Articles

Marshall's Law

By Marshall H. Tanick, Attorney at Law

Courts Consider Whistle-Blowing, Bias Cases

Judicial Law

WHISTLE-BLOWING

The failure of a nursing home administrator to meet safety standards warranted her termination and negated any pretextual claim of violation of the Minnesota whistle-blower statute in Buytendorp v. Extendicare Health Services, Inc., 2007 WL 2376338 (8th Cir. 2007). Affirming a ruling from the U.S. District Court in Minnesota, the 8th Circuit Court of Appeals held that the existence of a close proximity between the time the claimant objected to a policy that she believed was unlawful and her subsequent termination was not sufficient to overcome the employer's legitimate safety reasons for her termination.

DISCRIMINATION

An employee terminated for improper conduct, including a threat to kill a married co-worker with whom she had an affair, was not entitled to pursue a gender discrimination claim against the U.S. Postal Service in Shaffer v. Potter, 2007 WL 2375770 (8th Cir. August 22, 2007). The discrimination claim failed because there was no showing that the supervisor was motivated by gender bias in the termination, which followed the employee's arrest for the murder threat.

A written response by the company's attorney to a terminated employee's claim of age and sex discrimination, citing the employee for insubordination and poor performance, could not give rise to a defamation claim arising out of a claimed discriminatory termination in Humann v. KEM Electric Cooperative, Inc., 497 F.3d 810 (8th Cir. 2007). The company's reply to the request of the employee's attorney for a reasonable severance based upon sex and age discrimination was privileged because it was made in response to a threatened lawsuit.

A fired 49-year-old sales representative was not entitled to pursue an age discrimination claim after he was discharged due to violation of his employer's sex harassment policy in Swenson v. Northern Tool and Equipment Co., 2007 WL 3076992 (Minn. Ct. App. 2007) (unpublished). The company's investigation showing that the employee committed harassment was not a pretext for discrimination and workplace comments about his age were non-actionable "stray remarks."

ERISA

An employee's long-term disability benefits properly ceased after its employer was twice acquired and the successor employer was not required to perpetuate the prior plan under the Employment & Retirement Income Security Act (ERISA) in LaSalle v. Mercantile Bancorporation, 2007 WL 2331890 (8th Cir. August 17, 2007). The employee, who needed two liver transplants, challenged the termination of his benefits by the successor-former employer, claiming that there were procedural irregularities that warranted heightened judicial review of the decision by the plan administrator to end the benefits. But the 8th Circuit disagreed, upholding the decision on a more lenient abuse of discretion standard.

WORKER'S COMPENSATION

Clarifying precedent, the State Supreme Court held that when a direct claim for worker's compensation benefits is made and the employer asserts a claim of insurance coverage, the latter claim falls within the ancillary jurisdiction of the worker's compensation tribunal in Schmitt v. Innovative Law Systems, Inc., 2007 WL 2874943 (Minn. September 26, 2007). This doctrine of ancillary jurisdiction, although implied in precedent case law, is now made explicit. On the merits, coverage existed because the insurer was stopped from denying coverage based upon representation made by its agent to an "unsophisticated" business owner. But the prevailing employer on the coverage issues was not entitled to reimbursement of attorney's fees, which is impermissible under a breach of contract doctrine.

UNEMPLOYMENT COMPENSATION

An employee of a temporary agency, who worked 32 or more hours, was presumed to be employed on a full-time basis for purposes of eligibility for unemployment compensation benefits, but was disqualified because he voluntarily quit his job in Lamah v. Doherty Employment Group, Inc., 787 N.W.2d 595 (Minn. 2007). Working 32 or more hours gives rise to a presumption of full-time employment and the presumption was not overcome in this case. However, the employee was ineligible for benefits because he quit his job without good cause; not covered by any statutory exemption from disqualification.

Legislation

A pair of major Federal bills making their way through the legislative process would, if enacted, have significant impact upon the rights and obligations of employers and employees.

One measure, the Employment Non-Discrimination Act, would forbid employers from discriminating against individuals in employment decisions based upon their sexual orientation. Twenty jurisdictions, including Minnesota, have similar laws, although one has never been enacted at the federal level. The bill has strong support in the House of Representatives, but its fate is uncertain in the Senate and could run into a presidential veto. Under the law, employers could not base hiring, firing, promotion, or pay decisions on sexual orientation or gender identity. The bill would exempt religious organizations and the military.

Supporters of the measure claim that it extends equal treatment to individuals regardless of sexual orientation. Opponents claim the bill would undermine the rights of people who oppose homosexuals or because of religious reasons.

Another measure, the Arbitration Fairness Act of 2007, would amend the Federal Arbitration Act, 9 U.S. § 1 et seq. The major change would be a clause in employment agreements calling for mandatory arbitration which would not be enforceable if they are entered into before a dispute actually arises. Similar provisions would apply to consumer transactions and franchise disputes. Under existing law, those agreements generally are upheld unless they are unconscionable or cost-preclusive for participants. The measure would also clarify that the Act does not apply to collective bargaining agreements between employers and labor unions.

The purpose of the measure is to prevent employees from being forced into a mandatory arbitration as a condition of employment. Its proponents view the amendment as a way of overcoming unequal bargaining power between employers and employees. Opponents, however, see the measure as an unnecessary means of intruding into rights of management. Similar to the anti-gay discrimination law, the measure is progressing in the House of Representatives, and is likely to be acted upon there before it faces an uncertain future in the Senate.

Marshall H. Tanick

MANSFIELD TANICK & COHEN, P.A.

E-mail: mtanick@mansfieldtanick.com