ZEANAH, HUST, SUMMERFORD

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1 March 14, 2014 Volume 3, Issue 1 ZEANAH, HUST, SUMMERFORD & WILLIAMSON Employment, Worker s Compensation and Civil Litigation Newsletter Points of Interest: Employment Law Update: Who is a Supervisor? 1 Employment Law Update: Retaliation Claims 2 Construction Co. to Pay $125,000 in Same- Sex Harassment Case 2 Anniston Restaurant to Pay $91,000 for Sexual Harassment 3 Website Coming Soon! 4 Case Notes: Worker s Comp.: Retaliatory Discharge 2-3 Workers Comp.: Scheduled Injury 3 Slander; Damages 4 Homeowners Insurance; Bad Faith 4-5 Subrogation Against Uninsured Motorist Recovery 5 Employment Law Update: Who is a Supervisor? On June 24, 2013, the U.S. Supreme Court issued a ruling in Vance v. Ball State University, 570 U.S. (June 24, 2013), that narrows the definition of supervisor in discrimination cases. Prior to that, the 1998 cases of Faragher v. Boca Raton and Burlington Industries v. Ellerth had left open the definition of supervisor. Since those cases in 1998, the definition of supervisor for purposes of imposing liability on employers had broadened. With the Vance ruling, the Court defined a supervisor as an individual who has been empowered by the employer to take tangible employment actions against the alleged victim of the harassment or discrimination. It remains the standard that an employer is liable for harassment or discrimination by a non-supervisor employee (a co-worker) if the employer is negligent in learning of the conduct and fails to correct it. However, where the alleged action is by a supervisor, the employer is strictly liable if the harassment or There have not been a large number of cases issued since our last newsletter about worker s compensation or other matters we think our friends and clients would be interested in. Hopefully, we have selected a few that will be useful. Contact Beverly Williamson for copies of any of the cases referenced or for further explanation as to the legal issues involved. discrimination results in a tangible employment action. However, the employer is still able to assert an affirmative defense if there is no tangible employment action if the employer can establish both (1) that it exercised reasonable care to prevent and correct harassment, and (2) that the victim unreasonably failed to take advantage of such measures. Wilbor J. Hust, Jr. Clark Summerford Beverly S. Williamson Joseph T. Cox, III ZEANAH, HUST, SUMMERFORD & WILLIAMSON, LLC P.O. Box 1310 Tuscaloosa, AL (205) While the ruling in Vance is certainly helpful for employers, employers must remain vigilant to make sure proper antiharassment policies are in place and that they are vigilant in training. Remember, prevention is the best way to prevent claims of discrimination and harassment in the workplace.

2 New Orleans Construction firm to Pay $125,000 in Same-Sex Harassment Case The EEOC filed suit against Boh Bros Construction Co. in 2009 alleging that a superintendent, Chuck Wolfe, harassed Kerry Woods with verbal abuse, taunting gestures of a sexual nature, and by exposing himself. The harassment took place on the I-10 Twin Span project over Lake Pontchartrain between Slidell and New Orleans, La. Woods's supervisor admitted at the trial that he harassed Woods because he thought Woods was feminine and did not conform to the supervisor's gender stereotypes of "rough iron workers." The jury awarded $451,000. This amount was reduced by statutory limits. Boh Bros. appealed and the Fifth Circuit upheld the award, which ultimately was settled for $125,000. Often, the tone with which words were spoken is lost when repeated later by an angry employee. Something meant as a joke, when recanted at trial, may be made to sound much more severe to a jury. Some of our clients no doubt will feel that cases such as this one place an impossibly and/or absurdly high bar of behavior for many of their workers. Nonetheless, employers will be forced to attempt to restrain their employees from making comments that, even taken out of context, could be considered harassing and which are sexual or gender related. This includes between members of the same sex. -EEOC Press Release 2/27/14 Employment, Worker s Comp and Civil Litigation Employment Law Update: Retaliation Claims During the summer of 2013, the U.S. Supreme Court issued another case that is important in Title VII litigation. In the case of University of Texas Southwestern Medical Center v. Nassar, 570 U.S. (June 24, 2013), a physician of middleeastern descent made a claim for discrimination, alleging that his supervisor discriminated against him because of his Muslim background. He also made a claim for Page 2 of 5 Retaliatory Discharge retaliation. The case went before the U.S. Supreme Court on the issue of whether a plaintiff must show that retaliation was merely a motivating factor in regard to the alleged retaliatory action. The Court concluded that there was an increase in the frequency of retaliation claims and the causation standard needed to be stricter. Therefore, the Court concluded that to prevail under a claim for retaliation, a plaintiff must Ex parte Isbell (In re: M&J Materials, Inc. v. Isbell, (Ala. June 28, 2013) This case involved the termination of an employee after he made a workers compensation claim. The employer argued that this termination was the result of an incident where the employee brought a gun to work. In the trial court, the jury found that the employer had discharged the employee in retaliation for his having made a workers compensation claim and awarded $75,000. The employer appealed to the Alabama Court of Civil Appeals who reversed the trial court on the grounds that the sole cause of the termination could not be determined to be illegitimate. The employee petitioned for a writ of certiorari to the Alabama Supreme Court, which was granted. In an opinion authored by Justice Murdock and joined by the rest of the Court (except Justice Bryan who recused himself), the Supreme Court strongly rejected the Court of Civil Appeals decision. The Supreme Court unequivocally disagreed with both the Court of Civil Appeals review of the facts and its statement of the substantive law. As to its review of the facts, the Supreme Court stated multiple times that the lower Court had failed to view the evidence in the light most favorable to the Plaintiff. It noted with particular show that but for the employee s complaint or claim, the employee would not have been subjected to adverse action, or retaliation. The motivating factor standard remains the standard to prove discrimination based on race, color, religion, sex and national origin. However, with this case, the Court has made the standard for proving retaliation more difficult for plaintiffs. emphasis that there were significant inconsistencies in the employer s enforcement of its alleged gun policy including that multiple employees testified that others had brought guns to work including to sell and trade but had not been disciplined. As to the substantive law, the Court held that the employer s mere proffering of a legitimate reason to terminate the employee is not to be automatically equated with a finding that such reason formed a part of the employer s motivation in firing the employee. Rather, where, as here, there was evidence that the reason for termination was pretextual, the jury is free to consider

3 Zeanah, Hust, Summerford & Williamson, LLC Page 3 of 5 whether, in fact, the proffered reason for termination indeed was a factor in the employee s termination. Finally, the Court disagreed with the Court of Civil Appeals that an employee must show past incidences of discriminatory application of the policy he was terminated under. Scheduled Injury In conclusion, this case goes a long way toward expanding the scope of retaliatory discharge cases capable of making it past the summary judgment phase to a jury as well as those cases that will be affirmed by the Court of Civil Appeals. Put simply, where there is real, substantial evidence of discrimination, DuBose Construction Company, LLC v. Simmons, (Ala. Civ. App. October 25, 2013) The Plaintiff in this matter fell and injured his knee while on the job in He was diagnosed with a tear in his knee, which was repaired surgically. In 2007, after a trial, the Court issued a judgment finding the plaintiff s body as a whole to be 15% permanently partially disabled. Defendant appealed that judgment and the Alabama Court of Civil Appeals reversed due to the trial court s failure to make findings of fact, as required by statute. The Plaintiff continued to suffer from knee pain and a second surgery was performed. This surgeon made further repairs and also discovered degenerative changes. In a deposition, the surgeon testified with a reasonable degree of medical certainty that the Plaintiff s continuing pain was related to the degenerative condition and not to the workrelated injury. The surgeon also testified that the knee injury did not affect any other parts of Plaintiff s body. The trial court again awarded benefits for a 15% permanent partial disability. This time the Court cited complaints of back pain associated with the knee injury in justifying an award outside of the schedule. The employer again appealed. The employer s primary argument on appeal was judges (both at the trial court level and on appeal) will not easily be allowed to discount that evidence simply because they disagree with it, and it will not be sufficient that an employer merely can offer some possible legitimate reason for the firing. Instead, these issues will often be left to juries. that the award should have been limited to the schedule. The Alabama court of Civil appeals agreed that the evidence of any effect on the plaintiff s back was sparse. The Court noted that the only evidence supporting this was a statement by the plaintiff at trial that the knee injury affects his back. In light of the surgeon s opinion and the fact that the Plaintiff had received no treatment for his back, the Court again reversed because the evidence of an injury extending beyond the knee was not substantial. Three judges concurred and another concurred in the result only but without separate writing. Anniston Restaurant to Pay $91,000 for Sexual Harassment The EEOC filed suit against Dad s BBQ in Anniston on behalf of Aretha Johnson and other women who allegedly experienced harassment including sexual comments, threats of sex and propositions for sex. Interestingly, the EEOC s press release includes the following ominous language: Employers, no matter their size, are forewarned that they may not discriminate without consequence. Hopefully, neither this statement nor this case signal a focus by the EEOC on small businesses. -EEOC Press Release 7/29/13

4 Employment, Worker s Comp and Civil Litigation Slander; Damages Pensacola Motor Sales, Inc. v. Daphne Automotive, LLC, (Ala. December 13, 2013) This case involved two Toyota dealerships, one in Daphne and one in Pensacola. The Pensacola dealership had been in business since In 2007, the Pensacola dealership had competed to open a dealership in Daphne but had lost out to Shawn Esfahani who opened it in After 2007, bad blood developed between the dealerships. Soon, the Pensacola dealership began making remarks about Esfahani (who was born in Iran but is an American citizen) linking him to the Taliban and terrorism. Salespeople at the Pensacola dealership were alleged to have regularly referred to Mr. Esfahani s dealership as Taliban Toyota and told customers that they funneled money to sinister interests in Iran. In July 2009, after becoming aware of these statements, the Daphne dealership sent a cease and desist letter instructing that the Pensacola dealership should stop making such statements. Apparently, the activity did not stop, and in 2010, suit was filed. The action went to trial on various claims including slander per se. The Daphne dealership presented an economist that calculated lost income at $7.1 Million. The jury awarded total damages of $7.5 Million dollars including both compensatory and punitive damages for the Daphne dealership and Mr. Esfahani personally. On appeal to the Alabama Supreme Court, the Pensacola dealership raised a number of issues as to why the jury s verdict should be overturned, but the Court rejected the arguments. The Court also rejected the contention that the damages were excessive. Among other things, the Court noted that the conduct was reprehensible and systemic, that it continued after the cease and desist letter, and that because the accusation was of criminal conduct (i.e. slander per se), mental anguish and injury to reputation were presumed to have occurred. The jury s verdict was affirmed with all Justices concurring. Page 4 of 5 Website Coming Soon! All of our newsletters will soon be available, along with other information about our Firm, at: We expect to have our site launched by the end of March. Please take a moment in the coming weeks to browse the available information and to review any of our old newsletters. Also, feel free to download our newsletters and use them as you please. Homeowner s Insurance; Bad Faith State Farm Fire and Casualty Company v. Brechbill, (Ala. September 27, 2013) Prior to Shawn Brechbill s purchase of his home, he had a home inspection which revealed no evidence of long-term settling. Upon issuing the policy, State Farm inspected the home to ensure that it met underwriting requirements, which it did. State farm insured the residential home for Shawn Brechbill. The Plaintiff alleged that four months later, on January 29, 2008, his house suffered damage from a windstorm. After the storm, Brechbill noticed squeaks and cracks in the home that he said were not there previously. Brechbill made a claim with State Farm and an adjuster performed an inspection. The adjuster determined that some roof damage was covered but suggested that State Farm retain an engineer with regard to whether the structural integrity of the home had been affected. The engineer determined that the problems with the house were the result of long-term settling and/or the original construction. State Farm denied this part of the claim. Brechbill then had two further inspections done and the engineer re-inspected the property. One of Brechbill s inspectors found a number of logical and evidentiary problems with the engineer s report. State Farm maintained its denial. Brechbill then filed suit against state farm alleging breach of contract and bad faith. State Farm filed a motion for summary judgment as to the bad faith claim. The Court denied the motion insofar as it concerned abnormal bad faith; that is, a failure to sufficiently investigate the claim, but granted it as to normal bad faith because there was an arguable reason to deny the claim. The case was tried and the jury returned a verdict for Brechbill on both claims. State Farm appealed. On appeal, State Farm argued that because the trial court had determined that there was an arguable reason to deny the claim, this precluded recovery

5 Zeanah, Hust, Summerford & Williamson, LLC Page 5 of 5 Brechbill, cont d on the failure to investigate claim. The Supreme Court confirmed that bad faith is one tort and that so-called abnormal bad faith simply contains an additional element (or manner of proof). The Court also agreed with State Farm that the lack of an arguable reason for the denial is an element of both and that, therefore, Brechbill s failureto-investigate claim necessarily failed. All Justices concurred with some concurring only in the result or concurring specially. Chief Justice Moore authored a lengthy concurrence in which he urged abandonment of the tort of bad faith, which, he says, is not law. This is a good case for insurers because it would appear to reduce insurers duty of investigation where an otherwise legitimate reason for denial exists. Subrogation Against Uninsured Motorist Recovery Roblero v. Cox Pools of the Southeast, Inc., (Ala. Civ. App. June 2, 2013) The Plaintiff, Samuel Roblero, was involved in an automobile accident at work for Cox Pools. The other driver was at fault but not insured. The Plaintiff made a claim on Cox Pools uninsured motorist policy and received a settlement. The next day, Mr. Roblero filed suit for workers compensation benefits. Cox Pools argued that (a) it had a claim for subrogation against the uninsured motorist recovery because it had paid the Plaintiff s medical expenses and (b) that allowing the Plaintiff to recover under the workers compensation law would allow for a double recovery, and thus should not be allowed. Cox Pools filed a motion for summary judgment on both of these issues which was granted. Roblero s suit was dismissed as a result. Plaintiff appealed. On appeal, the Court noted that Alabama s third party statute allows a worker to recover under the workers compensation act and also pursue an action against a third party. The Plaintiff may do these simultaneously or in whatever order he chooses. The right to pursue a third party claim, however, is subject to the employer s right of subrogation. The Plaintiff argued that Alabama law prevents subrogation in this context against an uninsured motorist recovery because the recovery is the result of a private contractual obligation. The Court acknowledged that to be the law but, because the Plaintiff had not raised the issue before the trial court, declined to hold accordingly. The Defendant urged the Court to overrule this aspect of Alabama law, but the Court declined to do so, citing the fact that such precedent originated in the Alabama Supreme Court and thus it has no authority to overrule it. As a result, the Court reversed the dismissal of Plaintiff s claim but affirmed the portion of the trial court s order allowing for Cox Pools to subrogate against the thirdparty recovery. Three Judges concurred. Judge Moore authored a separate concurring opinion. Founded by Olin W. Zeanah in 1959, Zeanah, Hust, Summerford, & Williamson, LLC practices throughout Alabama in both state and federal court. The Firm maintains a general practice with an emphasis on litigation including commercial disputes, insurance defense, workers compensation and employment law, corporate, real estate, banking, and estate/probate. Mr. Hust is a fellow of the American College of Trial Lawyers. Mr. Hust and Mr. Summerford are both AV rated by Martindale-Hubbell. Ms. Williamson is rated as Distinguished by Martindale-Hubbell and is a former Chair of the State Bar s committee on Workers Compensation. The Firm has been listed for over fifty years by A.M. Best as recommended insurance defense counsel University Blvd. (35401) Seventh Floor PNC Bank Building P.O. Box 1310 Tuscaloosa, AL P - (205) F - (205) The Workers Compensation and Civil Litigation Newsletter is for informational purposes only and should not be construed as legal advice. This information is not intended to create, and receipt of it does not constitute, a lawyerclient relationship. For more information or an explanation about the matters discussed in the Workers Compensation and Civil Litigation Newsletter, please contact Beverly Williamson. No representation is made that the quality of legal services to be performed is greater than the quality of legal services provided by other lawyers.

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