Employee sues employer. Employer calls employer’s lawyer. Employer and lawyer discuss the case. They review the cast of characters. They talk about the chronology of events. They assess the potential exposure to employer.

And, as sure as eggs, employer asks lawyer the following question: “Can’t we sue him?”

And what, do you presume, employer proposes to sue employee for exactly? Oh, there are many options, of course. But the classic is a claim for defamation. Employer wants to sue employee for alleging that employer engaged in unlawful discrimination or harassment or retaliation, etc., etc. Ok, truthfully, employer doesn’t care much about what exactly the suit would be for–just whether employer can sue the bejesus out of employee.

99 times out of 100, the answer to that question is a resounding “no”. See Jon Hyman’s post yesterday on this very topic. And, worse yet, lawyer may even tell employer that, just the threat of suit would be grounds for employee to add another claim to employee’s original suit.

Which, at last, brings me to the case I’d intended to post about today.

In Soterion Corp. v. Soteria Mezzanine Corp., the parties had negotiated the sale of a business but the sale was not consummated. The plaintiff sent the prospective buyers a letter threatening litigation and enclosing a copy of a draft complaint. The complaint was not filed until three months later.

The parties litigated the case all the way up to the courthouse stairs, as the saying goes. But, several days before trial was set to begin, the plaintiff stipulated to dismiss its claim.

The defendant counterclaimed, alleging that the plaintiff’s threat of litigation constituted a tortious interference with prospective business relations. The Court of Chancery addressed, as a matter of first impression, the question of whether such a claim could stand. Put differently, when does a threat of litigation constitute tortious interference? ,

The court held that a claim for tortious interference cannot stand where the threat of litigation is made in good faith and the bases for the threatened litigation are truthful. So, what is the lesson to be learned for employers from this case? In short, where a real claim exists, employers (and their lawyers) need not be afraid to say so.

Soterion Corp. v. Soteria Mezzanine Corp., No. 6158-VCN (Oct. 31, 2012).

Last week, I posted about the decision of an ALJ finding that Quicken Loans’ confidentiality and non-disparagement provisions contained in its employment contracts violated the National Labor Relations Act (NLRA). Before the new year, though, the NLRB gave us some indication about its position with respect to confidentiality in the workplace. In short, it is not a fan.
box of chocolates.jpg

On December 28, 2012, the NLRB announced its decision in American Baptist Homes of the West d/b/a Piedmont Gardens. In that decision, the Board overruled a decision from 1978, which established a categorical exemption for witness statements made during a workplace investigation. Under that long-standing precedent, an employer did not have to provide such witness statements to the union representing an employee concerning discipline.

Well, not anymore. Under the new decision, which found that the bright-line rule established in Anheuser-Busch, Inc., should be replaced by a balancing test. The Board found that the NLRA imposes on an employer a “general obligation” to furnish a union with relevent information necessary to perform its duties. Under the new balancing test, the employer will have to determine whether it has “any legitimate and substantial confidentiality interests.”

I’ve written before about the NLRB’s apparent lack of understanding of what exactly an investigation entails. By definition, a legitimate investigation involves legitimate confidentialty concerns. I won’t repeat myself here but will note that it’s not too late for us to pool together and buy the Board a new dictionary. Valentine’s Day is right around the corner, after all.

Just when you think the NLRA has been expanded as far as it can possibly go, POP!! Along comes a decision yet again expanding the reach of the NLRA and limiting the ability of employers to manage their workforces. The latest such expansion comes from an Administrative Law Judge in an unfair labor practice charge filed against

The Delaware Supreme Court started the New Year with a resolution of sorts for lawyers. In a decision issued on January 2, 2013, the Court instructed that, if counsel agrees to alter a deadline in the trial court’s scheduling order, all remaining deadlines will be rendered inapplicable:

Henceforth, parties who ignore or extend scheduling deadlines without promptly consulting the trial court will do so at their own risk. In other words, any party that grants an informal extension to opposing counsel will be precluded from seeking relief from the court with respect to any deadlines in the scheduling order.

The Court also stressed the priority of avoiding any changes that would affect the trial date:

. . . [I]f the trial court is asked to extend any deadlines in the scheduling order, the extension should not alter the trial date. Counsel may face a compressed time period to complete discovery, or the filing of dispositive motions, but the most important aspect of the scheduling order–the trial date–will be preserved.

And, the Court warned, where the trial court does elect to postpone the trial date, the parties should expect that their new date will be after “all other trials already scheduled on the court’s docket.” In other words, there’s no butting in line.

The Court’s admonition is a welcome one. All too often, counsel wants to extend a deadline that truly should not be extended. There seems to be a belief by some practitioners that all requests or extension must be granted. This simply is not true. In fact, a lawyer may not agree to extend a deadline that would detrimentally affect his client’s case.

Moreover, the parties negotiate the scheduling order–it is not a set of arbitrary deadlines forced upon them by the court. It is a set of obligations created entirely by agreement. Thus, I tend to have a fairly low tolerance for the opposing counsel who cries that he just couldn’t meet the deadlines and whines that I’m such a monster for not agreeing to extend them. In my book, a deal’s a deal and there’s a lot to be said for keeping your promises.

Christian v. Counseling Resource Assocs., Inc., C.A. 460, 2011 (Del. Jan. 2, 2013).

Delaware’s Court of Chancery is the North Star of the noncompete-litigation universe in the State and, in many respects, in jursidctions around the country. It can also be a tricky galaxy to traverse due to the speed of litigation, the equitable principles that control procedural rules and, on an even more basic level, the fact that many of the court’s opinions are not reported. As a result, transcripts of rulings from the bench are commonly cited as binding authority.

But today’s post is not about a transcript ruling but about a letter decision, issued by Vice Chancellor Glasscock on October 12, 2012, in NuVasive v. Lanx, Inc., No. 7266-VCG (PDF). In this case, the plaintiff alleged that the defendant had “lured away a number of [its] employees to work for [the defendant], in breach of various duties owed to NuVasive by these employees.”

The opinion was issued on the plaintiff’s motion to compel the defendant to provide the identities of all of the plaintiff’s employees, past and current, with whom the defendant had communicated in the past year about possible employment.

The defendant opposed the motion, arguing first that the information was not relevant. The court quickly dismissed that argument, finding that “it is clear . . . that, in this case, where NuVasive seeks injunctive relief from Lanx’s allegedly toritious efforts to hire NuVasive employees,” the information and documents sought were reasonably calculated to lead to the discovery of admissible evidence.

Next, the defendant argued that the plaintiff’s real purpose in requesting the names of the solicited employees was so that it could “coerce them into staying with NuVasive.” Again the court was unpersuaded. It reiterated that the plaintiff sought to enjoin the defendant from its allegedly unlawful dealings with the plaintiff’s employees. As a result, the court found, the plaintiff was entitled to discovery of the details of the defendant’s contacts with those employees.

It is interesting to note that, based on this opinion, there does not appear to be an agreement not to solicit or other restrictive that would prevent Lanx from hiring NuVasive’s employees. Parties and their lawyers tend to forget that contractual duties are not the only ones by which employees are bound. So, if you attempt to compete unfairly by unlawfully soliciting employees from your competitor, that competitor will have the right to discover who you called and who turned down your offer. Presumably, these individuals, having declined your offer of employment and electing, instead, to stay with their current employer, will make good witnesses for that employer, which you would want to avoid.

Denial. It may, as they say, be a river in Egypt, but that river doesn’t run through the Delaware Court of Chancery.

I took a week off of blogging last week in a largely unsuccessful attempt at vacation. Although my vacation plans did not turn out quite as I’d expected, I did manage to tear myself away from the computer, my smartphone, Twitter, and the Internet as a whole for three entire days. For me, this is no small feat.

The draws of the digital world are many. For me, the strongest pull is the thought of a client trying to reach me. I’m in the service business, after all. So it’s my business to make sure my clients are getting the services they need, when they need it.

My three-day reprieve was a reasonable success. I was able to see a few sights, take a few good pictures, and even managed to make some time for a little retail therapy. And, despite my digital absence, no client suffered as a result.

Maintaining a “work-life balance” (whatever that is), has never been my strong suit. But my long weekend has given me a bit of perspective. It’s good to get some fresh air once in a while. It’s good to get away from the daily grind every so often. And it’s really good not to be tied to the iPhone 24-7.

Now, all that being said, I’ll finally get to the point of this post. During my brief respite, I learned that this blog was voted into the top spot in the Labor & Employment category of ABA Journal’s Top 100 Blawgs. Lest you think that I was anything other than extremely grateful for your votes, I thought it best to let you know why my thanks have been somewhat delayed.


Delayed or not, my thanks are sincere. I’ve said it before but I’ll say it again–thank you for your support.

For those of you who visit the blog irregularly, consider subscribing via email, which you can do by entering your email address in the box at the top right side of this page. That way, you’ll get the day’s post delivered before lunch. Seems that email has its advantages after all.

Michigan is the latest State to pass a “Facebook-privacy” law. The law, called the Internet Privacy Protection Act, was signed by Gov. Rick Snyder last Friday. The law prohibits employers and educational institutions from asking applicants, employees, and students for information about the individual’s social-media accounts, reports The Detroit News.

The Michigan law contains four important exceptions. Specifically, the law does not apply when:

1. An employee “transfers” (i.e., steals) the employer’s “proprietary or confidential information or financial data” to the employee’s personal Internet account;

2. The employer is conducting a workplace investigation, provided that the employer has “specific information about activity on the employee’s personal internet account;”

3. The employer pays for the device (i.e., computer, smartphone, or tablet), in whole or in part; or
4. The employer is “monitoring, reviewing, or accessing electronic data” traveling through its network.

The enactment of Michigan’s Social Network Account Privacy Act makes Michigan the fifth State this year to enact legislation that prohibits employers from requiring or requesting an employee or applicant to disclose a username or password to a personal social-media account. Maryland, Illinois, California, and New Jersey were the first four. California and Delaware passed similar legislation applicable to educational institutions. Notably, new legislation was introduced in California on December 3, which would extend that State’s law to public employers.

I continue to believe that these laws are unnecessary and do nothing more than expose employers to legal risk with no real benefit to the citizenry. However, of all of the states to have passed such “internet-password-protection” laws, Michigan’s is the first to contain these critically important exceptions. Without them, the laws have the potential to paralyze employers from conducting internal investigations that are necessary to protect both the organization as a whole and individual employees.

Problems With Delaware’s Proposed Social-Media Law

Lawfulness of Employers’ Demands for Facebook Passwords

Should Employer Cyberscreening Be Legislated?

Employers Who Demand Facebook Passwords from Employees. Oy Vey.

The EEOC has enjoyed several victories in recent months. For example, the EEOC was granted summary judgment in a hostile-environment claim filed on behalf of a class of black construction workers. Even more recently, the EEOC was awarded summary judgment in an age-discrimination lawsuit against the City of Baltimore. But things haven’t been all peaches and cream for the EEOC.

In EEOC v. McPherson Cos., Inc., a federal district court in Alabama granted summary judgment to the defendant-employer in a sexual-harassment lawsuit brought by the EEOC on behalf of an unnamed male employee. The employee worked in a warehouse with an all-male workforce.

The EEOC alleged that, after being subject to a constant barrage of “ugly talk,” the employee complained to his supervisor about the allegedly hostile work environment. About a year later, the employee confronted his co-workers, who apologized and, thereafter, stopped directing rude comments his way. About a year after that, the employee complained to HR, which investigated the complaint, resulting in discipline for several workers and two supervisors. After this last complaint, the comments ceased.

The court held that the EEOC had failed to establish the existence of an unlawful hostile environment because it had not shown that the rude comments and “ugly talk” were of a sexual nature or that they were made “because of” the employee’s gender.

The EEOC argued that the harassment was because of his gender and, specifically, because of his effeminate behavior. This can be a valid cause of action–when a male employee is treated badly because he acts “too girly.” But, here, despite the EEOC’s argument, the testimony of the employee himself contradicted this argument. Thus, the court dismissed the gender-discrimination and sexual-harassment claims.

The court also dismissed the EEOC’s retaliation claim. The employee was terminated, along with 11 other employees, as part of a reduction-in-force 3 months after his complaint to HR. The court expressed that it was “hard to believe” that the EEOC “is seriously arguing that the entire RIF process was a subterfuge for fraud designed for the sole purpose of providing cover for retaliation.”

EEOC v. McPherson Cos., Inc., No. 10-cv-2627 (N.D. Ala. Nov. 14, 2012).

I’ve posted more than my share of stories involving allegations by employees that they were terminated because they were “too sexy” for the job. For example, there was the female banker who sued Citigroup, alleging that she was terminated for being “too sexy for her job.” Then there was the data-entry employee who was terminated from her job in a lingerie warehouse for, she alleged, wearing what her employer considered to be clothing that was “too sexy.”

Usually, this type of allegation involves at least some level of grandiose delusion and almost always involves the employee’s belief that everyone hates her for being so darn good looking. But today’s post goes much closer to the realm of the legitimate. Because this post involves an actual court decision. On December 21, the Iowa Supreme Court unanimously ruled that there was no unlawful discrimination where a dentist terminated his dental assistant of 10 years after his wife became jealous.

For his part, the dentist admitted that the assistant was a good employee and wasn’t fired for poor performance. Instead, he claimed that her tight clothing was too distracting and felt that he wouldn’t be able to resist her charms if she remained in his employ any longer, reports CNN.

In other words, the ruling makes clear that “being irresistible” will not serve as the basis for a gender-discrimination or sexual-harassment claim.

Nelson v. James H. Knight DDS, P.C., No. 11-857 (PDF).

Wage-and-hour lawsuits continue to plague employers around the country. Off-the-clock claims are some of the most difficult to defend because, by definition, the employee did not record the time in dispute. Trying to disprove an allegation is about as easy as boxing shadows.

Employers who face these off-the-clock claims are understandably frustrated by the ability of an employee to bring a lawsuit based on the employee’s failure to comply with workplace rules. A recent trend has been the application of an affirmative defense similar to the one used in harassment cases. This defense is a very positive development for employers.

A recent decision by the 10th Circuit applied a similar reasoning with a similarly positive result. In Brown v. ScriptPro, LLC, the plaintiff-employee claimed that he’d worked from home during a 4-month period so he could take time off before the birth of his child. Despite the company’s policy that required employees to record and submit time worked, the plaintiff claimed that he did not report the time. After he was fired for performance issues a few months later, he filed suit

The district court dismissed the suit, finding that the employee had failed to meet his burden to produce evidence of the overtime he claimed to have worked. He argued that the employer failed to keep the required time records. As a result, he argued, his burden to prove the amount of time worked should be lessened. The 10th Circuit disagreed.

Instead, the court found that the employee not only could have submitted the time he worked from home but, also, that he should have done so as required by the employer’s policy. Thus, the employee’s failure to record and report all time worked was fatal to his claim.

Brown v. ScriptPro, LLC, No. 11-3293 (10th Cir. Nov. 27, 2012).

Contact Information