Florida Governor Rick Scott signed into law H.B. 655 (linked below), which preempts laws enacted by counties, cities and other local governmental units that require employers to pay wages and provide employee benefits more favorable than those required under federal and state laws.  The measure thus preempts local laws affecting: minimum wage; health benefits; disability benefits; death benefits; group accidental death and dismemberment benefits; paid or unpaid days off for holidays, sick leave, vacation, and personal necessity; retirement benefits; and profit-sharing benefits. 

Some local laws are carved out and thus survive.  These include laws requiring in certain cases time off for domestic violence victims (Miami-Dade County has such an ordinance).  In addition, the new law does not affect employment laws enacted by federally recognized tribal governments.   

Most importantly, in most situations, Miami-Dade County’s and Broward County’s living wage ordinances will survive.  The new law preserves local minimum wage laws for employees of political subdivisions, and for employers who contract with political subdivisions for goods and services (along with subcontractors of such employers where the contract requires that subcontractors pay the local minimum wage).  

There is one potentially big change for Miami-Dade County’s living wage law. Miami-Dade County’s living wage law, like many such ordinances,  applies to County employees and county contractors.  The law also applies to employers providing services under aeronautical services permits issued by the Miami-Dade Airport.  Thus, aviation service providers must pay a living wage to airport workers.  These covered airport workers include wheelchair assistants, baggage handlers, fuelers, in-flight caterers, among others.  (Skycaps that receive tips are exempt under Miami-Dade County’s living wage ordinance and typically are not paid the living wage.)    With some exceptions, aviation support services  are not provided under contracts or subcontracts with the county; the services are provided under contracts with the airlines.   These workers’ pay does not come from county funds.  But for the requirement that permit holders pay their employees the living wage for services provided pursuant to the permit, the living wage ordinance would be inapplicable.  But the carve out in H.B. 655 does not reach services provided under aeronautical service permits.  An argument can be made that these aviation services providers will no longer be required to pay their workers the living wage. 

This law is good for employers because it provides clarity and uniformity.  The local laws were often obscure, making it difficult for employers with facilities in different localities to comply.

The measure takes effect on July 1, 2013. 

new law.pdf  

Florida has always been regarded as a "pro-business" state.  We have very few employment laws here, and that's the way employers like it.  I doubt that will change any time soon, as Republicans still dominate our legislature.  But, nationally these are "progressive" times (did you listen to the President's inaugural address?), and there have already been some pro-employee bills introduced in the state legislature this year.  One such bill is the "Abusive Workplace Environment Act", which was introduced earlier this month by Sen. Oscar Braynon, who represents Miami Gardens.

The bill applies only to governmental employers, and seeks to prohibit abusive work environments, defined as those "in which an employee is subject to abusive conduct that is so severe that it causes physical or psychological harm to the employee."  The bill includes a lengthy definition of  "abusive conduct", but the gist is that the law would prohibit the repeated use of "derogatory remarks, insults, and epithets", or any other type of "threatening, intimidating, or humiliating" conduct.  The introduction to the bill claims that this is necessary because "[a]pproximately one-half of all employees directly experience health-endangering workplace bullying, abuse, and harassment, and this mistreatment is approximately four times more prevalent than sexual harassment".

In sum, this bill seeks to make being a jerk or bully illegal in the public workplace.  The bill also includes an anti-retaliation provision, which makes it illegal to fire anyone in retaliation for their making a complaint about workplace abuse.

There will be some who see some merit to this effort.  I have never been the victim of currently illegal forms of harassment (harassment based on sex, race, age, religion, etc...), but I know that a dificult boss can make anyone's life miserable. 

On the other hand, personality conflicts are part of every workplace, and life in general.  Employers, especially public employers, are already hesitant to discipline and terminate employees.  A law such as this would make it more difficult for public agencies to manage their employees, and run their businesses. 

I have no information about this bill's likelihood of passage.  I would guess that it is slim, but we will have to wait and see.

Those employers that conduct Fair Credit Reporting Act ("FCRA") background checks need to be aware that three important FCRA forms have been revised.  One of the three is the Summary Of Rights form that employers must distribute to employees before obtaining an FCRA investigative consumer report.  As of January 1, 2013, employers must use the new forms, which are available here at Appendices K, M, and N.

The primary reason for the changes is that, pursuant to the Dodd-Frank Act, a new governmental agency, the Consumer Financial Protection Bureau ("CFPB"), has rule-making responsibility for the FCRA.  Previously, the Federal Trade Commission ("FCRA") interpreted the FCRA.

As always, if employers have any questions regarding these changes or the FCRA in general, they should contact labor and employment counsel.

More and more clients have been asking me whether it is wise to require employees to sign mandatory arbitration agreements. My response is generally that there are advantages and disadvantages to mandatory arbitration of employment claims, and that it depends largely on what the client is trying to accomplish.  Many employers these days view the advantages of mandatory arbitration - avoiding jury trials and class and collective actions - as outweighing the disadvantages. 

Recently, however, there has been some question whether class/collective action waivers are enforceable in the employment context.  The National Labor Relations Board issued a ruling earlier this year, In re D.R. Horton, Inc., which held that, at least in certain circumstances, they are not.

Judge Lazzara of the Middle District of Florida issued an important decision on Friday, compelling arbitration of collective action FLSA claims.  At issue was an arbitration agreement that clearly required arbitration of the FLSA claims, including those brought as part of a collective action.  The plaintiffs argued that the collective action waiver was unenforceable as a result of Horton. Juge Lazzara ultimately disagreed, and noted that the law in the Eleventh Circuit is clear on this point - class/collective action waivers in arbitration agreements are enforceable. 

This decision provides clarity on this subject, and is ultimately good news for Florida employers.  This has been a fast moving area of the law in recent years, but, at least for now, it is clear Florida courts will enforce properly drafted arbitration agreements containing class action waviers.

The Greater Miami Chamber of Commerce's HR Insights Conference is coming up on March 29 at Jungle Island.  I will be speaking on labor and employment law issues for the third year in a row.  Here is the invite.

This is always a great program for South Florida HR professionals and business leaders.  Note that the invited featured speaker is Secretary of Labor Hilda Solis.  We are hoping she can make it.  I hope you can attend as well.

These days, I see an increasing amount of non-employment attorneys practicing in the area of labor and employment law.  It may be because employers believe that the risk of monetary exposure in employment cases is low. 

But, every once in a while we get word of a large verdict that reminds us that there can be enormous amounts of money at stake in such cases.  To wit, a California jury last week awarded $168 million to a sexual harassment plaintiff - $42.7 million in lost wages and emotional distress damages, and another $125 million in punitives.  It is thought to be the largest harassment award in history. 

This should be a reminder to all employers of the need to take employee complaints of workplace discrimination seriously, and also to take seriously the lawsuits that later come with many such complaints.  Employers should be careful to select expert labor and employment lawyers to represent them in defense of such suits.  And, if you are an employer that has an employment practices liability insurance (EPLI) policy, make sure that your insurer is assigning cases to actual labor and employment lawyers, and not to personal injury defense lawyers who dabble in labor and employment law. 

The Miami office of the EEOC released its 2011 numbers last week.  It was a busy year for the agency.  Employees filed a record 5,263 charges of discrimination last year.  That number is up from 5,077 filed in 2010. 

The most popular chargers were charges of retaliation, and race or sex discrimination.  Age discrimination charges were also up.

These numbers should come as no real surprise - the nationwide numbers show similar trends.  Nationally, the EEOC took in more charges last year than ever before. 

The EEOC claims the increase in the number of charges is a result of "more people becoming aware of their rights".  I doubt that is entirely accurate.  It is more likely that the numbers are up because the economy continues to languish.  When employees lose their jobs in a bad economy, they will consider all options.  And, one option is to bring claims against their former employer.  As long as the economy continues to sputter along, I expect that the EEOC (and labor and employment attorneys) will continue to be busy.

Lawyers don’t like to admit mistakes. But, of course, even good lawyers make mistakes on occasion.  The key, I have found, is to acknowledge your mistake as soon as possible and attempt to correct it promptly.  (I suppose that’s good advice not just in litigation, but in life generally.)

A few years ago I made a mistake in filing my client’s answer to a complaint in an Americans with Disabilities Act case:  I admitted in the answer that the plaintiff had a disability.  Perhaps the mistake was understandable, as the plaintiff was born with only one hand, and the defendant had admitted in its response to plaintiff’s EEOC charge that she was disabled.  Still, the admission was a mistake, because when I took the plaintiff’s deposition, she insisted that she was not disabled and could do anything any two-handed person could do, except juggle.  Seriously, that was her testimony.  The plaintiff’s can-do attitude was admirable, but her testimony was inconsistent with her ADA complaint.  I immediately moved the amend the defendant’s answer to deny that she was disabled.  Plaintiff’s counsel opposed the motion. After briefing by the parties, the judge denied my motion on the grounds that the amendment would be futile.  The court reasoned that whether the plaintiff was disabled under the ADA was an issue of law for the court to decide; thus, the defendant’s admission of a legal conclusion could have no binding effect.  The court cited the Eleventh Circuit’s decision in Almand v. DeKalb County, Georgia, 103 F.3d 1510, 1514 (11th Cir. 1997), in which the court questioned “whether [defendant’s] admission has effect for conclusions of law that are set out in the complaint”.

(By the way, we ultimately prevailed in the case, because whether the plaintiff was disabled or not, the evidence showed that she had been fired for violating a company policy.)

I was reminded of my mistake this morning when I read of a lawyer’s similar mistake in a case under the Fair Labor Standards Act, Cortina v. F.A.D. Detective & Security Services, Inc., Case No. 11-20732-CIV-KING (S.D. Fla., December 1, 2011).  The defendants’ attorney admitted in the answer that defendants engaged in interstate commerce, which is a prerequisite for establishing that the business is covered by the FLSA.  (This is known as “enterprise coverage.”)  Subsequently, the defendants retained a different attorney. The second attorney filed a motion for summary judgment, arguing that the court lacked subject matter jurisdiction because there was no evidence that defendants had ever engaged in any interstate activities.  But the court rejected this argument on the grounds that defendant had admitted in their answer that they engaged in interstate commerce.  The court stated that while subject matter jurisdiction cannot be waived, defendants’ “assertion that they were not engaged in commerce raises a factual question.”

I find the court’s reasoning to be dubious.  All legal conclusions ultimately turn on the underlying facts.  The proper question, it seems to me, is whether the defendants admitted facts that compelled the legal conclusion that they engaged in interstate commerce, or, alternatively, whether defendant merely admitted the legal conclusion that they engaged in interstate commerce, notwithstanding any actual facts.  In my ADA case a few years ago, although defendant admitted that plaintiff was disabled, the court was open to the possibility that this legal conclusion might not be supported by the facts.  It seems to me that the judge in my case got it right, and the Cortina court got it wrong. 

But perhaps the real problem for defendants in the Cortina case was their unexplained delay of pointing out their mistake to the court.  In a footnote to its decision, the court noted that two months had elapsed between the time the second attorney had entered an appearance, and the date that defendants filed their motion for summary judgment.  Thus, the court noted, “Defense counsel had ample time to move to amend the Answer,” but failed to do so.

To answer the question posed by the title of this blog post –  is a mistaken admission to a conclusion of law binding on the defendant? – I think the answer is maybe.  Like so many other issues in the law, it depends on how the judge frames the issue.  What seems certain is that defense counsel should move to amend the answer as soon as possible after realizing their mistake, and not wait until filing a motion for summary judgment to spring their defense on opposing counsel and the court.

An arbitrator’s decision upholding an employee’s termination under civil service rules barred, under the doctrine of res judicata, the employee’s subsequent Title VII claims, according to a recent decision by a Florida federal judge in Palmer v. Miami-Dade County, Florida (Case No. 10-23478-CIV-COOKE/TURNOFF (S.D. Fla., April 25, 2011).  The decision sheds light on when Title VII claims are barred by earlier state court proceedings. 

The facts of the case are as follows.  Defendant, Miami-Dade County, employed Plaintiff, Sebrina Palmer, as a police sergeant. On August 22, 2008, Defendant terminated Plaintiff's employment. Plaintiff is an African-American female. Defendant stated, as grounds for her termination, that Plaintiff falsified payroll records. Plaintiff challenged her termination pursuant to Miami-Dade County Code § 2-47, the County's classified civil service hearing process. An arbitrator was appointed.  After a two-day hearing, he wrote a report concluding that Plaintiff violated County rules by failing to take reasonable steps to ensure that the payroll documents she submitted were accurate. The arbitrator recommended that Plaintiff's termination be upheld. The County Manager sustained the arbitrator’s decision and confirmed Plaintiff's dismissal. Plaintiff appealed the County Manager's final order to the Appellate Division of the Circuit Court for the Eleventh Judicial Circuit of Florida. The Appellate Division, upon review of the entire administrative record, issued a mandate affirming the County Manager's decision. 

Plaintiff subsequently brought suit in federal court, alleging that her termination was racially and sexually discriminatory in violation of Title VII.  Defendant moved for summary judgment, arguing, among other things, that Plaintiff’s claim was barred by res judicata, otherwise known as claim preclusion.

The court agreed.  The court began its analysis by noting that the doctrine of res judicata may bar Title VII claims where a state court affirms an administrative agency's decision, and two criteria are met: (1) the state court would grant preclusive effect to the judgment, and (2) the state proceedings comport with the procedural requirements of the Fourteenth Amendment's Due Process Clause.  The court held that the first criterion was met because Florida courts grant preclusive effect to quasi-judicial administrative decisions.  The court held that the second criterion was met because  state proceedings comport with the procedural requirements of the Fourteenth Amendment's Due Process Clause. Under Miami-Dade County Rules §§ 2-47 and 2-47.1, a dismissed employee is entitled to notice, an opportunity for a full hearing, compulsory process and representation by counsel before the hearing examiner, with layers of administrative and judicial review.

Turning to Florida law, the court held that the doctrine of res judicata applies if four conditions exist: (1) identity of the thing sued for; (2) identity of the cause of action; (3) identity of the parties; and (4) identity of the quality in the person for or against whom the claim is made.  When the four identities are present, res judicata attaches to all matters which were or could have been determined.

The outcome of the case turned mainly on the second factor:  Were Plaintiff’s administrative proceeding and her Title VII action the “same” cause of action for res judicata purposes? 

The court held that they were: Plaintiff's administrative proceeding and this federal action consist of the same cause of action for purposes of res judicata analysis under Florida law. “The determining factor in deciding whether the cause of action is the same is whether the facts or evidence necessary to maintain the suit are the same in both actions.” Albrecht, 444 So. 2d at 12. In the administrative proceeding, Plaintiff challenged the propriety of her dismissal. Here, she also argues that Defendant improperly dismissed her. In both proceedings, Plaintiff must proffer evidence regarding her dismissal. In both proceedings, Plaintiff argues that she was subject to disparate treatment, and therefore her dismissal was improper. Thus, the facts and evidence are the same in both causes of action -- Plaintiff must proffer evidence and show facts to support her contention that Defendant improperly dismissed her because it had a discriminatory intent and the County's reasons for dismissing her were pretextual and illegitimate. The court went on to hold that Plaintiff could, and did, litigate the issue of disparate treatment in her administrative proceeding.  Thus, res judicata barred the re-litigation of her claims in U.S. District Court.

But what happens when the opposite situation presents itself, i.e. when a plaintiff litigates her Title VII claim in federal court, and then attempts to litigate a similar discrimination claim under state law? 

According to Florida’s Fourth District Court of Appeals, the state law claim may or may not be barred by res judicata, depending on whether the plaintiff also litigated state law claims in federal court. 

In Andujar v. Nat'l Prop. & Cas. Underwriters, 659 So. 2d 1214 (Fla. 4th DCA 1995), the Fourth DCA held that a federal court’s dismissal on the merits of Title VII claim did not bar a claim arising from the same core of operative facts asserted under the Florida Human Rights Act.  The court reasoned that because the plaintiff did  not allege any state law claims in her first action, and thus did not seek to have the federal district court assert jurisdiction over such claims under its pendent jurisdiction, the federal and state claims were separate and distinct for purposes of federal claim preclusion rules.

Less than a year later, however, the Fourth DCA considered a similar situation in Dalbon v. Women's Specialty Retailing Group, 674 So. 2d 799, 801 (Fla. 4th DCA 1996), and reached a different result.  In Dalbon, the plaintiff, in addition to asserting a Title VII claim, had asserted a state law claim for intentional infliction of emotional distress, which the federal court dismissed on summary judgment.  The federal court subsequently dismissed the Title VII claim after a trial on the merits.  Plaintiff subsequently filed state law claims in state court for negligent misrepresentation and negligent supervision and retention.  On appeal, the Fourth DCA held that the new claims were barred by res judicata. The court reasoned that “[h]aving presented one of her state law claims arising from the termination of her employment to the federal court, plaintiff cannot now attempt to raise new state law claims in state court arising from the same facts and from the same primary rights and duties as were litigated previously.” 

Courts often hold that parties are presumed to know the law.  And sometimes courts say otherwise. That's as much sense as I can make of the Eleventh Circuit's recent decision in Cummings v. Washington Mutual, Case No. 10-10706 (11th Cir, August 22, 2011). 

In Cummings, the court addressed the issue of when the plaintiff's improper-notice claim under COBRA accrued.  Under COBRA, an employer -- through its healthcare administrator -- must notify an employee of his right to continue his healthcare coverage after the termination of his employment. 29 U.S.C. §§ 1163(2), 1166. The employer must notify its healthcare administrator of the employee's termination within 30 days, § 1166(a)(2).  The administrator then must notify the employee of his continuation right within 14 days, §§ 1166(a)(4)(A), (c). Cummings was terminated from his bank job on March 19, 2007.  Thus, the employer had 44 days, i.e. until May 2, 2007, to notify Cummings of his continuation right: Cummings claimed that he never received a notification about his COBRA continuation right.

In Georgia, where Cummings was employed, a one-year limitations period applies to COBRA improper-notice claims.  The issue in Cummings was when that one-year period began running.  Cummings argued that his claim did not accrue until he learned from his lawyer on March 20, 2008 that his employer had failed to send him notification of his COBRA continuation right. The employer argued that the limitations period began to run on May 3, 2007, the day that the time for notifying Plaintiff expired. Cummings filed his lawsuit on July 24, 2008.

The Eleventh Circuit held that that a COBRA improper-notice claim accrues "when the plaintiff either knows or should know" that his former employer has failed to provide him with the required notice of his continuation right.  This holding is not surprising. As the opinion in Cummings notes, the Eleventh Circuit has applied the "knew or should have known" standard in other contexts. 

There was no allegation that Cummings actually knew on May 3, 2007 that his employer had failed to give him notice.  So the question was, should Cummings have known on May 3, 2007?

The Eleventh Circuit said no, stating that:

The COBRA notification requirement exists because employees are not expected to know instinctively of their right to continue their healthcare coverage. To begin the statute of limitations when the notification period expires, as Defendant urges, would create the possibility that the limitations period will run out before a plaintiff even knows he has been injured... [T]he mere expiration of the notification period on 3 May 2007, without more, was insufficient to give Plaintiff reason to know his notification right had been violated.

This holding is surprising.  Employment laws are complex and often misunderstood, even by practicing lawyers (or at least those who do not specialize in employment law).  Knowledge of employment laws, or the violation of such laws, can rarely be said to be "instinctive."  Yet in construing statutes of limitation, courts usually indulge in the presumption that parties do know the law.  Otherwise, the "knew or should have known" standard becomes elastic to the point of absurdity:  Only when the employee gets around to consulting an employment law specialist "should" he know that his rights have been violated.  This principle seems to run contrary to the purpose of statutes of limitation: to bar stale claims and protect expectations of parties that have settled over time.  See Nat'l Parks & Conservation Ass'n v. TVA, 502 F.3d 1316, 1326 (11th Cir. 2007). Nevertheless, at least for COBRA improper-notice claims in the Eleventh Circuit, this elastic standard now determines when the statute of limitations begins running.

Some companies have formal policies on how to respond to reference requests.  Other companies lack such policies, and exercise little control over the process.  A recent federal court case from New York illustrates the problem with such a loose approach.  There, the plaintiff, Julie E. Male, sued her former employer, Tops Markets, LLC, for employment discrimination and retaliation.  One of her claims alleges that Tops Markets retaliated against her by providing a negative reference.

Male had taken FMLA leave while working for Tops Markets, and was later terminated.  She applied for more than 100 jobs, but apparently landed none.  She claims that a Top Markets manager informed one of her prospective employers that Male "missed and was late to work a lot because of her personal and medical issues."

Tops Market moved to dismiss that claim.  But, the trial court denied the motion to dismiss, and allowed the claim to go forward.  The court stated:  "While the statement that Plaintiff took absences due to her personal and medical issues may have been true, if Plaintiff can prove the Defendant made such a statement to a prospective employer in retaliation for the Plaintiff's exercising her rights under the FMLA or the ADA, such a statement may violate the anti-retaliation provisions of the ADA, FMLA..."

The lesson for employers here is to develop formal reference policies which limit the information the company will provide in response.  For example, cautious companies allow only HR to respond to reference requests, and  provide no information beyond the employee's dates of employment.  While such a policy renders reference checks close to meaningless, it is unfortunately the prudent approach.