So what does this mean to you if you are an employee or an employer?  Before I turn to my view of the case and its affects, please note that this opinion is by no means a complete analysis of the Decision.  I’m simply discussing some of the highlights that I found interesting after reading the opinion and listening to commentary from legal scholars.

Facts

The facts of the case are pretty straight forward.  The case started in 2000, when a 54-year-old Wal-Mart worker in California named Betty Dukes filed a sex discrimination claim against her employer. Dukes claimed that, despite six years of hard work and excellent performance reviews, she was denied the training she needed to advance to a higher salaried position. Wal-Mart’s position is that Dukes clashed with a female Wal-Mart supervisor and was disciplined for admittedly returning late from lunch breaks.

Dukes filed a class action lawsuit in U.S. District Court in San Francisco on behalf of herself and 1.6 million female plaintiffs, including all those who work or have previously worked in a Wal-Mart store since December 26, 1998.  Dukes’ position was that Wal-Mart’s corporate policy was to refuse management training to women, but provide it to men.  What is critical in the Plaintiff’s claim is that Wal-Mart did not have an explicit policy refusing management training to women. Instead, Dukes claimed that such a policy existed because evidence the management at Wal-Mart was predominately male.  The Supreme Court ultimately ruled against Dukes and held that the case could not continue as a class action.

Employee

So if you are an employee what does this mean?  Unfortunately because of this decision it will be very difficult, if not impossible, for groups of employees to bring a class action lawsuit for race/sex discrimination against an employer unless there is an explicit corporate policy encouraging discrimination, which usually doesn’t exist – most companies aren’t that stupid.  Anything less and the case cannot continue as a class action.

Next, and even more frightening for employees and other plaintiffs, is that the decision could extend to other class actions.  Since the Supreme Court issued the decision, other courts have extended the ruling to class actions involving nonpayment of wages (overtime and minimum wage) and toxic tort claims in an effort to prevent class actions from proceeding.  My understanding is that these courts are claiming that the Dukes decision supports the claim that a class action cannot proceed if the court must conduct an analysis on each individual in the class to determine that person’s specific damage.

Employer

Conversely, if you are an employer, especially a large one, the decision is a victory for you.  The Dukes decision virtually eliminates the possibility that employees can come together and bring a class action lawsuit against your company based on discrimination.  The decision also reminds employers to carefully develop objective factors to determine when an employee is entitled to a promotion.  These factors coupled with an extensive anti-discrimination policy should be an effective tool to protect the employer from discrimination suits.

The Future of the Case

Legal scholars, particularly on the plaintiff’s side, are already discussing how the case can be overturnned.  One theory is that legislation can be passed by Congress that amends Title 7 and includes an exception to the Dukes decision.  Sample legislation has already been drafted by a Columbia Law School Professor, but it is unlikely that it will be introduced or passed by Congress since they can’t seem to agree on anything these days.

The next, and more likely way that the case will be overturned, is through a subsequent decision by the Supreme Court.  The decision in Duke’s was decided 5 to 4 (Five justices voting for it, and four voting against it).  Therefore all that is needed is for one of the majority members to retire, for the President to appoint someone who will overturn Dukes, a similar case to be brought before the Supreme Court, and then the Court, consisting of the new member, overturns the case with its new decision.

Who is to say when this will happen, but you can bet that during the next senate confirmation hearing of whoever is appointed, members from both sides will be asking questions to determine how the potential justice views the decision in Dukes.

My View

I disagree with the Court.  As a matter of public policy we need to provide Plaintiff’s with some avenue to have their case heard when it would be too burdensome for the plaintiff to proceed on his or her own.  Think about it, in many class actions, the class is made up of individual plaintiffs whose claim by itself would not justify the legal costs associated with an individual case.  The only way to make such an action feasible is for individuals with similar claims, to pull them together as one group, (i.e. a class) and then bring them at the same time.  If we eliminate this avenue, such as the Duke’s case attempts to do, then thousands of Plaintiff’s due process rights will be affected.  These Plaintiff’s will have no feasible way to bring their case before a court so their rights will continue to be violated and they will have limited or no judicial recourse for such violations.

Conclusion

As discussed above, the Dukes decision is clearly a controversial decision that has affected the rights of employees, employers and anyone else who is either a plaintiff or defendant in a class action.  Only time will tell how long this decision and its affects will last.

In an effort to kill two birds with one stone, when I watched the movie I thought of various employment laws that arose so I could combine those examples into my review about the movie.  The final product resulted in what you’ll read below.  My article essentially consists of the various employment laws that were called into question during the movie and of course my review of the film.  Oh, and don’t worry, I won’t reveal anything that spoils the ending.  

Employment Laws

The employment law issues I picked out of the movie were 1) payment for travel time and 2) the at-will employee relationship. 

Payment for Travel Time

If you’ve seen the movie, you know that the bride to be, Lillian, lives in Milwaukee, but commutes to Chicago for work.  The first issue I spotted here was whether she is entitled to compensation by her employer for time that she travels.  The answer is, probably not.  Compensation for travel time only arises in the context of non-exempt employees.  A non-exempt employee is a person who is (i) not paid on a salary basis, and/or (ii) not employed in an executive, administrative, professional or outside sales capacity.  I don’t know what Lillian did for a living, but if it required her to drive back and forth from Chicago, I assume she probably fell into the professional or outside sales capacity.  Now if she was a non-exempt employee, then the FLSA (Fair Labor Standards Act), Portal to Portal Act and/or Department of Labor Regulations would apply and she might be entitled to some form of compensation.  If you want to learn more about these laws/regulations in this context, feel free to review the following article by clicking here. 

At-Will Employment

The next employment law issue that arose addressed the ever popular at-will employee relationship.  In the movie, the maid of honor, Annie, is terminated on the spot after calling a customer a vulgar word (I’ll exclude the word  for professional reasons).  Of course, the issue I  identified from this, putting aside the comment, was the question of “Could Annie just be fired on the spot?”  

Now if Annie was in Washington State, the answer to this question would likely be “yes” so long as she is an at-will employee.  Employees in Washington are generally at-will, meaning they can quit or be fired at anytime.  Gardner v. Loomis Armored Inc., 128 Wash.2d 931.  In contrast to employment at-will, some employees are given greater protection from termination.  This type of employment is commonly referred to as “just cause employment”.  This higher protection typically arises if the employee has an employment contract with the employer or is working under a collective bargaining agreement which states that the employee can only be terminated for “cause”.  Now the term “cause” can vary, but if you are the employee it’s best to have the definition of “cause” be as narrow as possible.  Conversely, if you are the employer, you want the definition of “cause” to be as broad as possible.   

Now that we know all this, let’s turn back to Annie.   Chances are she was an at-will employee because she likely didn’t have an employment contract and I doubt she was employed under a collective bargaining agreement.   Therefore, her termination was permitted.  In addition, even if she was a “just cause employee”, I’m sure calling a customer a vulgar name would fall under any definition of the term “cause”, particularly the word she used.  Sorry to say this Annie, but your employer’s actions were legal. 

My Review

Okay, now that the boring stuff is out of the way, let’s talk about the movie itself.  From a guys’ perspective, I thought it was great.  Despite the fact that it was hard for me to relate to the challenges of a bridesmaid, I had a good time watching Kristen Wiig and the other actresses deal with the pressures and responsibilities of it.  Kristen Wiig is hilarious and also co-wrote the script.  If you like her on Saturday Night Live, you’ll certainly enjoy her performance.  I think the best part was her reaction on the airplane after mixing medication and scotch.  Calling “Steve” “Stove” was pretty classic.  In sum, I thought it was a fantastic movie.  If you are a guy and your wife / girlfriend / partner is asking you to see it, go! You’ll not only score points with him or her, but also have an enjoyable time and have some good laughs.

Since I practice law in Washington I naturally looked at our state’s case law, but couldn’t find a case on point to answer my question. I expanded my search to other states and found two relevant cases, one in Illinois and the other in Missouri. In 2001, an Illinois’ court found that an employer has no protectible interest in an employee’s customers unless the employer can show the employee would not have had contact with the customers absent his association with the employer. Com-Co Ins. Agency, Inc. v. Service Ins. Agency Inc., 748 N.E.2d 298, *302 (2001). I interpret this to mean that in state of Illinois, that when an employee leaves their employer he or she can bring their clients with him as long as that person brought them to the company at the time they were hired. In addition to this Illinois case, I also found a Missouri case that held the exact opposite. Naegele v. Biomedical Systems Corp., 272 S.W.3d 385, *389 (2008).

So now the question remains, would the Washington court follow Illinois or Missouri? My opinion is that a Washington court would follow Illinois, and here’s why. The backbone of decisions regarding non-competes are that the agreement must be reasonable. In fact, a court in WA will not enforce a non-compete or a provision of the non-compete if it results in an unreasonable outcome. This would be the case if the state followed the Missouri case law. Think about it, in Missouri an employer can hire a salesperson, have them bring their clients to the company, terminate the employee right after the hire date, and prevent the employee from contacting the same clients that he or she brought to the Company. Sounds unreasonable to me, and I think the Washington courts would agree. Therefore, I believe that the Illinois holding discussed above would be adopted by a Washington court.

In the end of it all I guess my niece, i.e. the company, doesn’t get to keep something if it doesn’t belong to them in the first place. Sorry Bailey, but I’ll buy you some M & M’s to make up for it.

In the state of Washington all employees are subject to the minimum wage unless excluded by statute. RCW 49.46.010 excludes certain volunteers as “employees”. The applicable statutes related to interns are RCW 49.46.010(5)(d) and (e). Those sections read as follows:

RCW 49.46.010(d)

Any individual engaged in the activities of an educational, charitable, religious, state or local governmental body or agency, or nonprofit organization where the employer-employee relationship does not in fact exist or where the services are rendered to such organizations gratuitously.

RCW 49.46.010(e)

Any individual employed full time by any state or local governmental body or agency who provides voluntary services but only with regard to the provision of the voluntary services.

The Department of Labor and Industries has also enacted an official policy statement interpreting the above. Most applicable is the section that reads:

DOL Policy

Volunteers are not allowed in a “for-profit” business. Any individual, partnership, association, corporation, business trust, or any person or group of persons acting directly or indirectly in the interest of an employer, who permits any individual to work, is subject to the provisions of the MWA.

In sum, even if the intern is willing to work free the “for profit” business must pay the intern. But come on, interns are usually smart, enthusiastic, and willing to do whatever is needed to get experience. In my mind an employee like that is worth at least $8.55 per hour.

Washing law only permits a potential employer to pull a credit report if it is 1) required by law or 2) substantially related to the job. RCW 19.182.020. If your credit is substantially related to the job, the employer or person pulling the report, must also state in writing the reasons for use of the report. If the employer fails to follow these laws it leaves itself vulnerable to claims under the consumer protection act.

The next logical question that follows is, “What jobs are substantially related to a credit score?” This depends. As with most of the law, there is no clear answer, but I would argue that a substantial part of the position must involve maintaining company finances. For example, obviously a credit score is not substantially related to an applicant’s ability to perform the duties of a machinist. However, a credit score would likely be substantially related to the applicant’s ability to perform the duties of an accountant, i.e. paying bills, balancing a check register, etc. Therefore, obtaining a credit report in the latter situation would be warranted. Because the majority of jobs do not involve the management of company finances, I would estimate that most Washington companies obtaining credit reports as part of the hiring process are violating state law.

Prior to the economic crisis, I don’t think this topic would have generated much attention, and not even a blog post. However, times change and I anticipate that more states will follow Washington’s lead and adopt legislation regulating the use of credit reports during the hiring process.

Although the firm working on the litigation was based in Pennsylvania, I thought I would give my readers some background on the regulations in Washington which require contingency fee agreements to be in writing.

The Rule of Professional Conduct (RPC), in addition to other state laws, governs an attorney’s conduct in Washington State. RPC 1.5 specifically requires that if a lawyer is paid by a client through a contingency fee, the lawyer must have a signed agreement with the client which explains how the fee is paid.

In regards to the Sterling Financial case, the attorney representing the lead plaintiff likely failed to obtain a signed copy of this agreement. Therefore, under the RPC’s it likely would have been unethical for the firm to continue the representation.

Assuming the case was not dismissed with prejudice, a new lead plaintiff will likely come forward, sign the required forms, and proceed with the lawsuit. However, until that occurs the case will be on hold.

If you’ve been following the hiring and firing of coaches such as Jim Mora from the Seattle Seahawks or Jim Zorn of the Washington Redskins, you’ve no doubt heard the commentators bring up the Rooney Rule.

The Rooney Rule requires that before an NFL team can hire a new coach it must interview a minority coach for the position. This rule was passed in 2003 and named after the Steelers’ owner Dan Rooney who had long been an advocate for equality in coaching positions. The rule was passed due to the dismal record of minority hiring in coaching positions. Prior to 2003, although more than 70% of the players were African American, only 6% of the head coaches and 28% of the assistant coaches were minorities.

The rule does not necessarily guarantee equal treatment in the hiring process, but will help create a more level playing field.

Since the suit was filed in federal court, the plaintiffs were entitled to punitive damages up to $300,000. Generally courts don’t award these damages often, unless the conduct is very egregious. In this case, it sounds like it was.

If you want to read more about the settlement, check out the following link:

http://seattletimes.nwsource.com/html/localnews/2009708604_weblowes21m.html

Ryan Pauley

Some of you might be wondering “Can the employer just do that?”  Unfortunately, the answer is “yes”.  Washington is an at-will state.  This means that an employer can fire you for any reason unless:  1) you have an employment agreement, or collective bargaining agreement, that states you can only be fired for cause; or 2) the firing would violate a state or federal law (such as Title VII for the Washington Law Against Discrimination).

Based on the information contained in the article it seems that Key Bank’s firing was justified. I can’t fault Key Bank for having the policy, but I still have to give credit to the teller for standing up for himself.

In case you missed the article, here it is.

http://seattletimes.nwsource.com/html/localnews/2009579648_teller01m.html

http://seattletimes.nwsource.com/html/localnews/2009518030_apwawalmartsettlement.html