Keefe, Campbell & Associates, LLC

Editor’s comment: Plaintiffs were assistant store managers for Defendant Station Operators, Inc. and alleged discrimination on the basis of age, race, national origin, and religion in violation of Title VII of the Civil Rights Act of 1964, Section 1981, and the Age Discrimination in Employment Act (ADEA) after being terminated. They sought punitive damages under both Title VII and Section 1981 by alleging each claim raised separate factual issues.

The District Court for the Northern District of Illinois was not persuaded. It indicated both claims arose from the same series of operative facts and to permit Plaintiffs to seek punitive damages under both provisions would potentially enable the double recovery Section 1981a(a)(1) seeks to avoid. In Thakkar v. Station Operators, Inc. (2010 WL 832129 N.D.Ill.) Plaintiffs were married employees who were assistant managers at two gas stations owned by the Defendant. Plaintiffs are of Indian descent, are Hindu, identify their race as East Asian, and were born in 1951. They were both terminated shortly after they transferred five cases of windshield fluid between their gas stations by driving the product themselves. This was clearly against company rules, but there was evidence these rules were not strictly enforced.

Shortly before the Plaintiffs were terminated one Plaintiff filed two separate complaints with Station Operators, Inc.’s (SOI’s) management about his store manager not following SOI’s security procedures. The store manager was a 31 year old Caucasian female of Irish descent. Her direct supervisor discussed the security issues raised by Plaintiff with the manager and placed a letter of reprimand in her employment file. Plaintiffs’ transfer of product between the gas stations that led to them being terminated occurred three days after Plaintiff lodged his second complaint. SOI terminated Plaintiffs less than a month later for insubordination and violation of company policies and safety procedures.

Plaintiffs filed suit asserting Defendants SOI and their manager violated Title VII, Section 1981, and the ADEA by terminating Plaintiffs for discriminatory reasons. They claimed unlawful discharge and disparate enforcement of company rules. To demonstrate discrimination under the burden-shifting method chosen by Plaintiffs they must offer evidence showing:

1) They belong to a protected class;

2) They were meeting their employer’s legitimate job expectations;

3) They suffered an adverse employment action; and

4) Similarly situated employees outside of the protected class were treated more favorably by the employer.

If an employee/plaintiff demonstrates these elements an employer/defendant should offer evidence to provide a legitimate, nondiscriminatory reason for the employment decision. The employer must have a reasonable explanation for the action it took. SOI argued Plaintiffs’ violation of company rules regarding driving and transferring product was a legitimate, nondiscriminatory reason for termination. Plaintiffs countered the rule was deployed against them in a discriminatory manner because the rule was not consistently enforced. They presented evidence a Caucasian employee who engaged in a similar driving/product transfer violation was not terminated.

The Court found Plaintiffs demonstrated the necessary elements because they were members of a protected class, they had a good record of performance, they were terminated, and the selective nature with which the driving rules were apparently applied combined with the timing of Plaintiff’s complaints regarding the manager and the termination indicated other SOI employees were treated more favorably.

Please note this Court merely ruled Plaintiffs had a valid cause of action, a verdict has not yet been reported. Plaintiffs’ Complaint also contained Section 1981 claims for failure to promote Plaintiffs and violation of Illinois’ One Day Rest in Seven law. The Court ruled neither of these claims were proper. Regarding the failure to promote claim the Court found neither Plaintiff ever actually applied for any promotion or discussed the possibility with any territory manager. Thus, there was no cause of action. Regarding the One Day Rest in Seven claim the Court found a one-time assignment of an unfavorable weekly work schedule is not an adverse employment action that supports an independent discrimination claim.

Plaintiffs also claimed punitive damages under both Section 1981 and Title VII. The Court stated Section 1981a(a)(1) permits recovery of punitive damages under Title VII only when the complaining party cannot recover under Section 1981, because their Title VII claim (in this case unlawful discharge) and Section 1981 claim (in this case disparate enforcement of company rules) raise separate factual issues. Plaintiffs conceded, typically, a party cannot separately recover punitive damages under both Title VII and Section 1981, but they sought recovery by asserting each of these claims raised separate factual issues.

The Court disagreed finding unlawful discharge and disparate treatment claims arose from the same series of operative facts and stated if Plaintiffs were to prevail at trial they would not be able to recover punitive damages under both Section 1981 and Title VII. We applaud the recognition by this Court that separate claims based on the same facts will not allow a Plaintiff double recovery of punitive damages.

This article was drafted by another recent addition to our team, Matthew Ignoffo, J.D. Please do not hesitate to reply or provide comments to Matt at mignoffo@keefe-law.com.

Editor’s comment: This opinion represents a welcome respite for employers in strengthening their ability to defend against unwarranted claims filed by employees for discrimination under Title VII and for acts tenuously and remotely connected to the alleged adverse employment action. In Everroad v. Scott Truck Systems, Inc., (No. 08-3311 May 10, 2010), Plaintiff Everroad sued her former employer and the company’s general manager asserting claims for gender discrimination, age discrimination and retaliation under Title VII and under the Age Discrimination in Employment Act (ADEA). The trial court (Hon. Richard Young, SD Indiana) granted summary judgment in favor of the employer. The Seventh Circuit Court of Appeals affirmed, concluding any argument the Federal District Court abused its discretion in refusing to consider the transcripts of recorded conversations was frivolous.

Next, in affirming the district’s court grant of summary judgment in favor of the employer, the Federal Appellate Court held Plaintiff was unable to make out a prima facie case of discrimination under the McDonnell Douglas analysis and she failed to present any evidence calling into question the sincerity of her employer’s non-discriminatory reason for terminating her. Finally, the Federal Appellate Court held the District Court properly granted summary judgment on her retaliation claim as she failed to establish the requisite causal connection between the protected activity and her retaliation holding a year was too long in the absence of any other evidence connecting the protected activity to the adverse action.

The Seventh Circuit’s decision is important as their analysis applies to both discrimination and retaliation claims. First, an employer’s claim of a legitimate non-discriminatory reason for termination often overlaps with the burden of establishing the employee was meeting the employer’s performance expectations. Thus, it may be in certain circumstances, employers are able to assert insubordination may defeat an employee’s argument they have established a prima facie case of discrimination or retaliation. The Seventh Circuit also stated to establish pre-textual reasons for firing, the employee must prove the employer’s stated reason is dishonesty or lies rather than oddities or errors. Moreover, employees cannot rely on a single statement that occurred more than one year ago before the employee’s termination to demonstrate a causal link for purposes of a retaliation claim. The Seventh Circuit also bolstered the employer’s ability to defend these types of unwarranted claims, holding Plaintiff must establish similarly situated employees were treated more favorably at the time of the alleged discrimination against Plaintiff.

It will be interesting to see how the Everroad opinion impacts the usual burden-shifting analysis for claims of discrimination based on indirect evidence. For now, the opinion strengthens employer’s ability to defend frivolous or unwarranted claims of discrimination.

This article was written by Patrick C. Cremin, J.D., a recent addition to Keefe, Campbell & Associates LLC. We are very happy to add a veteran defense trial lawyer with lengthy jury trial experience along with IWCC claims handling. Please do not hesitate to contact Pat about this article or any defense issue at pcremin@keefe-law.com.

Editor’s comment: As we tell our employment practices clients, your goal is to have your defense case-in-chief ready long before litigation is filed. If you need help with such issues moving forward, please send a reply.

In Gratzl v. Office of the Chief Judges of the 12th, 18th, 19th and 22nd Judicial Circuits, Plaintiff suffered from incontinence as a result of pregnancy complications. In 2001, she applied for a certified court stenographer or court reporter position with DuPage County working exclusively in their control room. In this position, she was able to step away quickly to use the restroom, so she never had to make her supervisors aware of the somewhat intimate personal medical condition. A few years after Plaintiff was hired, the Illinois Coordinator of Court Reporting Services issued a directive requiring all court reporters to rotate through various courtrooms as well as the control room. Gratzl informed the Chief Judge about her medical condition and claimed it would prevent her from performing as an in-court reporter. Plaintiff also requested a leave of absence for a scheduled surgery for a separate issue. The Chief Judge approved the leave and began the paper trial when she subsequently sent correspondence to Plaintiff stating Plaintiff needed to decide if she was going to participate in the full courtroom rotation.

Plaintiff’s attorney submitted a formal request to Defendant seeking reasonable accommodation of Gratzl’s condition by returning her to work full time in the control room. The request was supported by a letter documenting the basis for the request from Plaintiff’s physician. The employer responded by offering to limit assignments to juvenile courtrooms only, as those rooms did not have jury trials. The treating physician rejected this written offer as inconsistent with Plaintiff’s condition. The doctor insisted she be returned to her position in the control room. We note it is very common in ADA claims for physicians to take on the role of patient advocate, as outlined here.

The employer sought to accommodate Plaintiff by offering a number of possible accommodations, such as

(1) Allowing her to avoid assignments to any courtrooms in which a trial was scheduled;

(2) Not assigning her to juvenile courtrooms, which were farther from the restrooms; and

(3) Establishing a clandestine “high sign” she could use to quietly signal the presiding judge that she needed a quick break.

Plaintiff rejected all of these proposals without first reviewing them with her physician. The employer continued their documentation which later became their defense case-in-chief. They wrote Plaintiff and reiterated the job duties for all court reporters required rotating through the court rooms and the control room. The employer repeated its proposals of accommodations and set forth a deadline for Gratzl to identify specific reasons why the offer was incompatible with her medical condition.

Plaintiff replied stating her condition had not changed, so further back-and-forth debate served no purpose. She was then terminated and sued under the ADA. The Seventh Circuit affirmed dismissal of the claim by the District Court because the employer clearly took good faith steps to engage in the interactive process to identify a reasonable accommodation for Plaintiff. Although the ADA Amendments of 2008 expressly state that elimination of bodily waste is a major life activity, the federal courts ruled it did not apply to this case.

Either way, the decision is still instructive because the court focused on the essential functions of the job and the employer’s efforts to identify reasonable accommodations for the employee to perform those essential functions. Under the ADA Amendments of 2008, these are now the critical issues for all pending or potential ADA cases. The court focused on the fact Plaintiff’s only suggestion for a reasonable accommodation was to return her to the control room position. The federal court recognized the concept of “reasonable accommodation” does not require an employer to create a new job or strip a current job of its principal duties.

Similarly, the Court ruled the employer was not required to maintain an existing position or job structure it no longer needed or desired. In short, Plaintiff’s only suggestion was not reasonable as a matter of law and she had no reasonable basis for rejecting the employer’s proposals. The court pointed out employers are not obligated to provide an employee the accommodation he/she prefers; they need to provide one that is at least demonstrably reasonable. This Court emphasized the employer proposed a few different accommodations that were structured to conform to Plaintiff’s physician’s recommendations.

The court went on to conclude Plaintiff rejected the employer’s proposals for purely personal reasons and, therefore, she was the one responsible for terminating the interactive process. Accordingly, she was not entitled to relief under the ADA. Under the ADA amendments, employers are forced to focus more on the accommodation process rather than whether a condition qualifies as a “disability” under the Act. This case provides guidance for HR and benefits managers on how employers should handle employee requests for accommodation.

We feel knowledgeable employers should ask employees to submit ideas for reasonable accommodations supported by the employee’s physician review of how the employee’s condition relates to the essential functions of the job. The employer can identify reasonable adjustments that address treating physicians’ recommendations and then put the burden on the employee to identify why the proposals are insufficient or come forward with alternative proposals to consider. Employers should be sure to document all of it in writing to be able to demonstrate efforts to reach a reasonable accommodation. We are confident this process will be the critical aspect of the inquiry if the issue is ever reviewed by the EEOC or a court.

We appreciate your thoughts and comments. The ruling can be found on the web at: http://www.intheiropinion.com/uploads/file/gartzl.pdf.

Synopsis: Appellate Court remands case to the Circuit Court and directs a temporary restraining order (TRO) against the Illinois Dep’t of Labor until the Circuit Court conducts a full hearing on Plaintiff’s request for a preliminary injunction.

Editor’s Comments: Plaintiff Construction Company is in a fight for its life under this new and anti-business law. The company name is “Jack’s Roofing” and they were investigated by the Illinois Department of Labor (the Department) pursuant to the two-year-old Illinois Employee Classification Act. Despite production by Plaintiff of subcontractor agreements and proof of subcontractor liability insurance, the Department of Labor conducted an informal “telephone interview” and concluded Plaintiff failed to properly classify 10 subcontractors in violation of the Act. Further, Plaintiffs were notified they may be assessed fines up to $1.6 million!

Trust us; fines at that level are a death knell for most small to medium construction companies. If you look up tiny “Jack’s Roofing” they are based in Royalton, IL and have been a family run business since 1977. They have been listed with the Better Business Bureau since October 2002. You may also note the population of Royalton, IL was 1,130 during the 2000 census.

Rhonda and Jack Bartlow, doing business as Jack’s Roofing, may have set the wheels in motion for the Illinois Employee Classification Act to be declared unconstitutional by the Illinois courts. Plaintiff filed a complaint in the Circuit Court of Franklin County, Illinois, for declaratory judgment and for injunctive relief against the Dep’t of Labor. Plaintiffs alleged in their complaint the Department was attempting to enforce the Act despite the fact the Act violates the Illinois Constitution and the United States Constitution. The specific focus of the alleged constitutional violations was interference with their procedural due process rights. The Circuit Court denied Plaintiffs’ request for a temporary restraining order or TRO. They rapidly filed a timely notice of an interlocutory appeal to allow consideration by the reviewing court.

Please note of the five appellate districts in this state, the Fifth Appellate District in Illinois is, in the view of most business observers, by far the most liberal and pro-labor district. We feel they might be coming around to possibly protect small businesses in little towns who are struggling in this awful economy. In an opinion delivered by Justice Stewart, the Appellate Court, 5th District ruled the Circuit Court abused its discretion in denying Plaintiff’s TRO request. The Appellate Court went on to find Plaintiff’s raised a “fair question” concerning whether the Act violates procedural due process, because the Act “does not appear to provide the accused with a meaningful opportunity to be heard.”

The Appellate Court majority was openly critical of the cursory investigation and evidence of a mere telephone conference held by the Department before a hefty seven-figure fine was assessed. The Court noted the need for a more formal administrative hearing process, concluding “[w]e believe that the plaintiffs have raised a fair question concerning whether due process requires the Department to provide an administrative hearing when there exists a dispute concerning material facts before it can assess fines and penalties or seek other sanctions or remedies against Jack’s Roofing. The Supreme Court has stated that there is “no doubt” that administrative proceedings are governed by the fundamental principles and requirements of due process. Balmoral Racing Club, Inc. v. Illinois Racing Board, 151 Ill.2d 367, 405, 177 Ill.Dec. 419, 603 N.E.2d 489 (1992)”.

We understand the purpose behind the Employee Classification Act is to determine whether an individual performing services for a construction contractor is truly an employee versus an independent contractor. It appears from this case the Illinois Department of Labor is aggressively pursuing massive and business-crushing fines and penalties, even against relatively small family-operated businesses. As we indicate above, we feel the Department of Labor’s goal is to rapidly bring home trophies to warn others not to go down that path. Maybe the courts are noting they can’t do so after a quick review and a telephone call.

What is alarming is the fact Plaintiffs in this case produced substantial documented proof of subcontractor bids, written contracts with subs, and also demonstrated there were certificates of insurance by the subcontractors! Despite all of this, the Department chose to pursue the claim and was poised to assess fines of over one million dollars on a family business. All of this was possible without a formal hearing and/or ruling by an objective ruling body! We applaud the Appellate Court for permitting Plaintiff their day in Court to properly defend against such a claim, which would surely put this small family company out of business. We will work to track progress of this case and the development of the body of law in this area.

At the federal level, please note this effort isn’t going to stop any time soon. Businesses that utilize independent contractors should be ready for increased federal scrutiny. As part of President Obama’s federal budget for the upcoming fiscal year, $25 million was requested by the U.S. Department of Labor (DOL) to enforce wage and hour laws and pursue employers who misclassify employees as independent contractors.

Another $12 million and 90 new investigators were requested by the Wage and Hour Division to expand its efforts to ensure compliance with the law. The “Misclassification Initiative” also supports new targeted efforts to recoup unpaid payroll taxes due to misclassification through state audits of problem industries supported by federal audits. These industries include construction, manufacturing, restaurants and home health care. Additionally, the initiative includes a $10.9 million pilot program that would reward states most successful or improved at detecting and prosecuting employers that fail to pay the appropriate taxes due to worker misclassification.

In addition to the U.S. DOL, the Internal Revenue Service will be scrutinizing independent contractor arrangements. As part of a National Research Project on employment taxes, the IRS is due to audit 6,000 randomly selected companies over the next three years. The audit will focus on, among other things, worker classification. Given the potential liability for penalties, taxes and interest, businesses must pay close attention to this issue. We are confident at the federal level, stricter adherence to due process protocols will occur. We feel employers across the U.S. should engage in proactive self-audits, reviewing, among other things, payroll records and IRS Form 1099s to identify those they have been paying as independent contractors and assess whether these individuals meet the requirements established by federal, state and local laws.

This article was researched and written by John P. Campbell, Jr. Please do not hesitate to reply or send inquiries to John at jcampbell@keefe-law.com or post them on our award-winning blog.

Editor’s comment: Don’t expect immigration reform to start in the Courts, folks. We have been looking at the forces against immigration reform trying to stage protests and generate as much press as they possibly can to block reform—it was kind of funny to see 12 people show up at an Arizona Diamondbacks v. Chicago Cubs game to prove their angst and outrage against the state of Arizona. We continue to feel most Americans quietly want immigration reform and understand protests are part of the fight.

As almost everyone in Illinois is a child of an immigrant, we want to point out the main issue may truly be controlling overpopulation in countries such as Latin America, Eastern Europe and China.

Population statistics for Latin America and the Caribbean indicate population was at 167M in 1950 and was at 577M in 2008. You may note that is almost a four-fold increase. It is projected to almost double again by 2100 to 912.

Northern American had population of 172M in 1950 and was at 337 in 2008. It is expected to grow to 398M by 2100.

Asia is at about 4B right now and will grow to 5.5B by the end of the century. If you wonder where global warming is coming from stop worrying about carbon, look to the expanses of Asia that are getting more crowded every day. We can have the thriftiest and most carbon-saving folks in the world but if there are gazillions of them, what difference will it make?

We truly feel the squalor and desperation of overpopulation is going to continue to cause anyone with resources to try to get into the U.S. Please understand it is may be impossible to stem a tide of folks from Asia, Eastern Europe and Latin America. If we don’t take aggressive steps, try to imagine three or four Americans for every one currently in the U.S. Try to also remember you can’t take a bath and get clean if there are ten people in your bathtub—if we don’t control our population, we are going to run out of clean air and water and other resources. We simply can’t afford an “open door” policy on immigration.

Going back to legal news, in Bollinger Shipyards, Inc v. Director, Office of Worker’s Compensation Programs, U.S. Dep’t of Labor, the Fifth Circuit upheld an award of workers compensation benefits to an illegal alien who was injured on the job as a pipefitter. The Fifth Circuit, based in New Orleans, joined the D.C. Circuit in holding immigration status is irrelevant under the LHWCA.

The Court noted the employee told Bollinger he was a citizen and gave the company a fake social security number. After he was injured on the job, the company paid some of his expenses and benefits but then stopped when it discovered he was an undocumented immigrant. The primary question on appeal was whether an undocumented worker could be eligible for benefits under the LHWCA. Analyzing the statute and cases from other statutes, the Federal court held the worker here was an employee within the meaning of the Act and entitled to benefits. Bollinger argued because the worker was not legally entitled to work, he could not be entitled to benefits.

Here’s how the court characterized the company’s brief:

Bollinger contends that undocumented immigrants such as Rodriguez are per se ineligible to receive indemnity benefits under the LHWCA, as any such benefits “would be based on illegally obtained wages.” Bollinger reasons that Rodriguez’s injury caused him no loss of wage-earning capacity because he had no legal wage-earning capacity at the time he was injured. Bollinger histrionically compares the BRB’s ruling to “awarding benefits to a drug dealer based on ill-gotten ‘wages,’ [and] then telling the employer that it better find another illegal enterprise for the drug dealer, lest there be found a permanent loss of wage[-]earning capacity.” In the same melodramatic style, Bollinger compares awarding benefits to Rodriguez to “awarding benefits to a pirate or a Mafioso.”

Bollinger relied on the Hoffman Plastics line of NLRB cases, which made this distinction about whether wages could be paid legally in declining to award some types of relief under the NLRA in order to avoid conflict with the immigration laws, which prohibit the employment of aliens who enter or remain in the country illegally and which also criminalizes the use of false documentation to obtain work.

The court distinguished this line of cases for three reasons:

(1) Unlike discretionary backpay under the NLRA, workers’ compensation under the LHWCA is a non-discretionary, statutory remedy;

(2) Unlike the NLRA, the LHWCA is a substitute for tort law, abrogating fault of either the employer or the employee; and

(3) Awarding death or disability benefits post hoc to an undocumented immigrant under the LHWCA does not “unduly trench upon” the IRCA, as Congress chose to include a provision in the LHWCA expressly authorizing the award of benefits “in the same amount” to nonresident aliens.

The Federal court left open the possibility that an alien who was about to be deported or was sure to be deported might not be eligible for future lost wage benefits calculated as they would be earned in the U.S. We appreciate your thoughts and comments.

Editor’s comment: This is an important ruling for H.R. folks to follow and understand. Under the “cat’s paw” theory, in order to impute unlawful bias or prejudice from a coworker / supervisor to an employer, an employee must show the adverse employment decision was based solely on biased or prejudiced information from the coworker / supervisor and that the coworker / supervisor exercised singular influence over the employer.

In Vincent E. Staub v. Proctor Hospital, Nos. 08-1316, 08-2255 & 08-2402, (7th Cir. 2010), Plaintiff (employee) sued Defendant (employer) under the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. section 4301 et seq. USERRA makes in illegal to deny those in military service employment or retention in employment due to such service. In the present case, the employee was terminated from his position as an angiography technologist. He alleged he was fired because he was a soldier in the U.S. Army Reserves. Further, the employee sought to impute to the employer what he perceived as the “anti-military bias” of his immediate supervisor.

Plaintiff invoked the “cat’s paw” theory in an attempt to show the employer was used as “tool” by the supervisor to accomplish her goal of terminating Plaintiff. The term “cat’s paw” is taken from a fable written by 17th century French poet Jean de La Fontaine entitled “The Monkey and the Cat.” In this fable a hungry, unscrupulous monkey convinces an equally hungry but unsuspecting cat to pull chestnuts from a fire. The cat succeeds but in doing so burns its paws while the monkey eats all the chestnuts.

After the closure of proofs a jury found for Plaintiff. Defendant appealed to the Seventh Circuit. The Circuit Court noted the supervisor disdained Plaintiff’s participation in the military. Motivated in part by this bias, from 2000 through 2003 she engaged in a pattern of conduct designed to rid herself, and the employer, of Plaintiff. Relying in part upon information provided by the biased supervisor, the employer’s Vice-President of Human Resources eventually terminated the employee for insubordination.

However, the Circuit Court also found the evidence insufficient to support a verdict against the employer. The Circuit Court noted under the cat paw’s theory “animus by a non-decision maker is only relevant if she exercised singular influence over the decision maker.” The evidence and testimony presented established the employee was “technically competent” but was also “prone to attitude problems” and “offended numerous others for reasons unrelated to his participation in the Reserves.” The evidence further demonstrated the ultimate decision-maker terminated the employment relationship free of any anti-military bias. Thus, the Circuit Court found the cat’s paw theory was inapplicable as no reasonable jury could determine the supervisor had “singular influence over” the employer. The Circuit Court found “to be a cat’s paw requires more; true to the fable, it requires a blind reliance, the stuff of ‘singular influence’.”

This article was researched and written by Matthew A. Wrigley, J.D. Please direct your thoughts and comments to Matt at mwrigley@keefe-law.com.

Editor’s comment: Two Illinois healthcare givers, Dr. Salomon and Chiro Minnis, the latter of which owns Spine and Joint Rehabilitation Center in Maywood, IL, have been indicted on federal health care fraud charges. Each count carries a maximum of 10 years in prison and a $250,000.00 fine. The indictment was announced in March 2010 by Patrick J. Fitzgerald, U.S. Attorney. We note a brief Westlaw search under Illinois Workers’ Compensation Cases and Administrative Decisions produced numerous “hits” for both Dr. Minnis and Dr. Salomon.

In Unites States v. Darwin Minnis, Jacob Salomon, and Gary Strauss, 10 CR 0193, Unites States District Court, Northern District of Illinois, Eastern Division, the federal government accuses Dr. Minnis, Dr. Salomon, and “biller” Gary Strauss of submitting false claims which total more than one million dollars. The false claims were submitted to obtain payments from workers’ compensation and other insurance companies for services which were either not provided or for inflated claims for provided services. The alleged scheme took place from 2000 through 2007.

According to the 18 count indictment, Dr. Minnis forged the signatures of other physicians on documents which falsely represented treatment had been ordered or supervised. The indictment alleges Dr. Minnis committed these forgeries as he knew the federal workers’ compensation program would not accept a chiropractor’s opinions or reports as medical evidence to support workers’ compensation claims. Further, Dr. Minnis is accused of double-billing workers’ compensation providers for disability examinations.

In addition, the indictment alleges Dr. Salomon signed false documents which made it appear he or other physicians had treated certain patients when no treatment had been provided. Dr. Salomon and Dr. Minnis then prepared false progress notes and fee sheets.

This claim has been assigned to Honorable John F. Grady. This article was researched and written by Matthew A. Wrigley, J.D. Please direct your thoughts and comments to Matt at mwrigley@keefe-law.com.

Editor’s Comment: In Bailey v. Pregis Innovative Packaging, Inc., No. 09-3539 (April 2, 2010) the Federal Appellate Court ruled the District Court did not err in granting Defendant-employer’s motion for summary judgment in an FMLA action alleging the Employer wrongfully terminated Plaintiff under its no-fault attendance policy when it counted two absences under said policy that were actually covered under FMLA.

The Court noted Plaintiff failed to preliminarily establish she worked required 1,250 hours of service during previous 12-month period of time so as to qualify for protection under FMLA. The Federal Court also rejected Plaintiff’s argument she was entitled to toll the 12-month period by 56 days when on leave during said period. We feel the purpose of the statutory FMLA requirement of 1,250 hours in 12-months is to avoid precisely what Plaintiff was trying to do.

The Court further rejected Plaintiff’s claim her employer retaliated against her by failing to remove an absentee point after expiration of the 12-month period as set forth in absenteeism policy, since any benefit to Plaintiff occasioned by removal of absenteeism point would have occurred after FMLA leave had commenced, and thus was not covered under retaliation provisions of FMLA.

We strongly agree with the ruling. If you have concerns about an FMLA issue or how to best address defense of such claims, send a reply.

Editor’s comment: Human resources and benefits managers across the U.S. are smiling to hear a federal judge in Iowa ordered the Equal Employment Opportunity Commission to pay $4.56 million in attorney fees and expenses to a Cedar Rapids trucking business after dismissing the agency’s sexual harassment lawsuit. A team of attorneys successfully defended CRST Van Expedited in the lawsuit, which was filed in 2007.

The fee award against the EEOC by a federal judge is unusual and may be among the largest imposed by a federal court. They are appealing. The agency alleged CRST’s lead drivers or team drivers subjected approximately 270 female drivers to sexual harassment and a sexually hostile work environment and the company had failed to correct and protect them.

In a series of rulings, Chief Judge Linda Reade of the Northern District of Iowa dismissed the agency’s claims. She previously granted summary judgment on the claim CRST tolerated a “pattern and practice” of sexual harassment against female drivers. The EEOC presented the court with what was felt to be solely anecdotal evidence to show some members of CRST’s management may have occasionally violated CRST’s anti-sexual harassment policy by failing to respond appropriately to sexual harassment in the workplace.

The EEOC did not present the failings of CRST’s managers in any meaningful way to show CRST had a defined pattern or practice of tolerating sexual harassment in its workplace. This summary judgment ruling effectively left 200 or so EEOC claims with nothing in common.

Please don’t hesitate to reply with your thoughts and comments.

Editor’s comment: Last week, we published an article about self-administered MSA trusts. We were stated:

We caution our readers the injured worker has to be advised Medicare Set-Aside monies cannot be used until the worker is eligible for Medicare benefits. Once the worker is eligible to receive Medicare benefits, the monies supplant the federal benefit–the monies have to be used to pay Medicare-covered medical or other expenses related to the work injury or management of the MSA until they are used up. Most important, the injured worker has to annually report what they do with the money to CMS.

Fran Mohrmann of Travelers Insurance who is one of the top Medicare/CMS/MSA folks in the U.S. claims industry pointed out this statement above may have been accurate five years ago but it isn’t accurate now. She cited language from the CMS 2005 memo which states:

Q3. Use of WC Settlement Funds Prior to Medicare Entitlement – May workers’ compensation settlement funds attributable to future medicals be used prior to Medicare entitlement?

A3. For claimants who are not yet Medicare beneficiaries and for whom CMS has approved a WCMSA, the WCMSA may be used prior to becoming a beneficiary because the amount was priced based on the date of the expected settlement. Use of the WCMSA is limited to services that are related to the workers’ compensation claim or settlement and that would be covered by Medicare if the individual were a Medicare beneficiary. The same requirements that Medicare beneficiaries follow for reporting and administration are to be used in the above cases. The CMS will not pay for any expenses related to the workers’ compensation illness or injury until a self-attestation document or a full accounting of all monies expended from the WCMSA are sent to the lead contractor upon Medicare entitlement. At that time, the lead contractor will adjust the WCMSA record to reflect the expenses paid prior to entitlement.

As always, our goal is to get things right and kidding aside, Fran has an almost encyclopedic recall of such government minutiae. We again salute her. If you ever need to contact Fran, send a reply and we will direct it to her for response.