Justia Labor & Employment Law Opinion Summaries

A dispute arose concerning the payment rate for a surgical procedure performed at an out-of-network facility. The patient receiving the surgery was covered by an ERISA-governed health plan provided by the employer and administered by an insurance company. Prior to the surgery, the facility contacted the plan administrator to verify coverage and was told that the plan would reimburse at the usual, customary, and reasonable (“UCR”) rate, not the lower Medicare rate. Relying on this representation, the facility performed the surgery. However, the plan later paid only at the Medicare rate, far less than the full billed amount. The facility’s successor in interest, having obtained the rights to the claim, sought to recover the unpaid balance.The action was first brought in California state court, then removed to the United States District Court for the Central District of California. The plaintiff asserted both ERISA and state law claims. The district court dismissed the ERISA claim for lack of derivative standing, as the plaintiff was not properly assigned the right to sue under ERISA. The court also dismissed the state law claims for negligent misrepresentation and promissory estoppel, holding that these claims were preempted by ERISA because they related to an ERISA-covered plan.The United States Court of Appeals for the Ninth Circuit reviewed the case. It affirmed the district court’s dismissal of the promissory estoppel claim, holding that, under circuit precedent, such claims are preempted by ERISA. However, the Ninth Circuit reversed the dismissal of the negligent misrepresentation claim. The appellate court held that ERISA does not preempt a negligent misrepresentation claim by a provider’s successor in interest when the claim arises from representations made by the plan administrator during a pre-service verification call. The court concluded that such a claim does not sufficiently “relate to” an ERISA plan to trigger preemption, as it is not based on an ERISA-regulated relationship or enforceable under ERISA’s civil enforcement mechanism. The case was remanded for further proceedings on the negligent misrepresentation claim. View "HEALTHCARE ALLY MANAGEMENT OF CALIFORNIA, LLC V. WSP USA, INC." on Justia Law

The petitioner, a former project manager at a large corporation, raised internal compliance concerns in 2018. In April 2019, he was notified that he would be subject to a reduction in force and laid off, effective June 21, 2019. He subsequently filed several internal complaints alleging that his layoff and the company’s refusal to rehire him for numerous positions were retaliatory acts in response to his whistleblowing. After his layoff, he was placed on short-term disability and given a period during which he could apply for other positions within the company, but his applications were unsuccessful.Following these events, the petitioner filed a whistleblower-retaliation complaint under the Sarbanes–Oxley Act (SOX) with the Occupational Safety and Health Administration in December 2020. OSHA dismissed the complaint as untimely. The petitioner then sought review before an administrative law judge (ALJ), who held a hearing and dismissed the claims as untimely, also finding that equitable tolling was not warranted. The petitioner appealed, and the Administrative Review Board (ARB) affirmed the ALJ’s dismissal.On review, the United States Court of Appeals for the Second Circuit determined that the ARB did not err in finding the claims untimely. The court held that the SOX 180-day filing window begins when the employee is notified of the adverse action or when the refusal to rehire becomes apparent, not the last date of employment or the date of final application rejection. The court also found no basis for equitable tolling, as the petitioner knew or should have known of the alleged retaliation well before the statutory deadline. Accordingly, the Second Circuit denied the petition for review. View "Mehrotra v. U.S. Dep't of Lab." on Justia Law

The plaintiff, a former employee of a company participating in a deferred profit-sharing plan, sought to liquidate his 401(k) account in anticipation of a post-election stock market increase. He requested that the plan’s record keeper, Fidelity, complete the liquidation rapidly and in a manner advantageous for tax purposes. The plaintiff claimed that Fidelity’s communications led him to believe he would have quicker access to his funds than ultimately occurred, resulting in a missed investment opportunity. Additionally, he alleged that the plan administrator, Altria, failed to provide him with a copy of the administrative services agreement (ASA) between Altria and Fidelity, which he requested under ERISA.After the plaintiff’s formal complaint was denied by the plan administrator, he appealed to the plan’s management committee, which upheld the denial. He then filed suit in the United States District Court for the Eastern District of Virginia, raising claims for denial of benefits, breach of fiduciary duty, and failure to provide plan documents. The district court granted summary judgment to the defendants on all remaining claims, finding that the plan administrator’s denial was reasonable, that Fidelity was not acting as a fiduciary or had not breached any fiduciary duties, and that the ASA was not a document required to be disclosed under ERISA.The United States Court of Appeals for the Fourth Circuit reviewed the case. The appellate court affirmed the district court’s rulings on the denial of benefits and breach of fiduciary duty claims, concluding that the plan administrator’s decision was reasonable and that Fidelity was not a fiduciary in this context or had not breached any such duty. However, the Fourth Circuit reversed the district court’s decision regarding the ASA, holding that it was a document under which the plan was operated and remanded for consideration of statutory penalties. The court affirmed the award of attorney’s fees to the defendants. View "Kelly v. Altria Client Services, LLC" on Justia Law

A Native American woman was recruited in 2017 to work as a Clinical Research Manager at a health research institute that focuses on underserved populations, including Native Americans. She supervised a small team and was initially hired, in part, because her background was seen as beneficial for engaging Native American study participants and diversifying management. Over several years, she led or participated in research studies, experienced workplace conflicts, and alleged that she and her assistant were subject to “tokenism” and disparate treatment. In 2022, following complaints about workplace discrimination, disputes over recruitment methods, and changes in her role, the institute’s leadership eliminated her position as part of a reduction in force (RIF) to meet a 5% budget improvement mandate. Her salary was funded mostly by internal, non-grant money, unlike other managers whose salaries were grant-funded.She filed suit in the United States District Court for the District of South Dakota, alleging race discrimination in violation of Title VII and state law. The district court granted summary judgment for the employer, finding that she failed to establish a prima facie case of race discrimination and failed to show that the RIF was a pretext for unlawful discrimination.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the grant of summary judgment de novo. Applying the McDonnell Douglas burden-shifting framework, the court assumed without deciding that a prima facie case was made, but held that the employer had articulated a legitimate, non-discriminatory reason for the termination: budgetary constraints and the unique funding of her position. The appellate court further found that the plaintiff did not present sufficient evidence for a reasonable jury to conclude that this stated reason was pretextual or that racial discrimination was a determinative factor in her termination. The Eighth Circuit affirmed the district court’s judgment. View "Tobacco v. McKennan" on Justia Law

A former President and CEO of the Roosevelt Island Operating Corporation (RIOC), a public benefit corporation in New York, was terminated in June 2020 after an internal investigation into complaints of offensive remarks. On the same day as her termination, a senior adviser to the New York Governor’s Office provided statements to the press alleging that she was dismissed for making racially and sexually offensive comments. The former executive denied these allegations and asserted that her firing was actually retaliation for her complaints about public safety risks on Roosevelt Island and that state officials deliberately spread false allegations about her.After her termination, the former executive initiated two separate proceedings in New York State courts. First, she brought a CPLR Article 78 proceeding in New York Supreme Court, challenging her dismissal as arbitrary and capricious and seeking reinstatement and back pay. The court dismissed her petition, finding a rational basis for her termination and noting that more extensive factual disputes belonged in a plenary action, not an expedited Article 78 proceeding. The Appellate Division, First Department, affirmed. While the Article 78 proceeding was pending, she also commenced a plenary action in New York Supreme Court, raising discrimination, defamation, whistleblower, and federal civil rights claims under 42 U.S.C. § 1983. The court dismissed her discrimination claims with prejudice as precluded by the Article 78 judgment, but dismissed her § 1983 and other non-discrimination claims without prejudice, inviting her to refile them in an appropriate forum.The United States Court of Appeals for the Second Circuit reviewed whether the doctrine of res judicata barred her federal § 1983 claim. The court held that under New York law, res judicata does not preclude a claim dismissed without prejudice and with express leave to refile, even if other claims from the same transaction were dismissed on the merits. Therefore, the district court’s dismissal on res judicata grounds was vacated and the case was remanded for further proceedings. View "Rosenthal v. Roosevelt Island Operating Corporation" on Justia Law

A Chicago police officer with cystic fibrosis and related diabetes requested a workplace accommodation in March 2020 to minimize his risk of contracting Covid-19. After receiving guidance from the Department, his medical provider submitted documentation, and he followed up with a self-certification form. The officer continued working as usual during this period. Following Illinois’s stay-at-home order, narcotics officers, including the officer in question, were reassigned to monitor public spaces individually from their vehicles, minimizing contact. The officer expressed concerns to his superiors and was assured that an accommodation would be made. He indicated to a Medical Section captain that his sergeant would ensure he was assigned to solo patrol duties and stated he was content with this arrangement. He worked several more days before becoming ill, was hospitalized, and later died from Covid-19.The Estate sued the City of Chicago in the United States District Court for the Northern District of Illinois, asserting claims under the ADA, Illinois Human Rights Act, and Illinois Wrongful Death Act. The court dismissed disparate treatment claims and granted summary judgment for the City on the failure-to-accommodate and wrongful death claims. It found the officer was reasonably accommodated by reassignment to isolated duties, emphasizing that the method of accommodation was less important than its effect. The court also concluded that the officer was exposed to Covid-19 before requesting reassignment, so any alleged delay could not have caused his death, and the Estate presented no evidence of a later exposure.The United States Court of Appeals for the Seventh Circuit reviewed the district court’s summary judgment decision de novo. The Seventh Circuit held that the City promptly accommodated the officer’s request, and the Estate failed to provide evidence disputing the material facts or establishing a causal link between any City omission and the officer’s illness and death. The court affirmed the district court’s judgment. View "DiFranco v City of Chicago" on Justia Law

Mark Pannek and Thomas Strotman, both former vice presidents at U.S. Bank, alleged the bank retaliated against them after Pannek filed an ethics complaint against their supervisor, Gemrich, who had made inappropriate sexual comments and engaged in other unprofessional conduct. Pannek also claimed age discrimination after his termination, asserting he was replaced by a younger employee. Following internal investigations, U.S. Bank issued a written warning to Gemrich and eventually terminated him, but before that, Pannek and Strotman were terminated as part of a departmental reorganization. Their responsibilities were redistributed among other employees.The United States District Court for the Southern District of Ohio granted summary judgment in favor of U.S. Bank on all claims. The court found insufficient evidence for the retaliation, hostile work environment, and age discrimination claims, concluding that the bank’s actions were justified by a neutral workforce reduction and that Pannek and Strotman failed to establish a causal link between the ethics complaint and their terminations. The district court also determined the hostile work environment claims did not meet the necessary legal standards, and that Pannek was not replaced in a manner that would support his age discrimination claim.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo. The court held that summary judgment was improper for the Title VII retaliation claims, finding genuine disputes of material fact about whether the terminations were motivated by retaliation for the ethics complaint. It affirmed summary judgment for the Title VII hostile-work-environment claims, ruling U.S. Bank was entitled to the Faragher/Ellerth affirmative defense because it had a reasonable harassment policy and Pannek and Strotman failed to promptly and fully utilize corrective measures. The court also affirmed summary judgment on Pannek’s ADEA claim, finding he was not replaced in a manner supporting age discrimination and presented no additional evidence of discriminatory motive. The retaliation claims were remanded for further proceedings. View "Pannek v. U.S. Bank Nat'l Ass'n" on Justia Law

An employee suffered a work-related injury in 1985 while married to his then-spouse. At the time, the couple shared finances and property. Years later, the couple divorced, and the former spouse later remarried. Despite these changes, the original injury continued to affect the employee, ultimately leading to his death in 2020. Following his death, the former spouse sought death benefits under Maine’s workers’ compensation statute, claiming she met the dependency requirements.After a contested hearing, an Administrative Law Judge of the Workers’ Compensation Board found that the former spouse was living with and dependent on the employee at the time of his injury. The judge further concluded that she had not become the dependent of another person, interpreting the statute to require dependency only at the time of injury, not at the time of death. S.D. Warren, the employer, challenged this interpretation, but the Appellate Division of the Workers’ Compensation Board affirmed the judge’s decision, holding that dependency at the time of injury was sufficient.The Supreme Judicial Court of Maine reviewed the case. It held that the statute unambiguously ties eligibility for death benefits to dependency at the time of injury, not at the time of death, unless the statute states otherwise. The Court found that the plain language of the relevant statutory provisions, as well as prior precedent, supported this interpretation. Therefore, the Court affirmed the Appellate Division’s decision, upholding the award of death benefits to the former spouse based solely on her dependency status at the time of the employee’s injury. View "Brewster v. S.D. Warren/Sappi N.A." on Justia Law

A California Highway Patrol (CHP) officer, who had an otherwise unblemished record, was found to have claimed unearned overtime compensation on a single occasion by leaving his post early and later submitting forms indicating he worked the full scheduled hours. The officer admitted to leaving the office before the overtime was completed, contrary to established policy, but believed the practice was tolerated by management. An internal audit revealed that, in addition to the false overtime claim, the officer had repeatedly failed to properly complete vehicle return time records, though there was no evidence that these omissions were intended to deceive.Following an administrative hearing, an Administrative Law Judge (ALJ) found cause for discipline but did not find intentional dishonesty, recommending a one-month suspension. The California State Personnel Board (SPB) rejected the ALJ’s leniency, finding the officer acted dishonestly and in violation of policies, but, considering the totality of circumstances—including the single instance of unearned overtime, the officer’s otherwise exemplary record, and a lack of evidence for a pattern of dishonesty—reduced the penalty from dismissal to a one-year suspension without pay.The CHP filed a petition for writ of mandate in the Superior Court of Los Angeles County, arguing the SPB abused its discretion by not imposing dismissal for dishonesty. The superior court denied the petition, concluding that the SPB’s decision was not a manifest abuse of discretion, as reasonable minds could differ on the appropriate penalty in light of the specific facts.The California Court of Appeal, Second Appellate District, Division Eight, affirmed the superior court's judgment. The court held that the SPB did not abuse its discretion by imposing a one-year suspension, rather than dismissal, for the officer’s single act of dishonesty and related misconduct. View "Cal. Hwy. Patrol v. Cal. State Personnel Bd." on Justia Law

A woman applied for a mailroom position with a security company that provided services at an automobile manufacturing plant. The company had a grooming policy prohibiting certain hairstyles, including locs. During her interview, concerns about her hairstyle were raised, but she was hired after showing a picture of her hair styled in an "updo." She began work with her locs, but was sent home because of her hair. After subsequent discussions and expressing concerns about discrimination, she was ultimately not allowed to return to work. She filed complaints with the Equal Employment Opportunity Commission (EEOC), naming individuals involved, and later received a right-to-sue letter for one of her charges, but maintains she never received the letter for the other.She filed suit in the United States District Court for the Middle District of Alabama, alleging race and pregnancy discrimination and retaliation under Title VII and 42 U.S.C. § 1981 against several defendants. The district court dismissed disparate-impact claims and all Title VII claims against one defendant, then granted summary judgment on all claims against two defendants, and on all but one retaliation claim against the security company. That retaliation claim went to a jury, which awarded substantial damages. The district court denied the security company’s motion to strike her jury demand, finding no knowing and intentional waiver of her right to a jury trial.The United States Court of Appeals for the Eleventh Circuit affirmed dismissals and summary judgment for two defendants and on the race discrimination claim against the security company. However, it held that the district court erred by presuming timely receipt of the right-to-sue letter at summary judgment and by failing to properly instruct the jury on the protected activity element of retaliation. The court vacated the judgment against the security company and remanded for a new trial on the remaining claims. View "Key v. Dynamic Security, Inc." on Justia Law