Justia Labor & Employment Law Opinion Summaries

Larry Lawson, former CEO of Spirit AeroSystems, Inc., retired and entered into a Retirement Agreement with Spirit, which allowed him to continue vesting in long-term incentive stock awards as if he were an active employee. This agreement was conditioned on his compliance with a non-competition covenant from his original Employment Agreement. Lawson later engaged with a hedge fund, Elliott Management, which was involved in a proxy contest with Arconic, a competitor of Spirit. Spirit deemed this a violation of the non-competition covenant and ceased payments and stock vesting under the Retirement Agreement.The United States District Court for the District of Kansas held a bench trial and found that Lawson had not violated the non-competition covenant, ruling in his favor. Spirit appealed, and the Tenth Circuit reversed, holding that Lawson had breached the covenant and remanded the case to determine the enforceability of the covenant under Kansas law.On remand, the district court found the non-competition covenant enforceable without applying the reasonableness test from Weber v. Tillman, concluding that the covenant was a condition precedent to the receipt of future benefits, not a traditional non-compete. The court severed the injunctive enforcement mechanism from the covenant, leaving only the condition precedent.The United States Court of Appeals for the Tenth Circuit affirmed the district court's judgment, predicting that the Kansas Supreme Court would not apply the Weber reasonableness test to a non-competition condition precedent to the receipt of future benefits. The court also denied Lawson's motion to certify the question to the Kansas Supreme Court, finding it unnecessary to resolve the issue. View "Lawson v. Spirit Aerosystems" on Justia Law

LaTonya Jackson, a former patient services coordinator at Hennepin Healthcare System, Inc., was terminated in October 2022. She filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) in May 2021, alleging race, age, and disability discrimination, as well as retaliation. The EEOC issued a right to sue letter on May 5, 2023. Jackson filed a complaint against Hennepin Healthcare on August 4, 2023, alleging violations of Title VII, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA). She also initially sued a supervisor, Duang See, but later withdrew that claim.The United States District Court for the District of Minnesota dismissed Jackson's complaint as untimely. The court found that the complaint was filed one day past the ninety-day deadline following the issuance of the right to sue letter. Additionally, the court concluded that Jackson failed to state a claim and had not properly exhausted administrative remedies.The United States Court of Appeals for the Eighth Circuit reviewed the district court's decision de novo. The appellate court affirmed the district court's dismissal, agreeing that Jackson's complaint was filed on August 4, 2023, one day after the deadline. The court found no evidence to support Jackson's claim that a computer glitch caused the delay. The court also declined to apply the doctrine of equitable tolling, noting that Jackson had adequate notice of the deadline, was represented by counsel, and there was no misconduct by the defendant or misleading action by the court. The court emphasized that equitable tolling is reserved for circumstances beyond the plaintiff's control, which did not apply in this case. The judgment of the district court was affirmed. View "Jackson v. Hennepin Healthcare System, Inc." on Justia Law

An employee, Sharon Dunn, was injured while working as an emergency-department nurse for East Texas Medical Center Athens (ETMC Athens), a nonsubscriber to the Texas workers’ compensation program. Dunn alleged that an emergency medical technician (EMT), who was not employed by ETMC Athens, negligently pushed a stretcher into her, causing a serious back injury. Dunn initially sued the EMT and his employer, but those claims were dismissed due to her failure to timely serve an expert report as required by the Texas Medical Liability Act. Dunn then amended her pleadings to assert negligence claims against ETMC Athens.The trial court granted ETMC Athens's motion to designate the EMT and his employer as responsible third parties under the Texas proportionate-responsibility statute. However, eleven months later, Dunn moved to strike the designations, arguing that her suit was an action to collect workers’ compensation benefits, to which the proportionate-responsibility statute does not apply. The trial court granted Dunn’s motion, and the court of appeals denied ETMC Athens’s petition for mandamus relief.The Supreme Court of Texas reviewed the case and concluded that the trial court abused its discretion by striking the designations. The court held that the proportionate-responsibility statute applies because Dunn’s negligence claim against ETMC Athens is not an action to collect workers’ compensation benefits under the Workers’ Compensation Act. The court also held that the Act does not prohibit nonsubscribing employers from designating responsible third parties and that there was sufficient evidence of the third parties’ responsibility. Consequently, the Supreme Court of Texas conditionally granted ETMC Athens’s petition for mandamus relief, ordering the trial court to vacate its order striking the designations. View "IN RE EAST TEXAS MEDICAL CENTER ATHENS" on Justia Law

A railroad worker, Phillip Morgan, committed suicide after experiencing months of alleged harassment by his supervisor at Union Pacific Railroad Company. His wife, Kera Morgan, acting as the administrator of his estate, filed a lawsuit under the Federal Employers’ Liability Act (FELA), seeking wrongful death damages. She claimed that the harassment and stress from his job led to Phillip's emotional distress and eventual suicide.The Iowa District Court for Polk County granted summary judgment in favor of Union Pacific, concluding that Phillip's injuries were emotional and not tied to a physical impact or near physical harm, thus falling outside the scope of FELA. The court held that FELA did not cover emotional injuries unless there was a physical impact or the worker was in imminent danger of physical harm.The Iowa Supreme Court reviewed the case and affirmed the district court's decision. The court held that under the precedent set by the United States Supreme Court in Consolidated Rail v. Gottshall, FELA incorporates common law limits on compensable injuries. The court concluded that Phillip's emotional injuries, which led to his suicide, did not meet the "zone of danger" test established in Gottshall. This test requires that the worker must have been in immediate risk of physical impact or harm to recover for emotional injuries under FELA. Since Phillip's injuries were purely emotional and not tied to any physical impact or imminent threat of physical harm, the court ruled that FELA did not provide coverage for his case. View "Estate of Morgan v. Union Pacific Railroad Company" on Justia Law

The case involves Leika Joanna García-Gesualdo, who filed an employment discrimination lawsuit against Honeywell Aerospace of Puerto Rico, Inc., and Honeywell International, Inc. García-Gesualdo alleged that Honeywell discriminated against her in violation of Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA). The EEOC investigated her claims but decided not to proceed further, issuing a right-to-sue letter on March 29, 2022. García-Gesualdo filed her lawsuit on July 7, 2022, 100 days after the EEOC's decision.The United States District Court for the District of Puerto Rico dismissed García-Gesualdo's claims as time-barred, agreeing with Honeywell that the complaint was filed more than ninety days after the EEOC issued the right-to-sue letter. The court noted that García-Gesualdo's attorney received emails from the EEOC on March 29 and April 6, indicating that a new document was available on the EEOC's portal. The district court concluded that the ninety-day period began on either March 29 or April 6, making the July 7 filing untimely.The United States Court of Appeals for the First Circuit reviewed the case and reversed the district court's dismissal. The appellate court held that neither the March 29 email nor the April 6 email provided sufficient notice of García-Gesualdo's right to sue. The court emphasized that the emails did not unambiguously indicate that the EEOC had terminated its processes or that the ninety-day period to file a lawsuit had begun. Therefore, the appellate court concluded that the facts establishing untimeliness were not clear on the face of the pleadings, and the case was remanded for further proceedings. View "Garcia-Gesualdo v. Honeywell Aerospace of Puerto Rico, Inc." on Justia Law

Christina DeBenedetti and Morgan Ensburg were involved in a marital dissolution case where the trial court assigned four of Morgan’s ERISA-governed retirement accounts to Christina through Qualified Domestic Relations Orders (QDROs). This assignment was to satisfy an award made against Morgan after the court found he breached his fiduciary duty to Christina, resulting in a loss of community property. The total amount ordered for reimbursement and attorney fees exceeded $2 million.The Superior Court of San Diego County initially issued QDROs dividing the community property interests in Morgan’s retirement accounts. After a trial on reserved financial disputes, the court found Morgan had mismanaged community property and awarded Christina $1,831,250 for her share of the lost assets and $230,000 in attorney fees. Christina later sought to enforce this award through new QDROs, which the trial court granted, assigning her 100% of Morgan’s remaining interests in the retirement plans.The Court of Appeal, Fourth Appellate District, Division One, State of California, reviewed the case. Morgan argued that the QDROs did not relate to “marital property rights” and violated ERISA’s purpose of protecting retirement income. He also claimed the QDROs were invalid under California law and that the trial court did not value the retirement accounts. The appellate court rejected Morgan’s contentions, holding that the QDROs related to marital property rights, complied with ERISA, and that California laws cited by Morgan were either preempted by ERISA or did not invalidate the orders. The court also found that Morgan’s argument regarding the valuation of the retirement accounts was not raised in the trial court and could not be considered on appeal. The appellate court affirmed the trial court’s orders. View "In re Marriage of DeBenedetti" on Justia Law

Event Media Inc. and Pack Expo Services, LLC, were contributing employers to the Central States, Southeast and Southwest Areas Pension Fund. Both companies withdrew from the Fund and incurred withdrawal liability obligations. The dispute centers on how to calculate these obligations, specifically whether post-2014 contribution rate increases should be included in the calculation.The United States District Court for the Northern District of Illinois, Eastern Division, held that the employers' post-2014 contribution rate increases should be excluded from the calculation of their withdrawal liability payments. The court reasoned that these increases were required by a rehabilitation plan and thus should be disregarded under 29 U.S.C. § 1085(g)(3).The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the post-2014 contribution rate increases were indeed required by the rehabilitation plan and should be excluded from the calculation of the employers' withdrawal liability payments. The court concluded that neither of the exceptions outlined in 29 U.S.C. § 1085(g)(3)(B) applied in this case, as the increases were not due to increased levels of work, employment, or periods for which compensation is provided, nor were they used to provide an increase in benefits permitted by subsection (f)(1)(B). Therefore, the Fund must use the 2014 contribution rate, not the higher 2019 rate, in calculating the employers' withdrawal liability payments. View "Central States, Southeast and Southwest Areas Pension Fund v. Event Media Inc." on Justia Law

Several hair stylists filed a lawsuit against their employer, Lady Jane’s Haircuts for Men, alleging that they were underpaid due to being misclassified as independent contractors instead of employees. This misclassification, they argued, allowed the employer to avoid the Fair Labor Standards Act’s minimum-wage and overtime-pay requirements. The employer moved to dismiss the lawsuit, citing an arbitration agreement in the Independent Contractor Agreement, which required disputes to be resolved through the American Arbitration Association (AAA) under its Commercial Arbitration Rules.The United States District Court for the Eastern District of Michigan reviewed the case and found the arbitration agreement enforceable but severed the cost-shifting provision, which required the stylists to pay arbitration costs exceeding their yearly income. The court ruled that the arbitration would proceed under the less costly AAA employment rules and dismissed the lawsuit in favor of arbitration.The United States Court of Appeals for the Sixth Circuit reviewed the case and affirmed the district court’s decision. The appellate court held that the severability clause in the contract allowed the court to remove the cost-shifting provision while enforcing the rest of the arbitration agreement. The court found that the term “provision” in the severability clause referred to individual clauses within the contract, not entire sections. The court also rejected the stylists’ arguments that the district court had impermissibly reformed the contract and that the arbitration agreement should be unenforceable for equitable reasons. The court concluded that the district court correctly severed the cost-shifting provision and enforced the arbitration agreement under the AAA’s employment rules. View "Gavin v. Lady Jane's Haircuts for Men" on Justia Law

A landlord operated a business renting homes and had a tenant who performed repair, maintenance, and improvement work in exchange for reduced rent and payment. The tenant fell while working on the roof of one of the rental units and filed a workers' compensation claim. The landlord denied an employment relationship and disputed the work-related injury.The Director of the Department of Labor and Industrial Relations ruled in favor of the tenant, finding an employer-employee relationship. The landlord appealed, and the Labor and Industrial Relations Appeals Board (LIRAB) reversed the Director's decision, concluding there was no employment relationship under the control and relative nature of work tests. The tenant appealed to the Intermediate Court of Appeals (ICA), which vacated parts of LIRAB's decision, instructing LIRAB to apply the substantial evidence standard instead of the preponderance of the evidence standard.The Supreme Court of the State of Hawai'i reviewed the case. The court held that the landlord did not present substantial evidence to rebut the presumption of an employment relationship under the relative nature of the work test. The tenant's work was integral to the landlord's rental business, and the tenant did not have a business of his own. Therefore, the court concluded that an employer-employee relationship existed, and the tenant's injury was covered under Hawai'i's workers' compensation laws. The court vacated LIRAB's decision and the ICA's judgment, remanding the case to LIRAB to compute compensation. The court also held that the landlord was not responsible for the tenant's attorney fees and costs. View "Borrson v. Weeks" on Justia Law

A former employee, Corbin Williams, worked as an insurance adjuster for Alacrity Solutions Group, LLC, from 2014 until January 2022. Williams typically worked 84-hour weeks but was not paid overtime, violating the Labor Code. In March 2023, over a year after his employment ended, Williams notified the California Labor & Workforce Development Agency of his intent to pursue a PAGA action for these violations. He then filed a lawsuit seeking civil penalties on behalf of other current and former employees but not on his own behalf.The Superior Court of Los Angeles County sustained a demurrer to Williams's complaint without leave to amend, finding the action time-barred. The court noted that Williams had not suffered any Labor Code violations within the one-year statute of limitations period before notifying the Agency, as his employment ended in January 2022. Consequently, the court did not address the defendant's alternative argument regarding Williams's standing.The California Court of Appeal, Second Appellate District, Division Five, affirmed the lower court's decision. The court held that to be a PAGA plaintiff, an individual must have a timely individual claim for at least one Labor Code violation. Since Williams's individual claims were time-barred, he could not satisfy this requirement. The court rejected Williams's arguments that other aggrieved employees' timely claims could substitute for his own untimely claims and that the continuous accrual doctrine applied. The court also found no abuse of discretion in denying leave to amend, as Williams's proposed amendments would not cure the timeliness defect. View "Williams v. Alacrity Solutions Grp." on Justia Law