Justia Labor & Employment Law Opinion Summaries

Plaintiffs M.S. and L.S. sought insurance coverage for mental health treatments for their child, C.S., under a health benefits plan provided by M.S.'s employer, Microsoft Corporation. The plan, administered by Premera Blue Cross, is subject to ERISA and the Parity Act. Premera denied the claim, stating the treatment was not medically necessary. Plaintiffs pursued internal and external appeals, which upheld the denial. Plaintiffs then sued in federal district court, alleging improper denial of benefits under ERISA, failure to produce documents in violation of ERISA’s disclosure requirements, and a Parity Act violation for applying disparate treatment limitations to mental health claims.The United States District Court for the District of Utah granted summary judgment to Defendants on the denial-of-benefits claim but ruled in favor of Plaintiffs on the Parity Act and ERISA disclosure claims. The court found that Defendants violated the Parity Act by using additional criteria for mental health claims and failed to disclose certain documents required under ERISA. The court awarded statutory penalties and attorneys’ fees to Plaintiffs.The United States Court of Appeals for the Tenth Circuit reviewed the case. The court vacated the district court’s grant of summary judgment on the Parity Act claim, finding that Plaintiffs lacked standing to bring the claim. The court reversed the district court’s ruling that Defendants violated ERISA by not disclosing the Skilled Nursing InterQual Criteria but affirmed the ruling regarding the failure to disclose the Administrative Services Agreement (ASA). The court upheld the statutory penalty for the ASA disclosure violation and affirmed the award of attorneys’ fees and costs to Plaintiffs. View "M.S. v. Premera Blue Cross" on Justia Law

The City of Chicago’s Department of Water Management hired Tinka Vassileva as a Filtration Engineer (FE) in 2001. Vassileva, who started as an FE II, was promoted to FE III in July 2019. She applied unsuccessfully for promotions to FE V in April 2018 and FE IV in July 2019. Vassileva claimed that the City’s decisions not to interview her for these positions were based on age, gender, national origin, and retaliation for previous discrimination charges she filed with the Illinois Department of Human Rights (IDHR) and the Equal Employment Opportunity Commission (EEOC).The United States District Court for the Northern District of Illinois granted summary judgment in favor of the City on all claims. The court found that Vassileva did not provide sufficient evidence that her age, gender, national origin, or EEOC charges motivated the City’s decision not to interview her for the 2018 FE V position. Additionally, the court concluded that Vassileva had not administratively exhausted her claims related to the 2019 FE IV openings, as she failed to file an EEOC charge based on the City’s 2019 actions before filing the lawsuit.The United States Court of Appeals for the Seventh Circuit affirmed the district court’s decision. The appellate court held that Vassileva did not present evidence suggesting that the City’s explanation for not interviewing her in 2018 was pretext for discrimination or retaliation. The court also noted that Vassileva failed to show that the decision-maker was aware of her EEOC charges. Regarding the 2019 claims, the court found that Vassileva waived her argument about administrative exhaustion by not addressing it until oral argument. Thus, the appellate court affirmed the summary judgment in favor of the City. View "Vassileva v. City of Chicago" on Justia Law

Steve L. Michaud sustained a traumatic injury to his left eye on December 26, 2014, while working as an auto mechanic, resulting in an immediate loss of more than eighty percent of his vision. Michaud underwent multiple surgeries between 2015 and 2019 in an attempt to restore his vision, but these efforts were largely unsuccessful. In September 2021, Michaud filed petitions for an award of compensation and specific-loss benefits. A doctor’s report in October 2021 confirmed that Michaud had reached maximum medical improvement (MMI) with a ninety-four percent vision loss in his left eye.An Administrative Law Judge (ALJ) determined that Michaud’s specific-loss benefits became due on October 14, 2021, the date of the doctor’s report, and ordered interest to be paid from that date. Michaud appealed, arguing that the benefits should accrue from the date of his injury in 2014. The Workers’ Compensation Board (WCB) Appellate Division affirmed the ALJ’s decision, relying on the precedent set in Tracy v. Hershey Creamery Co., which held that specific-loss benefits for an eye injury are determined when the injury reaches a reasonable medical endpoint.The Maine Supreme Judicial Court reviewed the case and found that Michaud’s injury immediately resulted in more than eighty percent vision loss and that his condition did not materially improve despite medical interventions. The court held that Michaud’s specific-loss benefits became due on the date of his injury, December 26, 2014, and that interest should accrue from that date. The court vacated the Appellate Division’s decision and remanded the case for entry of a decree ordering Michaud’s employer to pay interest from the date of the injury. View "Michaud v. Caribou Ford-Mercury, Inc." on Justia Law

A former professor at the University of California, Berkeley, sued the Regents of the University of California, alleging violations of the Fair Employment and Housing Act (FEHA) and the Information Practices Act (IPA). The professor claimed that the university failed to engage in the interactive process and provide reasonable accommodations for his bipolar II disorder, and that it invaded his privacy by leaking information about student complaints and his disability accommodations to the media.The Alameda County Superior Court granted summary adjudication in favor of the Regents on the claims of failure to engage in the interactive process, failure to provide reasonable accommodations, and invasion of privacy. The court also denied the professor’s motion to compel responses to certain discovery requests and his request for a retrial on the cause of action for which the jury left the verdict form blank. The jury found in favor of the Regents on all other claims except for the personnel file cause of action, which the jury did not address due to the instructions on the verdict form.The California Court of Appeal, First Appellate District, Division Four, affirmed the trial court’s rulings on the claims of failure to engage in the interactive process and failure to provide reasonable accommodations, finding no prejudicial error. The court also upheld the trial court’s denial of the motion to compel discovery, agreeing that the requests were overly broad and protected by the reporter’s privilege. However, the appellate court reversed the summary adjudication of the invasion of privacy cause of action, finding that there were triable issues of fact regarding whether the Regents violated the IPA by leaking information to the media. The court also reversed the trial court’s denial of attorney’s fees and costs, remanding for further proceedings consistent with its opinion. View "Wentworth v. UC Regents" on Justia Law

In 2022, Congress amended the Federal Arbitration Act (FAA) by passing the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), which renders arbitration agreements unenforceable at the plaintiff’s election in sexual assault and sexual harassment cases arising on or after March 3, 2022. Jane Doe filed a lawsuit in 2023 against her employer, Second Street Corporation, and two supervisors, alleging sexual harassment, discrimination, and wage-and-hour violations. The defendants moved to compel arbitration based on an arbitration provision in the employee handbook. The trial court denied the motion, concluding that the EFAA rendered the arbitration provision unenforceable for all of Doe’s claims and allowed her to file a first amended complaint adding additional claims, including constructive wrongful termination.The Superior Court of Los Angeles County denied the defendants' motion to compel arbitration, finding that Doe’s sexual harassment claims, which included conduct both before and after the EFAA’s effective date, were exempt from mandatory arbitration. The court also ruled that all of Doe’s other claims were exempt from arbitration under the EFAA because they were part of the same case. Additionally, the court permitted Doe to file a first amended complaint.The California Court of Appeal, Second Appellate District, affirmed the trial court’s order. The appellate court held that under the EFAA’s plain language, Doe’s sexual harassment claims, which alleged continuing violations both before and after the EFAA’s effective date, were not subject to mandatory arbitration. The court also held that the EFAA invalidates an arbitration clause as to the entire case, not just the claims alleging sexual harassment. Therefore, the trial court properly denied the motion to compel arbitration and did not abuse its discretion by allowing Doe to file a first amended complaint. View "Doe v. Second Street Corp." on Justia Law

Thomas Mooney, the plaintiff, was employed as the Chief Operating Officer (COO) for Dr. Douglas Fife, Heather Fife, and Fife Dermatology, PC, doing business as Vivida Dermatology. Mooney raised concerns about improper billing practices at Vivida. After a conversation with Dr. Ken Landow, a dermatologist from another practice, Vivida terminated Mooney's employment, citing unauthorized disclosure of confidential information in violation of his employment agreement.The United States District Court for the District of Nevada granted summary judgment in favor of Vivida on all three of Mooney's claims: False Claims Act (FCA) retaliation, breach of contract, and breach of the implied covenant of good faith and fair dealing. The district court concluded that Mooney's reporting of billing irregularities did not put Vivida on notice of potentially protected conduct under the FCA. It also found that Mooney had violated the confidentiality provision of his employment agreement and that his claim for breach of the implied covenant of good faith and fair dealing failed because he did not argue that Vivida literally complied with the contract.The United States Court of Appeals for the Ninth Circuit reversed the district court's summary judgment. The appellate court held that the district court erred in applying the relevant substantive law for Mooney's FCA retaliation claim and failed to view the evidence in the light most favorable to Mooney for his breach of contract and breach of the covenant of good faith and fair dealing claims. The Ninth Circuit clarified that the McDonnell Douglas burden-shifting framework applies to FCA retaliation claims and that the Moore test for protected conduct continues to apply following the 2009 amendment to the FCA. The court concluded that Mooney engaged in protected conduct, satisfied the notice requirement, and established genuine issues of material fact regarding whether Vivida's reasons for his termination were pretextual. The court reversed and remanded the case for further proceedings. View "MOONEY V. FIFE" on Justia Law

Michael Hermalyn, a former employee of DraftKings, left his position to join a rival company, Fanatics, based in California. DraftKings, headquartered in Massachusetts, claimed that Hermalyn's new role violated a noncompete agreement he had signed, which included a Massachusetts choice-of-law provision and a one-year noncompete clause. DraftKings sued Hermalyn in the U.S. District Court for the District of Massachusetts for breach of the noncompete agreement.The district court sided with DraftKings, applying Massachusetts law to determine the enforceability of the noncompete agreement. The court found the noncompete enforceable and issued a preliminary injunction preventing Hermalyn from competing against DraftKings in the United States for one year. Hermalyn appealed, arguing that California law, which generally bans noncompetes, should apply instead of Massachusetts law. Alternatively, he argued that if Massachusetts law applied, the injunction should exclude California.The United States Court of Appeals for the First Circuit reviewed the case. The court examined whether the district judge abused her discretion in granting the preliminary injunction and whether she made any legal errors in applying Massachusetts law. The appellate court found that Massachusetts law was correctly applied, noting that Massachusetts generally respects choice-of-law provisions unless they violate a fundamental policy of another state with a materially greater interest. The court concluded that Hermalyn failed to demonstrate that California's interest in banning noncompetes was materially greater than Massachusetts's interest in enforcing them.The First Circuit also upheld the scope of the preliminary injunction, rejecting Hermalyn's argument to exclude California. The court reasoned that excluding California would undermine the effectiveness of the injunction, as Hermalyn's role involved interacting with clients in states where online sports betting is legal. Consequently, the appellate court affirmed the district court's decision and awarded costs to DraftKings. View "DraftKings Inc. v. Hermalyn" on Justia Law

Art Iron, Inc. faced a lawsuit from the Board of Trustees of the Shopmen’s Local 499 Pension Plan seeking over one million dollars in withdrawal liability under ERISA. The key issue was whether Robert Schlatter, Art Iron’s sole shareholder, and his wife, Mary Schlatter, were personally liable for this withdrawal liability due to their operation of businesses allegedly under common control with Art Iron.The United States District Court for the Northern District of Ohio granted summary judgment in favor of the Board, finding both Robert and Mary Schlatter personally liable. The court determined that Robert’s consulting business and Mary’s jewelry-making activities were trades or businesses under common control with Art Iron, thus making them jointly and severally liable for the withdrawal liability.The United States Court of Appeals for the Sixth Circuit reviewed the case. The court affirmed the district court’s judgment regarding Robert Schlatter, agreeing that his consulting business was a trade or business under common control with Art Iron. The court applied the Groetzinger test, which considers whether the activity is continuous and regular and primarily for income or profit, and found that Robert’s consulting business met these criteria.However, the court reversed the district court’s judgment regarding Mary Schlatter. It found that her jewelry-making activities did not constitute a trade or business under the Groetzinger test, as her activities lacked the necessary continuity and regularity in 2017, the year of Art Iron’s withdrawal from the Plan. Consequently, Mary Schlatter was not personally liable for the withdrawal liability.The Sixth Circuit thus affirmed the district court’s judgment as to Robert Schlatter and reversed and remanded the judgment as to Mary Schlatter. View "Shopmen’s Local No 499, Bd of Trustees v. Art Iron, Inc." on Justia Law

A former employee, Campbell, filed a putative class action lawsuit against her employer, Sunshine Behavioral Health, LLC, alleging wage and hour violations. Campbell claimed that employees were not paid proper overtime, were required to work through meal and rest breaks without compensation, were not paid minimum wage, and were not paid in a timely manner. Sunshine initially proceeded with litigation and agreed to participate in mediation. However, Sunshine later claimed to have discovered an arbitration agreement signed by Campbell, which included a class action waiver.The Superior Court of Orange County found that Sunshine had waived its right to compel arbitration. Despite allegedly discovering the arbitration agreement in November 2022, Sunshine continued to engage in mediation discussions and did not inform Campbell or the court of its intent to compel arbitration until March 2023. Sunshine's delay and conduct were deemed inconsistent with an intent to arbitrate, leading the court to conclude that Sunshine had waived its right to arbitration.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and affirmed the lower court's decision. The appellate court found clear and convincing evidence that Sunshine had waived its right to arbitration. The court noted that Sunshine's actions, including agreeing to mediation on a class-wide basis and delaying the motion to compel arbitration, were inconsistent with an intent to arbitrate. The court emphasized that Sunshine's conduct demonstrated an intentional abandonment of the right to arbitrate, thus affirming the order denying the motion to compel arbitration. View "Campbell v. Sunshine Behavioral Health" on Justia Law

Plaintiffs Marla Knudsen and William Dutra, representing a class of similarly situated individuals, filed a class action lawsuit under the Employee Retirement Income Security Act (ERISA) against MetLife Group, Inc. They alleged that MetLife, as the administrator and fiduciary of the MetLife Options & Choices Plan, misappropriated $65 million in drug rebates from 2016 to 2021. Plaintiffs claimed this misappropriation led to higher out-of-pocket costs for Plan participants, including increased insurance premiums.The United States District Court for the District of New Jersey dismissed the case for lack of standing. The court concluded that the plaintiffs did not demonstrate a concrete and individualized injury. It reasoned that the plaintiffs had no legal right to the general pool of Plan assets and had not shown that they did not receive their promised benefits. The court found the plaintiffs' claims that they paid excessive out-of-pocket costs to be speculative and lacking factual support.The United States Court of Appeals for the Third Circuit affirmed the District Court's dismissal. The Third Circuit held that the plaintiffs failed to establish an injury-in-fact, as their allegations of increased out-of-pocket costs were speculative and not supported by concrete facts. The court noted that the plaintiffs did not provide specific allegations showing how the misappropriated drug rebates directly caused their increased costs. The court emphasized that financial harm must be actual or imminent, not conjectural or hypothetical, to satisfy Article III standing requirements. Consequently, the plaintiffs lacked standing to pursue their ERISA claims. View "Knudsen v. MetLife Group Inc" on Justia Law