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Lawsuits You Should Know About
Contents copyright 1996, 1997 by NYPER Publications
PRESS CONTACTS BY EMPLOYEES
Harman v City of New York, USDC SDNY 96Civ846
A federal district court judge has ruled that a public employer violates the
First Amendment rights of its employees by requiring "pre-clearance" of any
communication with the news media.
New York City's Administration for Child Services [ACS] adopted an executive
order requiring "all contacts with the media ... regarding any policies or
activities of the Agency [to] be referred to the ACS Media Relations Office
before any information is conveyed by an employee...."
Harman, an ACS employee, participated in a TV interview concerning the death
of a child ACS had a duty to protect without "clearing the matter" with
ACS'
Media Relations Office.
This resulted in disciplinary action and her being suspended without pay for
30 days. Claiming that the executive order violated her First Amendment
rights, Harman sued. In rebuttal, ACS argued that its order did not
adversely impact Harman's Free Speech Rights because "it merely effects a
pre-clearance procedure and employees may be allowed to speak with the press
if the agency determines that their proposed speech is consistent with the
efficient and effective operation of the agency..
The Court was unimpressed by ACS' rebuttal, holding that the order
constituted a prior restraint on employee speech by permitting the agency to
determine what would be consistent with the efficient and effective
operations. The Court also commented that the order probably "chills speech,
making it less likely for employees to speak and, in addition, raised the
specter of censorship of the content of employee speech."
Another element raised by ACS was its claim that the policy allowed it to
protect itself against employees revealing "confidential child welfare
information." The Court agreed that this was an important consideration but
said that ACS presented no evidence that allowing employees to speak with
the press without first review the content of their speech will result
confidential information being impermissibly revealed to the media.
Noting that ACS' policy did not limit itself to screening against the
disclosure of such confidential information, the Court pointed out that
there were state confidentiality laws, carrying criminal sanctions for their
violation, and ACS did not show why these laws were not sufficient to
protect the confidentiality of its record.
The courts have been reluctant to allow governmental agencies to place
limitations on employees speaking out concerning matters of public interest.
In contrast, agency prohibitions on speech limited to matters solely of
"personal interest" to the employee usually have been upheld by the courts.
Source: The Public Employment Reporter, January 1997
POLITICAL REMOVAL
McCloud v Testa, CA6, 94-4144
From time to time the courts are asked to consider a case involving the
termination of public employees because of their political affiliation.
The McCloud case involved a variation on this theme: the removal of members
of a political faction by rival members of the same political party.
The case arose when Franklin County [Texas] Auditor Testa, a Republican,
fired a number of employees who were affiliated with a rival faction in the
Franklin County Republican Party. The individuals were employed in the
County Auditor's office. The terminated workers sued, contending that their
dismissal violated their First Amendment rights.
The leading cases in this area, Elrod v Burns [427 US 347], Rutan v
Republican Party of Illinois [497 US 62] and Branti v Finkel [445 US 507]
concern situations involving the removal of public employees "in a patronage
context" in that the individuals involved in those cases were members of
different political parties.
Do the same standards apply in cases where there are no ideological
considerations involved in the decision to dismiss the individuals?
The U.S. Court of Appeals for the Sixth Circuit concluded that it did not
make any difference with respect to the motivation underlying the dismissals
and "non-ideological factions" within the same political party are entitled
to the same First Amendment protections that are available to individuals
who are discharged because of their ideological affiliation or beliefs.
Source: The Public Employment Reporter, December 1996
FRIVOLOUS LAW SUITS
AFSCME v Nassau County, CA2, 95-9022
Courts are becoming less reluctant to award attorney fees to the defendant
when the court determines that the litigation brought by the plaintiff was
"frivolous." The decision in the AFSCME case is instructive regarding the
standards that the courts are applying in such situations.
The American Federation of State, County and Municipal Employees [AFSCME]
sued Nassau County claiming that the County's compensation plan
discriminated against workers on the basis of gender and thus violated Title
VII of the Civil Rights Act of 1964.
A federal district court ruled in favor of Nassau County and then awarded
the County attorney fees because it was the "prevailing party." AFSCME
appealed and won a reversal by the U.S. Circuit Court of Appeals, Second
Circuit.
The Circuit Court said that attorney fees may not be awarded in Title VII
cases unless the action, or appeal, is "frivolous" or the plaintiff
continues to litigate the matter after the weakness of the case becomes
clear.
AFSCME had introduced statistical evidence sufficient to present a prima
facie case that there was a pay disparity related to the gender of Nassau
County employees. Was this evidence sufficient to overcome allegations that
the action was frivolous?
The Court said that a party could state a prima facie case of discrimination
by showing "thin evidence." While "thin evidence" may not be
sufficient to
prevent a court from determining that the action brought is frivolous, in
this instance the Court ruled that AFSCME's prima facie case was based on
"extensive statistical studies."
Although AFSCME ultimately lost the case, its introduction of this
"extensive statistical evidence" was sufficient to insulate it from claims
that its action was frivolous or that it continued to litigate after the
"weakness of its claims" became clear.
Source: The Public Employment Reporter, November 1996
CONTRACTING PERSONNEL SERVICE
Contracting out work is one of the options that government employers are
considering in their efforts to reduce personnel service costs. Advocates of
"outsourcing" or "contracting out" claim that by using an
"independent
contractor" to perform the work, the employer will be able to make
significant financial savings including not having to make employer
contributions for retirement, health insurance, social security and similar
programs.
Further, independent contractors are usually not protected by statutes that
would indemnify public employees in the event they are held liable in
connection with acts or omissions involving the performance of their
"official duties".
The Small Business Job Protection Act, signed into law on August 20, 1996,
provides what some in the field call "safe harbors" with respect to
determining if an individual is an independent contractor rather than an
employee.
Probably the most significant "safe harbor" contained in the new law
provides that it is reasonable for a particular employer to consider a
worker to be an independent contractor if 25% or more of the employers in a
particular industry treat that class of workers as independent contractors.
For instance, if 25% of fast food restaurants treat cleaning crews as
independent contractors, this could be viewed a standard industry practice.
This provision is expected to help some employer avoid paying back taxes and
penalties if the IRS challenges an employer's treating such employees as
independent contractors.
This could be significant because if an employer can demonstrate that its
classifying an individual as an independent contractor was reasonable, it
will probably be able to avoid paying the Internal Revenue Service back
payroll, unemployment and similar taxes and penalties as well as the any
"employer contributions" to employee benefits plans. In any event, IRS still
is able to collect payroll taxes due from independent contractors. Payments
to an independent contractor that total $600 or more for the year must be
reported by the business owner on Form 1099-MISC, "Miscellaneous Income,"
and filed with the IRS. A copy also must be given to the independent
contractor.
NOTE: Increased use of "outsourcing" has resulted in the Internal Revenue
Service focusing on the use of independent contractors in both the public
and private sectors. The IRS currently applies some 20 criteria, set out in
Section 530 of the Revenue Act of 1978, to determine if a particular
individual is an independent contractor or not. As a general rule, if the
employer "set workers' hours, provide them with tools, tell them what to do
and how to do it, and can fire them," IRS will deem the workers employees
and not independent contractors. IRS even has developed a form that can be
used by an employer to determine if a particular individual is an employee
or an independent contractor: Form SS-8, Determination of Employee Work
Status. In addition, IRS Publications 15-A and 505 deal with employer
obligations with respect to tax withholding. Free copies may be obtained
from the IRS. Call 800-829-3676 for copies of these forms and publications.
Source: The Public Employment Reporter, October 1996
MISSTATEMENTS ON APPLICATIONS
Hearst v Muhl, NYS Appellate Division
In Hearst v Muhl the Appellate Division sets out some guidelines concerning
omitting or falsifying information on an application, in this case an
application for a license.
The courts probably will apply the same rationale used in Hearst when
deciding cases involving the falsification of information on an application
for public employment. Section 50.4(f) of the NYS Civil Service Law
authorizes the disqualification of an individual "who has intentionally made
a false statement of any material fact in his application."
Garry J. Hearst's application for an insurance broker's license indicated
that he had never been convicted of a crime when, in fact, he was convicted
of a federal felony as well as two violations under State law.
The Appellate Division found that the misstatements were intentional and
"demonstrated untrustworthiness" within the meaning of Section 2110(a)(4) of
the Insurance Law.
Hearst's application for the license was rejected notwithstanding a hearing
officer's finding that:
1. Hearst "mistakenly" believed that his holding a certificate of relief
from disabilities permitted him to answer "no" to the question concerning
conviction of a crime; and
2. There were "mitigating factors" considered by the hearing officer, here
illness in Hearst's family.
The Appellate Division said that the question concerning conviction of a
crime directed a "yes" answer "even if the conviction was expunged,"
and
directed the applicant to attach any certificates of relief from
disabilities that may have been issued.
As to "family illness" constituting a mitigating factor sufficient to excuse
Hearst's misstatement, the Court said that the record failed to show how the
alleged illness could have caused Hearst to "so misconstrue the application
question."
Source: The Public Employment Reporter, June 1996
TAPE RECORDED EVIDENCE
Marrello v Carter, NYS Appellate Division, 2nd Dept.
The use of tape-recorded interviews of hospital patients in cases of alleged
patient abuse is frequently an element in the proof offered by the employer
in an effort to show such abuse occurred. In other cases an accused employee
might introduce such a tape in an effort to prove his or her innocence. The
Marrello case involved the rejection of statements contained on such a tape
recording introduced by the accused employee in an effort to rebut the
employer's allegations against her.
Sylvia Marrello, a licensed practical nurse employed by the Westchester
County Medical Center, was brought up on disciplinary charges alleging
patient abuse involving two patients. One of the patients was described as
"mentally retarded" while the other was characterized as a "93 year-old who
suffered from Alzheimer's disease."
The hearing officer found her guilty of three specifications of misconduct
and recommended that she be dismissed from her position.
The appointing authority, Commissioner Mack L. Carter, adopted the hearing
officer's findings and recommendation and terminated Marrello.
One of the elements in Marrello's appeal challenging the disciplinary action
taken against her involved statements contained on a tape recording of an
interview with one of the alleged patient-victims.
The hearing officer apparently placed little credence in the taped interview
during which the patient denied being struck by Marrello "in view of the
fact that another witness testified that the same victim told him a
contradictory story shortly after the interview was conducted."
The Appellate Division said that Marrello's appeal merely raised the issue
of credibility which on the basis of the record before it, was "beyond the
purview of judicial review."
In other words, the Court said that issues involving the creditability of
conflicting testimony was for the hearing officer to resolve.
Another element in the appeal involved the "inadvertent destruction" of the
audiotapes containing the patient-victim's statements. Marrello argued the
destruction of the tapes mandated that the disciplinary action be annulled.
The Court disagreed, noting that the parties had stipulated as to the
contents of the tape.
The Appellate Division said that although the contents of the tape were
clearly favorable to Marrello, "the contrary account given by a witness who
actually observed the occurrence justifies the hearing officer's finding
that the patient's recorded declarations were less than creditable."
"In view of the risk of harm Marrello's conduct posed to the patients in her
care," the Court said that the penalty of dismissal was not so
disproportionate to the offense as to warrant judicial interference with the
appointing officer's determination.
Source: The Public Employment Reporter, May 1996
TAXATION OF ADEA AWARDS
Commissioner v Schleier, 4 EDR 798
Back pay and damage awards received by an individual under the Age
Discrimination in Employment Act cannot be excluded from gross income for
the purposes of personal income tax liability under the Internal Revenue
Code, according the Schleier decision. The Internal Revenue Service has
suspended its Revenue Ruling 93-88, which discusses the taxability of awards
received under Title VII and the Americans With Disabilities Act, while it
considers its policies in the light of the Schleier decision.
The American Institute of Certified Public Accountants argues that Congress,
not the courts, should determine if monetary awards under federal human
rights law should be considered taxable income.
Source: The Public Employment Reporter, April 1996
SEXUAL HARASSMENT COMPLAINTS
Spicer v Commonwealth, CA4, 93-2136
A prompt and appropriate response to complaints of sexual harassment usually
will insulate an employer from liability for sexual harassment under Title
VII.
Such was the case with Spicer, a Virginia Department of Corrections
rehabilitation counselor. After a lower court ruled that Spicer was the
victim of sexual harassment by her coworkers, the Circuit Court of Appeals
reversed the ruling. The Circuit Court said that Corrections acted
"immediately and effectively" to stop the acts of harassment by Spicer's
co-workers and therefore should not have been found to have violated Title
VII.
Source: The Public Employment Reporter, March 1996
FAMILY MEDICAL LEAVE
Manuel v Westlake Polymers Corp., 66 F3d 758
When must an employee inform an employer that a particular absence is
subject to the provisions of the Family Medical Leave Act (FMLA)? The
Westlake case suggests there is no easy answer to this question. Until more
clear guidance comes from the courts, employers should be cautious and
deliberate in developing policies on approving or disapproving absences
claimed to be covered by FMLA.
The Westlake case concerned an employer who required an employee to
anticipate his or her need for leave to be considered leave covered by FMLA.
Essentially, employees were asked to give prior notice of absences that they
claimed were covered by the Act. The U.S. Circuit Court of Appeals ruled
that such a requirement is not authorized by the FMLA.
First, the court noted that employers have no greater rights following the
adoption of the FMLA than they possessed prior to its enactment. The Court
said that before the enactment of FMLA, employers had no legal authority to
require employees to foresee their need for sick leave. That did not change
with passage of the FMLA.
The next logical question is: May an employer legally require an employee to
declare an absence as being FMLA leave at the time that the absence is
taken? The Court said that there is no language in the FMLA saying that to
be eligible for the protections provided by the Act, an individual is
required to invoke the FMLA either before or contemporaneously with the
absence. Therefore, it is appears perfectly legal for an employee to assert
FMLA coverage AFTER an absence.
Such flexibility in claiming FMLA coverage poses many potential headaches
for employers. For example, an employee could be absent so often that the
employer decides to initiate disciplinary action based on "habitual
absences." Will the employee able to rebut such charges by retroactively
asserting, and proving, that his or her absences were protected under FMLA?
Furthermore, when an employee asserts FMLA coverage, he or she is not
required to cite the specific provision that the employee believes covers
the absence, the Court said.
Employers are not powerless in dealing with FMLA leave approvals, however.
The decision suggests that an employer may object to the granting of FMLA
benefits, or the employee's eligibility for such benefits, after the fact.
Source: The Public Employment Reporter, February 1996
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