Practice Tips

Monday, December 21, 2015

Always Consult An Attorney Before Signing A Severance Agreement

The holidays is a festive time of year, full of family celebrations, gift giving, and ringing in the new year.  Unfortunately, it also is a time when many employees are laid off, as businesses look back at their performance over the past year and re-evaluate their budgets and staffing needs going forward.  (Another time when lay offs are common is near the end of the first quarter, before annual bonuses are paid out.)

The Warshawsky Law Firm receives numerous inquiries during the holiday period from laid off employees who want to learn about their legal rights or who have been given severance agreements that they need reviewed and explained.  Perhaps the two most frequent questions we are asked are:  Am I entitled to severance? and Is it possible to get more severance?

The answer to the first question is no, unless the employer has a formal policy of paying severance to laid off employees, or unless the employer has made a promise to the specific employee, in a written employment contract, to pay severance (which many high-level employees receive).

As a general matter, there is no entitlement to severance under federal, state, or city law.  However, some companies "promise" employees that they will receive severance if they are laid off.  This promise usually is found in an employee handbook.  If it is written in nondiscretionary, contractual language, then it may be legally enforceable (meaning, if the employer fails to pay the severance, the employee may be able to sue the company for breach of contract to obtain the severance).  Such a policy needs to be reviewed carefully with an attorney to determine if it is binding on the company and if the laid off employee otherwise qualifies for the severance.

The harder question is whether it is possible to get more severance.  Although each employee's situation must be evaluated individually, for most employees the answer will be no.  Companies that have written severance policies usually will not make exceptions to the "formula" used for calculating how much severance each employee receives (for example, one week pay for every year of service).  But sometimes it may be possible for an employee to make a personal appeal to the company for more severance based on length of service or excellent work performance or hardship or another relevant factor that touches on the "fairness" of the severance amount.  In these situations, the company is under no legal obligation to increase the amount of the severance payment, but it may be willing to do so to help out an especially valued or deserving employee.

Is it possible for an attorney to "write a letter" to the company to obtain more severance for the employee?  Yes and no.  Unless the attorney has a prior relationship with the company, an attorney's letter only will have influence if there are valid legal claims -- usually some kind of discrimination -- that the employee could assert against the company.  Evaluating these potential legal claims is the most important reason for consulting with a qualified employment lawyer before signing any severance agreement.

A severance agreement is a contract between the company and the employee in which the employee agrees to waive any claims he/she may have against the company in exchange for the severance payment.  This "bargain" is the heart of every severance agreement, although these agreements usually impose additional obligations on the employee, including not to disclose the severance agreement and not to disparage the company.  Even "straightforward" severance agreements are full of legalese that requires an attorney to review and explain.

Ultimately, the key question is whether the amount of severance that is being offered is "enough" -- in terms of whether it reasonably compensates the employee for the rights he/she is giving up and the obligations he/she is accepting under the agreement.

Frankly, for most employees, who do not have any viable legal claims against their companies, almost any amount of severance will be better than nothing.  But some employees will have viable legal claims -- which they may not know about until they consult with an attorney -- that may be "worth" more than the amount of severance that is being offered.  For these employees, accepting the severance may be a mistake.  The bottom line is that the decision whether or not to accept a severance agreement should not be made until the employee has consulted with a qualified employment lawyer.       

For more discussion about severance agreements, please see here

The Warshawsky Law Firm has reviewed severance agreements for employees at all levels and in a wide range of industries, including finance, technology, real estate, travel, fashion, publishing, media, entertainment, insurance, medicine, and law.  If you have been offered a severance agreement, please contact us today.

Monday, October 12, 2015

To Settle Or Not To Settle, That Is The Question

Although people speak about "having their day in court," very few civil cases actually go to trial.  The vast majority of civil cases either are dismissed or settle.  According to various online sources, only approximately 10% of civil cases go to trial.  Moreover, research shows that many of the cases that go to trial would have been better off settled.  In this blog post, I want to discuss some of the considerations that go into deciding whether or not to settle a lawsuit.

As I explain to potential clients, in most cases, it is not easy to win a lawsuit.

First, the plaintiff's allegations have to be strong enough to avoid being dismissed for "failure to state a claim for relief."  This is a relatively low hurdle to jump over (but higher in federal court than in state court).  Assuming the plaintiff has a legitimate grievance against the defendant, and assuming that the plaintiff's allegations do not raise novel legal issues, this hurdle is one that a competent lawyer should be able to get over -- or the lawyer should not take the case.

The second, much higher hurdle is called "summary judgment," which is where the defendants ask the judge to throw out the lawsuit because, based on the evidence developed during discovery, there is no basis for the jury to rule in the plaintiff's favor.  Some kinds of cases, e.g., employment discrimination, are especially prone to being dismissed on summary judgment.  Other kinds of cases, e.g., false arrest, are less likely to be dismissed on summary judgment.  Unfortunately, at the start of a lawsuit, it is difficult to predict the chances that any given case will be dismissed on summary judgment.  Nevertheless, the ability to exercise this judgment accurately is a hallmark of an experienced, effective civil litigator.

The last hurdle that a plaintiff must get over to win a lawsuit is the trial.  Even when the plaintiff has a strong case, the jury can side with the defendant.  There are no guarantees once the jury starts deliberating.  The jury's sense of "justice" does not have to coincide with the plaintiff's.  Moreover, depending on the type of case, it can be more or less challenging to persuade the jury to find in favor of the plaintiff.  For example, juries are notoriously reluctant to rule against police officers in civil rights cases.

In short, winning a civil lawsuit isn't easy, but litigation is an all-or-nothing affair in which the only outcomes are win or lose. 

Given the nature of the legal system, it almost always make sense for the plaintiff to settle for a reasonable amount of money instead of running the risk of losing and obtaining no compensation for the harms the plaintiff has suffered.  (In addition, plaintiffs who lose cases can be required to reimburse the defendants for their costs and attorney's fees -- so the plaintiff ends up even worse off financially.)

OK, but what is a "reasonable amount of money"?  How is this determined?

Unfortunately, there is no formula that can answer this question.  It involves making an educated assessment of the "value" of the case (based on the damages that the applicable law allows a plaintiff to recover) and the "likelihood" of winning or losing at each stage in the litigation process (primarily based on case law).  These variables then must be viewed in light of the plaintiff's financial circumstances and willingness to risk losing the case.  For example, a plaintiff who does not "need" the money from a settlement is going to evaluate a case differently than someone who needs the money to pay bills.  Very few plaintiffs are this fortunate, however.  Most need the money, and sooner than later -- which can be a compelling reason to settle a lawsuit.

But again, it all depends on whether the defendant makes a "reasonable" settlement offer.  Some offers are just too low to accept, even for cases that are worth little and have low chances for success.

In my experience, however, most defendants in most cases will make settlement offers that are "reasonable" based on the facts and law of the case, even if the offers are lower than the plaintiffs would like (as they almost always are, of course).

This brings me to a critical issue:  unrealistic expectations.  In my experience, most plaintiffs believe their cases are "worth" more than they really are (from a legal perspective).  This is understandable, because the plaintiffs have experienced injustice and want compensation.  Unfortunately, the law usually does not provide for the amount of compensation they think is fair.  Usually, the law provides for much less.  In those situations, all I can do is explain to my clients how the legal system values their case and help them make an appropriate settlement decision based on the strengths and weaknesses of their case as well as their personal circumstances.

At The Warshawsky Law Firm, our goal is to obtain as much compensation as possible for our clients.  We screen potential cases carefully.  We research and draft complaints thoroughly.  We conduct aggressive discovery to obtain the evidence needed to defeat a motion for summary judgment.  Above all, we prepare cases with an eye for trial.  We are not afraid to take cases to trial.  Indeed, we had three jury trials this year alone.  But this does not mean that going to trial always is in our clients' best interest.  Often it isn't.  It almost always makes more sense to accept a reasonable settlement than to "roll the dice" at trial.

The decision whether or not to settle ultimately depends on the facts of each case and each plaintiff's personal circumstances.  Sometimes, however, plaintiffs refuse to settle and then obtain a worse outcome later (either a lower settlement, a summary judgment dismissal, or a loss at trial).  This happens much more often than the cases in which the plaintiff "hits a home run" at trial.

If I could offer just one piece of advice to plaintiffs, it would be to lower their expectations and accept settlement offers that they and their attorneys think are "reasonable"; then they should take the money, consider that a victory, and move on with their lives. 

Monday, September 21, 2015

A Tale Of Two Cases: Why Some Employment Discrimination Plaintiffs Win And Others Lose

At The Warshawsky Law Firm, we handle a wide variety of employment discrimination cases.  When first meeting a prospective client, perhaps our most important task is evaluating the strengths and weaknesses of a potential lawsuit.  Indeed, we usually are asked by the client whether he/she "has a case" and "what are the chances of winning."  This is a complicated question that can be difficult to answer based on the limited information and documentation that the client usually has in his/her possession.  Often times the full picture of an employment situation does not emerge until after the lawsuit has been filed and the parties engage in discovery.

The central question in every discrimination case is whether the plaintiff can prove that the employer was motivated by unlawful discriminatory bias, hostility, or animosity.  For example, in a wrongful termination case, was the plaintiff fired because of his/her race or age or religion, etc.?  While the plaintiff may "believe" that he/she was discriminated against by the employer, this is not good enough in court.  To be able to win a lawsuit in court, the plaintiff must have objective evidence that shows that the employer acted from a discriminatory motive.

What kind of evidence?  While each case is different and various factual circumstances can raise an inference of unlawful discrimination, the most common types of evidence that courts look for are discriminatory comments and differential treatment of similarly situated employees.

Discriminatory comments are just that -- spoken or written comments that demonstrate discriminatory animus.  For example, derogatory comments about a person's race or sex or disability, etc.  Comment evidence is the most important type of evidence in an employment discrimination case.   

Differential treatment of similarly situated employees means, for example, that the employer treats black and white employees differently in the same context (for example, when being disciplined for alleged infractions of workplace rules).  This is the second most important type of evidence -- showing that employees are treated differently for no reason other than their race, sex, disability, etc.

Two recent decisions by U.S. District Judge John Gleeson of the Eastern District of New York (a highly respected jurist) illustrate these basic principles. 

The first case is Charles Krugler v. MTA New York City Transit Authority, et al., Case No. 12-CV-2900.  The second case is Russell Herling v. New York City Department of Education, et al., Case No. 13-CV-5287. 

In the Krugler case, the plaintiff was a 57-year old transit employee who alleged that his employer had discriminated against him on the basis of age by rejecting him for 18 promotions that he had applied for between 2001 and 2011.

In a decision issued on September 10, 2015, Judge Gleeson granted the defendants' motion for summary judgment and dismissed the lawsuit.  Why?  Because the plaintiff did not have any evidence, other than his own opinion, that he had been discriminated against based on his age.  There were no discriminatory comments, and the evidence showed that older employees had been interviewed for and in some cases selected for the positions in question -- as Judge Gleeson explained, "[t]his is persuasive evidence that the defendants did not discriminate against Krugler based on his age."  Moreover, "Krugler was eventually promoted to the position of AGS, one of the positions he claims he was passed over for because of his age."  Based on these facts, Judge Gleeson concluded "as a matter of law" that "age discrimination played no role in the failure to promote Krugler."

In the Herling case, the plaintiff was a white Jewish physical education teacher at a public high school in Brooklyn who alleged that his employer had discriminated against him on the basis of race and religion by disciplining him for workplace infractions, giving him an unsatisfactory rating, and denying him opportunities for additional pay.

In a decision also issued on September 10, 2015, Judge Gleeson denied the defendants' motion for summary judgment and allowed the plaintiff's case to proceed to trial.  Why?  Unlike the plaintiff in the Krugler case, the plaintiff in the Herling case offered objective evidence of his supervisor's discriminatory animus.  This evidence included several discriminatory comments and specific examples of non-white and non-Jewish teachers receiving preferential treatment.  For example, the plaintiff showed that black employees who committed the same alleged rules infractions (e.g., being late to work, not submitting student grades properly) were not disciplined for the same or worse conduct for which he was disciplined.  Judge Gleeson agreed with the plaintiff that this evidence was sufficient to raise an inference of discrimination.  Although the defendants offered various non-discriminatory reasons for the plaintiff's workplace treatment, Judge Gleeson ruled that the plaintiff's evidence was strong enough to require a jury to decide whether or not he had been discriminated against.

The outcomes in these two cases highlight the crucial importance in an employment discrimination case for the plaintiff to present objective evidence -- usually in the form of discriminatory comments and/or differential treatment of similarly situated employees -- that the employer was motivated by discriminatory animus.  Without such evidence, it is very difficult for a plaintiff to persuade a court to allow the case to go to trial.


If you or someone you know has been the victim of workplace discrimination, please contact The Warshawsky Law Firm today.

Monday, September 15, 2014

Workplace Bullying Is Not Illegal Unless It Is Motivated By The Victim's Membership In A Protected Class

Workplace bullying is a too common experience for too many employees, whether blue collar or white collar, hourly or salaried, administrative, technical, or professional.  As an employment lawyer, I frequently am called and emailed by people who have been bullied at work by coworkers, supervisors, and/or managers and who want to know their rights.  Unfortunately, unless the bullying was motivated by the victim's membership in a protected class, the victim essentially has no "rights" under existing federal, state, and city employment laws.

This important issue -- one that most people are not aware of -- was highlighted in a decision issued today by the U.S. District Court for the Southern District of New York (SDNY) in the case of Alfred Johnson v. City University of New York, No. 14-CV-587 (Hon. Valerie Caproni).  The plaintiff in Johnson was a lecturer in the music department of CUNY's Medgar Evers College.  He alleged that, for more than three years, he had been "bullied" and "harassed" by his department chairman.  After complaining about the bullying, first to the college and then to the U.S. Equal Employment Opportunity Commission (EEOC), his appointment was not renewed, which he alleged was retaliation for his complaints. 

The plaintiff then filed a lawsuit against CUNY, representing himself (pro se), in which he charged the college with wrongful discharge, failure to hire, failure to promote, and retaliation.  However, he did not allege that this mistreatment was based on his race, sex, age, national origin, religion, disability, or any other protected characteristic.  At a court conference, the plaintiff confirmed to the judge that "he was not alleging that his Chair's hostility was motivated by his race, sex, age, or national origin."  Consequently, the judge granted CUNY's motion to dismiss the lawsuit.  The judge explained the basis of her ruling in the opening paragraph of her decision:

"Bullying and harassment have no place in the workplace, but unless they are motivated by the victim's membership in a protected class, they do not provide the basis for an action under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-2 (Title VII), and any complaint to the Equal Employment Opportunity Commission (EEOC) based on them does not constitute 'protected activity' under Title VII.  Victims of non-discriminatory bullying at the workplace, like those treated unfairly for reasons other than their membership in a protected class, must look outside Title VII to secure what may be their fair due.  The Court does not condone bullying, but it cannot read Title VII to protect its victims unless the bullying reflects discrimination based on race, color, religion, sex, or national origin."

The key point is that Title VII and other employment discrimination laws -- including, for example, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), the New York State Human Rights Law, and the New York City Human Rights Law -- only protect employees from mistreatment that is motivated by one or more of their protected characteristics.  The term "protected characteristic" refers to certain physical and social traits that are deemed by the law to be unrelated to a worker's occupational abilities, including age, sex/gender, race/color, national origin, religion, marital status, pregnancy, disability, and sexual orientation.  Importantly, different laws protect different characteristics.  For example, just about every law prohibits race and sex discrimination, but only the state and city laws prohibit sexual orientation discrimination.  A qualified employment lawyer will know which laws potentially apply in each particular situation.

The bottom line is that, for a victim of workplace bullying to be able to sue in court, the bullying must have been motivated by the employee's protected characteristic(s).  This is because the employment discrimination laws only protect against certain kinds of mistreatment, specifically defined in each law.  These laws do not protect against bullying, harassment, hostility, meanness, and unfairness in general.  Unfortunately for the plaintiff in the Johnson case, this means that his lawsuit against CUNY was doomed from the start.  Judge Caproni had no choice but to dismiss the case. 

If you or someone you know has been the victim of workplace discrimination, please contact The Warshawsky Law Firm today.  

Thursday, January 30, 2014

An Overview Of The Law Governing Overtime Pay Claims

One of the most important rights afforded by federal and state employment laws is the right to overtime pay.  In this blog entry, I am going to discuss some of the basic legal rules surrounding this issue.  Please note:  This is a very complex issue and an employee's eligibility for overtime and the amount of overtime owed to the employee will depend on the circumstances of each case.  Any worker or company with questions about overtime pay should consult a qualified employment lawyer.

Generally speaking, overtime pay means the extra pay that an employee is owed for working more than 40 hours in a workweek.  In recent years, there has been an explosion of individual and class action lawsuits filed by workers who were not paid the overtime owed to them.  Unfortunately, many employers either do not know or do not follow the rules governing overtime pay.  This can result in large amounts of back pay and liquidated damages being owed to employees, which hurts both the employee (who should have been paid in a correct and timely manner) and the employer (who will have to pay significant penalties).

When is an employee entitled to overtime pay?

Assuming an employee is eligible for overtime pay (more on that below), the law normally requires the payment of overtime whenever the employee works more than 40 hours in a workweek (defined as seven consecutive 24-hour periods).  Importantly, overtime pay is not owed for working more than 8 hours in a day or for working on weekends or holidays; it only applies when the employee works more than 40 hours in a workweek.  For example, if an employee works three 12-hour shifts per workweek (36 hours total), he is not owed overtime; if he works six 7-hour shifts (42 hours total), he is.

How much overtime pay is required?

Generally speaking, if an eligible employee works more than 40 hours in a workweek, he must be paid time-and-a-half for every hour over 40.  In other words, an employee is owed a "premium" of an additional 50% pay for every overtime hour.  The overtime rate is based on the employee's "regular rate" of pay, usually his regular hourly wage.  The overtime rate is the regular rate times 1.5.  For example, assume an employee is paid $20 per hour; his overtime rate would be $30 per hour.  This is the amount he must be paid for every hour over 40.

Are all employees entitled to overtime?

No.  Many categories of workers are exempted from the overtime requirement, meaning they do not receive any extra pay for working more than 40 hours in a workweek.

The most common categories of exempt workers include:

Executive employees (who manage business operations and supervise at least two other employees);

Professional employees (who perform intellectual work requiring advanced knowledge and specialized training);

Administrative employees (who exercise responsibility and discretion related to the business operations of the company); and

Computer professionals (who perform high-level work involving computer systems and programs). 

A complete listing of exemptions may be found here.

Please note:  Whether or not an employee is exempt can be complicated and depends on the circumstances of each case.  A qualified employment lawyer can provide guidance on this issue.

If an employee is paid a salary, does that mean he is not entitled to overtime?

Not necessarily.

It is a common misconception that, so long as an employee is paid a salary, he is not entitled to overtime. This often is not the case.

It is true that many overtime exemptions include, among their various requirements, that an employee be paid a certain minimum salary.  For example, the executive, professional, and administrative exemptions require a minimum salary of $455 per week.  (However, the minimim salary requirement does not apply to teachers, lawyers, and doctors.)  Being paid a "salary" means that an employee receives a predetermined amount of compensation each pay period, which does not depend on the quantity or quality of the employee's work.  But these exemptions have additional requirements besides the salary requirement -- requirements that pertain to the nature of the employee's work and the amount of responsibility exercised by the employee. 

For example, suppose a receptionist in an office is paid a salary of $1000 per week.  If he works 50 hours per week, is he owed overtime?  Generally speaking, yes, he is owed for 10 hours of overtime, unless he falls under one of the exemptions.  But which exemption?

Companies often claim that ordinary office workers, like receptionists and secretaries and assistants, are "administrative" employees.  However, to qualify for the administrative exemption, an employee's "primary duty" must be the performance of office work "directly related to the management or general business operations" of the company and must involve "the exercise of discretion and independent judgment with respect to matters of significance."  In most cases, ordinary office workers do not perform work that meets these requirements.  Therefore, they are not exempt and are owed overtime.

In the example of the receptionist, he is owed for 10 hours of overtime.  How much is he owed?  His overtime rate is 1.5 times his "regular rate" of pay.  Because he is paid by salary, his "regular rate" is determined by dividing his salary by the total number of hours worked in that workweek, i.e., $1000 divided by 50 hours = $20 per hour.  His overtime rate, therefore, is $30 per hour.  However, this does not mean he is owed an additional $300.  Why not?  Because he already was paid $20 for each hour of overtime.  Rather, he is owed the overtime premium that he did not get paid, i.e., the extra $10 per hour.  In sum, he is owed $100.

Of course, in some cases, companies actually refuse to pay employees for hours worked over 40.  For example, some businesses have a "policy" that hourly employees will be paid only for 40 hours each week, even if they work more than 40 hours.  Some businesses instruct their employees to work "off the clock" once they have reached 40 hours in a workweek.  These types of policies are blatantly illegal.  In those cases, the employees are owed full overtime pay (1.5 times their hourly wage) for every hour over 40.

What if an employer fails or refuses to pay overtime?

Both federal and state laws provide powerful legal remedies for employees who are not paid the overtime they are owed.  These remedies include back pay (compensation for the amount of overtime owed) and liquidated damages (double damages), as well as attorney's fees and costs.  Moreover, overtime laws intentionally favor employees, making it easier for them to prevail in these cases.  The statute of limitations for bringing an overtime claim under federal law is two years (three years for willful violations) and six years under state law.  Although these sound like long periods of time, if an employee believes he or she is owed overtime, it is very important to contact an employment attorney right away.  Likewise, companies should not wait to correct overtime problems, as the potential damages and penalties quickly add up to very large amounts.

Additional information about federal and state overtime laws can be found here (US DOL website) and here (NY DOL website). 

The Warshawsky Law Firm represents employees and employers in overtime pay cases. 

Monday, February 4, 2013

Are Illegal Immigrants Protected By Labor And Employment Laws?

There are an estimated 12 million illegal immigrants in the United States, including more than 500,000 in New York City.  Many thousands of illegal immigrants participate in the labor force, frequently in the restaurant, janitorial, construction, and domestic service industries.  Are these workers protected by federal, state, and local employment laws?  Generally speaking, yes.

Minimum Wage and Overtime Laws

The federal and state governments require employers to pay minimum wages and overtime (time-and-a-half for every hour over 40 in a work week) to most workers.  The minimum wage and overtime laws are complex and require a case-by-case analysis. 

Currently the federal minimum wage for covered nonexempt employees is $7.25 per hour.  The New York minimum wage is the same.  Where federal and state minimum wages are different, the higher wage applies.  Several states, including California, mandate minimum wages above $7.25 per hour; legislation is pending in New York to raise the minimum wage in this state to $8.50 per hour.

Note:  Employees who customarily receive tips as part of their jobs may be paid a lower cash minimum wage (for example, $5.00 per hour for food service workers).  The amounts of these so-called "tip credits" are established on a state-by-state basis. 

Do these laws apply to illegal immigrants?  Yes.

The federal wage laws are set forth in the Fair Labor Standards Act (FLSA), which covers employees engaged in interstate commerce (very broadly defined) or who work for businesses with at least two employees and total sales of $500,000.  The FLSA does not contain an exception for illegal immigrants.  Neither does the New York Labor Law, which defines an employee as "any individual employed or permitted to work by an employer in any occupation" (although certain occupations are excluded from the law).  Accordingly, illegal immigrants in New York City (and elsewhere) are entitled to the same minimum wage and overtime pay as other workers.

This was the issue in two recent federal district court cases:  Solis v. Cindy's Total Care, Inc., Case No. 10-CIV-7242 (PAE), 2011 WL 6013844 (S.D.N.Y. Dec. 2, 2011), and Angamarca v. Da Ciro, Inc., Case No. 10-CIV-4792 (RLE), 2012 WL 5077480 (S.D.N.Y. Oct. 15, 2012).  In Solis, the court held that an employee's immigration status was not relevant to his or her claims for unpaid wages under the FLSA.  In Angamarca, the court adopted that holding and further ruled that the plaintiff, who had returned to his home country, would be permitted to appear remotely (via videoconference) for his deposition and for trial -- thus making it possible for him to pursue his lawsuit from outside the United States.

New York state courts similarly have held that illegal immigrants are covered by the state wage laws.  For example, in Pineda v. Kel-Tech Construction, Inc., 15 Misc.3d 176, 832 N.Y.S.2d 386 (N.Y. Sup. 2007), the court held that illegal immgrants who worked on municipal construction projects were entitled to be paid "prevailing wages" as mandated by state law.  Likewise, in Garcia v. Pasquareto, 11 Misc.3d 1, 812 N.Y.S.2d 216 (N.Y. Sup. App. Term 2004), the court held that illegal immigrants could bring an action in court for wages earned but not paid.   

In sum, illegal immigrants must be paid proper minimum wages and overtime for all work they actually perform, and they may bring actions in federal or state court to recover unpaid wages, even though they are not authorized to work in this country.

Employment Discrimination Laws

In addition to minimum wage and overtime laws, the federal and state governments (and many local governments, including New York City) prohibit employers from discriminating against employees based on race, sex, age, religion, disability, national origin, and other protected characteristics (which are different depending on the law).

Of course, under federal immigration law, employers can -- indeed must -- discriminate against employees on the basis of immigration status.  That is, employers are prohibited from hiring and employing workers who are not authorized to live and work in the United States.  Technically speaking, therefore, no illegal immigrants should be working in the country, but many do.  Just as they are protected by minimum wage and overtime laws, are they protected by employment discrimination laws?  Yes, but with certain limitations.

The various federal, state, and city anti-discrimination laws do not contain exceptions for illegal immigrants.  For example, the main federal anti-discrimination law, Title VII of the Civil Rights Act of 1964, applies to persons "employed by an employer."  The U.S. Equal Employment Opportunity Commission (EEOC) has declared it a "settled principle" that "undocumented workers are covered by the federal employment discrimination statutes and that it is as illegal for employers to discriminate against them as it is to discriminate against individuals authorized to work."  Likewise, the New York City Human Rights Law, which is one of the most protective laws, prohibits employers from discriminating against "any person."

Consequently, employers who employ illegal immigrants are not allowed to discriminate against them, any more than they are allowed to discriminate against other employees.  But this does not mean that illegal immigrants are entitled to all of the protections and remedies provided by these laws.

In Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002), the U.S. Supreme Court held that an illegal immigrant who had been illegally terminated in retaliation for union activity was not entitled to receive back pay for the period following his termination.  Back pay is a common remedy in wrongful termination cases and refers to the amount of money that the employee would have been paid if he had not been terminated.  That is, it refers to income that the employee theoretically would have earned, not to income that the employee in fact earned. Under Hoffman, illegal immigrants are not entitled to back pay, i.e., pay for work they did not in fact perform.  The Hoffman ruling applies to federal law claims.

Consequently, if an illegal immigrant is terminated from his employment based, for example, on religion or age or disability, under federal law (Title VII or the ADEA or the ADA) he will not be allowed to recover back pay as part of any lawsuit.  Logically, the Hoffman ruling also covers non-promotion claims, i.e., where the employee claims he should have been promoted to a higher-paying position but was not due to some form of illegal discrimination.  In those situations, the employee seeks compensation for work he did not actually perform, which is barred to illegal immigrants under Hoffman.  (As several courts have noted, Hoffman does not bar illegal immigrants from recovering wages owed to them for work they performed.  See, e.g., Flores v. Amigon, 233 F. Supp.2d 462 (E.D.N.Y. 2002).)       

Nothing in the Hoffman decision, however, appears to preclude an illegal immigrant from being compensated for mental and emotional distress caused by harassment and other forms of workplace discrimination that he or she actually suffered.

Moreover, New York courts have not applied the Hoffman ruling to state law claims.  The New York Court of Appeals has held that illegal immigrants who are injured on the job may recover lost income damages (i.e., for work they did not actually perform) as part of the compensation they receive under state labor law.  See Balbuena v. IDR Realty, LLC, 6 N.Y.3d 338 (2006); see also Janda v. Michael Rienzi Trust, 78 A.D.3d 899, 912 N.Y.S.2d 237 (2d Dept 2010) (same).  Importantly, the U.S. Court of Appeals for the Second Circuit (which covers New York) has held that federal immigration law does not preempt state labor law on this issue.  See Madeira v. Affordable Housing Foundation, Inc., 469 F.3d 219 (2d CIr. 2006).  Arguably, the Balbuena decision supports the position that illegal immigrants are entitled to back pay damages under state and city anti-discrimination laws.

The bottom line is that illegal immigrants are protected by federal, state, and local employment laws, are entitled to be paid for all hours worked (including overtime and other forms of mandatory pay), and are entitled to work in an environment free from illegal discrimination.  But they may not be entitled to the full range of remedies available under these laws, particularly under federal law.  This is a complex issue that requires careful case-by-case analysis.

Lastly, it must be emphasized that, even if illegal immigrants are covered by employment laws, this does not mean that they cannot be detained, prosecuted, and/or deported by federal immigration authorities.  This factor must be considered very seriously when deciding whether or not to file an employment lawsuit on behalf of an illegal immigrant.   

Wednesday, December 5, 2012

How Much Is My Employment Discrimination Case Worth?

As an employment lawyer, I regularly am consulted by people who believe they have been discriminated against at work.  After describing the facts to me, they always ask, first, "do I have a case?" and, second, "how much is my case worth?"  In this blog entry, I am going to discuss the second question.  In short, how do employment lawyers assess the "value" of a potential discrimination case?

The answer to this question begins with the statutory framework that applies to a person's case.

There are many statutes, federal, state, and local, that prohibit various forms of workplace discrimination.  The most frequently litigated anti-discrimination laws in New York courts are Title VII of the Civil Rights Act of 1964 (Title VII) (which prohibits discrimination based on race, color, religion, sex, and national origin), the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), 42 U.S.C. § 1981 (which prohibits discrimination based on race), the New York State Human Rights Law (NYSHRL) (which prohibits a wide variety of discrimination), and the New York City Human Rights Law (NYCHRL) (which also prohibits a wide variety of discrimination).  Importantly, these different statutes provide different remedies.  That is, they entitle an employee whose rights are violated to different kinds of relief.

For example, an employee who proves his or her rights were violated under Title VII may recover monetary damages, including lost income and benefits, reimbursement for out of pocket expenses, compensatory damages for mental and emotional pain and suffering, and punitive damages (except against a government defendant).  The employee also may be entitled to "equitable" relief, including hiring, promotion, and reinstatement, depending on the circumstances.  A prevailing plaintiff (or his or her attorney) also is entitled to receive reasonable attorney's fees and costs.  The purpose of these remedies is to make the plaintiff "whole" -- that is, to restore the plaintiff to the same position he or she would have been in, assuming the discrimination never had happened.  However, under Title VII compensatory and punitive damages are capped, depending on the size of the employer.  The maximum combined compensatory and punitive damages is $300,000 (for employers with more than 500 employees).  The same scheme applies to the ADA. 

Both Section 1981 and the New York City Human Rights Law provide the same array of relief as Title VII, but there are no caps under these statutes.

Under the ADEA, no compensatory or punitive damages are available.  The ADEA only provides for the recovery of lost income damages, plus an equal amount in "liquidated damages" (intended as a substitute for compensatory damages), as well as attorney's fees and costs. 

The New York State Human Rights Law, like the ADEA, provides more limited remedies, including lost income damages and compensatory damages (without a cap), but no punitive damages or attorney's fees.

In short, evaluating how much a case is worth depends on which statute applies to the person's claim.  A claim covered only by the New York State Human Rights Law, for example, may be "worth" less than a claim covered by the New York City Human Rights Law.  For purposes of this discussion, I will assume that the New York City Human Rights Law -- which provides the broadest relief available to employees -- applies to a hypothetical claim for wrongful termination based on age discrimination.

The first step is to determine (estimate is a better word) a person's lost income damages.  Lost income damages are the most "objective" and "proveable" form of a plaintiff's damages.  Technically, lost income includes back pay and front pay.

"Back pay" refers to the amount of money that a person lost from the time of the adverse employment action (e.g., termination) to the time he or she obtains a court judgment (or to the present moment).  "Front pay" refers to the amount of money that the person will lose in the future, usually for some period of time after he or she obtains a court judgment.  Front pay is awarded when reinstatement is not a viable option.  Front pay can be more complicated and more speculative, and is less likely to be awarded in a lawsuit.  But the basic analysis for both back pay and front pay is the same:  How much was the person earning when fired?  How much would the person have earned in the future if still on the job?  Now subtract from that number the amount of money earned at another job or in the form of government benefits.  The difference is lost income damages.

For example, suppose a person was making $50,000 when fired and is out of work for one year, but earns $15,000 from occasional consulting work.  The estimated lost income damages is $35,000.  Repeat the analysis, as necessary, for as long as the person suffers lost pay as a result of the discriminatory termination.

Note:  If a person has not suffered any lost income as a result of the employer's discrimination -- for example, in cases involving only workplace harassment or where a fired employee quickly finds a better paying job -- then this component of the plaintiff's damages will be zero. 

Next, are there any actual damages, e.g., unpaid bills for needed psychological counseling?  If so, how much?

This brings us to compensatory damages, which are more difficult to estimate.  For "garden variety" cases, where the plaintiff does not suffer from any diagnosed mental health problems, they can range from $10,000 (or less) to $50,000 (or more).  However, amounts greater than $50K rarely are awarded for "garden variety" cases (and courts often will limit such awards to no more than $100,000).  Of course, plaintiffs who experience more severe forms of mental and emotional pain and suffering may be able to recover larger amounts of compensatory damages.  But these cases almost always require supporting testimony by a mental health professional as well as relatives and friends.  As a general rule, when evaluating the "worth" of an employment discrimination case, it is prudent to assume an amount of compensatory damages on the low end of the possible range.

Like compensatory damages, punitive damages are very difficult to estimate.  Punitive damages are awarded to punish a defendant for maliciously mistreating an employee, but are not automatically awarded whenever a plaintiff wins a discrimination case.  Assuming such damages are awarded, they can range anywhere from a token amount, say $100, to many tens of thousands of dollars (or more).  Nevertheless, when evaluating the "worth" of a case, it is prudent to assume zero punitive damages, except in egregious circumstances.

Lastly, attorney's fees and costs, while recoverable, are not really part of the "worth" of the case, but simply reimburse the plaintiff (or his or her attorney) for the expenses of bringing a lawsuit against the employer.  Accordingly, I do not think that attorney's fees and costs should be factored into the "worth" of the case, insofar as this is an estimate of the monetary payment that the plaintiff might receive in the case.  Nevertheless, the availability of attorney's fees provides an incentive for attorneys to handle cases that may be "worth" relatively little money and also provides an inventive for defendants to settle cases before the plaintiff incurs large amounts of attorney's fees that the defendant will have to reimburse if it loses the case. 

In sum, lost income damages are the single most important component in assessing the "value" of a typical employment discrimination case.  Compensatory damages -- conservatively estimated -- are the second most important component.  Actual damages, if any, also should be considered.  In my opinion, punitive damages should not be considered for the typical case.  Neither should attorney's fees and costs (with the caveat mentioend above).  Of course, estimating the "worth" of a case in this manner will result in a lower number than the plaintiff may want to hear.  But I think this is appropriate when balancing the overall costs and benefits of pursuing litigation against an employer.   

Unfortunately, estimating the "worth" of an employment discrimination case is difficult and imprecise.  Unlike personal injury cases, which have a fairly well-defined range of monetary values for different kinds of physical injuries (mainly determined by insurance companies), the recoveries in employment discrimination cases vary quite widely.  This is why I believe that employment lawyers and their clients should take a cautious, conservative approach to estimating the value of their cases. 

Thursday, December 30, 2010

Are English-Only Workplace Rules Legal? Probably, If Justified On Business Grounds And Narrowly Applied.

A 2003 report by the U.S. Census Bureau, based on Census 2000 data, found that 18% of the total population aged 5 and older (47 million people) spoke a language other than English at home.  This was an increase from 1990 (14% or 31.8 million people) and 1980 (11% or 23.1 million people).  Census 2010 data almost certainly will show a further increase in the number of foreign-language speaking persons in the United States.  Not surprisingly, the most common non-English language spoken in the United States, by far, is Spanish, spoken by 28.1 million people (according to Census 2000 data).  Other languages spoken by more than 1 million people include Chinese (2 million), French (1.6 million), German (1.3 million), Tagalog (1.2 million), Vietnamese (1 million), and Italian (1 million).  The number and variety of foreign-language speaking persons is even greater in certain large metropolitan areas (for example, Los Angeles and New York City).

What happens when foreign-language speaking persons go to work for businesses whose employees and customers are predominantly English-speaking?  Very frequently, these businesses adopt some form of "English-only" workplace rules that either limit or prohibit the speaking of non-English languages at work.  Are such rules legal?  Do they violate laws against employment discrimination based on race, ethnicity, or national origin?

The U.S. Equal Employment Opportunity Commission, which is responsible for administering and enforcing most federal employment discrimination laws, e.g., Title VII of the Civil Rights Act of 1964, has adopted a strict guideline for English-only rules.  See 29 C.F.R. s. 1606.7.  According to the EEOC:

(a) When applied at all times. A rule requiring employees to speak only English at all times in the workplace is a burdensome term and condition of employment. The primary language of an individual is often an essential national origin characteristic. Prohibiting employees at all times, in the workplace, from speaking their primary language or the
language they speak most comfortably, disadvantages an individual's employment opportunities on the basis of national origin. It may also create an atmosphere of inferiority, isolation and intimidation based on national origin which could result in a discriminatory working environment.  Therefore, the Commission will presume that such a rule violates title VII and will closely scrutinize it.

(b) When applied only at certain times. An employer may have a rule requiring that employees speak only in English at certain times where the employer can show that the rule is justified by business necessity.

Thus, the EEOC takes the position that blanket English-only rules are inherently discriminatory, but limited English-only rules can be justified by business necessity.  Although the EEOC guidelines do not have the force of law, they are shown considerable deference by courts applying Title VII and other statutes under the EEOC's jurisdiction.  See Albermarle Paper Co. v. Moody, 422 U.S. 405, 431 (1975); EEOC v. Beauty Enterprises, Inc., No. 01-CV-378 (AHN), 2005 WL 276822 (D. Conn. Oct. 25, 2005).

An excellent analysis by a federal district court in New York of the legality of English-only workplace rules is found in Pacheco v. New York Presbyterian Hospital, 593 F. Supp.2d 599 (S.D.N.Y. 2009).

In Pacheco, the plaintiff worked as a "patient representative" in a major New York City hospital.  He was an American citizen, born and raised in Puerto Rico, and fully bilingual in English and Spanish.  After several patients complained to management about hospital employees speaking Spanish around them -- the patients believed that the employees were gossiping about them and making jokes about them in a language the patients couldn't understand -- the plaintiff's manager told the plaintiff that he was to speak only English when performing his duties, unless he was assisting a Spanish-speaking patient.  Shortly thereafter, the plaintiff complained to the hospital's human resources department, which took no action.  The disputed ended up in court, where the plaintiff claimed national origin discrimination, under theories of disparate treatment, disparate impact, hostile work environment, and retaliation.  The court rejected each of the plaintif's arguments and granted summary judgment to the hospital.

The court's analysis under each theory focused on the hospital's proffered justification for the English-only rule.  Specifically, the hospital argued that the English-only rule -- which was a limited rule that did not prohibit the plaintiff from speaking Spanish during breaks and when not in the vicinity of patients -- was necessary for two reasons:  first, to promote effective customer (patient) relations; second, to enable the plaintiff's manager (who did not speak Spanish) to supervise and evaluate the plaintiff properly.  The court found that these reasons were non-pretextual, legitimate, and lawful:  "Given this undisputed record, the case law supports Defendant's claim of business necessity."  The court noted that this conclusion was consistent with the EEOC Compliance Manual, which provides that English-only rules may be justified "for communication with customers, coworkers or supervisors who only speak English" and "to enable a supervisor who only speaks English to monitor the performance of an employee whose job duties require communication with coworkers or customers."  See also EEOC v. Sephora USA, LLC, 419 F. Supp.2d 408 (S.D.N.Y. 2005) (upholding English-only rule that only applied when employees were on the sales floor interacting with customers, not when no customers were present or when employees were on break). 

In sum, English-only rules that apply to an employee's actual job performance, but provide exceptions for non-work time and non-work communications, probably are legal unless they are applied in an arbitrary or discriminatory manner (e.g., being enforced against speakers of certain foreign languages but not others; see here).  But blanket prohibitions on employees speaking non-English languages in the workplace probably are not legal.  Such rules are deemed inherently discriminatory by the EEOC guidelines and appear to contradict the reasoning set forth in the Pacheco and Sephora USA decisions.  Of course, each workplace situation will be analyzed on a case-by-case basis.

Sunday, December 5, 2010

Are Unpaid Internships Legal? Probably Not.

College students and young workers often perform unpaid internships with companies in industries they are interested in pursuing for their careers.  Indeed, internships are common in most "white collar" fields, including publishing, fashion, television, film, high technology, advertising, and law.  Unpaid internships can be a "win-win" situation:  the intern benefits by obtaining work experience, networking opportunities, and exposure to different job settings, while the company benefits by identifying promising entry-level employees and obtaining some "cheap labor."  Alas, the "cheap labor" aspect of internships -- which makes many, if not most, internships economically feasible -- probably is illegal.

In general, unpaid internships for private, for-profit employers violate federal and state wage and hour laws, including minimum wage and overtime laws, unemployment insurance and worker's compensation laws, and payroll and income tax laws.  As stated by an official with the U.S. Department of Labor, Wage and Hour Division:  “If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and still be in compliance with the law."  Why not?  Because in most cases an unpaid intern is considered an "employee" to which the full panoply of workplace rules applies.  (Internships with government agencies and non-profit charitable organizations are excluded from these rules.)

As the Wage and Hour Division recently explained, an unpaid internship must meet the following six criteria to pass legal muster:

1.  The internship must be "similar to training which would be given in an educational environment";

2.  The internship must be "for the benefit of the intern";

3.  The intern "does not displace regular employees" and "works under close supervision";

4.  The company "derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded";

5.  The intern "is not necessarily entitled to a job at the conclusion of the internship"; and

6.  The intern understands that he/she is not entitled to wages for the time spent in the internship.

These are very strict criteria that effectively bar most unpaid internships, which are intended to benefit both the intern and the company; otherwise, why would the company offer the internship in the first place?  Yet the Wage and Hour Division has stated unequivocally that a company may derive "no immediate advantage" from the internship.  The upshot is that if an intern performs any useful work, however simple or menial or clerical in nature, the intern must be treated as an employee, subject to all applicable labor and employment laws.  Failure to comply with these laws can result in liability for back wages, back taxes, and other civil and criminal penalties. 

Saturday, December 4, 2010

Ten Common Employment Law Mistakes Made By Businesses.

The contemporary American workplace is subject to numerous federal, state, and local laws that impose strict obligations on businesses (e.g., wage and hour laws, nondiscrimination laws, etc.).  Many companies, especially smaller companies, do not fully understand the scope of these obligations and, as a result, frequently (albeit inadvertently) violate the law.  These violations can lead to costly lawsuits, as well as civil and criminal penalties.  In my experience as a defense attorney and as a plaintiff's lawyer, the most common employment law mistakes made by businesses are the following (in no particular order):     

1.  Misclassifying employees as independent contractors.  In general, only workers who operate their own separate businesses are "independent contractors."  Few workers meet this test; in fact, most workers are considered "employees" under the law, which means they are entitled to the full range of workplace protections.

2.  Misclassifying non-exempt employees as exempt.  In general, all employees are entitled to minimum wage and overtime pay, unless they are "exempt" under federal and state law.  The exemption rules (e.g., for executive, administrative, and professional employees) only apply in limited circumstances, however; as a result, many employees who are claimed by businesses to be "exempt" in fact are entitled to minimum wage and/or overtime pay.

3.  Not complying with state wage payment laws.  New York imposes several specific rules regarding how businesses must pay their employees.  These rules include providing new employees with written notice of their rate of pay and regular pay date; prohibiting deductions from wages unless for the employee's benefit and authorized in writing; requiring written contracts for commissioned salespersons; and providing terminated employees with written notice of their last day of work, their last day of benefits, and their right to apply for unemployment benefits.

4.  Not having an employee handbook.  An employee handbook is an important tool for effective employer-employee relations.  It notifies employees of the company's values, policies, and procedures; promotes compliance with labor and employment laws; and helps create an orderly, efficient, and transparent workplace.

5.  Not documenting employee job performance.  A well-managed company clearly communicates its employees' duties and responsibilities (e.g., through written position descriptions), trains and supervises employees to ensure they are meeting these requirements, and provides regular, objective, consistent feedback (e.g., through written evaluations and, where necessary, disciplinary actions).  A lack of accurate, complete, contemporaneous documentation can lead to liability in the event of a lawsuit by an employee.

6.  Not training supervisors regarding EEO laws.  Federal, state, and local equal employment opportunity (EEO) laws prohibit businesses from taking adverse actions against employees (e.g., demotion, termination) for reasons not related to an employee's job performance, including based on an employee's race, color, sex, age, disability, religion, national origin, sexual orientation, and marital status (to name the most common "protected characteristics"), as well as in retaliation for an employee's good faith complaints of discrimination.  It is imperative that supervisors be trained on how to manage employees without violating (or appearing to violate) these laws.

7.  Not providing reasonable accommodations for disabled employees.  Most EEO laws prohibit businesses from taking adverse actions against employees based on certain protected characteristics, but disability discrimination laws also impose an affirmative obligation on businesses to "reasonably accommodate" disabled employees so as to enable them to perform the essential functions of their jobs.  Such accommodations may include restructuring job duties, modifying work schedules, or providing assistive devices.  Businesses are required to provide a disabled employee with needed accommodations unless doing so would cause an "undue hardship" to the company (e.g., too expensive, too disruptive). 

8.  Not obtaining releases from terminated employees.  When terminating an employee, businesses should try to obtain a release that waives the employee's potential legal claims against the company.  The best way to obtain a release is in exchange for an offer of severance (where appropriate).  In general, businesses are not required to pay severance to employees (unless required by an employment contract or a collective bargaining agreement).  If they decide to do so (e.g., in connection with layoffs), they should require employees to sign a release in exchange for the payment.

9.  Not protecting confidential business information.  Every company depends on certain vital, often confidential, information about its business operations, including trade secrets, sales and marketing practices, and customer and client lists.  Access to this information should be limited to employees with a "need to know" and should be protected by appropriate nondisclosure, noncompete, and/or nonsolicitation agreements (depending on the nature of the information and the employee's position).

10.  Not consulting a qualified employment law attorney.  Perhaps the single most important point to take away from this discussion is that businesses need to consult a qualified employment lawyer to ensure they are in compliance with the increasingly numerous and complex laws that carpet the workplace like a minefield.  Large companies usually have attorneys and human resources professionals on staff to assist them in this area.  Small- and medium-size companies often do not.  Their biggest mistake is trying to navigate this minefield on their own.   

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