Articles Posted in Labor & Employment Law

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Plaintiff-Appellant Market Synergy Group appeals from the district court’s judgment in favor of Defendant-Appellee United States Department of Labor. This case stemmed from the Department of Labor’s (DOL) final regulatory action on April 8, 2016, as it applied to fixed indexed annuity (FIA) sales. Plaintiff-Appellant Market Synergy Group (MSG) was a licensed insurance agency that works with insurers to develop specialized, proprietary FIAs and other insurance products for exclusive distribution. It partnered with independent marketing organizations (IMOs) to distribute these products. MSG did not directly sell FIAs but conducted market research and provided training and products for IMO member networks and the independent insurance agents that IMOs recruit. In April 2015, the DOL issued a proposed rule redefining who is a “fiduciary” of an employee benefit plan under ERISA and the Internal Revenue Code, which would “update existing rules to distinguish more appropriately between the sorts of advice relationships that should be treated as fiduciary in nature and those that should not.” The final rule contained two changes important to this case: (1) it created a new exemption, with added regulatory requirements, the Best Interest Contract Exemption (BICE), which imposed a more stringent set of requirements on prohibited transactions than those required under PTE 84-24; and (2) the DOL removed FIAs (as well as variable annuities) from the PTE 84- 24 exemption and placed them in the newly created BICE. MSG filed this suit under the Administrative Procedure Act (APA) claiming the DOL violated the APA: (1) by failing to provide adequate notice of its intention to exclude transactions involving FIAs from PTE 84-24; (2) arbitrarily treated FIAs differently from other fixed annuities by excluding FIAs from PTE 84-24; and (3) by not adequately considering the detrimental economic impact of its exclusion of FIAs from PTE 84-24. MSG alleged that it would lose 80% of its revenue if the new regulation were to be enforced and sought a preliminary injunction to prevent the DOL from implementing the new regulation. The district court denied the preliminary injunction. On cross-motions for summary judgment, the district court ruled in favor of the DOL, finding that there was adequate notice, no arbitrary treatment of FIAs as compared to other fixed annuities, and an adequate economic impact analysis. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Market Synergy Group v. Department of Labor" on Justia Law

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This case arose out of a 2007 injunction, which prohibited Paragon Contractors Corporation and its president, Brian Jessop, from engaging in oppressive child labor. The Department of Labor procured a contempt citation, with the district court finding that Paragon and Jessop had violated the injunction by employing children to harvest pecans. For this violation, the district court sanctioned Paragon and Jessop by: (1) appointing a special master to monitor Paragon’s ongoing compliance with the injunction; and (2) ordering Paragon and Jessop to pay $200,000 into a fund to compensate the children. Paragon and Jessop appealed the contempt finding and the sanctions. After review, the Tenth Circuit concluded the district court did not err in (1) finding that Paragon and Jessop had violated the injunction by oppressively employing children; and (2) ordering Paragon and Jessop to pay $200,000. But the Court reversed the district court’s appointment of a special master. View "Acosta v. Paragon Contractors" on Justia Law

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Paul Knopf, the former Director of the Planning and Development Department (“City Planner”) in Evanston, Wyoming (“City”), sued Mayor Kent Williams under 42 U.S.C. 1983. Knopf claimed Mayor Williams did not reappoint him to his position as City Planner because he had sent an email to the City Attorney raising concerns about impropriety relating to a City project. Thus, Knopf alleged that Mayor Williams retaliated against him for exercising his First Amendment rights. Mayor Williams moved for summary judgment based on qualified immunity, which the court denied. In this interlocutory appeal, the Mayor asked the Tenth Circuit Court of Appeals to reverse that denial, arguing that a reasonable person in his position would not have understood Knopf to have spoken outside of his official duties, and that a “reasonable official: would have believed the email at issue here exceeded the scope of Knopf’s official duties. A split panel concluded Knopf failed to show a violation of clearly established federal law on an essential element of his claim, thus the Court reversed the district court’s denial of sovereign immunity to Mayor Williams. View "Knopf v. Williams" on Justia Law

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Plaintiffs Maria Fernandez and Laura Chacon’s Fair Labor Standards Act (FLSA) claims against Defendants Clean House and Cesar Barrida were dismissed. On appeal, Plaintiffs alleged Defendants failed to properly compensate them as employees. The general limitations period under the FLSA was two years, but that period is expanded to three years for willful violations. Plaintiffs’ employment ended between two and three years before they filed suit. Although the complaint alleged that Defendants’ violations had been willful, Defendants moved to dismiss the claims as untimely on the ground that Plaintiffs had not supported their allegation of willfulness with sufficiently specific facts. The district court agreed with Defendants and dismissed the claims with prejudice. Plaintiffs argued the statute of limitations was an affirmative defense which they did not need to anticipate in their complaint by alleging willfulness, and, in any event, their allegation of willfulness was adequate. The Tenth Circuit Court of Appeals agreed with this contention and reversed the district court’s dismissal of their claims. View "Fernandez v. Clean House" on Justia Law

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Carl Genberg was an executive for Ceragenix Corporation when he suspected misconduct by the Company's Board of Directors. When he acted on these alleged suspicions, he was fired. He sued Ceragenix's Chief Executive Officer for retaliation under the Sarbanes-Oxley Act of 2002 and defamation under Nevada law. The district court granted summary judgment to the CEO on both claims. The Tenth Circuit Court of Appeals affirmed in part and reversed in part. The Court concluded a reasonable factfinder could have concluded two emails at the heart of this case could have been viewed as protected activities that had contributed to Genberg’s termination, or the absence of which would not have lead to his termination. Either way, the Court concluded the CEO was not entitled to summary judgment based on the same-action defense with respect to these emails. Because the district court found otherwise, the Court reversed the district court’s grant of summary judgment to the CEO on the Sarbanes-Oxley claim. Regarding the defamation claim, the Court affirmed the district court’s award of summary judgment: the CEO's statements fell under the common-interest privilege, and Genberg did not present evidence of an abuse of the privilege. View "Genberg v. Porter" on Justia Law

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Spring Creek Coal Company (Spring Creek) petitioned the Tenth Circuit Court of Appeals for review of a decision by the Department of Labor (DOL) awarding survivors’ benefits to Susan McLean under the Black Lung Benefits Act (BLBA), 30 U.S.C. sections 901-944. The DOL concluded that Bradford McLean became disabled and died from his exposure to coal dust during the course of his employment at Spring Creek’s surface coal mine. The BLBA adopts several presumptions that apply for purposes of determining whether a miner is totally disabled due to pneumoconiosis and whether the death of a miner was due to pneumoconiosis. See 30 U.S.C. § 921(c)(1)-(5). One of those presumptions, the fifteen-year presumption, is central to the outcome in this case. The ALJ, after concluding that Mr. McLean was entitled to the statutory/regulatory presumption of pneumoconiosis, in turn analyzed the medical evidence to determine whether Spring Creek had rebutted that presumption. The Tenth Circuit determined the ALJ’s findings and decision in this case were case-specific and confined to the specific flaws in the testimony of Spring Creek’s medical experts, thus concluding Spring Creek did not rebut the presumption. Thus, the Tenth Circuit concluded the ALJ did not err in his analysis of the proffered medical opinions, and that there was no need to remand this case for further proceedings. Spring Creek’s petition for review was denied. View "Spring Creek Coal Company v. McLean" on Justia Law

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This appeal stems from a district court’s denial of qualified immunity to the former El Paso County Sheriff, Terry Maketa and undersheriff, Paula Presley. The claims were brought by three categories of subordinates: (1) Lieutenant Cheryl Peck; (2) Sergeant Robert Stone; and (3) Commanders Mitchell Lincoln, Rodney Gehrett, and Robert King. Lt. Peck, Sgt. Stone, and the three Commanders alleged retaliation for protected speech. The district court held that the subordinates’ allegations were sufficient to defeat qualified immunity at the motion-to-dismiss stage. The Tenth Circuit disagreed because the law was not clearly established that: (1) Lt. Peck’s speech fell outside of her duties as a public employee; (2) the investigations of Sgt. Stone and his children constituted adverse employment actions; and (3) the investigation of the Commanders, their placement on paid administrative leave, and their alleged humiliation constituted adverse employment actions. Therefore, Sheriff Maketa and Undersheriff Presley were entitled to qualified immunity and dismissal of the complaint. View "Lincoln v. Maketa" on Justia Law

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Plaintiffs Richard Tabura and Guadalupe Diaz were Seventh Day Adventists. Their religious practice of not working Saturdays conflicted with their job schedules at a food production plant operated by Defendant Kellogg USA, Inc. (“Kellogg”). Eventually Kellogg terminated each Plaintiff for not working their Saturday shifts. Plaintiffs alleged that in doing so, Kellogg violated Title VII of the Civil Rights Act by failing to accommodate their Sabbath observance. Both sides moved for summary judgment. The district court denied Plaintiffs’ motion and granted Kellogg summary judgment, concluding as a matter of law both that Kellogg did reasonably accommodate Plaintiffs’ religious practice and, alternatively, that Kellogg could not further accommodate their Sabbath observance without incurring undue hardship. The Tenth Circuit concluded after review of the district court record that the district court erred in granting Kellogg summary judgment; however, on the same record, the district court did not err in denying Plaintiffs summary judgment. View "Tabura v. Kellogg USA" on Justia Law

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Life Insurance Company of North America’s terminated plaintiff-appellant Carl Van Steen’s long-term disability benefits under Lockheed Martin’s ERISA Plan. Life Insurance Company of North America (LINA) appealed the district court’s finding that its decision to terminate Van Steen’s benefits was arbitrary and capricious. Van Steen, in turn, appealed the district court’s denial of his attorney’s fees request. Van Steen was physically assaulted during an altercation while walking his dog. The assault resulted in a mild traumatic brain injury (mTBI) that impacted Van Steen’s cognitive abilities that prevented him from returning to full time work; Van Steen was eventually allowed to return to part-time work on a daily basis roughly six weeks later. Even on a part-time schedule, Van Steen experienced cognitive fatigue and headaches that required him to frequently rest. Due to his inability to stay organized and keep track of deadlines after the assault, Van Steen received poor feedback on his job performance. Van Steen’s claim for partial long-term disability benefits was approved on March 30, 2012. Roughly a year later, LINA reviewed Van Steen’s file, contacted his doctors, and confirmed that Van Steen’s condition and restrictions were permanent as he was “not likely to improve.” Despite this prognosis, LINA sent Van Steen a letter one week later terminating his long-term disability benefits, explaining that “the medical documentation on file does not continue to support the current restrictions and limitations to preclude you from resuming a full-time work schedule.” Having exhausted his administrative appeals under the Plan, Van Steen next sought relief before the district court. The district court reversed LINA’s decision to terminate Van Steen’s partial long-term disability benefits on the grounds that it was arbitrary and capricious, but denied Van Steen’s request for attorney’s fees. The Tenth Circuit agreed with the district court’s reversal of LINA’s decision to terminate Van Steen’s coverage. The Court also found that Van Steen was not eligible for attorney fees: “Van Steen’s arguments fail to convince us that the district court’s decision was based on a clear error of judgment or exceeded the bounds of permissible choice.” View "Van Steen v. Life Insurance Company N.A." on Justia Law

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A jury rejected an employment-discrimination claim against JetStream Ground Services, Inc. filed by several Muslim women and the Equal Employment Opportunity Commission (EEOC) who alleged that JetStream discriminated against the women on religious grounds by refusing to hire them because they wore hijabs. Plaintiffs’ sole argument on appeal was that the district court abused its discretion by refusing to impose a sanction on JetStream (either excluding evidence or instructing the jury that it must draw an adverse inference) because it disposed of records contrary to a federal regulation purportedly requiring their preservation. The Tenth Circuit found no abuse of discretion: plaintiffs’ argument that the exclusion sanction should have been applied was waived in their opening statement at trial. And the district court did not abuse its discretion in refusing to give an adverse-inference instruction after Plaintiffs conceded that destruction of the records was not in bad faith. View "EEOC v. JetStream Ground Services" on Justia Law