 weeks is inappropriate.” Id.
This is not to suggest that a claimant may never convert a temporary total disability award into a permanent total disability award. “We do not hold that the claimant must wait until the full 500-week period for temporary total disability benefits has actually expired before filing [his/her] claim.” Id. However, it is clear that the Commission discourages filing for permanent total disability prematurely.
Permanent total awards present the “worst case scenario” in workers’ compensation claims. Any avenue for defending these claims should be explored.
Where the claimant is on an open award for temporary total disability benefits, and he/she attempts to convert that award into a permanent total award, it should be confirmed that the statutory 500 weeks is close to expiration. Much could happen to the claimant during the 500 week period. Advancements in medical treatment and technology may improve the claimant’s condition to a level where he/she is no longer eligible for a permanent total award under the Code.
Monday, October 23rd, 2006
In Burlington Northern v. White, 126 S.Ct. 2405 (June 22, 2006), the United States Supreme Court decided an important case that set forth a new test as to how courts would need to analyze Title VII retaliation claims.
A recent decision by Chief Judge Jones of the Western District of Virginia gives us some helpful insight as to how retaliation cases may be analyzed after Burlington Northern. In Martin v. Merck & Co., 2006 U.S. Dist. LEXIS 60830 (W.D. Va. Aug. 28, 2006), the Court granted summary judgment to Merck in a case involving allegations of race harassment, discrimination and retaliation. (Plaintiffs have appealed this decision to the 4th Circuit Court of Appeals. Thus, it is possible that the Fourth Circuit could reverse some or all of this decision.)
When Judge Jones issued his opinion in late August 2006, the case had three remaining plaintiffs, two of whom were currently employed. Plaintiff had alleged at least 38 separate objectionable occurrences at Merck’s Stonewall plant over a 25 year period of time. As to plaintiffs’ retaliation claims, plaintiffs alleged 10 specific instances of retaliation and a retaliatory hostile work environment resulting from their filing of EEOC charges in June 2000, initiating a lawsuit in December 2001, and raising various other discrimination allegations. A few of the specific allegations will be discussed below.
1. Change in Shift Found to Be “Minor Inconvenience.”
Plaintiff Martin took issue with the fact that in 2001, she was informed that she could no longer work a straight daylight shift but was given the choice between a rotating shift or a newly-created third shift.
The Court concluded that under the facts of this case, a change in the hours of her shift constituted a “minor inconvenience” which was not deemed to be a “materially adverse” change.
2. Restricting Plaintiff From Working in More Lucrative Area for 5 Months Was Not Materially Adverse.
Plaintiff Thomas was not permitted to work in the “filling room” for five months in 2002 because he had not completed certain mandatory job requirements. Thomas contended that two trainees were allowed to enter the filling room without completing the requirements.
The Court concluded that Merck had a logical explanation for permitting the trainees to work in the filling room and that it otherwise complied with its policy. Thus, the Court concluded that, “Given the temporary nature and logical explanation for Thomas’ exclusion from the filling room, I find that this exclusion…would not dissuade a reasonable worker from making or supporting a charge of discrimination.” Id. at *63.
3. Reassignment to Another Product Line Was Not Materially Adverse.
Plaintiff Tams had worked in an operator position on the packaging line for almost 25 years. Upon returning to work after sick leave in 2001, she had certain work restrictions that Merck contended did not allow her to return to her prior position on the packaging line. Tams argued that Merck should have accommodated her by permitting her to take the spot of a less senior employee who had another position on the packaging line. Tams was placed temporarily in another area. Tams was eventually put back on the packaging line position when there was an opening.
The Court concluded that Tams’ reassignment was temporary, was in the same building and was in the same category of “pharmaceutical processor.” There was no evidence to support that the tasks involved were more arduous or less desirable. Accordingly, the Court concluded that this reassignment was “not materially adverse.” Id. at *66-68.
4. Getting “Cold Shoulder” From Co-Workers Constituted Petty Slight and Minor Annoyance.
Plaintiff Tams alleged that in 2002, she was verbally harassed and insulted in the locker room by two white co-workers because of her race. She complained and the two employees ultimately received one day suspensions. Tams alleged that after she reported the harassment, she subsequently experienced hostility from other employees in the locker room. Specifically, she claimed that the other employees would walk out of the locker room and break room whenever she walked in.
The Court concluded that these actions by her co-workers failed the material adverse prong of retaliation. “While being avoided and ignored by fellow employees is undoubtedly uncomfortable, I find that it is in within the category of ‘petty slights and minor annoyances’ and would not ‘dissuade a reasonable worker from engaging in a protected activity.’”
Concluding Thoughts
The prediction after Burlington Northern was that fewer Title VII retaliation claims would be dismissed by summary judgment. This prediction may turn out to be accurate. These cases, however, will continue to be analyzed on a case-by-case basis. Judge Jones’ decision in Merck is a good example of this point.
On the front end, companies are well advised to include retaliation training and education as part of their overall EEO training for supervisors. Moreover, companies must ensure that they have effective anti-retaliation policies and practices in place to prevent and correct alleged cases of retaliation. Please let us know if we can help you with these initiatives.
Todd Leeson presented the defense counsel’s perspective on Title VII retaliation claims after Burlington Northern at the Virginia Bar Association Labor & Employment Law’s 36th Annual Conference in October 2006. If you would like to know more about this topic or receive a copy of the 23 page paper that accompanied this presentation, please contact Mr. Leeson.
Monday, October 23rd, 2006
On October 6, 2006, Mr. Paxton and Mr. Leeson presented on the above topic at the Virginia Bar Association’s Section on Labor and Employment Law’s 36th Annual Conference. This paper is a shortened version of the 23-page written paper that accompanied the presentation. Readers of this article who would like additional information on this topic should contact Mr. Paxton or Mr. Leeson.
In June the United States Supreme Court decided an important Title VII retaliation case, Burlington Northern & Santa Fe Railroad Co. v. White, 126 S. Ct. 2405 (June 22, 2006). The initial reaction was that this decision would open the floodgates to a new era in employment litigation. While this was clearly an important case with many lessons for corporate America, it is our judgment that the case will not have the devastating impact that many predicted.
Retaliation Claims are on the rise
Lawsuits which include retaliation allegations are unquestionably on the rise and have been for a number of years. In 1991, the Equal Employment Opportunity Commission (EEOC) reported that it had received a total of 8,504 retaliation charges, which constituted only 13.3% of all the charges which the EEOC received under Title VII of the Civil Rights Act, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA) and the Equal Pay Act (EPA). By the end of fiscal year 2005, the number of retaliation charges had risen by more than 250% to a total of 22,278. This figure represented 29.5% of all charges filed with the EEOC in FY2005. Whether Burlington Northern will lead to more EEOC charges is unclear. However, it is almost certain to give attorneys who represent employees a new reason to consider taking a case where acts of alleged retaliation are involved.
The Facts in the Burlington Northern case.
Sheila White was employed as a “track laborer” in the Maintenance of Way department at Burlington’s Tennessee yard. She was hired by Marvin Brown, and was the only woman working in the Maintenance of Way department. Shortly after her employment began, Brown assigned her to operate the forklift as her primary responsibility. In September, 1997 White complained to Burlington officials that her immediate supervisor, Bill Joiner, had repeatedly told her that women should not be working in the Maintenance of Way department. White also alleged that Joiner had made insulting and inappropriate remarks to her in front of her male colleagues. After an internal investigation, Burlington suspended Joiner for 10 days and ordered him to attend a sexual harassment training session.
Brown informed White about Joiner’s discipline on September 26. At the same time, he told White that he was removing her from forklift duty and assigning her to perform only standard track laborer tasks. Brown explained that the reassignment reflected co-worker’s complaints that, in fairness, a “more senior man” should have the less arduous and cleaner job of forklift operator.
On October 10, White filed a complaint with the Equal Employment Opportunity Commission (EEOC). She claimed that the reassignment of her duties amounted to unlawful gender-based discrimination and retaliation for her having earlier complained about Joiner. In early December, White filed a second retaliation charge with the EEOC, claiming that Brown had placed her under surveillance and was monitoring her daily activities. The charge was mailed to Brown on December 8.
A few days later, White and her immediate supervisor, Percy Sharkey, disagreed about which truck should transport White from one location to another. Later that afternoon, Sharkey told Brown that White had been insubordinate. Brown immediately suspended White without pay. White invoked internal grievance procedures. Those procedures led Burlington to conclude that White had not been insubordinate. Burlington reinstated White to her position and awarded her back pay for the 37 days she was suspended. White filed an additional retaliation charge with the EEOC based on the suspension.
After exhausting her administrative remedies, White filed a Title VII action against Burlington claiming that Burlington’s actions in changing her job responsibilities and suspending her for 37 days without pay amounted to unlawful retaliation in violation of Title VII. A jury found in her favor. A divided Sixth Circuit panel reversed the judgment and found in Burlington’s favor on the retaliation claims. The full Court of Appeals vacated the panel’s decision, however, and heard the matter en banc. The Sixth Circuit then affirmed the District Court’s judgment in White’s favor on both retaliation claims. While all members of the en banc Court voted to uphold the District Court’s judgment, they differed as to the proper standard to apply. The United States Supreme Court then granted certiorari to resolve the issue.
Supreme Court’s Decision in Burlington Northern.
The Supreme Court decided two legal issues in Burlington Northern. The Court’s analysis will be summarized below.
A.Court held that Title VII retaliation claims are not limited to those employer actions that are related to employment or the workplace.
As noted above, there were several circuits, including the Fourth Circuit, that had applied the same standards for retaliation claims that they applied to substantive discrimination claims—to be actionable, a plaintiff had to prove that the post-complaint actions resulted in an adverse employment action.
The Court contrasted the language of Title VII’s core anti-discrimination provision with the anti-retaliation provision. It noted that the terms of the anti-discrimination provision “explicitly limits the scope of that provision to actions that affect employment or alter the conditions of the workplace.” The Court further noted that the anti-discrimination provision “seeks to prevent injury to individuals based on “who they are, i.e., their status.” 126 S.Ct. at 2411-12.
In contrast, the Court found that Title VII’s anti-retaliation provision did not use language limiting retaliation to actions that affected the workplace. Moreover, the Court opined that the anti-retaliation provision “seeks to prevent harm to individuals based on what they do, i.e., their conduct.” Id.
Accordingly, the Court concluded that “the employer can effectively retaliate against an employee by taking actions not directly related to his employment or by causing him harm outside the workplace.” Id. at 2412.
As examples, the Court cited cases such as Berry v. Stevinson Chevrolet, 74 F.3d 980 (10th Cir. 1996) (finding actionable retaliation where employer filed false criminal charges against former employee who complained about discrimination).
In conclusion, the Court held that the scope of Title VII’s anti-retaliation provision extends beyond workplace-related or employment-related retaliatory acts and harm. Id. at 2414.
B.Court held that injuries or harm could be actionable if it could be found to be “materially adverse” to a reasonable employee under the circumstances.
The second legal issue concerned how harmful an act of retaliatory discrimination must be in order to fall within the provision’s scope.
Adopting the analysis of the Seventh and District of Columbia Circuits, the Court set forth the following test:
In our view, a plaintiff must show that a reasonable employee would have found the challenged action materially adverse which in this context means it well might have dissuaded a reasonable worker from making or supporting a charge of discrimination. [citation omitted]. We speak of material adversity because we believe it is important to separate significant from trivial harms. Id. at 2415.
The Court provided further insight with statements like the following:
An employee’s decision to report discriminatory behavior cannot immunize that employee from those petty slights or minor annoyances that often take place at work and that all employees experience. Id.
Similarly, the Court noted that “personality conflicts at work,” or “snubbing” by supervisors and co-workers are generally not actionable.
The Court further emphasized that the reference to a “reasonable employee” was used because the “standard for judging harm must be objective.”
In language that is sure to be often cited and frequently litigated, the Court further stated as follows:
We phrased the standards in general terms because the significance of any given acts of retaliation will often depend upon the particular circumstances. Context matters. The real social impact of workplace behavior often depends on a constellation of surrounding circumstances, expectations and relationships which are not fully captured by a simple recitation of the words used or the physical acts performed. . . . An act that would be immaterial in some situations is material in others. Id. at 2415-16.
C. Analysis of court’s standards to facts.
1. Reassignment of White’s duties was found to be materially adverse under the facts.
Burlington argued that White’s “reassignment of duties” did not constitute retaliatory discrimination because she was working as a “track laborer” at the same pay rate both before and after her discrimination complaint. The Court disagreed and found that this fact was not dispositive.
Whether a particular reassignment is materially adverse depends upon the circumstances of the particular case, and should be judged from the perspective of a reasonable person in the plaintiff’s position, considering all the circumstances. Id. at 2417.
Based on the record, the Court concluded that there was ample evidence that White was reassigned to duties that were “more arduous and dirtier,” and that it was “objectively considered” a lesser job than the one she previously held.
2. White’s suspension was found to be materially adverse even though she received back pay for her suspension.
As noted above, after Ms. White had filed an EEOC charge alleging gender discrimination, harassment and retaliation, she had a disagreement with her supervisor that resulted in her suspension without pay for 37 days. White invoked an internal grievance process which led Burlington to conclude that she should not have been suspended. Accordingly, Burlington reinstated White and awarded her back pay for the 37 days she was suspended. Burlington argued that because it ultimately reinstated White with back pay, her retaliation claim as to this incident lacked statutory significance and was not actionable. The Court disagreed.
A reasonable employee basing the choice between retaining her job (and paycheck) and filing a discrimination complaint might well choose the former. That is to say, an indefinite suspension without pay could well act as a deterrent, even if the suspended employee eventually receives back pay. Id. at 2417.
Accordingly, the Court concluded that there was sufficient evidence to support the jury’s conclusion that the 37 day suspension without pay was materially adverse.
Practical Recommendations, Insights, Unanswered Questions and Other Food For Thought.
In Title VII retaliation cases after Burlington Northern, there will be uncertainty in cases in which current employees allege that bad things happened to them after they lodged a discrimination or harassment complaint.
With renewed emphasis on retaliation claims, companies must ensure that they have effective anti-retaliation policies in effect. Cf. Gallina v. Mintz, Levin, 123 Fed. Appx. 558, 565, 2005 U.S. App. LEXIS 1710 (4th Cir. Feb. 2, 2005) (in assessing whether punitive damages were appropriate, court highlighted fact that “there was no evidence that [defendant] had any specific policy regarding retaliation”).
Companies should also emphasize in their training and education, especially to supervisors, that they will not tolerate retaliation. Stated another way, companies need to make sure that their managers know that the company prohibits retaliation against any employee who lodges a complaint of alleged unlawful treatment.
Potential Challenges/Questions for the Employer: How should the company respond when it learns that a current employee has engaged in protected activity by lodging a discrimination or harassment complaint?
- How will the company deal with the “angry supervisor” who may have the following opinion — “We need to run our business. I’m not going to let Sally’s bogus complaint alter how I supervise her. She needs to shape up or face the consequences.”
- What about the “angry or ignorant co-worker” — “I can’t believe Sally complained and got Fred fired. She is evil and manipulative and does not pull her weight. She needs to go. I am not going to deal with her anymore.”
- The human resource director and/or management needs to be more proactive in assessing whether the complainant is experiencing (or is likely to experience) any adverse treatment or change that could be considered material.
- Company management needs to be careful as to its communications, especially internal email. Unless company can claim privilege, email messages regarding the complainant will be discoverable!
- Human Resources and/or upper management should monitor situation, including periodic communications with complainant (preferably confirmed in writing) to ensure that he does not have any current or additional complaints that have not been adequately addressed.
- Company must be especially careful that it has its “ducks in a row” if it needs to take an adverse employment action against the complainant.
- The timing of any adverse action or significant change in the employee’s work environment or status must be carefully considered as part of the overall decision-making process.
What employer actions outside the workplace will be found to be retaliatory?
- It seems that an employer who files a counterclaim or lawsuit against an employee who engaged in protected activity could be subject to a Title VII retaliation claim. Bear in mind that the Court has already concluded that negative job references for former employees could constitute retaliation under Title VII. Robinson v. Shell Oil Co., 519 U.S. 337 (1997). What other claims might exist?
After Burlington Northern, there will be renewed emphasis on whether the employee engaged in “protected activity” (the first element of the prima facie case). See, e.g., Jordan v. Alternative Res. Corp., 2006 U.S. App. LEXIS 20737 (4th Cir. Aug. 14, 2006) (holding that plaintiff’s complaint did not constitute protected activity); Mann v. First Union Nat’l Bank, 2006 U.S. App. LEXIS 14518 (4th Cir. June 13, 2006) (summary judgment affirmed because plaintiff “could not have reasonably believed that the activities she complained of in her September 1998 memoranda were unlawful employment actions prohibited by Title VII”).
Cf. Slagle v. County of Clarion, 435 F.3d 262 (3rd Cir. 2006), cert. denied (June 19, 2006) (Supreme Court declined to review decision that plaintiff’s EEOC charge alleging “civil rights” violations did not constitute protected activity because he filed a facially invalid EEOC charge that did not allege a type of discrimination prohibited by the statute); Anduve v. Fla. Atl. Univ., 151 Fed. Appx. 875, 2005 U.S. App. LEXIS 21255 (11th Cir. Sept. 29, 2005), cert. denied (June 12, 2006) (Court declined to hear case in which Appeals Court concluded that employee who filed an internal race discrimination complaint and participated in its internal investigation was not protected by the “participation” clause of Title VII ‘s retaliation provision).
It is also a safe bet that the “causal connection” element of the prima facie case will receive more attention. Employers will likely more vigorously argue that the purported materially adverse changes cannot be found to be causally connected to the protected activity (i.e., the complaint of unlawful conduct). On this element, the temporal proximity will be an important consideration. See, e.g., Pascual v. Lowe’s Home Centers, Inc., 2006 U.S. App. LEXIS 19760 (4th Cir. Aug. 2, 2006) (3 month time period separated termination from protected activities; court found this time period to be “too long to establish a causal connection by temporal proximity alone”).
Sunday, October 1st, 2006
- Organize. Do not necessarily follow the order of opposing counsel’s direct examination of the witness. Use principals of primacy and recency. What the jury hears first and last are most memorable.
- Utilize the Two Types of Cross-Examination, as Appropriate. There are two types of cross-examination, constructive and destructive.
With constructive cross-examination, the lawyer seeks to get helpful testimony from the witness. Such testimony can corroborate the testimony of one of your witnesses or impeach another witness, either or both of which may be helpful to your case. The format, “Mr. Jones, can we agree that…?” is often useful in framing constructive questions. Frequently, constructive cross-examination is initially used with the other party’s expert witnesses. For example, getting the witness to agree with you that your expert is, in fact, an expert or that his methodology is accepted and reliable in the field can be valuable.
With destructive cross-examination, your goal is to destroy, or at least seriously hurt, the witness’ credibility or limit the effect of her testimony. This is the type of cross-examination we typically think of and, more importantly, that jurors have come to expect from watching television and movies. Destructive cross-examination is “gotcha” time.
Generally speaking, if you need constructive testimony from a witness, it is better to get it first before moving into destructive cross-examination. After having her credibility challenged, the witness will be more likely to fight you on the points about which you seek her agreement.
- Destructive Cross-Examination of Critical Adverse Witnesses. Your goal is to establish your immediate control over the witness in his mind and in the minds of the jurors. Again, jurors have come to expect this and if you fail to come out swinging, they’ll assume you can’t impeach this critical witness. In addition to starting strong, you should finish strong holding certain “zingers” until the end of the cross. Remember, utilize principals of primacy and recency. The first and last things jurors hear stick with them.
Establish and maintain your control over the witness by following the traditional rules of cross-examination: Ask only leading questions, ask only questions which can be answered with a “yes” or “no” (if possible in a situation where either answer hurts the witness) and never ask a question unless, first, it is absolutely necessary and, second, you already know the answer. Don’t ask that one question too many.
Ask questions in which you dare the witness to disagree with you. Assuming you’ve deposed the witness, lay the deposition on counsel table or the lectern where the witness can see it. This visual technique reinforces your challenge to the witness to disagree with you and tacitly tells the witness you expect certain answers from her and that she will pay dearly for varying from those answers.
- Framing your Questions. Your questions should be tight and limited to one fact per question. The more complicated a question or the more loaded it is with facts, the more easily the witness can quibble with it or deny it. The witness may fairly deny the question based the fact that a sub-part or minor fact, for example, is technically incorrect. Don’t give the witness that opportunity—leave out the extraneous stuff.
In framing your questions, and in keeping with the notion that you should dare the witness to disagree with you, don’t use the “Isn’t it true that…?” format. Instead, you, the lawyer, should testify. For example, don’t say “Isn’t it true that the light was red?”, “Isn’t it true that you were going 95 miles per hour?”, etc. Rather, say, “The light was red.”, “You were going 95 miles per hour.”, and so forth.
While opposing counsel might object on the grounds that, technically, you are not asking a question, the question is implied from your tone of voice. In any event, if the objection is sustained, you can revert to using the “isn’t it true that” format to cure the objection. In the process, you’ve succeeded in making opposing counsel look foolish for objecting to a question so easily corrected and the jury has now has gotten to hear the same question twice.
In summary, make your “statement”, get your “yes” or “no” answer and move on. Sometimes the best cross-examination, even of a critical witness who just completed a lengthy direct examination, consists of only a question or two. For example, consider a case in which the other side has an expert, but you don’t for whatever reason (and your not having one doesn’t hurt you). Following the expert’s presumably lengthy and technical testimony where opposing counsel didn’t “draw the sting” by asking the expert about her fees, consider this cross:
Q:Dr. Jones, you’re getting paid $450 per hour to testify here today?
A:Yes.
Q:I won’t take another minute of your time.
A colleague of mine claims to have done this and, while the story is perhaps apocryphal, it does illustrate the value of brevity.
- The Evasive Witness. The witness is evasive, won’t directly answer your question with a “yes” or “no” or claims not to know what the meaning of “is” is. Never interrupt the witness, just go back and repeat your question. Never rephrase it. Repeat it verbatim. If the evasiveness persists, continue to repeat the question exactly slowing down and pausing between words, if necessary. Eventually, the witness will look obstructionist or ridiculous to the jury. You have succeeded already in your cross even if the witness still hasn’t answered your question. Demand a “yes” or “no” answer if that’s what you’re seeking, but never invoke the judge unless all else fails. You will look like a tattletale running to the teacher. Establish and maintain your control, but don’t be rude, ugly or hostile to the witness. For example, if the witness dodges or gives a rambling answer to a simple, direct question, let him finish and then start over saying, “I’m sorry, sir, I must not have been clear. My question actually was…” Hostility is not necessary and the jurors likely will resent it.
- Remember the Point of Cross-Examination. Cross-examination is not a time for the lawyer to grandstand or win a battle of wits with the witness. Cross-examination is, like all other parts of the trial (opening, direct examinations and closing), a means by which you argue your case. If nothing else, remember that and you’ll have conducted a successful cross-examination.
Kevin W. Holt is a partner at the Roanoke, Virginia law firm of Gentry Locke Rakes & Moore, LLP, practicing in the area of commercial litigation. He attended the National Trial Advocacy College at UVA in 2006. This article borrows from the invaluable lessons taught in the program. It was published in Litigation News, Volume XIII Number 4, Winter 2006.
Sunday, October 1st, 2006
On November 17, 1987, National Linen Service v. McGuinn was decided by the Virginia Court of Appeals. Since that time, many questions have arisen concerning what constitutes a de facto award, when is the de facto award applicable, and what defenses, if any, survive an entry of a de facto award.
In McGuinn, the claimant sustained an injury to his ankle in August 1983. Although the claimant had not filed a claim for benefits and no memorandum of agreement had been forwarded to the claimant, the carrier paid temporary total disability benefits from November 22, 1983 through December 17, 1984. Following cessation of these benefits, on January 23, 1985, the claimant filed an application for hearing alleging continuing entitlement to temporary total disability benefits. The claimant alleged the voluntary payments, coupled with the carrier’s failure to submit a memorandum of agreement, warranted the entry of a “de facto” award in favor of the claimant. The Deputy Commissioner agreed, and the Full Commission affirmed.
It is important to note two significant factors which are often lost in the McGuinn shuffle. First, the claimant’s claim for benefits form, filed on January 23, 1985, was within the two year limitation period for filing original claims. Second, it is very significant that the carrier did not dispute the compensability of the original accident. Instead, the carrier relied on the claimant’s failure to market his residual capacity in December, 1984 as a basis for termination of disability benefits. It is regarding this element of the claimant’s prima facie case that McGuinn has significance.
By relying on the marketing issue, the carrier attempted to hold the claimant to his long-standing burden of proving marketing when alleging temporary total disability benefits are owed after a light duty release. McGuinn holds that the entry of a de facto award (based on voluntary payments and failure to contest compensability) obviates the claimant’s burden of proving marketing. McGuinn does not “shift” the burden to the employer (as the employer still has no affirmative duty to produce evidence on this point), but merely relieves the claimant of the obligation to market.
If the employer does want to terminate the claimant’s benefits based on the claimant’s release to light duty, it must do so using the sword (refusal of selective employment) rather than the shield (failure to market). Fortunately, the Commission does not, in almost all situations, force the employer to file an application for hearing prior to the original hearing which results in the de facto award. [See Amigh v. Fox Seko, Const. Inc., VWC File No.: 177-77-47 (May 13, 1997)].
In short, voluntary payments and a failure to contest compensability may result in the entry of a de facto award. After the creation of this de facto award, the claimant has no duty to prove marketing. The employer, as with any effort to terminate an outstanding award, has the burden of proving elements which may give rise to the termination of the outstanding award (e.g. refusal of selective employment, refusal of reasonable and necessary medical treatment, etc.) Of course, the issue then becomes: How long do voluntary payments need to continue to create a de facto award? The short answer to this question is that there is no definitive answer. However, the Commission has held that anywhere from 9 weeks to 5 months is long enough, provided the carrier does not contest compensability. Tatum v. John D. Lucey & Son Plumbing, VWC File No.: 177-73-13 (March 24, 1998). Regrettably, the Commission is intentionally ambiguous. “We decline to establish a bright line test for determining how many weeks of voluntary payments are enough for a de facto award.” Id. Yet, the Commission has stated that “30 days is normally a sufficient period to investigate a claim.” Smith v. Southland Corp., 71 OWC 1,4 (1992).
Friday, July 14th, 2006
A recent federal case re-emphasizes the importance of management training to avoid punitive damages in employment litigation. An Alexandria jury had awarded each plaintiff $600,000 in compensatory damages and $2 million in punitive damages on claims of racial harassment. White v. BFI Waste Services, LLC, 2006 U.S. App. LEXIS 12749 (4th Cir. May 23, 2006). But the Fourth Circuit Court of Appeals held that, while the management training did not insulate the employer from all liability, the adoption and implementation of a comprehensive policy to address the issue did shield it from exposure to punitive damages.
The company argued that it had a complete defense to the harassment claim under the Farragher/Ellerth affirmative defense because it had an effective anti-harassment policy, and that it responded to complaints in accordance with the policy. The company demonstrated that each plaintiff received the policy prohibiting harassment and the procedures to follow if discrimination was experienced, including a separate telephone number for anonymous complaints. The plaintiff admitted that he had never complained through the established process, but the testimony supporting the claims was egregious, including testimony that various BFI managers regularly used racial slurs such as “nigger,” “boy,” “Zulu warrior,” and “porch monkey,” among others. The plaintiffs proved that they complained regularly to the shop steward who reported the complaints, and that the company never responded. The court found that this evidence was sufficient for a jury to find that the anti-harassment policy was “ineffective.”
Punitive damages were a different matter. The Fourth Circuit ruled that the company could not be vicariously liable for the supervisors’ discriminatory actions because they were contrary to the “good faith” efforts taken to comply. The court reiterated: “We have held that distributing an anti-harassment policy and conducting training seminars ‘preclude the award of punitive damages.'” White, 2006 U.S. App. LEXIS 12749 *8 (citing Bryant v. Aiken Reg. Med. Ctrs., Inc., F.3d 356, 354 (4th Cir. 2003), cert. denied, 540 U.S. 1106 (2004)). The court went on to note:
While the ineffectiveness of an anti-harassment policy [can] defeat an employer’s affirmative defense, as we have already noted, a policy’s ineffectiveness alone cannot demonstrate the lack of good faith required for justifying an award of punitive damages. If it could, employers with anti-harassment policies who failed on their affirmative defenses would automatically be exposed to punitive damages, and there would have been no need for the Kolstad Court to have formulated the additional “good-faith efforts” inquiry.
Id. *8-9 (citing Kolstad v. Am. Dental Assoc., 527 U.S. 526, 535 (1999)).
Action Item:
To avoid punitive damages, a three-step action plan is required. First, adopt a comprehensive policy that prohibits discrimination, harassment and retaliation. The courts have not hesitated to allow juries to award punitive damages if an employer’s policy is deficient and does not cover all issues. Gallina v. Mintz, Levin, Cohn, 123 Fed. Apx. 558 (4th Cir. 2005) (no policy that specifically prohibited retaliation, and there was no evidence offered that the managers knew about the anti-retaliation provisions in a manual). Second, training your managers. It is not enough to have a policy, employers must prove that its managerial employees are aware of the policy, how it is implemented, and how it is be enforced. Third, the company must prove it responds to complaints when received. In short, for a company to prove this “good faith” defense it must establish it has a comprehensive policy that is implemented through training and enforcement.
This decision is a critical reminder of the importance of providing regular training sessions for all managerial employees on the topics of discrimination, harassment and retaliation. An annual review of company policies and procedures, and a refresher on the types of conduct that can violate federal law, is not only beneficial to prevent claims, but may provide a shield to punitive damages.
Thursday, June 8th, 2006
A recent U. S. Supreme Court decision has potentially far-reaching implications for self-funded health plans sponsored by many employers. Employers and their insurance companies will need to utilize effective monitoring systems to stay aware of health and medical-related lawsuits filed by plan participants if they hope to recover costs advanced. With the escalating cost of health care, employers unaware of this decision may find it difficult to exercise the subrogation or recoupment rights built into most company’s plans.
In Sereboff v. Mid-Atlantic Medical Services, Inc. (“MAMSI”), decided May 15, 2006, the U.S. Supreme Court held that a health plan can bring a claim against a plan participant under the Employee Retirement Income Security Act of 1974 (“ERISA”) to recover reimbursement of medical costs which the participant had also recovered from a third party in a separate personal injury case. Critically, however, the plan can only do so if the funds from the tort action are “specifically identifiable” and still “within the possession and control” of the plan participant. If the funds recovered from the third party have already been disbursed (by way of payment of a settlement or judgment) and are part of the participant’s assets generally, such an action for reimbursement under ERISA will be barred.
In 2002, the U.S. Supreme Court decided a case similar to MAMSI where a health plan participant was injured in a car accident and the insurer sought to recover the participant’s medical expenses paid by the health plan. The plan contained a typical reimbursement provision which permitted the plan to recoup these costs if the participant recovered the costs from a third party. The personal injury lawsuit arising from the car accident was filed and settled before the subrogation suit was filed. Great West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002).
In Knudson, the Supreme Court held that although ERISA expressly authorizes suits “to enjoin any act or practice which violates the terms of [a] plan, or…to obtain other appropriate equitable relief…to enforce any provisions of the terms of [a] plan,” it found the plan’s suit to be improper. The Court reasoned that the plan was seeking the repayment of money, and was not really seeking the non-monetary “equitable relief” permitted by ERISA.
The Supreme Court did not overrule Knudson in MAMSI, but distinguished it. Because the settlement funds from the third party in MAMSI had been set aside and preserved in the plan participant’s investment accounts and had not been disbursed, the plan could seek reimbursement of medical expenses under ERISA’s “equitable relief” provision. Unlike in Knudson, the plan sought to recover a particular fund from the defendant and was not seeking money damages from the defendant’s general assets. This made the action “equitable” under ERISA and akin to restitution (a common law equitable remedy) rather than an action seeking the payment of money. Thus, an action could be maintained under ERISA.
Practice Pointer: The real-world fallout from these two decisions could prove expensive for employers, but the MAMSI opinion at least provides new hope and helpful guidance about how self-funded health plans should pursue reimbursement rights.
Sponsors of self-funded plans should consider implementing an effective mechanism that will allow them to know about and monitor litigation filed by plan participants (employees and their dependants) for personal injuries, where part of the damages sought are the medical bills that have been paid by the employer’s plan. The plan will then need to attempt to intervene in the case in order to preserve its ability to be reimbursed or bring an action later seeking to enjoin the disbursement of any money to the plan participant before the plan’s reimbursement rights can be decided. Failing to do so could prove fatal in any action brought by the plan for reimbursement of medical expenses under ERISA.
These decisions potentially affect all employers with self-funded plans. If you need advice on these decisions or other issues involving your company-sponsored health plan, please contact the firm at (540) 983-9300.
Monday, June 5th, 2006
Our company has received Notice from the EEOC that a former employee has filed a discrimination charge. What do we need to know about the process?
The Equal Employment Opportunity Commission (“EEOC”) is the federal agency that investigates charges of workplace discrimination, harassment, or retaliation under several federal employment laws such as Title VII, the ADA or the ADEA. When a person files a formal charge, the EEOC provides written “Notice” to the company and usually requests a response. Here is some information regarding the process.
It may be helpful to know that persons file almost 80,000 charges a year with the EEOC. The vast majority of these charges are dismissed and do not result in subsequent litigation. However, an EEOC charge must be taken seriously.
The EEOC will often ask the company if it is interested in “mediation.” A decision to mediate generally means the company is willing to pay or provide something to resolve the charge quickly and confidentially. While mediation should be considered in certain cases, companies often choose not to mediate.
Before responding to the EEOC, we recommend that you consult counsel with experience in employment law. For example, a charge is probably not timely if the alleged adverse employment action occurred more than 300 days before a person filed her charge.
The company will typically provide a written response to the EEOC. It is critical that the statement be truthful. While the company does not want to appear evasive, we generally recommend that the initial response be fairly succinct.
Once it receives the company’s response, there are 3 likely alternatives from the EEOC: 1) dismissal of the charge; 2) a request for additional information; or 3) a request to visit the company to interview key witnesses.
If the EEOC finds “reasonable cause” to believe the company has violated the law, it will issue a written determination and then seek to settle the charge. In the absence of a settlement, the EEOC may, but is not required to, initiate litigation.
The more common result is that the EEOC dismisses the charge. By law, however, when the EEOC issues its dismissal notice, it also informs the charging party that she has a right to file her own lawsuit in court. The charging party usually has 90 days to file a lawsuit or she loses her right to sue.
Please let us know if you would like to know more about responding to EEOC charges, or have questions regarding the EEOC’s practice in Virginia.
Friday, April 21st, 2006
ERISA is the Federal law governing employer-sponsored benefit plans, including health, life, pension and disability plans, established for employees. These plans can be self-funded or insured. Typically, employers engage a third party to administer the plan, such as an insurance company responsible for deciding whether to pay the benefits under the policy.
Can a Plan Create Subrogation Rights?
The answer is a resounding “maybe.” In 2002, the U. S. Supreme Court held that an employer’s health plan could not bring an ERISA claim against an employee for reimbursement of medical costs when the participant had recovered those same expenses from a third party in a separate personal injury lawsuit. The plan contained a typical reimbursement provision permitting the plan to recoup these costs if the participant recovered from a third party. The court held that although ERISA authorizes suits to obtain equitable relief to enforce the terms of a plan (including, presumably, the right of subrogation), the suit was improper because what the employer sought was the repayment of money, which is not “equitable relief.”
A 2005 decision from the Federal Court of Appeals in Richmond suggests that if the money recovered in the personal injury action has not been spent, but remains in an account controlled by the plan participant, the plan may seek reimbursement through enforcement of its subrogation rights. The U.S. Supreme Court is currently reviewing this decision and has an opportunity to provide guidance to plan sponsors and administrators about how to protect their rights to reimbursement.
The impact from these cases is very real. For example, sponsors of self-funded plans apparently should now monitor litigation filed by plan participants for personal injuries where the medical bills have already been paid by the employer’s plan. The plan will need to attempt to intervene in the case, prior to the payment of any judgment damages or settlement funds to the plan participant, in order to preserve its ability to be reimbursed for medical expenses already paid.
Plan Administration Pitfalls—Participants’ Requests for Plan Documents
Employers who administer their own plans (frequently through their human resources departments) may receive requests for plan-related documents from employees (or their participating family members). When an employee makes such a request in writing, the employer is required by ERISA to furnish within 30 days of the request, the current summary plan description and any other documents under which the plan is established or operated. The failure to do so can result in a penalty of up to $110 per day.
The penalties associated with ignored or neglected requests for plan documents can quickly add up. Employers, therefore, should carefully review any such requests in a timely manner.
