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U.S. DISTRICT COURTS ISSUE WARNINGS TO EMPLOYERS AND THEIR ATTORNEYS ABOUT PRESERVING INTER-OFFICE E-MAIL Zubulake v. UBS Warburg, No. 02 Civ. 1243 (S.D.N.Y. 7/20/04); U.S. v. Philip Morris, No. 99-2496 (D.C. 7/21/04). These decisions address an employer’s duty to preserve relevant information once it “reasonably anticipates litigation.” The courts warn that counsel should take affirmative steps to monitor the employer’s compliance with a “litigation hold” so that all sources of discoverable information are identified and searched. This “litigation hold” is a suspension of the employer’s routine document retention/destruction policy in favor of a procedure to ensure the preservation of relevant documents. In the area of computer-transmitted e-mail, the litigation hold would apply to accessible back-up tapes (meaning those that are “actively used for information retrieval”), but it would not normally be applicable to those that are inaccessible, unless there is specific cause for their production. “Spoliation” is defined as “the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.” If spoliation is willful, or even grossly negligent, then it can be presumed that the lost information was relevant to the case and unfavorable to the party who lost it. The sanctions imposed by the courts for spoliation of evidence include this “adverse inference” jury instruction - allowing the jury to infer that the information would have been harmful to the party who lost it, as well as monetary sanctions, including the cost of additional discovery and fines (in the case of Philip Morris, $ 2.75 million). Employers should heed the guidelines delineated by these cases and work with counsel to develop procedures to prevent destruction of relevant e-mail communications and regularly monitor compliance by employees likely to possess such information. MODEL SAFE HARBOR POLICY ISSUED BY THE DEPARTMENT OF LABOR http://www.dol.gov/esa/regs/compliance/whd/fairpay/modelPolicy_PF.htm August 27, 2004 – The Department of Labor has posted a Sample Salary Basis Policy on its website to provide guidance to employers as to how to avoid making improper deductions from an employee’s salary and maintain compliance with § 541.603(d) of the Fair Labor Standards Act (FSLA). The Sample Policy delineates the employees who will be exempt from the new overtime and minimum wage regulations, based on certain salary and job duty requirements. The policy then addresses the specific circumstances under which an employer may make deductions from an employee’s salary and prohibits managers from making any salary deductions that violate the FLSA. Employers would be well-advised to develop a similar policy and ensure that company managers have reviewed it before deducting any amounts from an employee’s paycheck due to absences from work. CALIFORNIA COURT RULES THAT AN EMPLOYER MAY BE LIABLE FOR RETALIATORY DISCHARGE WHEN ITS TERMINATION DECISION IS SET INTO MOTION BY A SUPERVISOR HARBORING DISCRIMINATORY INTENT Reeves v. Safeway Stores, Inc., California Court of Appeals, July 29, 2004 http://caselaw.lp.findlaw.com/data2/californiastatecases/h024375.pdf Plaintiff, William McLeod, worked for defendant, Safeway Stores, as a food clerk for nineteen years. Sometime during the last year of his employment, he became aware of conduct that he believed constituted sexual harassment of female employees. McLeod complained to his store manager several times about the conduct, but he was told that the problem existed only “between his ears.” One night after his shift ended, McLeod had an altercation with a co-employee, and the co-employee alleged that McLeod had pushed her. McLeod’s supervisor referred the matter to the Security Department, and McLeod was subsequently terminated. The trial court granted a summary judgment in favor of Safeway because the person ultimately responsible for firing McLeod had not even known of his complaints regarding the sexual harassment. The California Court of Appeals addressed the question of whether an employer may be liable for retaliatory discharge when the supervisor who initiates disciplinary proceedings acts with retaliatory animus, but the cause for discipline is separately investigated, and the ultimate decision to discharge the worker is made by a manager with no knowledge that the worker has engaged in protected activities. The court held that so long as the supervisor’s retaliatory motive was an actuating, but-for cause of the dismissal, the employer may be liable for retaliatory discharge. The trial court’s grant of summary judgment was reversed, and the case was remanded back to the trial court for a determination of whether McLeod’s supervisor had been motivated by discriminatory animus to initiate a biased investigation and set into motion a chain of events without which the plaintiff would not have been fired. Employers should be concerned about this, because even if they have a valid, non-discriminatory reason for terminating an employee and have no knowledge of any wrongful conduct on the part of a supervisor, they can still be liable for a supervisor’s discrimination if it taints the termination decision. This underscores the importance of educating and training supervisors regarding the types of legally protected conduct and how to avoid any appearance of disparate treatment of employees. NINTH CIRCUIT RULES THAT STATEMENTS REGARDING UNFAIR TREATMENT OF A CO-EMPLOYEE IN A MUNICIPAL OFFICE IS PROTECTED SPEECH OF A PUBLIC CONCERN Thomas v. City of Beaverton, U.S. District Court, Oregon, August 16, 2004 http://caselaw.lp.findlaw.com/data2/circs/9th/0335120p.pdf Plaintiff Annette Thomas was the municipal court administrator for the City of Beaverton, Oregon. Her supervisor, Sandy Miller, placed her on extended probation and eventually fired her after she refused to pass over a subordinate employee, Susie Perry, for promotion to senior court clerk. The plaintiff recommended Perry for the promotion, despite Miller’s initial insistence that Perry not be promoted. Perry had successfully prosecuted a discrimination lawsuit against the City a few years earlier. Miller told Thomas to be ready for a lawsuit when they didn’t promote Perry; and she expressed concern that, because of the prior lawsuit, there would be a problem between Perry and another supervisor if Perry were promoted. The plaintiff alleged that Miller retaliated against her, in violation of her First Amendment right to free speech, for speaking out and supporting the promotion of her co-employee. The district court found that Thomas’ speech did not constitute speech on a matter of public concern and thus was not protected. The Court of Appeals reversed, finding that unlawful conduct by a government employee or illegal activity within a government agency is a matter of public concern, and speech about such conduct is therefore protected. The Court noted that determination of that issue depended upon whether or not the plaintiff’s actions were expressive, meaning whether or not they were intended to convey a message. The Court noted further that protected speech of public concern can consist of express, even reckless, accusations; or it can consist of an implicit message to a supervisor of disapproval, relayed by a refusal to facilitate or to participate in illegal activity. This case provides a cautionary note to public-sector employers about what constitutes Constitutionally protected activity, particularly in a government setting. Although, traditionally, employment grievances in which the employee is complaining purely out of personal interest about her own job treatment will not be protected under the First Amendment, complaints about personnel matters relating to others, even if unfounded, will be protected if they relate to wrongdoing by a government employee.
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