Employment Law
Winter 2009-2010
Gross v. FBL Financial Services, Inc., 129 S. Ct. 2343 (2009)
Age Discrimination- ADEA: Gross filed suit, alleging that FBL Financial Services (FBL) demoted him in violation of the Age Discrimination in Employment Act of 1967 (ADEA), which made it unlawful for an employer to take adverse action against an employee "because of such individual's age," 29 U. S. C. §623(a). At the close of trial, and over FBL's objections, the district court instructed the jury to enter a verdict for Gross if he proved, by a preponderance of the evidence, that he was demoted and his age was a motivating factor in the demotion decision, and told the jury that age was a motivating factor if it played a part in the demotion. It also instructed the jury to return a verdict for FBL if it proved that it would have demoted Gross regardless of age. The jury returned a verdict for Gross. The Eighth Circuit reversed and remanded for a new trial, holding that the jury had been incorrectly instructed under the standard established in Price Waterhouse v. Hopkins 490 U. S. 228 (1988) for cases under Title VII of the Civil Rights Act of 1964 when an employee alleges that he suffered an adverse employment action because of both permissible and impermissible considerations i.e., a "mixed-motives" case. Held: A plaintiff bringing an ADEA disparate-treatment claim must prove, by a preponderance of the evidence, that age was the "but-for" cause of the challenged adverse employment action. The burden of persuasion did not shift to the employer to show that it would have taken the action regardless of age, even when a plaintiff has produced some evidence that age was one motivating factor in that decision. Note: Under Texas law, Texas Labor Code §21.052, age discrimination was prohibited along with discrimination based on race, color, disability, religion, sex, or national origin. Also TLC 21.125 specifically provided that the claimant only needs to show that age was a “motivating factor for an employment practice, even if other factors also motivated the practice...”. Therefore, a claimant should always consider whether it would be easier to make an age case under Texas state law, rather than the more difficult burden now pronounced by the U.S. Supreme Court.
Marsh USA, Inc., vs. Cook, 287 S.W.3d 378 (Tex.App.–Dallas 2009, pet. filed)
Employment Agreement – Covenant Not to Compete: A former employer filed suit against a former employee and his new employer alleging breach of a non-solicitation agreement. The former employee filed motion for partial summary judgment on ground that agreement was unenforceable. The court granted the motion and the employer appealed. Held: The non-solicitation agreement signed in exchange for receipt of stock options from former employer was not enforceable. For a covenant not to compete to be ancillary to or part of an otherwise enforceable agreement between employer and employee, it must comply with §15.50 of the Tex. Bus. & Com. Code. For the covenant to be enforceable, it must give rise to the employer’s interest in restraining the employee from competing, and the covenant must be designed to enforce the employee’s consideration or return promise in the otherwise enforceable agreement. The financial benefits offered by the employer to the employee in this case did not give rise to the employer’s interest in restraining employee from competing, as required for a covenant not to compete to be enforceable. The consideration given by the employer in this case, the stock options in the company, must give rise to the employer’s interest in restraining the employee from competing. The “give rise” requirement may be met only if the consideration given by the company created the interest in restraining competition. This, in turn, will occur only where the interest in restraining competition did not exist before the consideration was given. Under the facts of this case, the employer’s interest in restraining the employee from competing did not change or arise at the time that it transferred the stock to the employee. The employer offered the stock option to the employee because he was a valuable employee. The employee did not become any more valuable to the employer after the employee exercised the option and the stock was transferred to him.
Family Medical Leave Act- National Defense Authorization Act for Fiscal Year 2010 - Veteran Coverage
On October 28, 2009, the President signed the National Defense Authorization Act for Fiscal Year 2010 (Pub. L. 111-84) (NDAA). The NDAA includes provisions that expand the two types of military-related leave that became available under the Family and Medical Leave Act (FMLA) in January 2008: "qualifying exigency" leave and “military caregiver” leave. Although this portion of the NDAA does not have an effective date, according to the staff of the Subcommittee on Military Personnel of the House Armed Services Committee, the NDAA took effect when the President signed it. Under the FMLA, eligible employees may take leave for a "qualifying exigency" arising out of a spouse's, child's or parent's active duty or call to active duty as a member of the Reserves or National Guard in support of a "contingency operation" declared by the U.S. Secretary of Defense, the President, or Congress. Employees are entitled to take up to 12 workweeks of unpaid leave in any rolling 12-month period under this provision. Now, "qualifying exigency" leave must be extended not only to eligible families of members of the National Guard and Reserves, but also to eligible families of any member of the Armed Forces who is on active duty in a foreign country or is called to active duty in a foreign country.
The U.S. Department of Labor defines a "qualifying exigency" to include things such as preparing for a short-notice deployment, arranging for child care, making or updating financial or legal arrangements, attending counseling, resting and recuperating, post-deployment activities, and similar activities. Under the military caregiver provisions of the FMLA, eligible family members may take leave to care for a current member of the Armed Forces, National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in out-patient status, or is on the temporary disability retired list for serious injury or illness. An eligible employee may take a combined total of 26 workweeks of military caregiver leave in a single 12-month period that begins on the date the employee first uses the leave and ends 12 months later. The NDAA extends the entitlement to military caregiver leave to the families of veterans. Congress incorporated the definition of "veteran" that is used by the Department of Veterans Affairs: "[A] person who served in the active military, Naval, or Air Service, and who was discharged or released therefrom under conditions other than dishonorable."
Congress also expanded the definition of "serious injury or illness" for purposes of the military caregiver provisions of the FMLA. It now is defined as: “an injury or illness that was incurred by the member in line of duty on active duty in the Armed Forces (or existed before the beginning of the member's active duty and was aggravated by service in line of duty on active duty in the Armed Forces), and that may render the member medically unfit to perform the duties of the member's office, grade, rank or rating”. Since veterans, by definition, do not have a current "office, grade, rank, or rating," this requirement is replaced with the simple requirement that the serious injury or illness be one "that manifested itself before or after the member became a veteran." The entitlement to take military caregiver leave for the care of veterans extends only to family members of veterans when the veteran was a member of the Armed Forces at some point in the five years preceding the date on which the veteran undergoes the medical treatment or receives the therapy that necessitates the leave.