Employers Continue to Face Difficult and Costly Litigation

Recent cases, involving both jury trials and settlements, demonstrate that employers continue to face difficult and costly litigation in employment law disputes. Fortunately, in two of the cases described in this article, the employers obtained a defense verdict, although most likely still incurred significant defense costs. The defense costs of a single plaintiff case, taken through trial, are estimated by some to be in the $300,000 range, for reputable defense firms. Moreover, the significant amount of actual defense costs does not begin to address the immense time commitment these cases require from an employer in preparing a defense. For example, the typical production of documents in a wage and hour case often involves compiling volumes of payroll records that cover significant periods of time. In addition, the depositions of supervisors, managers, human resources personnel, co-workers and many others may be required as part of the lawsuit. Thus, because of the substantial amount of time and expenses associated with employment law litigation, and because of the continuing barrage of these types of case, employers must understand and follow the law, properly train their staff, and document as needed, particularly in regards to personnel matters. Employers should also consider “Employers Practices Liability Coverage” (EPLI). This is a type of insurance which provides coverage for many employment related matters. Some policies even cover wage and hour disputes, which employers must increasingly contend with, particularly in regards to misclassification of employees and overtime compensation claims. The following cases, which involve age discrimination, harassment, sexual orientation discrimination, exempt/overtime claims and failure to accommodate disputes are only a small sampling of the employment law cases that continue to plague employers.

Discrimination/Failure to Accommodate/Sexual Harassment--Carmen Hunt v El Camino Community College District This case involved a jury trial in downtown Los Angeles, a venue where plaintiffs typically are very successful as Los Angeles juries are notorious for favoring plaintiffs. The case involved Carmen Hunt, a professor at El Camino College. Ms. Hunt alleged she was harassed and discriminated against by her superiors at the college. According to Ms. Hunt, the college tried to force her out because of her extended leaves of absence due to Post Traumatic Stress Disorder (PTSD). The leaves of absence occurred when she collapsed on campus in 2002, took a leave of absence until 2005, then returned on a part-time basis. Ms. Hunt also claimed that the college and the district did not accommodate her PTSD and that her superiors collected secret personnel files on her, which were defamatory. Further, she claimed she was sexually harassed and exposed to a hostile work environment all in violation of Education Code §87031. The college denied all accusations. After a week of trial, and only 50 minutes of deliberation, the jury returned a 12 – 0 verdict in favor of the defendant. This case demonstrates that employers can sometimes “fight city hall and still win.”

Sexual Orientation Discrimination--Parks v City of Oakland
Sherry Parks, a lesbian, was the only female plumber on the Port of Oakland (the Port) staff. She complained that she was harassed regularly because of her sexual orientation, that she was given unfair job assignments, and that she was subjected to a hostile work environment. The Port alleged that every job assignment and disciplinary action taken against Parks was for a legitimate business reason. After a 6 week trial the jury returned a 12 – 0 defense verdict in one day of deliberation. Parks was represented by Jean Hyams a graduate of Wellesley and UC Berkeley School of Law ( Boalt Hall) who was admitted to practice in 1989 and is a member of the State Bar’s employment law section. The Port of Oakland was represented by Edwin J Wilson, Jr., who graduated from UC Berkeley and UC Berkeley School of Law and was admitted to the practice of law in 1971. Mr. Wilson is a specialist in employment cases. This was obviously a significant victory for employers.

Wage and Hour/Overtime--Hilda Solis U.S. Secretary of Labor v Poetry Corporation
Don & J Inc., Nu Plus USA, Inc and A-do Fashion Inc., sewing contractors, produced goods for Poetry Corp, a garment manufacturer of women’s clothing from 2009 to 2010. The Department of Labor (DOL) filed suit against Poetry Corp alleging violations of the Fair Labor Standards Act (FLSA) regarding employees who worked for the sewing contractors. The DOL alleged that the contractors failed to pay its employees the federal minimum wage and also failed to pay overtime hours. Poetry Corp was also accused of transporting, delivering and selling products it knew were made by employees who were not lawfully compensated. According to the DOL, this was a sweatshop type case. The DOL sought to prevent future practices and also sought restitution for the employees – back pay and overtime. The case settled for $53,956 without admission of liability by the defendant. While we can be sure this cost the defendant a considerable amount in attorney fees and litigation costs, in our opinion the defense won this one because of the significant nature of the allegations and the relatively small size of the settlement.

Age Discrimination/Harassment--Judee Welch v Ivy Hill Corporation
This case was also a jury trial in downtown Los Angeles, which, as noted above, is a very “plaintiff friendly” venue. A defense verdict was reached on March 8, 2011, before the Honorable Richard Fruin, who is one of the most highly rated judges in downtown Los Angeles. In the case, Judee Welch alleged that she worked for Ivy Corporation from 1987 through March 2009, as a saleswoman, selling print to the music industry. During the last 4 ½ years of her employment a new vice president was brought in to supervise her and the rest of the sales staff. Welch alleges that during that time, the vice president/supervisor allegedly made comments about Welch’s age and allegedly showed preference for younger people in hiring and promotion. When the company was purchased in 2009, Welch was part of a layoff. She then filed a lawsuit alleging age harassment and age discrimination and prevailed. At the end of the 11 day trial the jury, in a 12 – 0 verdict, after 5 hours of deliberation, awarded Welch $213,000 loss of earnings and $731,000 in future loss of earnings. Her lawyer intends to move for attorney fees under the Fair Employment and Housing Act (FEHA). Welch’s lawyer, Carney Shegerian, was admitted to the practice of law after an undergraduate degree from Hofstra University and a law degree from Loyola University in Los Angeles. Defense counsel, Kelly O Scott, was admitted to the practice of law in 1987 after an undergraduate degree at UCLA and a law degree at USC.

NBoxley