October 21, 2014

Tenth Circuit: Threat to Hire Permanent Replacements Not Enough to Invalidate Entire Lockout

The Tenth Circuit Court of Appeals issued its opinion in Teamsters Local Union No. 455 v. National Labor Relations Board on Wednesday, August 27, 2014.

Harborlite, Inc. locked out union members during a collective bargaining dispute. Harborlite threatened to hire permanent workers to replace the locked out union members, and the Teamsters brought a claim with the National Labor Relations Board. The NLRB ordered Harborlite not to make future threats of termination and to post a notice to that effect. Teamsters appealed, alleging that the NLRB should have held the entire lockout unlawful and awarded back pay.

The Tenth Circuit first addressed the Supreme Court’s recent ruling in NLRB v. Noel Canning, 134 S.Ct. 2550 (2014), and found it had jurisdiction, since the NLRB appointment at issue was made during a Senate recess that was longer than the period specified as problematic by the Court.

Turning to the merits of the appeal, the Tenth Circuit could not support the Teamsters’ contention that the lockout became unlawful when Harborlite threatened to hire permanent replacements. The threat did not cause the Teamsters to change their position, and it was not acted upon. A mere threat and nothing more was not enough to convert an otherwise legal lockout to an illegal one. The petition to review was denied.

Tenth Circuit: Jury Verdict and Attorney Fee Award Upheld in Employee Class Action

The Tenth Circuit Court of Appeals issued its opinion in Garcia v. Tyson Foods, Inc. on Tuesday, August 19, 2014.

Tyson employees were required to don and doff certain protective clothing before and after performing job duties. Tyson originally compensated only certain employees for 4 to 7 minutes of this “K-code” time, eventually changing its policy to compensate all employees for 20 to 22 minutes of K-code time. However, based Tyson’s own study, employees were uncompensated for approximately 29 minutes per shift based on the times they punched in and punched out versus actual compensation.

A group of Tyson employees brought class and collective actions against Tyson, seeking unpaid wages for pre- and post-shift activities. After a jury returned an award for the employees and an attorney fee award, Tyson unsuccessfully moved for judgment as a matter of law. Tyson appealed the district court’s judgment and denial of its motion for judgment as a matter of law. Tyson also argued the attorney fee award was excessive.

The Tenth Circuit addressed Tyson’s first argument – whether the evidence was sufficient to support the verdict – and found it was. The question for the jury was whether the K-code system had resulted in underpayment, and the Tenth Circuit found ample reason in the evidence to support the jury’s decision that it had, including Tyson’s own study. Tyson also challenged the proof of underpayment as to each class member. The Tenth Circuit rejected that challenge, because the proof was unnecessary, the jury could rely on representative evidence, and Tyson’s supporting cases are inapplicable.

The jury awarded less to plaintiffs than they requested. Tyson interpreted this to mean that the jury found some class members were appropriately compensated. The Tenth Circuit disagreed, finding the evidence supported a finding of undercompensation for all class members, and noting that Tyson’s argument was speculative.

Finally, the Tenth Circuit addressed the attorney fee award. The Fair Labor Standards Act provides a right to attorney fees to prevailing plaintiffs. The district court awarded over $3 million in attorney fees, despite the much lower awards to the plaintiffs. Because of ongoing class litigation in another county, the district court adopted a procedure whereby it reviewed the attorneys’ time records in camera, allowed disclosure of the hourly rate and number of hours worked, and allowed each side the chance to depose someone on the other side familiar with the billing process. Tyson objected to this process, instead requesting full discovery of billing records. The Tenth Circuit upheld the process and the award, finding good cause for the district court’s procedure and award.

The judgment was affirmed.

Colorado Supreme Court Reverses Years of Precedent in Softrock and Western Logistics

It is advantageous to employers to retain the services of independent contractors when possible. Contractors are not required to be covered by workers’ compensation insurance and employers need not pay unemployment tax out of the contractors’ wages. However, classifying workers as contractors has its risks; after an audit, the employer may be found liable for back taxes on workers who are found to be employees rather than contractors.

That is precisely what happened to Carpet Exchange in 1993, when the Colorado Court of Appeals issued its opinion in Carpet Exchange of Denver v. Industrial Claim Appeals Office, 859 P.2d 278 (Colo. App. 1993). The court of appeals analyzed C.R.S. § 8-70-115(1)(b) and, after applying the factors, decided that the workers in question were employees rather than contractors because they were not “customarily engaged in an independent trade, occupation, profession, or business related to the service performed.” Since then, courts have relied on this one-factor test to determine whether long-term workers are employees or contractors.

Industrial Claim Appeals Office v. Softrock Geological Services, 2014 CO 30 (Colo. May 12, 2014), reversed that precedent. In Softrock, the Colorado Supreme Court rejected the outside employment test as dispositive of whether a worker is an employee or an independent contractor, ruling instead that the totality of the circumstances must be considered and no single factor can be dispositive in deciding whether an individual is customarily engaged in an independent business or trade.

Michael Santo, lead counsel in Softrock, will present a lunchtime program on Friday, August 22, 2014 at the CLE offices to discuss Softrock‘s impact on employment law. Santo will also discuss Western Logistics, Inc. v. Industrial Claim Appeals Office, 2014 CO 31 (Colo. May 12, 2014), a related opinion that the supreme court delivered the same day as Softrock. Employment attorneys, business attorneys, and in-house counsel should attend this informative lunchtime program.

CLE Program: Independent Contractor or Employee? Softrock‘s and Western Logistics‘ Effect

This CLE presentation will take place on August 22, 2014. Click here to register for the live program and click here to register for the webcast. You can also register by phone at (303) 860-0608.

Can’t make the live program? Order the homestudy here — MP3 audio downloadVideo OnDemand

Tenth Circuit: Failure to Exhaust Administrative Remedies Resulted in Dismissal of ERISA Claim

The Tenth Circuit Court of Appeals issued its opinion in Holmes v. Colorado Coalition for the Homeless Long Term Disability Plan on Tuesday, August 12, 2014.

Lucrecia Carpio Holmes was employed by Colorado Coalition for the Homeless and suffered from a number of debilitating medical conditions. She applied for disability benefits through the Coalition’s employee benefit plan disability policy through Union Security Insurance Company. Union Security denied her claim, and Holmes appealed the denial on November 21, 2005. Union Security had 45 days within which to either overturn or uphold the denial, excluding certain tolling periods. Union Security issued its denial on April 7, 2006, 137 days after Holmes appealed. Included in each of Union Security’s denials was a document detailing the appeal procedure, which consisted of two levels of administrative appeal with Union Security prior to filing a civil action in district court.

Instead of filing a second appeal with Union Security, Holmes filed a civil action against the Coalition’s Long Term Disability Plan in the district court on April 28, 2008. The defendant was not aware of the appeal, and default judgment entered against it. Upon learning of the suit, Defendant removed the action to federal court and moved to have the default judgment set aside. The district court granted Defendant’s motion, ruling it had not been properly noticed in the lower court proceeding. Both parties filed cross-motions for summary judgment. While those motions were pending, Holmes filed a motion to stay decision, reopen discovery, and proceed to trial if necessary. The district court denied her motion and granted summary judgment to Defendant, holding that Holmes’s claim was barred because she failed to exhaust her administrative remedies. It found that although Union Security issued its second denial after 137 days, 67 of those days were attributable to Holmes, and Holmes had forfeited her right to enforce ERISA deadlines. The district court also held Union Security had complied with applicable ERISA notice and disclosure requirements. Holmes appealed.

The Tenth Circuit first evaluated Holmes’s argument that the district court erred by ruling she failed to exhaust her administrative remedies. Holmes argued that her Summary Plan Description failed to define the two-level review process, and alternatively she should be deemed to have exhausted her administrative remedies because Union Security failed to comply with ERISA’s timing and notice requirements. The Tenth Circuit addressed the language regarding administrative remedies contained in the plan and the Summary Plan Description, and determined that the administrative appeal process was contained in the plan by reference. Because Holmes failed to complete the administrative appeal process, district court review was barred.

The Tenth Circuit agreed with Holmes that Union Security failed to comply with ERISA’s timing and notice requirements; however, it found Holmes was not prejudiced by that failure. Although the Summary Plan Description failed to inform claimants of the review process, it incorporated by reference the letter detailing the review process that Union Security included with each denial.

The Tenth Circuit affirmed the district court’s dismissal.

Tenth Circuit: Ambiguities in Arbitration Agreement Must Be Resolved in Favor of Arbitration

The Tenth Circuit Court of Appeals issued its opinion in Sanchez v. Nitro-Lift Technologies, L.L.C. on Friday, August 8, 2014.

Miguel Sanchez, along with co-plaintiffs Shane Schneider and Eddie Howard, worked for Nitro-Lift Technologies in and around Johnston County, Oklahoma, servicing and monitoring oil rigs. At the beginning of their employment, they signed a “Confidentiality/Non-Compete Agreement.” They claim they were not allowed to read the document, ask questions, or have an attorney review it before signing. The agreement, which Nitro-Lift alleges is an employment agreement despite its title, contains a broad arbitration clause requiring arbitration for “any dispute, difference or unresolved question” between Nitro-Lift and the employee.

The employees brought suit against Nitro-Lift in the Eastern District of Oklahoma, alleging violations of the FLSA because they were forced to work more than forty hours nearly every week and did not receive overtime compensation from Nitro-Lift for the hours they worked in excess of forty hours per week. In response, Nitro-Lift filed a motion to dismiss and compel arbitration pursuant to the provision in the purported employment agreement, or, alternatively, a motion to stay pending arbitration. Plaintiffs argued the arbitration agreement was unenforceable as to their FLSA claims for a variety of reasons, their wage disputes did not fall under the scope of the arbitration clause, the arbitration clause’s fee-shifting provisions were impermissible as to their employment dispute, and the forum selection clause and application of commercial arbitration rules make the clause unenforceable because they would force employees to pay substantial costs they cannot afford. The district court denied Nitro-Lift’s motion to compel arbitration, ruling that the contract’s broad arbitration clause did not encompass wage disputes because the contract only applied to confidentiality and non-competition. Nitro-Lift filed an interlocutory appeal, and on the same day filed a new motion to dismiss based on plaintiffs’ amended complaint adding Howard and reasserting the same issues contained in its original motion. The district court denied Nitro-Lift’s second motion as a motion for reconsideration. Nitro-Lift timely appealed and the appeals were consolidated for Tenth Circuit review.

The Tenth Circuit first addressed the dispute regarding the applicability of the arbitration clause. The Tenth Circuit found a strong presumption in favor of arbitration, noting that any ambiguities must be resolved in favor of arbitration. Because the Tenth Circuit found ambiguity regarding whether the arbitration clause applied to the dispute at hand, it ruled that arbitration was required and reversed the district court’s denial of the motion to compel arbitration.

The district court did not address plaintiffs’ FLSA claims, and the Tenth Circuit declined to address them for the first time on review, instead remanding to the district court for determination of plaintiffs’ unresolved issues. The Tenth Circuit also left for the district court determination of whether the fee-shifting provision in the arbitration clause rendered the agreement unenforceable in light of U.S. Supreme Court and Tenth Circuit precedent. The Tenth Circuit also declined to address plaintiffs’ argument that Nitro-Lift’s willingness to waive the fee-shifting provision, the forum selection clause, and the rules governing arbitration constituted an impermissible unilateral contract amendment, instead leaving this issue for the district court’s determination.

The district court’s denial of Nitro-Lift’s motion to compel arbitration was reversed and the case was remanded for further findings consistent with the Tenth Circuit’s opinion.

Tenth Circuit: Statements in Articles, When Read in Context, Revealed Nasty Employment Dispute but Did Not Constitute Defamation

The Tenth Circuit Court of Appeals issued its opinion in Hogan v. Winder on Tuesday, August 5, 2014.

Beginning in 2008, Chris Hogan worked for the Utah Telecommunications Open Infrastructure Agency (UTOPIA), a state agency charged with upgrading high-speed internet access, as a consultant under a professional services agreement. In 2011, Hogan suspected that UTOPIA’s executive director unfairly favored a bid for services from a company where the director’s brother worked. Hogan discussed his suspicions with the plant manager overseeing the contractor selection process, the plant manager discussed that conversation with the executive director, and the executive director terminated Hogan’s employment.

The day after the termination, the mayor of West Valley City, Utah, Michael Winder, requested an interview with Hogan. At that meeting, Hogan began to suspect that Winder was associated with UTOPIA. Hogan then hired an attorney who sent UTOPIA a draft complaint, alleging wrongful discharge and several contract claims. The attorney also sent UTOPIA a letter that Hogan would be amenable to settling the dispute. The attorney sent UTOPIA another letter a few days later, raising four demands for settlement and suggesting that the public scrutiny from Hogan’s lawsuit could destroy the company. UTOPIA’s attorney responded with a letter saying that the common terms for Hogan’s attorney’s demands were “extortion” and “blackmail.” Shortly after these exchanges, both parties filed suit. UTOPIA requested the state court to seal the record. Hogan filed suit in federal court and, after the Salt Lake Tribune wrote a story about the lawsuit, UTOPIA moved to seal the record in the federal suit as well. The state court denied the motion to seal, and UTOPIA voluntarily dismissed its case and its motions to seal. Five days later, an online media outlet published a story titled “Former UTOPIA contractor accused of extortion.” It was later revealed that Winder pseudonymously wrote the article. Other news outlets published condensed versions of Winder’s article. Hogan sued UTOPIA, Winder, the city, and a number of other persons he believed to be involved in the publication of the articles, alleging defamation, false invasion of privacy, intentional infliction of emotional distress, and § 1983 violations.  The district court dismissed all his claims and Hogan appealed to the Tenth Circuit.

The Tenth Circuit affirmed the district court’s dismissal, examining each claim in turn. The Tenth Circuit noted that the potentially defamatory statements were explained by the articles’ context. Examined in context, the Tenth Circuit found that any reasonable reader would realize the parties were embroiled in a nasty employment dispute and would not take the statements at face value. Likewise, Hogan’s arguments that the statements portrayed him in a false light fail, because taken in context, any reasonable reader would recognize that the statements were made during a nasty employment dispute. As to Hogan’s claims regarding intentional infliction of emotional distress, the statements do not meet Utah’s high standard requiring outrageousness, and these claims fail as well. Finally, the Tenth Circuit addressed Hogan’s § 1983 civil rights claims. The district court concluded that Hogan failed to show the officials were acting under the color of state law while publishing the articles, and the Tenth Circuit agreed.

The judgment of the district court was affirmed.

Colorado Court of Appeals: Department Cannot Retroactively Deny Previously Approved Paid Sick Leave for Essential Employees

The Colorado Court of Appeals issued its opinion in Idowu v. Nesbitt on Thursday, July 31, 2014.

Overtime Compensation—Retroactive Cancellation of Approved and Taken Leave Time for Essential State Employees—CRS § 24-50-104.5(1).

Plaintiffs Idowu and Whitfield are employed as Health Care Tech IIIs at the Colorado State Veterans Nursing Home at Fitzsimons (Fitzsimons), a facility operated by the Colorado Department of Human Services (DHS). Plaintiff Steele is employed at Fitzsimons as a Nurse III. Plaintiffs are designated as “essential” state employees. CRS § 24-50-104.5(1) provides that authorized paid leave time counts as work time for purposes of providing overtime compensation to essential state employees.

Plaintiffs each received approval from their supervisors to take paid leave time, which, when combined with their work time, totaled more than forty hours in the workweek. Following the end of the relevant pay period, DHS, acting pursuant to a state personnel regulation allowing agencies to “deny, delay, or cancel leave” to reduce overtime liability, adjusted plaintiffs’ timesheets to reflect forty hours of work for the week. Plaintiffs grieved the alterations to their timesheets. The administrator of Fitzsimons denied the grievances.

Plaintiffs petitioned the State Personnel Board (Board), and the grievances were reviewed by defendant, the Executive Director of the Colorado Department of Personnel and Administration (Director), who upheld the denials. The district court upheld the Director’s decision. Plaintiffs appealed.

The Court of Appeals first upheld the denial of Steele’s grievance as untimely. Steele had ten days after learning Fitzsimons had reduced her sick hours to file a grievance. She filed it twenty-three days after receiving her paycheck.

The Court then turned to Idowu and Whitfield’s contention that the Director erroneously applied Regulation 3-34 and the district court erroneously interpreted CRS § 24-50-104.5(1) to allow Fitzsimons to cancel previously approved leave time that had been taken by them. The Court examined the statutory language and found no discretion in the agency to withdraw its authorization once an employee had acted in reliance on the authorization by taking the requested leave (as opposed to withdrawing the authorization before the employee took the requested leave). The Court also found that the Director cannot enact a regulation that would allow her to avoid the mandate in CRS § 24-50-104 requiring that authorized paid leave be counted toward the work of essential employees.

Accordingly, the judgment was reversed in regard to Idowu and Whitfield’s complaints. The matter was remanded for an entry of an order requiring that they be awarded back pay in the amount of overtime they would have received had their periods of authorized paid leave been counted toward the calculation of overtime. The judgment was affirmed in regard to Steele’s grievance.

Summary and full case available here, courtesy of The Colorado Lawyer.

Tenth Circuit: Discrimination Claims Time-Barred Under Federal Employee 45-Day EEO Charge Time Limit

The Tenth Circuit Court of Appeals issued its opinion in Green v. Donahoe on Monday, July 28, 2014.

Marvin Green worked for the postal service since 1973 and was the postmaster for Englewood, Colorado, from 2002 until his termination in 2010. At the time of the events leading to his termination, he had no disciplinary report in his permanent file. In early 2008, a postmaster position opened in Boulder, and Green applied for the position. He was not hired, and filed a complaint of racial discrimination with the Postal Service’s EEO Office. He requested a hearing with the EEOC and the matter eventually was settled.

In May 2009, Green filed an informal EEO charge alleging that his supervisor, Christ, had begun retaliating against him for his prior complaint of discrimination, saying that the supervisor intimidated, threatened, and harassed him. He filed a similar charge in July of that year, adding his new supervisor, Smith. The EEO Office informed Green that he could file a formal charge, but he did not do so.

In November 2009, Green received a letter from Charmaine Ehrenshaft, who was the Postal Service’s Manager of Labor Relations for his district, requiring him to appear for investigation of allegations of non-compliance regarding Green’s purported mishandling of the grievance procedure between April and December 2009, resulting in many adverse decisions against the Postal Service. Ehrenshaft and her supervisor, Knight, conducted the formal interview on December 11, 2009. Green was represented by Robert Podio of the National Association of Postmasters. Green was interrogated regarding processing of grievances, allegations that he had intentionally delayed the mail, and allegations of sexual harassment. After Ehrenshaft and Knight concluded their interview, Green was questioned by the Office of the Inspector General regarding federal mail fraud liability for intentionally delaying the mail.

After the OIG’s interview, Knight and Ehrenshaft reappeared and gave Green a letter informing him that he was placed on off-duty status immediately without pay due to the allegations. Unbeknownst to Green, after the interview, the OIG concluded that he had not engaged in wrongdoing. Podio began negotiating  with Knight to resolve the matter, and Knight insinuated that Green would be federally charged for delaying the mail. Green signed a settlement agreement, providing that he would give up his position as Englewood postmaster and would have until March 2010 to decide if he would retire or take a lesser position as postmaster in Wamsutter, Wyoming, for significantly less pay.

On January 7, 2010, Green met with an EEO counselor and filed an informal charge alleging retaliation regarding the December 11 interview. He filed the formal charge on February 17. The EEO Office dismissed the complaint because he had entered into a settlement agreement. On February 9, Green submitted retirement papers, effective March 31, 2010. On March 22, he initiated EEO counseling, alleging constructive discharge for his forced retirement. He followed up with another formal charge on April 23. The EEO Office accepted his charge on three grounds: (1) he was constructively discharged; (2) he was downgraded from a level 22 postmaster to a level 13 postmaster; and (3) his pay-for-performance salary increase was stopped. Green’s attorney advised the EEO Office to pursue only the first claim because the other two claims had been dismissed with the February 17 charge.

In September 2010, Green filed his complaint in this lawsuit. He amended his complaint in July 2011 to add five retaliatory acts in violation of Title VII: (1) the letter notifying him of the investigatory interview; (2) the investigatory interview; (3) the threat of criminal prosecution; (4) his constructive discharge; and (5) the emergency placement to Wyoming. The district court dismissed his first three claims for lack of subject matter jurisdiction. The district court later found that Ehrenshaft had in bad faith destroyed records and as a sanction would inform the jury that it could infer pretext from the destruction. However, in February 2013, the district court granted summary judgment to defendants on the remaining charges, ruling that Green’s emergency placement was not an adverse action and his constructive discharge claim was time-barred. Green appealed.

The Tenth Circuit first looked at the different rules for Title VII complaints for federal employees, noting that employees have 45 days within which to contact an EEO officer within their agency, as opposed to the 180 days given to private sector employees to file a charge of discrimination. Employees must exhaust all administrative remedies before filing a formal complaint.

Green did not submit an EEO charge regarding his first three complaints until April 23, 2010. The basis of these complaints was the December 11, 2009 interview and investigation, so April 23 was well beyond the 45-day deadline. As for the constructive discharge claim, Green alleged that the 45 days did not begin until he decided whether to retire or move to Wyoming. However, the Tenth Circuit determined that the adverse employment action occurred in December 2009, so this claim was also time-barred.

The Tenth Circuit then turned to the emergency placement claim. The district court had determined that Green could not prove the emergency placement was materially adverse. The Tenth Circuit disagreed. Green had not known that the federal investigators decided not to charge him, and did not know he would be paid when he agreed to the settlement agreement. This was enough to constitute a materially adverse employment action.

The Tenth Circuit affirmed the district court’s dismissal of the charges based on the investigative interview, the letter, the threat of criminal charges, and the constructive discharge. The Tenth Circuit reversed the district court’s judgment on the emergency placement claim, remanding for further proceedings.

Tenth Circuit: Employee’s Untruthfulness and Abuse of Sick Leave Justified Termination Despite Qualifying for FMLA Leave

The Tenth Circuit Court of Appeals issued its opinion in Dalpiaz v. Carbon County, Utah on Friday, July 25, 2014.

Bridget Dalpiaz worked as the benefits coordinator for Carbon County, Utah, from February 1995 until her termination in September 2009. As benefits coordinator, Dalpiaz scheduled doctor’s appointments for new county employees and was very familiar with the process for taking FMLA leave. She had favorable evaluations and no disciplinary history until she was in a car accident in April 2009.

After her motor vehicle accident, Dalpiaz missed work from April 3 through July 13, 2009, and she returned on a limited basis on July 13. Because of the extended absence, her supervisor requested that she submit a request for FMLA leave and mailed her a form in May 2009. Dalpiaz did not respond and did not submit the form. The supervisor emailed Dalpiaz on June 12, requesting that she return the FMLA form as soon as possible. Dalpiaz did not respond. The county attorney sent Dalpiaz a letter on June 30, advising her that she must return the form by July 10. Dalpiaz returned the form at 4:22 p.m. on July 10. On July 13, Dalpiaz returned to work for two hours a day, two days a week, per the restrictions set by a spine specialist she saw.

While she was gone from work, her supervisor received eight written statements from coworkers that Dalpiaz was engaging in physical activities that seemed inconsistent with her claims for injury. Because of these reports, the county requested that Dalpiaz submit to an IME and gave her three physicians from which to choose for this exam. Dalpiaz never responded. The county attorney then sent Dalpiaz a letter requesting her to schedule the exam by August 3, and advising her that failure to schedule the exam may result in disciplinary action. Dalpiaz attempted to set the exam but was told she needed a referral. Instead of obtaining the referral, she sent a letter to the county attorney regarding the referral and inquiring if it was now county policy to force employees to submit to IMEs. Eventually, Dalpiaz was terminated for five reasons – (1) failure to timely complete the FMLA forms; (2) failure to schedule an IME; (3) significant evidence of untruthfulness regarding her injuries; (4) abuse of sick leave; and (5) personal use of a camera belonging to the county. Dalpiaz filed a federal complaint on six grounds, the sixth alleging the county interfered with, restrained, and/or denied her right to FMLA leave. The district court granted summary judgment to the county on all counts.

Dalpiaz appealed only the grant of summary judgment related to the interference with FMLA leave. The Tenth Circuit first determined that the type of FMLA at issue in this case was retaliation, even though Dalpiaz only pled interference in her complaint. In response to the county’s claims that Dalpiaz waived the issue of retaliation by not pleading it in her complaint, Dalpiaz asserted that she did not need to specifically claim retaliation to preserve the issue. The Tenth Circuit disagreed with Dalpiaz, remarking that nothing in her complaint referenced retaliation, and instead she tracked the language pertaining to interference.

Examining her claims under the interference context, the Tenth Circuit found that Dalpiaz was entitled to FMLA leave and the county may have taken an adverse action which interfered with her right to FMLA leave. However, as to the third prong of the interference test, whether her termination was related to the exercise of her FMLA rights, the Tenth Circuit agreed that the county would have terminated Dalpiaz regardless of her FMLA status. The Tenth Circuit noted ample evidence in the record of the county’s sincere belief in Dalpiaz’s untruthfulness regarding the extent of her injuries and abuse of sick leave. The Tenth Circuit also noted that the county was justifiably concerned with Dalpiaz’s failure to return the FMLA forms “as soon as possible” as directed by her supervisor, instead choosing to return the forms at the last minute. Dalpiaz also failed to make an IME appointment as directed and did not put forth a good faith effort to make the appointment. The evidence, taken in the light most favorable to Dalpiaz, supported the county’s termination. The Tenth Circuit affirmed the district court’s grant of summary judgment.

Tenth Circuit: Summary Judgment Appropriate Where No Employment Relationship Existed

The Tenth Circuit Court of Appeals issued its opinion in Knitter v. Corvias Military Living, LLC on Tuesday, July 15, 2014.

Lisa Knitter worked as a handyman for Lewis General Contracting (LGC) from March to October 2010. During this time, LGC’s sole client was Corvias Military Living, formerly known as Picerne Military Housing (Picerne). Ms. Knitter performed handyman services solely on Picerne properties. Picerne properties were divided into neighborhoods, and each neighborhood had a neighborhood manager and a maintenance supervisor. Ms. Knitter worked on several Picerne neighborhoods, but had disputes with Picerne staff in three of the neighborhoods. Ms. Knitter called Mr. Lamb, the Assistant Director of Maintenance Operations for Picerne, to complain about sexual harassment and gender discrimination in one of the neighborhoods. After this phone call, Mr. Lamb contacted Mr. Lewis to request that Ms. Knitter no longer be assigned to do handyman work at Picerne. Because LGC had no work outside Picerne, Ms. Knitter was terminated.

Ms. Knitter sued Picerne under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq, alleging that she was paid lower wages than her male counterparts and she was fired in retaliation for her discrimination claims, and also that she was denied vendor status after her firing in retaliation for her prior complaints of discrimination. The district court granted summary judgment to Picerne, finding that it was not Ms. Knitter’s employer, and dismissed her retaliation claims for the denial of vendor status because Ms. Knitter had never applied for employment with Picerne.

The Tenth Circuit affirmed the summary judgment and dismissal. It applied the joint employer test set forth in Bristol v. Board of County Commissioners, 312 F.3d 1213 (10th Cir. 2002), and found that at no time was Picerne Ms. Knitter’s employer. Because Picerne was not Ms. Knitter’s employer, her claims of gender discrimination and wrongful termination necessarily failed, since Title VII applies only to employers. The Tenth Circuit then examined Ms. Knitter’s claims that she was denied vendor status in retaliation for her discrimination claims. The Tenth Circuit determined that at no time did Ms. Knitter apply for employment with Picerne, so there could be no retaliation based on an employer-employee relationship. The district court’s grant of summary judgment was affirmed.

Colorado Court of Appeals: Prevailing Employee Presumptively Entitled to Attorney Fees Under Colorado Wage Claim Act

The Colorado Court of Appeals issued its opinion in Lester v. The Career Building Academy on Thursday, July 3, 2014.

Attorney Fees Under the Colorado Wage Claim Act.

Lester appealed a jury verdict awarding him $12,307.69 in unpaid compensation based on breach of an implied contract with defendant, The Career Building Academy (TCBA). TCBA is a Colorado nonprofit corporation that provides vocational training, with an emphasis on residential construction, to high school students.

In 2011, Lester orally agreed to work as TCBA’s chief operating officer. Rick Johnson, TCBA’s founder, promised to pay Lester an annual salary of $150,000, of which $75,000 would be paid by TCBA and $75,000 by Johnson Heating and Plumbing (JHP).

During his first six months, Lester was paid twice, totaling $7,884 in gross pay. Lester resigned and sent a wage demand to TCBA. TCBA rejected the demand, contending that Lester agreed to volunteer as chief operating officer. Lester sued TCBA and JHP, seeking unpaid wages and compensation, as well as penalties and attorney fees.

A jury determined Lester had entered into an implied contract with TCBA and returned a verdict in his favor for $12,307.69. The court dismissed Lester’s claim against JHP. Following the verdict, Lester requested that the court award him statutory penalties and attorney fees under the Colorado Wage Claim Act (CWCA). TCBA argued that the CWCA did not apply to an implied contract. After applying factors in Carruthers v. Carrier Access Corp., 251 P.3d 1199 (Colo.App. 2010), used to determine an award of attorney fees to prevailing employers, the trial court denied the request.

On appeal, Lester argued it was error to apply the Carruthers factors to a prevailing employee who is presumptively entitled to an award of attorney fees. The Court of Appeals agreed. CRS §8-4-110(1) allows a court to award costs and attorney fees to the prevailing party on a CWCA claim. Unlike a prevailing employer, a prevailing employee is presumptively entitled to attorney fees under the CWCA. The attorney fee issue was remanded for reconsideration under the correct standard by the trial court.

Lester also argued it was error for the trial court to have, sua sponte, dismissed his claims against JHP as a matter of law. The Court found no reversible error. It also determined that because JHP was neither a member of TCBA nor an individual, the alter ego doctrine could not be applied to it.

The Court held that if the trial court decides that Lester is entitled to attorney fees in the trial court, Lester also should be awarded appellate attorney fees. The denial of attorney fees under the CWCA was reversed and the case was remanded to the trial court to consider Lester’s request for attorney fees, incurred in the trial court and on appeal.

Summary and full case available here.

Tenth Circuit: County Violated Title VII by Terminating Employee After He Helped Colleague Pursue Sexual Harassment Claim Against Employer

The Tenth Circuit Court of Appeals issued its opinion in Barrett v. Salt Lake County on Friday, June 13, 2014.

Michael Barrett was employed by Salt Lake County for 14 years, where he received promotions and favorable reviews until he helped a colleague pursue a sexual harassment claim against her boss. After he assisted his colleague, he was demoted by the county. He sued, alleging the county violated Title VII by retaliating against him, and the jury found for Mr. Barrett.

The county appealed, asserting that it was entitled to judgment as a matter of law. The Tenth Circuit disagreed, noting that the case on which the county relied play no role in post-trial motions. The county also alleged that the jury instructions provided the wrong procedural framework for determining Title VII cases. However, the jury received instruction on the proper procedural framework and decided the case accordingly, so the county’s argument failed. The county also objected to another jury instruction, but this objection was not properly preserved at trial.

The county also disagreed with the district court’s award, not restoring Barrett to his former position since the position had been filled but instead restoring him to his prior level of pay. The county claimed that the result afforded Barrett a “windfall” for performing less work for more pay. However, the Tenth Circuit was unsympathetic to this argument, noting that the district court retains wide discretion in determining equitable relief.

The final argument raised by the county was that the district court’s award of attorney fees to Barrett for fees incurred during the internal grievance process was in error because it was an optional process, not a mandatory exhaustion of administrative remedies. On that limited point, the Tenth Circuit agreed. The Tenth Circuit remanded for redetermination of attorney fees and affirmed on all other points.