Justia Labor & Employment Law Opinion Summaries

A group of former employees of a company that operated a manufacturing facility in Virginia sued the company after it announced it would close and began terminating employees. They alleged violations of the Worker Adjustment and Retraining Notification Act (WARN Act) due to insufficient notice of the plant closure, and violations of the Employee Retirement Income Security Act (ERISA) relating to the improper termination of a severance plan. The employees initially named an investment group and several related parties as defendants, claiming they were alter egos or successors of the company and should be jointly liable. However, before trial, the employees voluntarily dismissed the investment group and related parties without prejudice, focusing instead on the liability of the company itself.The United States District Court for the Western District of Virginia granted summary judgment in part, including dismissing claims by employees who signed releases, and ultimately entered a money judgment against the company after a bench trial. The employees were unable to collect on this judgment due to the company's insolvency. They then filed a new lawsuit against the investment group and various related parties, seeking to enforce the prior judgment on alter ego and veil piercing theories and claiming federal jurisdiction under the WARN Act and ERISA.The United States Court of Appeals for the Fourth Circuit reviewed the district court's dismissal of the new lawsuit for lack of subject matter jurisdiction. The Fourth Circuit held that federal courts lack subject matter jurisdiction to enforce a prior federal judgment against parties not found liable in the original action, absent independent allegations of new federal statutory violations. The court affirmed the district court's dismissal, concluding that neither federal question jurisdiction nor ancillary jurisdiction applied because the plaintiffs did not allege new violations of the WARN Act or ERISA. View "Messer v. Garrison Investment Group, LP" on Justia Law

Several software engineers at a beverage industry software company created and circulated a spreadsheet among their coworkers to share salary information. Their motivation stemmed from recent company restructuring and discussions about pay equity. The spreadsheet was shared widely, and a notation appeared that all developers were “underpaid.” Management quickly discovered the spreadsheet, traced its creation to one employee, and, within about ninety minutes, terminated him, citing his attitude toward the company and the restructuring. The three other employees who helped create and share the spreadsheet were fired the next day after management reviewed internal messages showing employee dissatisfaction, plans to leave, and criticism of the company.The four terminated employees filed an unfair labor practice charge with the National Labor Relations Board (NLRB), alleging they were fired for engaging in protected concerted activity under the National Labor Relations Act. After a hearing, an administrative law judge (ALJ) found for the employees, ordering reinstatement and financial compensation. The NLRB largely adopted the ALJ’s findings, but expanded its theory for three employees to include their discussions of workplace conditions as protected activity. The NLRB ordered make-whole remedies, including compensation for pecuniary harms regardless of interim earnings.On review, the United States Court of Appeals for the District of Columbia Circuit held that substantial evidence supported the finding that the company unlawfully fired the employee who created and shared the spreadsheet based on protected activity. The court denied the company’s petition as to him and enforced the NLRB’s order, including reinstatement and financial remedies. However, the court found that the NLRB exceeded its authority by expanding liability for the other three employees to cover uncharged conduct (general workplace discussions), vacated that portion of the order, and remanded for further proceedings. The court declined to consider unpreserved challenges to the NLRB’s make-whole remedy. View "Vermont Information Processing, Inc. v. NLRB" on Justia Law

Two former employees of a large utility holding company, participants in the company’s defined-benefit pension plan, challenged the way their monthly retirement benefits were calculated. Both men, after vesting in the plan, selected joint-and-survivor annuities that would provide payments to their spouses if they died first. The plaintiffs argued that the plan used outdated and unreasonable actuarial assumptions—some based on mortality tables from 1951 or earlier—to determine both the conversion of their accrued single-life annuity benefit to a joint-and-survivor annuity and to calculate charges for mandatory preretirement survivor annuity coverage. They alleged these practices resulted in significantly lower monthly benefits than they would have received if reasonable, current actuarial assumptions had been used.The plaintiffs filed suit in the United States District Court for the Northern District of Georgia, asserting violations of the Employee Retirement Income Security Act of 1974 (ERISA). They claimed the plan failed to provide “actuarial equivalence” between single-life and joint-and-survivor annuities as required by ERISA, and that excessive reductions for preretirement survivor benefits amounted to unlawful forfeiture of accrued benefits. The district court dismissed the complaint for failure to state a claim.On appeal, the United States Court of Appeals for the Eleventh Circuit held that ERISA’s “actuarial equivalence” provision requires plans to use actuarial assumptions that a reasonable actuary would use at the time of benefit determination—not arbitrary or outdated assumptions. The court further held that employers cannot impose preretirement survivor benefit charges that exceed the actual, reasonably calculated cost of providing those benefits. Because the plaintiffs plausibly alleged violations of these standards, the Eleventh Circuit reversed the district court’s dismissal and remanded the case for further proceedings. View "Drummond v. Southern Company Services, Inc." on Justia Law

General Electric Company (GE) was assessed withdrawal liability by the Boilermaker-Blacksmith National Pension Trust (the Fund) under the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), which amended the Employee Retirement Income Security Act (ERISA). The Fund claimed that GE partially withdrew from the plan based on a 70% decline in contribution base units (CBUs) and the closure of a manufacturing facility in Chattanooga, resulting in liability assessments totaling over $227 million. GE disputed these assessments, arguing that it qualified for the “building and construction industry” (BCI) exception, which exempts certain employers from withdrawal liability if substantially all their covered employees perform work in the building and construction industry.An arbitrator considered the dispute and found in favor of GE, concluding that it met the requirements for the BCI exception. Both parties sought review in the United States District Court for the Western District of Missouri, which affirmed the arbitrator’s decision. The district court determined that the statutory language was ambiguous regarding how to count employees for the purpose of the BCI exemption and adopted GE’s cumulative headcount method rather than the Fund’s preferred monthly headcount method.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the district court’s legal conclusions de novo and examined the ambiguity in the statutory language. The Court held that, of the two methods presented, the cumulative headcount approach advanced by GE was more consistent with the purpose and legislative intent of the statute, which was designed to accommodate the fluctuating nature of employment in the building and construction industry. The Court affirmed the district court’s judgment, holding that GE qualified for the building and construction industry exemption and was not liable for withdrawal assessments. View "General Electric Company v. Boilermaker-Blacksmith National Pension Trust" on Justia Law

Sarah Hinkes brought a lawsuit against her employer and two individual employees, alleging discrimination in violation of federal statutes. The dispute was stayed pending arbitration, as required under federal law. After the arbitrator ruled in favor of the employer, Hinkes sought to have the arbitration award set aside in the United States District Court for the Northern District of Illinois. The district judge confirmed the award, and Hinkes appealed that decision.On appeal, subject-matter jurisdiction was challenged due to lack of diversity between the parties, as both Hinkes and one defendant, Ravi Reddy, were citizens of Illinois. Although Hinkes attempted to argue that Reddy should be disregarded because she was not seeking relief against him, the court noted that Reddy remained a party to the action. Hinkes later asked for the appeal to be dismissed, but Sunera Technologies, the employer, argued for federal-question jurisdiction under 28 U.S.C. §1331. The Seventh Circuit identified that the original suit arose under federal law, and, following recent precedent from Kinsella v. Baker Hughes Oilfield Operations, LLC and Jules v. Andre Balazs Properties, concluded that federal-question jurisdiction continued to support the district court’s confirmation of the arbitration award.The United States Court of Appeals for the Seventh Circuit reviewed Hinkes’s challenges to the arbitration award, which centered on procedural objections and alleged misconduct under 9 U.S.C. §10(a)(3). The court determined that Hinkes had not shown arbitrator misconduct warranting vacatur, as the arbitrator did not improperly refuse to hear evidence and was not bound by federal evidentiary or discovery rules. Finding no misbehavior or prejudice, the Seventh Circuit affirmed the district court’s confirmation of the arbitration award. View "Hinkes v Reddy" on Justia Law

A holding company and its North Carolina insurance agency subsidiary, which function as intermediaries between clients and insurance carriers, experienced significant employee dissatisfaction after a shift in commission structure and a pay freeze in early 2020. This led to multiple employees, including both producers and account managers, leaving over several months to join a direct competitor, a new agency formed by a former employee. The departing employees had signed agreements with non-solicitation and confidentiality clauses. During their departures, some employees forwarded company documents to personal accounts, and, after litigation began, engaged in extensive deletion of electronic evidence.Previously, in Guilford County Superior Court, the plaintiffs had sued a former producer, with most claims dismissed except for breach of employment agreement, and that suit was later settled. In the current litigation, after discovery, both sides sought partial summary judgment in the North Carolina Business Court (Superior Court for Complex Business Cases). The Business Court granted summary judgment in part for both parties, including a grant of adverse inference against defendants for spoliation of evidence, but did not specify how that inference would apply to each claim.The Supreme Court of North Carolina reviewed the interlocutory appeal. It affirmed the adverse inference ruling but remanded for the Business Court to clarify its specific application. The Court reversed the Business Court’s summary judgment that two client lists could not be trade secrets, holding there were genuine issues of fact. It clarified the standard for misappropriation of trade secrets under state law, requiring evidence of a specific opportunity to acquire trade secrets without authorization. The Court remanded claims related to trade secrets, enforcement of non-solicitation provisions (pending factual findings on the scope of the employer and affiliates), and certain computer fraud claims for further proceedings. Summary judgment for defendants on unjust enrichment was affirmed, and the Business Court was directed to issue a written opinion for claims it disposed of in a summary order. The disposition was thus affirmed in part, reversed in part, and remanded for further proceedings. View "Rel. Ins., Inc. v. Pilot Risk Mgmt. Consulting, LLC" on Justia Law

An employee who had been diagnosed with metastatic urothelial carcinoma continued to work as a truck driver and farm laborer. Several months after his cancer diagnosis, he suffered a work-related fall that resulted in a hip injury and required surgery. Complications from the surgery, including an infection, delayed his ability to receive recommended immunotherapy for his cancer. The employee died approximately three months after the fall. His death certificate listed metastatic cancer as the immediate cause of death, but also noted that complications from the hip injury delayed treatment, resulting in progression of the cancer. The employee’s widow sought workers’ compensation death benefits, arguing that the work injury prevented timely cancer treatment and thereby shortened his life.The Nebraska Workers’ Compensation Court considered expert testimony from several physicians. The medical experts agreed that the work injury and its complications delayed cancer treatment, but their opinions as to whether this definitively shortened the employee’s life were couched in terms such as “may” or “might.” The compensation court concluded that the evidence was insufficiently definite to establish that the delayed treatment caused or hastened death by a preponderance of the evidence, as required under Nebraska law, and denied the claim for death benefits. However, the court did award compensation for temporary total disability during the period the employee was unable to work due to the hip injury, as well as associated medical expenses and attorney fees.The Nebraska Supreme Court reviewed the sufficiency of the evidence and the legal standard applied. It held that the compensation court did not err in denying death benefits, finding that the expert testimony lacked the necessary definiteness to establish causation. The Supreme Court affirmed the denial of death benefits, holding that the claimant failed to prove the work injury proximately caused the employee’s death. View "Hastreiter v. Foltz Bros." on Justia Law

A man was hired by a retail store in October 2020 and worked without incident for about 20 months. In June and July 2022, he was involved in a series of disruptive workplace incidents, including emotional outbursts, irrational statements, and aggressive behavior that concerned his supervisors and colleagues. Following these events, the company terminated his employment for violating its workplace violence policy. At no time prior to his termination did the employee disclose to company officials that he had been diagnosed with bipolar disorder, nor did he request any accommodations related to a mental disability.After his termination, the employee provided a generic doctor’s note indicating he could return to work, but it did not mention any disability. He later contacted the company seeking reinstatement, alleging discrimination based on his mental disability. The company reviewed his claim but upheld the termination decision.The employee subsequently filed a lawsuit in the Superior Court of Los Angeles County, asserting claims under California’s Fair Employment and Housing Act (FEHA) for disability discrimination, failure to provide reasonable accommodation, and failure to engage in the interactive process. The Superior Court granted summary judgment in favor of the employer, finding there was no evidence the company knew of the employee’s disability at the time of termination, and that the company had a legitimate, nondiscriminatory reason for the termination.On appeal, the California Court of Appeal, Second Appellate District, Division Five, affirmed the lower court’s judgment. The appellate court held that, as a matter of law, an employer cannot be held liable under FEHA for disability discrimination or failure to accommodate a disability when the employee’s disability was undisclosed and not the only reasonable interpretation of the employee’s observed conduct. The court concluded the employer’s knowledge of a disability cannot be inferred unless a disability is the only reasonable explanation for the employee’s behavior. View "Husband v. Target Corp." on Justia Law

Four employers participating in an underfunded multiemployer pension plan withdrew from the plan in 2018. The plan’s trustees, using a newly adopted discount rate of 6.50% (previously 7.50%), calculated each employer’s withdrawal liability based on the plan’s unfunded vested benefits as of December 31, 2017. The change in the discount rate, adopted after the measurement date but before the calculation, significantly increased the amounts the employers owed. The employers challenged these assessments in arbitration, arguing that only actuarial assumptions in effect as of the measurement date could be used.Each arbitrator agreed with the employers, concluding that the plan should have used the discount rate in effect on the measurement date and requiring reassessment with the prior, higher rate. The fund’s trustees then sought review in the United States District Court for the District of Columbia, which disagreed with the arbitrators and held that it was permissible for the plan’s actuary to select assumptions after the measurement date. The United States Court of Appeals for the District of Columbia Circuit affirmed, reasoning that the statutory text did not require actuarial assumptions to be fixed as of the measurement date, and that assumptions could be adopted later as long as they reflected the best estimate as of that date. This decision created a conflict with a prior ruling by the United States Court of Appeals for the Second Circuit.The Supreme Court of the United States held that the relevant provisions of ERISA do not require the actuarial assumptions used to calculate withdrawal liability to be selected on or before the statutory measurement date. The Court affirmed the D.C. Circuit, concluding that, while the measurement date fixes the relevant factual data, the timing of selecting actuarial assumptions is not limited by statute. The Court also noted that the statute requires only that the assumptions be reasonable and reflect the actuary’s best estimate. View "M & K Employee Solutions, Inc. v. Trustees of IAM Nat. Pension" on Justia Law

An off-duty police officer in the District of Columbia shot and seriously injured a man outside a residence in Maryland after suspecting an attempted vehicle break-in. The officer did not call 911 as trained, confronted the individual, and used deadly force, although no weapon or evidence of crime was found on the victim. Following internal reviews, the police department sought to terminate the officer. His union invoked arbitration, as allowed by the collective bargaining agreement.An arbitrator determined that the officer’s conduct was reckless, violated departmental policies, and met the definition of reckless endangerment under Maryland law. However, the arbitrator concluded that termination was not warranted and reduced the discipline to a 45-day suspension, referencing a prior similar case involving another officer. The District of Columbia Public Employee Relations Board (PERB) sustained this sanction. The Superior Court of the District of Columbia affirmed PERB’s decision. On a prior appeal, the District of Columbia Court of Appeals remanded the case, directing PERB to further explain its reasoning regarding whether the arbitral award was contrary to law or public policy.After PERB again upheld the arbitrator’s decision on remand and the Superior Court affirmed, the case returned to the District of Columbia Court of Appeals. The court reviewed whether the arbitral award was “on its face contrary to law and public policy.” The court held that the award was not contrary to law because the arbitrator did not purport to apply and misapply the Douglas factors, nor was the penalty so disproportionate as to be illegal. The court further held that the award was not contrary to public policy, noting the absence of a statutory or regulatory mandate requiring termination under these circumstances and emphasizing the narrow grounds for overturning arbitral awards on public policy. The court affirmed the judgment upholding PERB’s decision. View "District of Columbia Metropolitan Police Dep't v. District of Columbia Public Employee Relations Board" on Justia Law