EEOC Slams Rite Aid With $250,000 In Monetary Damages

Posted by Jeff Klein on December 04, 2012

EEOC Seal

The Philadelphia office of the Equal Employment Opportunity Commission recently found that a Rite Aid Pharmacy in Perryman, Maryland violated the Americans with Disabilities Act (ADA) when it terminated former employee Christopher Fultz for having epilepsy, and ordered the pharmacy to pay a $250,000.00 monetary award.

What is most striking about this case is not the high monetary award, but rather Rite Aid’s flagrant disregard for the laws and protections provided by the ADA.

Mr. Fultz had filed a previous complaint with the EEOC alleging discrimination based on his disability of having epilepsy. In response to this claim, Rite Aid retaliated against Mr. Fultz by forcing him to undergo a fitness-for-duty exam with an occupational health doctor. Mr. Fultz claimed that the doctor had no experience in treating individuals with epilepsy. Based on the lone opinion of this unqualified doctor, Rite Aid terminated Mr. Fultz’s employment.

I have to say, it is shocking to see a company of this size and name recognition handle a discriminatory claim filed by one of its employees in this way. The law is clear that upon receiving the complaint of discrimination, Rite Aid should have investigated whether or not the pharmacy could reasonably accommodate Mr. Fultz’s disability thereby eliminating any safety concerns his disability presented, or investigated to see if Mr. Fultz’s disability posed an actual safety threat to the workplace.

Rather than properly investigating the claims, Rite Aid egregiously retaliated against Mr. Fultz and that is the most shocking aspect of this case.

It is important for any business to understand the laws of the ADA and its corresponding responsibilities under the Act, and to train all of its employees accordingly. Without proper knowledge and training, a business subjects itself to a toxic work environment and costly litigation. Spending money on the front end in terms of discrimination trainings will save businesses a fortune in litigation and employee turnover.

The Boulder employment law attorneys of Laszlo & Associates Boulder provide legal counsel to for-profit and non-profit businesses on a variety of business needs including startup and corporate formation, employment law, risk management, corporate protection and legal compliance.

 

Non-Compete Agreements - What You Need To Know

Posted by Ted Laszlo on May 16, 2012

In Colorado “non-compete agreements” are presumptively void and are only valid if they meet one of four requirements:

  1. The covenant is made in connection with the sale of a business;
  2. The contract protects trade secrets;Tug Of War
  3. The contract recovers an employee's training or education costs; or,
  4. The contract is for "executive and management personnel" or "officers and employees who constitute professional staff to executive and management personnel."  C.R.S. § 18-2-113(2)

If the non-compete agreement falls within one of the statutory exceptions and the restrictions on competition are reasonable under the circumstances, then the courts should enforce the non-compete agreement.

Colorado extends the “executive and management personnel” category to include even mid-level supervisors who lack key decision-making authority. Generally, so long as the employee is at the top level of compensation and at least at the start of the decision-making level, with some amount of autonomy, then that employee will fall within the statutory exception for management and executive personnel.  Further, Colorado courts have expanded the exception to also include officers and employees who constitute “professional staff” to management and executive personnel.  The exception applies to individuals who qualify as “professionals” serving as key members of the manager's executive staff and are involved in the implementation of management or executive decisions. 

Finally, the Colorado Supreme Court recently decided that continued at-will employment is sufficient consideration for a non-compete agreement entered into after hire.  Thus, if the non-compete agreement fits into one of the four statutory requirements and is reasonable in scope, time and geography, it is supported by sufficient consideration with the continuation of “at-will” employment alone regardless of when the agreement is entered into.  While this may not seem fair, it does make sense as an at-will employee could simply be fired for not signing the agreement, so continued employment would be a benefit of signing the agreement.  This may not be the case in other states however.  If you are a contract employee however, such an agreement, without consideration, would most likely not be enforceable. 

The lawyers of Laszlo & Associates Boulder provide legal counsel to for-profit and non-profit businesses on a variety of business needs including startup and corporate formation, employment law, risk management, corporate protection and legal compliance.

Employee v. Independent Contractor - What Is The Difference?

Posted by Mike Laszlo on May 16, 2012

The lines are often blurred between employees and independent contractors, and we are always amazed by how often we are asked by business owners whether they have an employee or independent contractor on their hands.  The distinction between employee and independent contractor is important to both the worker - in order to ensure you are receiving the proper benefits and are not being taken advantage of - and the business owner – to ensure it is complying with employment laws and regulations and protecting against liability. 

In Colorado, a person hired to perform services for pay is presumed by law to be an employee unless they meet the definition of an “independent contractor” or qualify under a specific exemption provided by workers’ compensation laws. 

An employee is broadly defined as any person in the service of a private or public employer under a contract of employment.  

Conversely, an independent contractor is one who works for himself and is not under a contract of employment with an employer.   West’s C.R.S.A. § 8-40-202(1).

Here are some signs that you are likely an independent contractor:

  • The Company does not tell you what hours to work;
  • The Company does not tell you where to purchase supplies or services;
  • You do the same type of work for multiple different companies;
  • Your work for the Company is generally short-term;
  • You are more likely to have expenses that are not reimbursed by the Company;
  • You are typically paid by the job rather than hourly, weekly or monthly;
  • You typically do not receive benefits, including health care, sick time, paid   vacation or worker’s compensation  from the Company.

While a written contract may be helpful in proving independent contractor status, the facts of the work relationship are actually more important than what the contract says.  And remember, each of the above factors need not exist in order for you to be considered an independent contractor.  All businesses should consider what they are trying to achieve with a worker before hiring or contracting with a worker.  Further, different states have vastly different rules and employment laws regarding employment.  If you are a Colorado company and hire an independent contractor salesperson in California, you may have actually just added an employee to your payroll.

The Boulder Business Lawyers of LaszloLaw provide legal counsel to startups, for-profit and non-profit businesses on a variety of business needs including corporate formation, employment law, risk management, corporate protection and legal compliance.

Are Workplace Relationships with Subordinates Proper? Petrin, Melani and Dunn Show Why They're Not.

Posted by Mike Laszlo on April 13, 2012

clinton_lewinsky+Bday.jpgThe topic of sex in the workplace is nothing new – George Costanza had sex with the cleaning woman on his desk…he was fired.  Michael Scott dated the Human Resources lady at Dunder Mifflin … she was transferred.  Sam and Diane were on again off again for the first half of the 1980s - yet we all seem to go wild when the stories break.  This month, we have three prime examples of where sex in the workplace can lead ... Highmark fired Ken Melani, University of Arkansas fired Bobby Petrino and Best Buy ousted CEO Brian Dunn due to relationships they had with subordinates.  In the Petrino and Dunn cases, the relationships allegedly came with misuse of university and company assets or job positions.  In all three examples, the company or university stated that the conduct was not consistent with the values of the organizations.

Ken Melani – CEO Highmark Blue Cross Blueshield:  Melani was fired a week after he was arrested for allegedly assaulting his 28 year old mistress’ husband.  Melani’s mistress, Melissa Myler, was a lower level employee who worked in the sports marketing department at Highmark.  In firing Melani, Highmark cited “gross misconduct” related to Melani’s affair with as the chief reason for his firing.  Melani claims Myler got her position at Highmark without help from or influence from Melani. 

Brian Dunn – CEO Best Buy:  Brian Dunn resigned as Best Buy CEO last week and had carried on an affair with a 29 year old subordinate.  Now Best Buy is investigating his conduct to determine whether Mr. Dunn misused company assets in the course of his relationship with the woman.

Bobby Patrino – Head Football Coach University of Arkansas:  Bobby Patrino was fired about 10 days after he crashed his motorcycle and lied about an inappropriate relationship he was having with a 25 year old employee.  According to University of Arkansas athletic director, Mr. Petrino’s relationship with Jessica Dorrell lasted a “significant” amount of time, she was hired to his football staff and at one point, Petrino gave her $20,000 out of his own pocket as a “gift.”  According to the Petrino contract, he could be terminated for cause, defined as“engaging in conduct, as solely determined by the University, which is clearly contrary to the character and responsibilities of a person occupying the position of Head Football Coach or which negatively or adversely affects of the reputation of the University.” 

Melani’s might have legal recourse for termination.  Dunn resigned. Petrino’s case would be the interesting one given he had a contract and an $18 million buyout from that contract.  But news reports suggest Petrino will not seek the $18 million and instead will get the heck out of town. 

Though a boss/supervisor consensual sexual relationship is not necessarily sexual harassment, this type of relationship can certainly lead to legal trouble.  Simply, it may be against company policy to fraternize in such a manner with fellow employees.  I can think of several situations that can and have sparked litigation following a relationship between a boss and a willing subordinate.  First and foremost, the relationship can sour.  When this happens the boss/supervisor has now potentially opened themselves up to a claim of sexual harassment.  Though the claim may be baseless, it will cost your company valuable time and several thousands of dollars in legal fees to litigate in court.  Further, a relationship between a boss/supervisor and a willing subordinate may spark feelings of resentment in other employees who may feel the subordinate is receiving special treatment because of the relationship.  Now your company is faced with several claims of gender discrimination from the other employees again costing your company valuable time and money.     

To avoid situations where your company is vulnerable to easy claims for sexual harassment, gender discrimination and/or hostile work environment, it is important to establish company-wide policies preventing discrimination and harassment in the workplace.  Importantly, the company must have a legitimate complaint and anti-retaliation system. Employees must be encouraged to file complaints if they are victimized. Potential victims must receive meaningful assurances of no retaliation, and the investigation of the complaint must be prompt and thorough.  Further, employers should provide mandatory company-wide trainings regarding prevention of harassment and discrimination in the workplace.  Taking these steps might relieve an employer of liability even when the organization has employed a supervisor who is guilty of sexual harassment.  Remember that sexual harassment is a serious and potentially career-ending offense.

The Boulder lawyers of Laszlo & Associates' provide legal counsel to for-profit and non-profit businesses on a variety of business needs including startup and corporate formation, employment law, risk management, corporate protection and legal compliance.

Must Colorado Employers Provide Uninterrupted Meal Breaks To Hourly Employees?

Posted by Mike Laszlo on April 13, 2012

The California Supreme Court recently issued a decision stating that California state law requires an uninterrupted, 30-minute meal break if an hourly employee works more than five hours.  However, the decision came with the important distinction that employers are not required to ensure that employees do not work during their break.

“We conclude an employer’s obligation is to relieve its employee of all duty, with the employee thereafter at liberty to use the meal period for whatever purpose he or she desires, but the employer need not ensure that no work is done..."

So, what is Colorado's law on meal breaks?  Actually, its quite similar to California's. Colorado Minimum Wage Order Number 28 which went into effect January 1, 2012, applies to private sector employers and employees in Colorado in the following 4 industries: retail and service, commercial support service, food and beverage, health and medical (does not apply to public sector employers, independent contractors, construction, manufacturing, wholesale) states that:lunch-break.jpg

  • Employees shall be entitled to an uninterrupted and “duty free” meal period of at least a thirty minute duration when the scheduled work shift exceeds five consecutive hours of work.
  • Employees shall be permitted to fully consume a meal of choice “on the job” and be fully compensated for the “on-duty” meal period without any loss of time or compensation. 
  • When the nature of the business activity or other circumstances exist that makes an uninterrupted meal period impractical, the employee shall be permitted to consume an “on- duty” meal while performing duties.
  • The employees must be completely relieved of all duties and permitted to pursue personal activities to qualify as a non-work, uncompensated period of time.

Colorado Minimum Wage Order #28 is silent on whether employees are permitted to work on their break, and Colorado courts have yet to address the issue.  Based on the language above however, it is reasonable to infer that an employer has fulfilled its obligation once it has "completely relieved [the employee] of all duties and [has been] permitted to peruse personal activities to qualify as a non-work, uncompensated period of time."  If an employee decides to work on their break, it would be up to them.  The employer has fulfilled its obligation in providing the break.  To avoid confusion and limit exposure however, it is a good idea for employers to have a detailed policy on employee meal breaks and well trained managers that ensure such policies are followed.

Can A Restaurant Own Its Employees' Tips?

Posted by Mike Laszlo on March 23, 2012

Many have heard of the recently reported $5 miBy: Robyn Leellion settlement reached in the case against celebrity chef Mario Batali wherein his employees claimed Mr. Batali violated the Fair Labor Standards Act by skimming the wait staff’s tips equaling as much as five percent of the daily wine sales.  The employees claimed they were told that their tips were being taken to pay for the restaurant’s wine selection and to cover broken glassware.  The Washington Post's Michelle Singletary wrote a good article on the story.

So, is "skimming" tips in Colorado legal?  In fairness, let's not use the word "skimming," but rather, "owning."  The answer is – YES.  Let’s take a look at when and how an employer can claim ownership of an employee’s tips.

Colorado wage law (C.R.S. § 8-4-103(6)) allows for an employer to assert claim to, right of ownership in, or control over tips only if: the employer posts a printed card at least 12 inches by 15 inches in size with letters one-half inch high in a conspicuous location at the place of business. The card must contain a notice to the general public that all tips or gratuities given by the patron are not the property of the employee, but instead belong to the employer.  If the employer does not post a printed card detailing tip ownership as described above, the employer may not exert any control over cash tips designated for an employee.

So, in order for an employer to claim ownership of an employee's tips, they must follow specific guidelines and post conspicuous notice informing patrons (and employees) that any tips given are the property of the employer.  While it may not seem fair for an employer to take tips from its employees, it is legal.

Laszlo & Associates, a Boulder, Colorado based law firm, provides legal counsel to for-profit and non-profit businesses on a variety of business needs including corporate formation, employment law, risk management, corporate protection and legal compliance.

Do You Own Your Employees's Twitter Accounts? And Why This Matters to You.

Posted by Mike Laszlo on February 09, 2012

In PhoneDog v. Kravtitz, a case proceeding in the US District Court of Northern California, is a case between and employer and former employee that deals with an a dispute over the ownership of a Twitter account.

PhoneDog, LLC brought the suit against a former employee who, allegedly, while working for PhoneDog amassed over 17,000 Twitter followers and “took” those followers when he left the company.  In its complaint, PhoneDog asserts claims for (1) misappropriation of trade secrets; (2) intentional interference with prospective economic advantage; (3) negligent interference with prospective economic advantage; and (4) conversion.

Kravitz filed a motion to dismiss – first arguing the Court did not have subject matter jurisdiction because PhoneDog failed to establish that the amount in controversy exceeded $75,000.    PhoneDog asserts that according to “industry standards” a twitter follower is worth $2.50 (PhoneDog offered no support for the $2.50 per follower figure) and, based on the 17,000 users at issue, it alleged $340,000 in damages. The court stated that there was not sufficient evidence to determine the value at this point in the case.  

The valuation issue is perhaps the most interesting aspect of the case. Simply, the world has been trying to figure out what a Twitter follower is worth for quite some time.  What will go into legally determining the value of a Twitter account.  This valuation will be paramount to the outcome of that case as it will provide the damage amount should damages be awarded. (While the court initially dismissed two claims, PhoneDog amended its complaint and the claims will now go forward.) 

“The numbers the company submitted—$2.50 a month per follower—don’t really add up. There’s literally no industry standard for the value of a Twitter follower. What’s the value of a friend? Online, and in real life, it’s very much a world of quality over quantity, and any attempt at establishing a rate is generally derided. If numbers do exist, they most likely were fudged together for new business pitches fused in the fires of social-media gurus and new-media entrepreneurs.” Brian Reis: What Are Your Twitter Followers Worth, and Who Owns Them? 

The Twitter follower valuation formula, should one be developed and accepted, will almost certainly be the product of hard fought expert battles and industry analysis from as the effect could be far reaching given the lack of such valuation now.

In the meantime, consider your employee’s use of social media and the value it brings to your company.  What would happen if one of your employees’s left and took the account with them?  A well drafted company policy regarding social media use would help protect your company.  Moreover, as the use of social media, like twitter, increases (Twitter claims 250 million tweets per day; Facebook has 850 million users), we may see employees market themselves in part by tier social media “reach."  For instance, a salesman with 10,000 twitter followers may be a more attractive hire than an industry veteran with no Twitter account at all - why?  Becuase the former has a direct (and free) pipeline to 10,000 people.  These are issues all employees and employers will face in the social media dominate marketplace.  The key is to embrace and understand how social media affects your business - it is not going away.

Laszlo & Associates, a Boulder, Colorado based law firm provides legal counsel to for-profit and non-profit businesses on a variety of business needs including corporate formation, employment issues, risk management, corporate protection and legal compliance.

10th Circuit Considers Heightened Pleading Standards in United Air Lines Employment Discrimination Suit

Posted by Mike Laszlo on February 07, 2012

Khalik v. United Air Lines (10th Cir. Feb. 6, 2012) involved a Colorado Arab-American who made numerous claims of discrimination and retaliation because of race, religion, national origin, and ethnic heritage against United Air Lines.  The court found that Khalik’s claims were “conclusory” recitations that were insufficient to meet federal pleading requirements.

The court stated that under Twombly/Iqbal “Twiqbal” (we have preciously written about Twiqbal) while a plaintiff is not required to establish a prima facie case in a complaint, the elements of an alleged cause of action help to determine whether a plausible claim has been set forth.  Where allegations are entirely conclusory, they are not entitled to the assumption of truth.  A plaintiff does not need specific facts, however, cannot make mere conclusions in a complaint.   

“In this case, several of Plaintiff’s allegations are not entitled to the assumption of truth because they are entirely conclusory, including her allegations that: (1) she was targeted because of her race, religion, national origin and ethnic heritage; (2) she was subjected to a false investigation and false criticism; and (3) Defendant’s stated reasons for the termination and other adverse employment actions were exaggerated and false, giving rise to a presumption of discrimination, retaliation, and wrongful termination.”

"But a plaintiff must include some further detail for a claim to be plausible. Plaintiff’s claims are based solely on the fact that she is Muslim and Arab–American, that she complained about discrimination, that she complained about the denial of FMLA leave, and that Defendant terminated her. Without more, her claims are not plausible under the Twombly/Iqbal standard.”

Khalik is important because it demonstrates that courts are not abruptly dismissing claims under Twiqbal, but rather are looking for some details regarding allegations that could be plead to satisfy the plausibility requirement – like when, where, why, by whom, etc.  This case makes clear that without such information claims will not survive.  Plaintiffs should make every effort to include details to ensure their claims survive - while defendants should not assume the Twiqbal will simply save the day but rather seek to poke holes in and draw attention to deficiencies in specific details that would support those allegations against it.

Laszlo & Associates, a Boulder, Colorado based law firm provides legal counsel to for-profit and non-profit businesses on a variety of business needs including corporate formation, employment issues, risk management, corporate protection and legal compliance.