Four positive signs for employers on the legal front

by DLA Piper

In the last few weeks, there have been encouraging developments, from judge and jury alike, for employers fending off claims by disgruntled workers.

New York jury finds in favor of employer on gender discrimination and equal pay claims

Rochelle Cohen was terminated from Bank of New York/Mellon in 2010 as part of a reduction in force.  Ms. Cohen, one of many people finding themselves out of work during those difficult economic times, sued her former employer for sex discrimination and violations of the Equal Pay Act.  

Earlier this month,  a New York City jury found against her on all claims.  Employers can indeed win jury trials, which confirms that employers can successfully defend legitimate business decisions, even when challenged in court. Cohen v. Bank of New York/Mellon Corporation, Case No. 11 CV 0456 (S.D.N.Y.)

Second Circuit dismisses wage and hour claim for lack of specificity

Dejesus v. Healthfirst HF Management LLC upheld the trial court’s dismissal of claims for overtime because plaintiff had not pled sufficient facts to support her claim.

As the Court of Appeals explained, the commonplace allegations that in “some or all weeks” plaintiff worked more than “forty hours” without being paid “1.5 times” her rate of compensation was nothing more than a “rephrasing [of] the FLSA’s formulation…Whatever the precise level of specificity that was required of the complaint, [plaintiff] was required to do more than repeat the language of the statute.”

While the Second Circuit did not necessarily require detailed estimates of unpaid overtime hours, its decision demands plaintiffs to allege “sufficiently developed factual allegations” that they actually worked overtime without proper compensation in a given workweek.  This may not eliminate the epidemic of wage and hour litigation, but it offers a long-needed prescription for checking its spread.

Fee shifting in an employer’s favor? 

Six years ago, the EEOC filed suit on behalf of a purported class of female workers against their employer CRST Van Expedited, Inc.  Later, CRST prevailed on summary judgment motions and obtained dismissal of all claims brought by the EEOC and  remained victorious on appeal..

What is remarkable about this case is not that CRST prevailed, but that it has now won its attorneys’ fees as the “prevailing party.” This is a rare but welcome result. The court held that the EEOC’s pattern-or-practice claim, as well as the153 individual claims, were “frivolous, unreasonable or groundless” and, on that basis, awarded CRST US$4,694,442.14 in attorneys’ fees.

The right contract language is worth millions

A New York State judge held earlier this month that an executive fired literally on the eve of his contractual entitlement to a substantial (US$4.5 million) bonus had no claim.  The unambiguous language of the agreement provided that the executive had to be employed on the day the bonus was due in order to be paid and further confirmed that the executive was an “at will employee” who could be fired with or without cause at any time.

While the judge questioned the fairness of this result, she rightly noted that clear contract language is sacred.  Katz v. Yahoo Inc., Case No. 650740/2013 (Kapnick, J.)  Here, the contract was both short and clear, eliminating any wiggle room for debate.

The moral of these stories

Employers need not run their business in fear of litigation but should make smart decisions based on legitimate business needs.  When decisions get challenged in court, employers should not feel compelled to settle just to cap risks and/or costs.  These recent rulings demonstrate that sound decisions can be vindicated and that employers can successfully fend off unjustified claims.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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