Federal Court Applies Iqbal Standard in Dismissing Age and Disability Discrimination Claims

In Myers v. MAIF, the United States District Court for the District of Maryland applied the pleading standards established by the Supreme Court in Ashcroft v. Iqbal and dismissed the plaintiff's age and disability discrimination claims. The Court ruled that based upon the facts set forth in the Complaint the plaintiff had failed to set forth a "plausible" claim under either the ADEA or ADA. A copy of the case can be read here.

If you would like guidance or counsel defending employment discrimination claims under the ADEA, ADA, or other civil rights statute, please contact Eric Gunderson and/or visit the Farrell & Gunderson website.

City of Ontario v. Quon: Supreme Court Chooses Not to Address Employee's Expectation of Privacy In Using Employer-Provided Pagers and Cell Phones

In its long-awaited decision in City of Ontario v. Quon, the Supreme Court today held that a government employer's search of records concerning an employee's use of an employer-issued pager was reasonable. However, the Court did not provide any guidance on the question of whether an employee has a reasonable expectation of privacy in his or her use of an employer-issued pager or cell phone when using it for personal reasons. The Court, rather, simply assumed for purposes of its analysis that an employee does have a reasonable expectation of privacy of such use, and expressly cautioned that its ruling should not be relied upon to define the existence and extent of such privacy expectation. This no doubt has left employers and their counsel disappointed. It was anticipated that the Supreme Court would provide some much-needed guidance on this issue so that employers can act accordingly in handling issues of employee use of work-issued cell phones and e-mail.

If you would like guidance or counsel on issues involving employee use of cell phones or e-mail, or other employee privacy issues, please contact Eric Gunderson and/or visit the Farrell & Gunderson website.

Isolated Age-Based Comment Not Enough to Prove Age Discrimination

In Jackson v. Cal-Western Packaging Corp., the Fifth Circuit Court of Appeals upheld the lower court's grant of summary judgment on the plaintiff's age discrimination claim. In addition to the fact that the plaintiff was replaced by a younger employee, the plaintiff argued that age played a role in his termination because of a comment made by his supervisor a year prior when he referred to the plaintiff as an "old, gray-haired fart." The Court held that this isolated comment, made a year prior to the supervisor's decision to terminate the plaintiff, was not proximate enough in time to the termination to prove that age was a motivating factor. A copy of the decision can be read here.

If you would like guidance or counsel in defending a claim of age discrimination or other discrimination claims, please contact Eric Gunderson and/or visit the Farrell & Gunderson website.

Physician Allegedly Denied Hospital Privileges Becuase of His Race Cannot Assert Federal Section 1981 Claim

In Jiminez v. Wellstar Health System, a federal Court of Appeals upheld the dismissal of a physician's suit against a Hospital brought under 42 USC 1981 for alleged racial discrimination in the denial of his hospital privileges. The Court held that the decision to deny the physician hospital privileges was not an act proscribed by Section 1981, in that it did not breach any contractual agreement with the Hospital itself, it did not interfere with the physician's right to contract with his patients, and did not deprive him of a property interest because he had no contractual or state law entitlement to practice medicine. A copy of the decision can be read here.

Since private physicians in most cases are not employed by the hospital where they may provide treatment to patients and, thus, are unable to assert claims of employment discrimination under Title VII or other similar employment-related civil rights laws, physicians may seek relief under other civil rights laws, such as 42 USC 1981, in connection with claims of alleged discrimination relating to their hospital privileges or other similar associations with a hospital. This decision is helpful in defending those types of claims on the grounds that these federal statutes are not implicated in those circumstances.

If you would like guidance or counsel in defending a claim of discrimination under 42 USC 1981 or any other civil rights statute, please contact Eric Gunderson and/or visit the Farrell & Gunderson website.

With Agreed Waiver from Employer of Certain Provsions of Mandatory Arbitration Agreement, Court Enforces Agreement and Dismisses Discrimination Suit

In Ragone v. Atlantic Video, the defendant employer moved to dismiss the plaintiff's Title VII and State law discrimination suit on the grounds that her sole avenue of relief was arbitration as mandated by an Arbitration Agreement entered into between plaintiff and the defendant employer. Plaintiff argued that the Agreement was unconscionable and unenforceable in light of provisions which shortened the limitations period, permitted attorney's fees to be awarded in favor of the prevailing party, and prohibited the employee from appealing the arbiter's decision in court. The defendant employer, however, expressly agreed to waive these provisions in the agreement, and, relying on the severability clause of the Agreement, sought to enforce the remaining clauses of the Agreement. The Court, relying on the employer's agreed waiver of the challenged provisions of the Agreement, upheld the enforceability of the Agreement and dismissed the plaintiff's suit in favor of arbitration. A copy of the decision can be read here.

If you would like guidance or counsel in drafting or enforcing mandatory arbitration agreements, or otherwise defending discrimination claims, please contact Eric Gunderson and/or visit the Farrell & Gunderson website.

DC Federal Court of Appeals Holds Employee Cannot Invoke Benefit of Lily Ledbetter Fair Pay Act to Save His Untimely Failure to Promote Claim

In a key decision addressing the application of the Lily Ledbetter Fair Pay Act to claims of discrimination, the federal DC Court of Appeals, in Schuler v. PricewaterhouseCoopers, LLP, held that the Act, which effectively extends the accrual of a claim of discrimination in compensation for statute of limitations purposes to any date on which a person is affected by the discriminatory decision, does not apply to a claim that the employer's decision not to promote the employee to a higher paying position was discriminatory -- commonly referred to as a failure to promote claim. In Schuler, the plaintiff filed suit in 2002 under the ADEA claiming that the decisions not to promote him in 1999, 2000, and 2001 were discriminatory based upon his age. The district court dismissed the 1999 and 2000 failure to promote claims as untimely since the plaintiff did not file a charge as to those claims within the 300-day limitations period. Relying on the Lily Ledbetter Act, the plaintiff argued that the affect of the 1999 and 2000 decisions not to promote him continued up to the filing of this charge, thus making his claims timely. The Court rejected the argument, holding that the Act, which expressly applies only to claims involving "discrimination in compensation" and involves a "discriminatory compensation decision," does not apply. The Court concluded that a decision not to promote an employee does not necessarily implicate compensation, therefore it does not fall within the meaning of a "discriminatory compensation decision." A copy of the decision can be read here.

This case, which rejected an attempt to expand the application of the Lily Ledbetter Act and its limitations-saving provisions, should prove helpful to employers defending untimely claims of discrimination.

If you would like guidance or counsel in handling and litigating failure to promote and other discrimination claims, please contact Eric Gunderson and/or visit the Farrell & Gunderson website.

Non-compete Provision in Employment Agreement Upheld, But Only Injunctive Relief, Not Damages, Awarded

The United States District Court for the District of Maryland, in TEKsystems, Inc. v. Jonathan Bolton, granted relief to an employer who filed suit to enforce a non-compete provision contained in an employment contract of a key employee. Operating in the New York region, Mr. Bolton resigned from TEKsystems and began working for a similar job placement service in the same region. TEKsystems sued Mr. Bolton to enforce a provision in his contract that prohibited him from working for a competing company within 50 miles of its New York office for a period of 18 months. The Court held that the the scope of this non-compete provision was reasonable and that it is enforceable against Mr. Bolton. It rejected Mr. Bolton's argument that even if reasonable in scope the contract provision should not be enforced because it would cause him undue hardship by requiring him to work outside of the New York region.

The Court, however, denied TEK's request to award liquidated damages in an amount equal to the profits generated by Mr. Bolton during his employment with the competing business. The Court held that this liquidated damages provision was triggered only if TEK could show that Bolton generated profits from TEK's existing clients or customers, and that the profits generated by Mr. Bolton were shown to be from businesses who were not clients or customers of TEK. The Court did, grant, however, injunctive relief requiring Mr. Bolton to adhere to the non-compete provision for a period of 18 months from the date of the Court's decision. A copy of the decision can be read here.

This case provides an informative analysis of restrictive covenant law in Maryland, and could serve as helpful guidance in assessing and litigating these types of claims. It also provides guidance on critical issues to consider when drafting and negotiating non-compete provisions in employment contracts.

If you would like guidance or counsel in handling and litigating claims involving non-compete agreements and other employment contract provisions, please contact Eric Gunderson and/or visit the Farrell & Gunderson website.