The Eighth Circuit Court of Appeals issued a ruling last week affirming Wal-Mart’s right to fire an African-American manager for a seemingly minor violation of its “Working Off The Clock” policy. The case is an important reminder of the court’s rule in evaluating employer’s decisions.

Plaintiff Chestine Clay was manager of the Vision Center at Wal-Mart’s store in Bloomington, Minnesota. Beginning in 2005, Clay complained several times about the behavior of several co-workers, which she viewed as racially discriminatory. Wal-Mart investigated but concluded that race was not a factor.

In August 2006, one the employees that Clay supervised asked Clay to call her to let her know how Clay was doing. Clay called the employee at home after-hours, and they had a 90 minute conversation that included some work-related issues. Several days later, the employee mentioned to the Bloomington store manager that she and Clay had talked after-hours about work issues. The store manager informed the employee that she should be compensated for the time she spent on the phone with Clay. Two days later, the District Manager who was Clay’s immediate supervisor told Clay that the phone call had violated Wal-Mart’s “Working Off the Clock” policy, which prohibits managers from requesting that associates work off the clock, and that because of this violation Clay was being fired.

Clay sued, but the trial court dismissed her claim on summary judgment, finding that even though the outcome seemed harsh, there was no evidence that Clay’s race had played any role in the decision.

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A decision last week by Judge Ann Montgomery in RSM McGladrey v. Epp should be required reading for all attorneys who draft employment agreements, especially those with non-competition and arbitration provisions.

The defendants were managing directors of RSM, working out of its New York office, specializing in RSM’s health care practice. As a condition of their employment, each signed a Managing Director Employment Agreement, which includes covenants restricting the solicitation and servicing of certain RSM clients for a period of two years after termination of employment.  The Employment Agreement also has provisions regarding enforcement, preliminary equitable relief, and arbitration.

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What might have otherwise been a routine review of the actions of the National Labor Relations Board instead resulted in an opinion from the Eighth Circuit Court of Appeals in which all three members of the panel wrote separately, reflecting a broader national debate over the effect of vacancies on the NLRB.

The case, Osthus v. Whitesell, arose when Whitesell purchased a manufacturing facility in Iowa.  In May 2006, Whitesell began negotiations with the union representing the facility’s production and maintenance workers.  Negotiations eventually broke down, and in April 2009 Whitesell implemented its final offer.  The NLRB filed administrative charges and sought injunctive relief, which was granted by the District Court.  Whitesell appealed to the Eighth Circuit.

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I have written about religious accommodation issues before here and here.   Usually, these are tough cases for employees/plaintiffs to make.  In a decision earlier this week, however, Sr. U.S. District Court Judge Richard Kyle (D. Minn.) denied a motion for summary judgment on a religious accommodation case in a decision that suggests that obtaining summary judgment in these types of cases could become more difficult.

Maroko is a Seventh Day Adventist who went to work for Werner, a trucking company.  After his position was terminated, he sued for religious discrimination.

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The Minnesota Supreme Court today issued an important decision clarifying and broadening the contours of marital discrimination in light of recent legislative changes.

LeAnn Taylor began working for LSI in 1988 as a receptionist/secretary.  In February 2001, she was promoted to Sales and Marketing Coordinator.  In June 2001, she married Gary Taylor, the president of the company.  Five years later, however, Gary Taylor resigned from LSI.  Shortly after his resignation, LSI fired LeAnn as well.  LSI did not hire anyone to replace Taylor and her duties were reassigned to other employees.

In her complaint, Taylor alleged that she was terminated due to her ‘marital status,’ in violation of Minn. Stat. § 363A.08, subd. 2 (2010). Section 363A.08, subdivision 2, provides that “it is an unfair employment practice for an employer, because of . . . sex [or] marital status . . . [to] discharge an employee.”  According to Taylor, the chief executive officer of LSI’s parent company told Gary Taylor that he would like to terminate LeAnn because she would be uncomfortable or awkward remaining employed with the company after Gary left.  LeAnn also claims that the CEO told her directly that “due to her husband’s situation”,  and the fact that it was likely that the Taylors were going to have to relocate, LSI was eliminating her position.  LSI denies those statements , and instead claims that Taylor was fired for legitimate business-related reasons.

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The decision today by the 8th Circuit Court of Appeals in Harrell v. Donahue re-affirms the difficulty which employees have in proving that their employers failed to accommodate their religious beliefs.  In particular, employers are not required to take any action that would violate the terms of an applicable Collective Bargaining Agreement, nor anything that has more than a de minimis impact on co-workers.

Harrell is a member of the Seventh-day Adventist Church and a former employee of the United States Postal Service. After being fired from his position with the post office in Warrensburg, Missouri, Harrell brought suit, alleging violations of Title VII of the Civil Rights Act of 1964 for religious discrimination and failure to accommodate, as well as a violation of the Religious Freedom Restoration Act of 1993, 42 U.S.C. §§ 2000bb et seq., (RFRA). The district court granted summary judgment in favor of the USPS; the 8^th Circuit today affirmed that decision

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The Supreme Court yesterday in  SCI Minnesota Funeral Services, Inc., et al. v. Washburn-McReavy Funeral Corporation, et al. considered the circumstances under which a party is entitled to reformation or rescission of a stock sale transaction. Following the lead of both the District Court and the Court of Appeals, the Court concluded that the sellers were not entitled to reformation or rescission based on mutual mistake.  (Minnesota Litigator previously covered the case here.)

SCI sold Crystal Lake Cemetery Association to Corinthian Enterprises, LLC in 2005 a stock sale agreement for $1 million. Corinthian subsequently sold and assigned Crystal Lake to Washburn-McReavy Funeral Corporation in a share purchase agreement. At the time of the sale, in fact, none of the parties knew that the Crystal Lake stock included the two vacant lots.   Once they learned that the stock sale also included vacant lots in Burnsville and Colorado valued at $2 million, SCI and Corinthian brought this action contending the parties did not intend to include the vacant lots in the sale of Crystal Lake, and seeking equitable relief to remedy this claimed mistake.

Appellants argued that rescission should be allowed on two grounds—mutual mistake and the absence of mutual assent. The Court rejected both grounds.

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An unpublished decision issued yesterday by the Minnesota Court of Appeals in Farmers Insurance Exchange v. Tomczik raises a couple of interesting and uncommon issues that are worth noting.

Tomczik worked as an insurance agent for Farmers for 31 years.  In 2006, Farmers noticed a drop in the number of automobile policies that he was writing. An audit uncovered five individuals who appeared eligible for coverage by Farmers but whom Tomczik had placed with a competitor.   Based on this audit, Tomczik was fired.

After his termination, Farmers sued Tomczik and his new employer for recruiting his former Farmers’ clients  in violation of a restrictive covenant.  Tomczik counterclaimed, alleging age discrimination.  The district court granted summary judgment to Farmers on the age discrimination claim, resulting in this appeal.

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In a unanimous decision today, the Supreme Court limited certain health care facilities’ ability to sue drug manufacturers for overcharging them in  Astra USA v. Santa Clara County. 

Section 340B of the Public Health Services Act imposes ceilings on prices that drug manufacturers may charge for medications sold to specified health care facilities (called 340B entities).  The 340B ceiling-price program is superintended by the Health Resources and Services Administration, part of the Department of Health and Human Services.  In the 340B Program’s contract, called the Pharmaceutical Pricing Agreement (PPA), manufacturers agree to charge covered entities no more than predetermined ceiling prices.

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As any employment lawyer will tell you, wage-and-hour litigation has been a hot area for the last several years.  A recent opinion by U.S. District Judge Michael Davis provides a useful overview of the elements of one type of such a claim – the claimed misclassification of a non-exempt employee.

John Berscheid worked as a branch manager/respiratory therapist for Northwest Respiratory Services beginning in 2006.  NRS provides respiratory products and services to clients in their homes.   As a branch manager, Berscheid’s duties included directing the daily operations of the branch; facilitating communications between the branch and corporate; dispatching employees; setting up routes; maintaining the vehicles; hiring and firing employees; and conducting performance evaluations.  

In April 2009, NRS fired Berscheid for performance reasons; he sued, alleging that he had been wrongly classified as a non-exempt employee under both federal and state wage and hour laws, and therefore denied overtime pay.  He also claimed that he was fired in retaliation for complaining about his pay.  Last week, Judge Michael Davis granted summary judgment to NRS and dismissed Berscheid’s claims under the federal Fair Labor Standard Act (“FLSA”) and its Minnesota counterpart (“MFLSA”).

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First, thanks to Seth for allowing me to guest post during his absence.  For more on me, please check here.

Now, on to the main topic.   The medical device industry is well-known for the competition between companies for good sales talent.  Judge Susan Richards Nelson has penned a textbook example of how to analyze a motion for a preliminary injunction in a non-competition case in her decision earlier this month in Boston Scientific Corp. v. Kean and St. Jude Medical S.C., Inc.

The case is in many ways a typical non-compete dispute in the medical device industry. Kean worked as a sales representative for Boston Scientific from 1999 until January 2011.  In that role, he signed a non-competition agreement which state that he could not “sell, solicit the sale of, support the sale of, support or supervise the sale or implantation or other use of, or otherwise have any involvement whatsoever with the sale, manufacturing, research and development, marketing or other business aspect of any Competitive Product.”   Significantly, the restrictions were limited to customers with whom Kean had worked during the preceding 12 months.

Kean resigned from Boston Scientific to take a similar position at competitor St. Jude Medical.  Within days of his resignation, Boston Scientific sent him a letter reminding him of his non-compete agreement, and listing 74 providers and 14 hospitals at which he had worked during his last year of employment that he was barred from calling on.   When mediation failed, this lawsuit ensued.

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