Monthly Archives: January 2012

Fired for “Pants on Fire”: When Lies, GPS, and Employee Handbooks Meet

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Sasha VanDeGrift by Sasha VanDeGrift

One of the staples of the little kid lexicon is the expression “liar, liar, pants on fire!”  While there appears to be no direct correlation between flaming trousers and someone taking liberties with the truth, there does appear to be a common correlation between lying at work and getting fired.  It might have something to do with employers thinking that if they pay someone, they should be able to trust his or her word.  Silly employers!

Even employers in significant positions of public trust occasionally find their employees’ britches burning.  Case in point: Philip Mordick v. City of Dayton.  In Mordick, the City of Dayton fired Mordick, a police officer, after he filed a false report of his whereabouts while he was on patrol.  Mordick, 2nd Dist. 24663, 2012-Ohio-289 (for the full text of the Opinion: http://www.sconet.state.oh.us/rod/docs/pdf/2/2012/2012-ohio-289.pdf). 

Officer Mordick probably should have realized that his lie was likely to be discovered: he filed the false report in front of another officer, Officer Cash, while they were in the same police cruiser.  When Officer Mordick left the cruiser, ostensibly looking for his wayward girlfriend, Officer Cash contacted their sergeant and informed him that she and Officer Mordick were not at the location that Officer Mordick had reported.  The sergeant verified Officers Mordick and Cash’s location by tracking the cruiser’s GPS unit, confirming that Officer Cash was telling the truth and Officer Mordick had lied. 

When Officer Mordick returned to the cruiser, he called the sergeant, who asked Officer Mordick where he really was.  Officer Mordick admitted his true location.  Then, Officer Mordick drove to the location where he had falsely claimed to be. 

The City of Dayton charged Mordick with several violations of the Civil Service Rules and Regulations (the “Regs”) (basically the employee handbook for the City of Dayton police), including Rule of Conduct 8.5, which specifies:

No officer will knowingly falsify any report, document, or record or cause to be entered any inaccurate, false, or improper information on records, documents, or reports of the Department or of any court or alter any record, document, or report except by a supplemental report, document, or report. If an investigation reveals that an officer has violated this section, their employment with the Dayton Police Department will be terminated.

The City of Dayton found that Officer Mordick had violated the Regs and terminated his employment.  That decision was affirmed by the Civil Services Board, the Montgomery County Common Pleas Court, and now by the Second District Court of Appeals.

Most “pants on fire” cases are not this clear-cut.  More importantly, not all policies plainly state that “if you lie about X, we will fire you.”  The takeaway:

  • For employees: lying at work is a bad idea, especially in front of a witness and in a GPS-equipped vehicle.
  • For employers: when the evidence is clear that an employee was lying and you have a very carefully drafted policy specifying that the particular type of lie is grounds for termination, that is strong evidence in favor of termination.  It might seem a little late in the year for New Year’s Resolutions, but it is always advisable to dust off the employee handbook and give it a fresh read. 

Honesty is always the best policy, especially when that policy is clearly spelled out in writing…

Employer Collective Arbitration Prohibited

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David Pierce by David Pierce

In a victory for employees, the NLRB recently held in D.R. Horton, Inc., 357 N.L.R.B. No. 184 (Jan. 2012), that an arbitration agreement that prohibits employees from filing class action lawsuits violates the National Labor Relations Act.

In D.R. Horton, the company required employees to sign an agreement that required them to arbitrate their disputes. However, the agreement provided that the arbitrator would not have the power to consolidate claims or award relief on a class basis.

The Claimant’s attorney notified the company that he had been retained to represent a class of employees in a Fair Labor Standards Act case contending that the employees had been improperly classified as exempt and that he wished to arbitrate the dispute. In response, the company cited the class prohibition in the arbitration clause and claimed the notice to arbitrate was ineffective.

The NLRB in a 2-0 decision found that filing a collective or class action claim constituted protective concerted activity which is protected by Sections 7 and 8(a)(1) of the National Labor Relations Act.  Moreover, the Board determined that such an arbitration clause would cause employees to believe they were prohibited from filing an Unfair Labor Practice charge.  Therefore, the Board determined that such arbitration clauses are prohibited. 

The Board’s decision is significant.  It applies to both union and non-union employers. Furthermore, it casts renewed doubt on the utility of employment arbitration clauses as a means of eliminating class action disputes. Such clauses had become more popular in light of a recent U.S. Supreme Court case enforcing an arbitration provision that prohibited class action lawsuits by members of the public. AT&T Mobility v. Conception, 131 S. Ct. 1740 (2011).

Employers are cautioned to have their arbitration clauses reviewed by counsel before asking their employees to sign them.  In addition to problems with clauses that prohibit class actions, courts have found other restrictions in employer/employee arbitration clauses to be unconscionable or unenforceable.   Similarly, companies should carefully consider whether they want to include arbitration clauses as a means of alternative dispute resolution in other business agreements.  This is especially true because the traditional benefits of arbitration (i.e., faster and cheaper resolution) may not be present depending upon how the arbitration provision is drafted.

Are You a State Funded Employer For Workers’ Comp Coverage But Unable to Qualify for Group Rating in the Past?

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David Korte  by David Korte

If so, legal action has been initiated on your behalf in the Cuyahoga County Court of Common Pleas, suggesting that, by providing discounted premiums to employers that qualified for Group Rating discounts, the Ohio BWC conversely charged unnecessarily high premiums to state fund employers that did not qualify for the discounts. The time frame for which damages are requested begins in July, 2001 and runs for a period of 7 years. At this point, the BWC, as expected, denies inappropriate or inequitable results from the Group Rating discount programs in which many employers have participated through the years.

Many of you may have already received notice of this class action. If you believe you fall into the category of employers affected during the time frame involved, you don’t need to do anything to possibly qualify for damages resulting from the action. However, if you might otherwise qualify for those damages, but don’t wish to partake in same, you must complete written notice, to be filed with the court and with the attorneys for the named parties, in order to be excluded from any economic benefit to be derived from the cause of action. There are benefits and detriments with both options, primarily centering on protecting your company’s individual right to pursue damages under the same theory.

Social Media Posts as Evidence? The Verdict is YES!

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Sasha VanDeGrift  by Sasha VanDeGrift  

My mother used to always say that once your opinions hit the air, you are responsible for them. Like mothers usually are, she was right. But her advice is even more significant in the age of social media. A moment shared on Facebook or MySpace with 587 of your closest “friends” can truly come back to haunt you, not just in social settings, but also in court.

That’s right: the seemingly innocuous post today could be an opponent’s key piece of evidence tomorrow. I recently experienced this representing a client in an administrative hearing. Prior to the hearing, my client, a skilled internet sleuth, found some really good dirt on our opponent that our opponent had been kind enough to announce on his Facebook wall. Even better, our opponent had never elected to change his Facebook settings to make his wall content private. Without even being his “friends,” my client and I were able to see everything ever posted on our opponent’s page.

Before using this evidence, I did some legal research to see if any courts in Ohio had relied on social media pages as evidence. In fact, several local courts have admitted social media evidence:

  • State v. Hause, 2009-Ohio-548, Warren App. No. CA2008-05-063:
    • The Twelfth District Court of Appeals affirmed the conviction and sentence of a part-time school district employee stemming from pictures she posted on Facebook showing her providing alcohol to minors.
  • Gillum v. Gillum, 2011-Ohio-2558, Montgomery App. No. 24401:
    • The Second District Court of Appeals affirmed a decision by the Domestic Relations Court decision not to remove children from their mother’s custody based on content posted on the mother and daughters’ MySpace pages the father felt were “inappropriate.” The 13 and 15 year old daughters had posted pictures of themselves in swimsuits with captions like “sexii” and “one sexii cowgirl.” The mother had posted that the father was “fat,” “ugly,” and that he and his new wife were “sinners.” The Second District found that the posts were “problematic,” but that the danger posed by the posts was not significant enough to warrant a change in child custody.
  • State of Ohio v. McCraney, 2010-Ohio-6128, Summit App. Nos. 24750 and 25285.
    • The Ninth District Court of Appeals affirmed the convictions for two defendants of engaging in a pattern of gang activity based, in part, on pictures from the Defendants’ MySpace pages showing the Defendants wearing gang colors, displaying gang hand signs, standing with known gang members, and paying tribute to a fallen gang member.

The take-away for attorneys and social media users: even in cases given the highest level of constitutional protections (i.e. criminal and child custody cases), social media evidence has been admitted and considered by courts in rendering judgment. Now, it is worth noting that none of the parties in these cases challenged the authentication of the social media pages or raised any other objections to their admission into evidence. How courts have addressed such objections is a topic for another day (stay tuned).

What’s In Store for State Fund Employers from BWC?

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David Korte  by David Korte

The subject of Workers Compensation does not always conjure up visions of good news for employers in Ohio, but there may be some positive developments on the horizon. Consider, for instance:

  • Expected Loss Rates for the next fiscal year are expected to remain the same
  • Cafeteria Plan Discounts are being given serious consideration for implementation in the 2013 Rating Year, with options to include:
    • Drug Free Workplace Discount;
    • Safety Council Participation Discount;
    • Potential Mandatory Vocational Rehab for Claimants (though this would likely require a legislative mandate to change current law). Keep in mind that disability benefits paid to claimants who participate in a BWC approved rehab program are NOT charged to the employer;
    • Transitional Duty Discounts;
    • Discounts if your organization has never had a lapse in BWC coverage;
    • A “Go Green” discount for paying premiums online, instead of by mail.

More to come as the BWC Board of Directors continues to meet and fine tune these possible options.

The L. A. Dodgers are Claiming it was an Error

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Merle Wilberding  by Merle Wilberding

Like the players in the baseball world, the players in the legal world want the Golden Glove Award – - going through their careers with no errors. Now it is alleged that the L.A. law firm of Bingham McCutchen LLP is being charged with an error for how it fielded the post-nuptial agreement between Frank McCourt and Jamie McCourt on the ownership of the Los Angeles Dodgers.

The evidence suggests that when the law firm partner prepared the six signed execution copies of the post-nuptial agreement, three of the copies had one set of exhibits that named Frank McCourt as the sole owner of the Dodgers, while the other three copies had a different set of exhibits that were silent on that point.

My first thought when I read this in the Wall Street Journal was, “Who would think that it was okay to delineate the ownership of a multi-million dollar asset (the Dodgers) on an exhibit, and not have it clearly described in the main body of the agreement?”

Then, even with that, how could there be two different sets of exhibits attached to the agreement?

Although post-nuptial property settlements are generally not considered a solution in Ohio, the lesson of the McCourt case would apply equally well in Ohio if it were a pre-nuptial agreement. If in doubt, legal counsel should be consulted.

Here are the discussion points:

• Should Frank McCourt pursue litigation against his law firm and thereby waive the attorney-client privilege?
• Are there evidentiary suggestions to reconcile the inconsistent exhibits?
• Could a post-nuptial agreement be valid in Ohio?
• Is this just another strike against the once-wonderful image of the Dodgers?
• Shouldn’t Gil Hodges be admitted into the Hall of Fame?

The Ohio Supreme Court Shields an Insurance Company’s Communications with its Insured

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David Pierce  by David Pierce

When an insurance company appoints counsel to handle a case on behalf of its insured, issues sometimes arise as to which communications between the three parties are protected by the attorney-client privilege. These issues were addressed in part by the Court in Dawson v. Bloom-Carroll Local School District on November 29, 2011. In that case, Dawson filed a public records request seeking, among other things, a letter between the insurance company and the school district regarding the potential exposure of the school district in defending against Dawson’s claim. The letter identified who counsel would be for the case and the lawyer was copied on the correspondence. In a victory for insurance companies and their clients, the Court shielded the letter from production. According to the Court, the insurance company “stands in the shoes of the district” and its letter was covered by the attorney-client privilege. Therefore, the public records request was denied. In spite of the Court’s decision, companies in similar situations are cautioned to check with counsel before assuming that any correspondence will not end up in the hands of their adversary.

EEOC Reports Record Number Of Discrimination Charges

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David Pierce  by David Pierce  

In November 2011, the U.S. Equal Employment Opportunity Commission (EEOC) released its statistics for fiscal year 2011, which ended in September 2011. The EEOC reported that more charges were filed in this fiscal year (99,947) than in any other year in the agency’s 46-year history. Additionally, EEOC administrative enforcement actions resulted in record monetary awards (over $364.6 million) for those alleging workplace discrimination against their employers. All of this comes at a time when the EEOC has become more efficient at handling its charges. In spite of the record number of charges, about 10% fewer charges remain pending for this year than were pending at this time last year. In spite of the nation’s budgetary issues, funding during the past two years has been increased for the EEOC. Per EEOC Chair Jacqueline A. Berrien, the aforementioned numbers demonstrate what happens when the agency is “given resources to enforce the nation’s laws prohibiting employment discrimination.” In light of the agency’s increased activity and resources, employers are cautioned to exam their EEO policies and procedures to make sure they are in compliance with all applicable laws and regulations.

Your T&C’s (Terms & Conditions) can limit your liability, improve your chances in litigation and even save money on attorney fees

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Richard A. Talda  by Rchard A. Talda

There has been a dramatic rise in legal disputes where a company’s terms and conditions (T&C’s) have been found to control its business relationships with clients, customers and vendors. A review of and appropriate revisions made to T&C’s provide an opportunity to improve your position in disputes in a variety of ways. Depending on your State’s laws, provision can be made to limit your liability, better define (and limit) warranties, require the arbitration of disputes vs. court lawsuits, allocate who pays attorney fees, set up liens in combination with UCC compliance, require that disputes be held in your backyard vs. a far flung customer’s or vendor’s location, limit remedies in the event that you are found to be at fault, etc… I encourage anyone who uses T&C’s in daily business to evaluate them and seek advice as to how an update can better protect your business.

Can creditors sell your personal and sentimental possessions to collect on debts after obtaining a judgment in Ohio?

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Patricia Friesinger  by Patricia Friesinger

If other Courts follow the case of Estate of Beverly Hersh v. Robert Schwartz (2011-OHIO-3994), the answer appears to be a surprising “yes!”  In Schwartz, an unsympathetic debtor (an attorney convicted for his actions in retaining almost $2.5 Million from the Hersh estate) sought to protect paintings and collections that he had acquired that he alleged had sentimental value to him as household goods pursuant to R.C. 2329.66(A)(4)(a). The 1st Appellate District for the State of Ohio, as a matter of first impression, adopted the “functional nexus” test, which requires that “the good is used to support and facilitate daily life within the house.” Citations omitted. The Court went on to say “items that have only sentimental value, such as art, do not support and facilitate daily household living.” Does this mean that a spiteful (or forward-thinking) creditor could hold the wedding photos and children’s memorabilia hostage – with threats to sell it – unless the debtor comes up with a means to pay off a debt? Most sentimental items hold little or no value on the open market, but would hold much more value as a negotiating tool if NO exemption protects them from liquidation.