7/16/2009The American Lawyer has an informative article, available here, reporting that Plaintiffs' attorneys in a Massachusetts case, Salvas v. Wal-Mart Stores, have been accused of reaching a collusive settlement with Wal-Mart over unpaid wages.
Collusive settlements are a potential risk in all class action lawsuits in which individual plaintiffs have relatively small claims. The rationale behind allowing such class actions is that by aggregating plaintiffs with similar claims, it is possible for them to recover damages, despite the fact that each plaintiff's damages would be too small to be worth litigating by itself. However, the large number of plaintiffs and the relatively small stake of each plaintiff means that the clients are unable to exert the same kind of oversight over their attorneys as plaintiffs have in normal litigation.
In ordinary litigation, settlements must be approved by the client, and the client has an interest in maximizing their settlement because of the amount of money involved. This serves as a check on attorneys, who might be willing to accept a lesser settlement offer in order to avoid the delay and costs of further litigation and going to trial, especially in contingent fee cases, where the lawyers receives no fees until the case settles or is resolved in their favor by the court.
Because there is less client oversight in small individual claim class actions, attorneys on both sides may wish to settle for less than the claim might potentially be worth, to avoid delay and costs. In a true collusive case, a defendant who recognizes clear liability on their part, may wish to have a friendly plaintiffs' counsel appointed, with whom they know they can reach a quick and inexpensive settlement, potentially shortchanging the class members. As a result, courts generally exercise far more oversight over class action settlements than ordinary settlements. 7/7/2009
Today’s New York Times editorial criticized the recent holding of the United States Supreme Court in Gross v. FBL Financial Services, Inc. I Blawged about that case on June 18. The Times argues that the Court’s holding “disregarded legal precedent, longstanding practice and the plain reading of statutory language.” The editorial also argued that as a result of the Court’s ruling, all litigants under the Age Discrimination in Employment Act will now “bear the full burden of proving that age was the deciding factor….” Before Gross, under the ADEA an employee could survive summary judgment if it could show that his/her age was one reason for his/her termination. Upon that showing, the burden then shifted to the employer to demonstrate that it had a legitimate non-discriminatory reason for the termination. The editorial calls for Congress to pass legislation to overturn the Court’s holding. For a full copy of the editorial click here. 6/2/2009
The New York Law Journal recently published an article by Michell Boyarsky and Jason Zoldessy on the issue of employer liability for accessing and reviewing their employee’s private email accounts.
The article cites two decisions from the Federal District Court for the Southern District of New York: Pure Power Boot Camp v. Warrior Fitness Boot Camp and Rozell v. Ross-Holst. In Rozell, the Plaintiff sued her employer for amongst other things, violating the Electronic Communications Privacy Act (“ECPA”) for reviewing personal emails saved to her AOL email account. There was a dispute as to who owned the AOL account, her employer, who paid for it, or the Plaintiff who initially opened it. The employer moved for summary judgment on the ECPA claim, arguing that because it owned the AOL account it was expressly or impliedly authorized to review any emails stored on that account. The court overturned the motion for summary judgment, because of the dispute as to who owned the account. For those of you who are not familiar with the ECPA, I blawged about it on May 24.
The question of who owns an email account, employer or employee, is key to an analysis of whether an employer is liable under the ECPA for reviewing employee email. The cases from other circuits, including the Third Circuit of which Pennsylvania is a part, unanimously agree that it is illegal for an employer to access a private employee owned email account, e.g. Google or Hotmail. Conversely, the courts are in accord that it is not illegal for an employer to access an email account that it owns and maintains, such as interoffice email accounts.
The authors to the article contend that it is unclear whether private employee owned email accounts are covered under the ECPA if those accounts are accessed by the employee on a work computer. If the authors of the article are asking if and employer is liable under the ECPA if it re reviews emails from such accounts which are saved to an employer computer, the answer is no. Anything an employee saves to a computer owned by its employer is subject to employer review and is not protected by the ECPA. However, if the authors’ question is: under the ECPA can an employer access its employees personal email account because they have reviewed email from that account over a work computer, the answer is likely no.
The ECPA prohibits, amongst other things, the unauthorized access by another to a computer over which electronic communications are stored. With private email accounts like Google, a person’s email is stored on a computer server owned by Google. So long as the employee does not save the email to its work computer its email remains stored on the off-site Google computer. If an employer accesses that account and reviews emails saved thereto, he or she is literally accessing and reviewing information stored on another computer.
It would work an absurd result if the ECPA covered private email accounts which are accessed by an employee over an employee’s work computer. Ask yourself this, does the fact that I review personal snail mail at the office give my employer the right to access my mailbox at home? Of course not! Why should the result be any different when the employee accesses its personal email account over its work computer? This does not mean that an employee is free to do whatever they want over their work computer. The employer can always fire his or her employee for accessing personal email accounts while on work time.
The complexities of the ECPA are such that employers should consult with their attorneys to ensure that they have not violated any of its provisions. Violating the ECPA subjects a person to statutory penalties, attorney fees, and in some circumstances punitive damages.
5/15/2009
The Philadelphia Business Journal reported Wednesday, that a settlement was reached between Tullytown, Pa.-based Meenan Oil, a distributor of home heating oil, and Louis Ceccoli one of its employees. The lawsuit was filed under the Age Discrimination in Employment Act (“ADEA”). The EEOC filed suit, claiming that the actions of one of Meenan’s managers violated the ADEA. Those actions included: making derogatory comments respecting older individuals, telling Ceccoli that “he would retire if he was his age”, and taking sales leads and territory away from Ceccoli. Under the ADEA, it is unlawful to discriminate against an employee over the age of 40 in favor of a younger person. Meean did not admit liability under the settlement agreement. For the full article click here. 5/14/2009
The EEOC recently issued a press release reporting that a Pittsburgh area hospital has settled an employment discrimination case for $100,000.00. The employee in that case was diagnosed with colon cancer. After surgery and chemotherapy to combat the cancer, she requested, and was granted, a reasonable accommodation. The EEOC press release claims that the hospital later removed her accommodation, increased her workload, and eventually fired her. The employee filed a lawsuit under the American’s With Disabilities Act. The Hospital did no admit liability as part of the settlement, which is awaiting court approval. For a copy of the full release click here. |
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