Tuesday, August 29, 2006

Saudi Prince and Security Company are Liable For Overtime as Joint Employers Fourth Circuit Rules

The issues in Schultz v. Capital International Security, were: (1) whether a Saudi Prince and a Security company were joint employers for purposes of the FLSA; and (2) whether the security guards were employees or independent contractors.

According to the Fourth Circuit, because both Prince and the Security Company ("CIS") shared control over the guards, they should be considered a joint employer

Both the Prince and CIS were involved in the hiring of agents.. . CIS advertised for agents and screened responses, which were forwarded to the detail leader. The detail leader, who was on the CIS payroll and reported to [the Prince's representative], interviewed selected applicants; the Prince's representative]had the final word on hiring. [The Prince's representative]generally handled agent work schedules, compensation, discipline, and terminations, but CIS played some role in these matters. CIS maintained the authority to discipline agents and change the terms of their employment.

With respect to the independent contractor issue, the Court easily determined that the guards were employees because the Prince and CIS "exercised nearly complete control over how the agents did their jobs."

This decision, while not creating new law, is important because it clarifies when two entities can be considered a "joint employer" for overtime purposes, even if one entities has no responsibilities for payroll. The Court's reasoning could certainly be applied to a temporary agency/employer relationship.

Wednesday, August 23, 2006

Employment Law: News of the Weird

It is the week before school starts. The Courts are not writing opinions; Maryland Employment Law is not developing (this week). So I give you this:

People With Issues

In July, Cory Neddermeyer, 42, was turned down for unemployment benefits in Iowa, after a judge ruled that he was fired for cause. His employer, the Amaizing Energy ethanol plant, suffered a massive spill that created a pond of fuel alcohol, and Neddermeyer (a recovering alcoholic), after resisting as long as he could, gave in and started drinking from the pool (causing him to pass out and later register an 0.72 blood-alcohol reading). [Des Moines Register, 7-9-06]

Tuesday, August 22, 2006

Q: Which Overtime Law applies -- Maryland or Federal? A: The Law That Most Benefits the Employee.

  • There is a Maryland overtime law. There is a Federal overtime law. Which one applies? The one that is most favorable (or provides a greater benefit) to the employee.

    So, the Maryland law carves out employers in certain industries, such as:

    Trucking companies which operate interstate
    Hotels or motels
    Gasoline service stations
    Private country clubs
    Not for profit
    temporary home care services
    Not for profit concert promoter or theater
    Some amusement or recreational establishments, including seasonal swimming
    pools (However, companies which manage such establishments may still be required
    to pay overtime)
    Food processing companies engaged in canning, freezing,
    packing, or first processing of perishable or seasonal fresh produce, poultry,
    or seafood.
  • But the Federal law may nevertheless apply. For example, the Federal law does not carve out Restaurants. If you have any doubt as to what law applies, you should contact an attorney.

Tuesday, August 15, 2006

On Reconsideration: Court of Special Appeals reaffirms that Statute of Limitations Bars Workers Compensation Claim

I wrote here that the Court of Special Appeals denied a workers compensation claim because the employee waited too long to file it. I stated:

On January 2, 2002, Randolph Griggs was injured while working construction. On February 20, 2004, Mr. Griggs filed a workers compensation claim. Maryland Law requires employees to file such claims within two years of the accident. Because Mr. Griggs's claim was untimely, the Court of Special Appeals affirmed the dismissal of his case. The Court did not buy the argument that Griggs's employer -- by promising to file a claim for him -- actually induced Mr. Griggs to wait more than two years to file with the Workers Compensation Commission.

On reconsideration, the Court of Special Appeals affirmed its decision and had this to say:

Our opinion was first filed on June 1, 2006. Griggs asks us to reconsider our decision, arguing that we erred by “shift[ing] the burden of producing undisputed facts” from appellees to him. In his view, it is “inconsistent to hold that a reasonable person could have relied on the letter to his or her detriment but refuse[] to draw the inference that [Griggs] did actually have such a reliance.” He argues that, because “there is no evidence refuting appellant’s actual reliance on the letter,” he cannot be required to produce evidence of actual reliance in order to survive the motion for summary judgment. We do not agree.

Estoppel under LE section 9-709(d)(1) requires proof of actual reliance. . . Although appellees had the summary judgment burden of establishing that Griggs did not rely on them to file his claim, they satisfied that burden by pointing to established law that an employer is not obligated to file a worker’s compensation claim on behalf of its employee. . . Griggs did not present any evidence that he construed the December 15, 2003 letter as an offer to file his claim and that he did not file the claim because of that offer. We therefore deny the motion for reconsideration.

Monday, August 14, 2006

Fourth Circuit Re-Affirms Decision in "Black Monkeys" Case

"They should put those two black monkeys in a cage with a bunch of black apes and let the apes f--k them."

I wrote here that an employer was free to retaliate against an employee for reporting the above comment to his employer. A majority opinion (Judge Niemeyer joined by Judge Widener) held that the employee could not have reasonably believed that above single outburst constituted a civil rights violation. This is so because a single racially derogatory remark does not rise to the level of actionable racial harassment

I then wrote here the Fourth Circuit panel vacated it decision for reconsideration.

The Fourth Circuit re-issued its opinion and reached the same result as the original decision. (Judge King dissented.)

I am sure the plaintiff will seek re-hearing en banc.

Thursday, August 10, 2006

Maryland District Court Rules Waiver-For-Severance Deal Violates ADEA and Title VII

In a shocker, Judge Titus ruled in EEOC v. Lockheed Martin Corp, that Lockheed Martin's offer of severance in exchange for a full waiver of claims violated the ADEA and Title VII as a matter of law. Lockheed eliminated several positions as a result of a merger. It offered those losing their jobs severance benefits in exchange for a complete release of claims. Judge Titus ruled that Lockheed's could not "provide [severance] only to employees who refrain from protected activity."

Washington Post and Baltimore Sun Cover Steffen's testimony

Ehrlich Adviser Details Firings

Steffen, From Ehrlich's Transition Team in 2002 to Yesterday's Testimony

Taciturn 'Prince of Darkness' Leaves Assembly in Just That

Steffen's testimony raises perjury issue

Wednesday, August 09, 2006

Steffen Ordered to Testify

Following up on yesterday's posting, a Harford County Circuit Court Judge ordered Joseph Steffen to testify today before the Committee examining Governor Ehrlich's employment practices. Given his colorful personality, no matter what your political affiliation, what Mr. Steffen says should be interesting.

Tuesday, August 08, 2006

"Prince of Darkness" Moves to Quash Subpoena

I wrote here and here about the Special Committee on State Employee Rights and Protections. The Committee is looking into Governor Ehrlich's employment practices, including whether he terminated employees based on their political beliefs. The Committee leaders allege that Joseph Steffen, nicknamed the "Prince of Darkness," served as Governor Ehrlich's hatchet man. In the past few months Steffen (1) agreed to testify (2) left the jurisdiction avoiding a subpoena; then (3) reemerged and stated again he wanted to testify. Today's Baltimore Sun reports that Steffen has changed his mind again. He filed suit yesterday contending the Committee lacks the power to issue subpoenas.

Thursday, August 03, 2006

Maryland District Court Dismisses Sexual Harassment Claim But Allows Retaliation Claim to Proceed

Carole Sraver's boss, Dr. Jeffrey Owen, allegedly made the following comments:

"Good morning/afternoon Carole, did you get laid last night?"

"How's the sex life?"

"You'll get a bonus when I get a blow job."

I have a present for you that is "about six inched long with a gold tip . . . "

"Your boobs are bigger than my wife's."

"I am on a liquid diet to make my dick look bigger."

Sraver complained about her Owens's comments, but continued to perform her job. In fact, she prospered earning raises and bonuses.

Shortly after Sraver complained about one of her Owens's comments, her employer, Surgical Monitoring Services (SMS) terminated her employment. The company gave no explanation for its decision to terminate Sraver at the time it took the action. It later claimed that she made an administrative error that cost the company $5 million.

Sraver sued for: (1) sexual harassment; and (2) retaliatory termination. After discovery, SMS moved for summary judgment. The Court dismissed Sraver's sexual harassment claim finding that the alleged harassment was not severe or pervasive enough to create an abusive working environment. The Court noted that Dr. Owens never threatened Sraver, many of his comments were directed to several people, and that despite the alleged harassment, Sraver thrived at SMS.

The Court allowed Sraver's retaliation claim to proceed. The Court relied on SMS's failure to mention the alleged $5 million mistake at the time of Sraver's termination. Also, Sraver claimed that SMS's attorney and management directed her to take the actions the company now claimed were erroneous.