LEL News-Jul09

The full text of many cases is now available free on-line. Where that is the case, links are provided.

The bargain that made workers compensation attractive in the late nineteenth and early twentieth century was that injured workers gave up the right to sue in tort in exchange for a quick and certain remedy for accidental injuries that were caused by their work. As a result, an employer can move to dismiss a lawsuit by an injured employee on the ground that workers compensation is the exclusive remedy. A narrow exception to is when the injury is not accidental, that is, when the injury is caused by the employer’s intentional tort. A recent case from Ohio provides a good example of such a case. State ex rel. Hina v. Industrial Commission, 121 Ohio St.3d 4, 2009-Ohio-250 (S.D. Ohio July 13, 2009) http://www.sconet.state.oh.us/rod/docs/pdf/0/2009/2009-ohio-250.pdf

The employer had a mill that had, at some point, been modified so that its cutters were close to the mill’s on-off lever. One year before the employee was injured, OSHA had cited the employer for a repeat violation for not placing a guard on the machine. Two years before, Anchor had been cited under the same standard on a different machine.

While adjusting the speed on the mill’s cutter, the employee’s left hand became entangled in the cutters. When found, “he was flush against the mill, with his body against the spindle activation lever, holding it in the “on” position. His gloved left hand was caught in and shredded by the mill's unguarded cutters. He was severely injured . . .” The injured employee and his wife sued, claiming that the injury was caused by the employer’s intentional tort. The employer moved to dismiss the case as barred by workers compensation.

The court denied the motion to dismiss after examining evidence that the employer knew that a dangerous condition existed within its business operation; that it was a substantial certainty that exposure to the danger could cause harm to an employee; and that the employer nonetheless required the employee to continue to perform the dangerous task. As a result, the case can continue toward trial. The case includes a careful and clear examination of the evidence in the case and the application of the law to that evidence.

For a number of years now, courts been struggling with cases that involve company refusals to provide health benefits to retirees who worked for employers with benefit plans providing health benefits to retirees. At stake in these cases is the existence of health care for retirees who can no longer find a job that provides health care coverage versus the cost of providing health care for retirees, many of whom may need expensive treatment. These are complex actions that often involve ERISA, labor law, and contract law and interpreting decades of benefit plans, summary plan descriptions, collective bargaining agreements, and oral statements that often involved amendments and changes to their terms. In addition, cases are often brought as class actions, which leads to complex litigation as to whether a class can be certified. For example, a recent Third Circuit case filed in 1992 has involved many appeals and remands to decide class action status and other issues before finally reaching a decision on the cases of 14 plaintiffs who retired between 1987 and 1989. In its decision on September 2, 2009, the court found that misrepresentations by Unisys fiduciaries breached their fiduciary duties, so 12 of the plaintiffs were entitled to the promised benefits. Along to this decision thousands of other plaintiffs gained benefits under the plan. In re Unisys Corporation Retiree Medical Benefits ERISA Litigation, Case No.07-3369 (3d Cir. Sept. 2, 2009) http://www.ca3.uscourts.gov/opinarch/073369p.pdf

On the same day the Unisys case was decided, a Sixth Circuit decision raised issues as to whether the employer’s refusal to continue retiree health benefits breached the collective bargaining agreement and violated fiduciary duties under ERISA. As the court put it, the ultimate question was whether the parties had intended to vest benefits. If so, the benefits are “forever unalterable”. The majority in the 2-1 decision sent the case back to the district court to interpret the meaning of the parties’ collective bargaining agreement that said insurance benefits must be maintained throughout the life of the CBA. The majority found that the language was ambiguous because it did not specifically state that “retiree benefits expire upon the termination of the agreement, and therefore the durational provision alone does not manifest a lack of intent to vest healthcare benefits upon retirement.” As a result, other documents, such as the summary plan description would need to be examined to determine the parties’ intent as to retiree benefits. The majority noted that it has been the position of the 6th Circuit that retiree benefits are “status benefits” that continue as long as the former employee is a retiree. The court directed the trial court to consider the language of the summary plan description in interpreting the ambiguous collective bargaining agreement language. Finally, the majority told the trial court to decide whether the employer violated ERISA fiduciary obligations when it transferred plan assets to a new division. Schreiber v. Philips Display Components Co., Case No.07-2440 (6th Cir. Sept. 2, 2009) http://www.michbar.org/opinions/us_appeals/2009/090209/43635.pdf; http://www.ca6.uscourts.gov/opinions.pdf/09a0321p-06.pdf

The Older Workers Benefit Protection Act (OWBPA) includes detailed provisions to protect workers over 40 years of age from waiving age discrimination claims unless the waiver is knowing and voluntary. In a recent case, an employer and employee settled a case involving various discrimination claims, but no claim of age discrimination. The employer, however, included a waiver of age discrimination claims in the settlement agreement and included the time and revocation rights found under the OWBPA, although the parties had not discussed these terms during settlement negotiations. The plaintiff revoked the agreement within the time limits. Two years later, the employer attempted to enforce the settlement agreement, even though the plaintiff had revoked it. The court rejected the employer’s argument that it had never intended the revocation language it drafted to be effective. The court noted that when “interpreting contractual language, ‘a contract is to be construed against the party who drew it.’” The court held that the settlement agreement was void, because it gave the plaintiff a right to revoke the settlement and the plaintiff had properly exercised her right to revoke it. Neely v. Good Samaritan Hospital, Case No.07-4281 (6th Cir. July 31, 2009). http://www.ca6.uscourts.gov/opinions.pdf/09a0531n-06.pdf

A recent case from the Michigan Court of Appeals provides a clear example of the parties’ burdens of proof in a whistleblower case. The case reached the court of appeals after the trial court dismissed the case without a hearing. Kaupp v. Mourer-Foster, Inc., Case No.281578 (Mich. Ct. App. July 14, 2009) http://www.michbar.org/opinions/appeals/2009/071409/43244.pdf

The court of appeals majority reviewed the evidence to decide whether there was a question of fact that required a hearing. In this case, a payroll employee noticed that her employer appeared not to be paying overtime properly. After state and federal agencies confirmed that the payments were improper, the employee talked to her supervisor (the company's comptroller) about the problems with overtime payments. Shortly afterwards she was fired. The court reviewed the evidence and found that the plaintiff employee had shown a connection between her efforts to comply with the law and employer retaliation against her. In addition, the company met its burden on defense of providing “some evidence of a legitimate business reason for plaintiff's discharge”– that the plaintiff could not work with the company's owner. The court noted that the plaintiff employee must then offer evidence to show that the company’s reason for firing her was not true but was merely a pretext. The court found that summary judgment was not appropriate and that the differing versions of what was said in the final conversation between the plaintiff and the company representative must be sent to trial in order to resolve the factual dispute as to the reason for her discharge. The dissent took the position that the plaintiff had failed to carry her burden of showing that the company’s reason for firing her was mere pretext and thus the case should have been dismissed.

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