The news that Anthony Bourdain committed suicide, following closely on the heels of the Kate Spade announcement has got me a little melancholy this morning. And, it’s got me thinking about my Dad, and my relationship with him.
This was a man who was all about love. He was joyful, and a hugger. Goofy and embarrassing. He gave me my sense of humor, and gave me everything he could within his means.
But, he wasn’t perfect. He was prone to mood swings, and just didn’t act with common sense sometimes. For me, the final straw was his breakup with my Mom. To this day, I really don’t know all of the details, but I unquestionably placed the onus on him. I shut him off and stopped talking to him. While I let him have a few brief interactions with my young kids, our relationship was almost nonexistent.
It’s one of the biggest regrets of my life. I don’t know what he was going through, but my Dad was clearly in a bad place. He took his life, and I don’t know why – other than a note that I read once and never want to read again.
I don’t think I could have prevented his choice. But, I could have been more loving and comfortable in my relationship with him. I could have forgiven him (and arguably myself) for whatever sins I believed he committed. Most importantly, my kids could have known this glorious man, and known the love that he could give. And his goofiness.
So, when one of my friends tells me that they aren’t speaking with their parents, I tell them about my regrets and encourage them to reach some kind of resolution. I try not to sound preachy, but if I’ve done that to anybody, I apologize. It just stinks not having that relationship with a man that I once adored, and I don’t want my friends to have the same regrets.
I’ve got no words of wisdom for those affected by suicide. It’s terrible. Everybody will say: “Get help before it happens.” But, it’s never that easy when you’re trying to influence another human being. We can’t control the inner forces that cause loved ones to make this terrible decision. But, we can try to have a meaningful relationship with them, and love them – even if that’s not enough to save them from themselves.
Alabama businesses need to take note. A recently enacted law, the Alabama Data Breach Notification Act (No. 2018-396), creates new requirements for “covered entities” who have “sensitive personally identifying information” that is the subject of a “data breach.” A signed version of the act can be found here: Act No. 2018-396. The Act mandates certain security measures for businesses and requires notification if a breach occurs. Failure to comply can result in significant fines, and a violation of the Act is also considered a violation of the Alabama Deceptive Trade Practices Act (Alabama Code Sections 8-19-1, et seq.).
The requirements of the Alabama Data Breach Notification Act apply to covered entities and to third-party agents. These terms are defined:
(2) COVERED ENTITY. A person, sole proprietorship, partnership, government entity, corporation, nonprofit, trust, estate, cooperative association, or other business entity that acquires or uses sensitive personally identifying information.
(7) THIRD-PARTY AGENT. An entity that has been contracted to maintain, store, process, or is otherwise permitted to access sensitive personally identifying information in connection with providing services to a covered entity.
Alabama Data Breach Notification Act, Act No. 2018-396.
The Act protects “sensitive personally identifying information,” which is an Alabama resident’s first name or first initial and last name, combined with one or more numbers or other data – such as a social security number, bank account number, medical information, or username and email address information.
The Alabama Data Breach Notification Act requires: (1) reasonable security, (2) investigations, and (3) notification under certain circumstances.
Reasonable Security Measures. Covered entities and third parties are required to consider, implement, and maintain certain security measures. The Act contains a list of certain measures that should be considered. But, the statute explains that “[r]easonable security measures [are] security measures practicable for the covered entity to implement and maintain.” Factors like the size of the entity, amount of sensitive information, and cost of implementation of measures are considered when determining what security measures should be undertaken. What constitutes “reasonable security measures” is likely to be the subject of debate in the future.
Good Faith and Prompt Investigation. If a covered entity or third party determines there has been a breach of security in relation to “sensitive personally identifying information,” they have a duty under the Act to conduct a good faith and prompt investigation.
Notification. When there is a data breach, covered entities and third parties must notify affected Alabama residents. Unless an exception in the act applies, they must do so “as expeditiously as possible and without unreasonable delay.” In any event, notification must occur no later than 45 days after the covered entity or third party determines a breach has occurred and is likely to cause substantial harm. The Act sets forth the information required to be provided. Furthermore, if more than 1,000 Alabama residents are affected, the Alabama Attorney General and consumer reporting agencies must be alerted.
Businesses should review the Act and seek guidance from experts to determine appropriate data security measures. While there will be questions when data breaches occur, such as what are “reasonable security measures” and when is a loss “likely to cause substantial harm,” the Alabama Data Breach Notification Act attempts to provides answers – including recommendations concerning appropriate security measures – in addition to setting forth requirements.
Richard Raleigh, a Past President of the Alabama State Bar (2014-2015) and a U.S. Army veteran, is an experienced trial and appellate attorney at Wilmer & Lee, P.A. in Huntsville, Alabama, with a practice concentrated on government contracts law, complex litigation, cybersecurity law, and employment law. He recently served on the Alabama Law Institute’s Restrictive Covenants and Contracts Study Committee, and he serves on the American Law Institute’s Members Consultative Group for Restatement Third, Torts: Liability for Economic Harm. Richard also serves on the Alabama Supreme Court Standing Committee on Alabama Rules of Civil Procedure and the Alabama Judicial Compensation Commission, and he represents Alabama in the American Bar Association House of Delegates. He has a diverse litigation practice, has tried numerous trials in various state and federal courts, and has argued cases before the Fifth and Eleventh U.S. Courts of Appeal, the U.S. Court of Appeals for the Federal Circuit, the Florida 1st District Court of Appeals, and the United States Court of Federal Claims. Richard is admitted to practice in Alabama and Tennessee as well as various federal courts, including the United States Court of Federal Claims, the United States Tax Court, and the United States Supreme Court.
As I discussed last week, arbitration agreements are popular with Alabama employers and the Alabama Supreme Court: The Supreme Court Really Likes Arbitration. While Alabama has become a favorable venue for arbitration, other jurisdictions, like California, remain hostile. In particular, some judges find that employment arbitration agreements are unconscionable. In other words, the employer possesses so much bargaining power in the employment relationship that the employee should not be bound by a “take it or leave it” arbitration policy. In an effort to avoid such determinations, some employers have inserted opt-out provisions into their arbitration agreements.
In 2016, Brian Berkley wrote a great article discussing the benefit of opt-out provisions: Can Opt-Out Provisions Save Arbitration Clauses? An opt-out provision gives the employee the opportunity to escape arbitration. Typically, the provision is buried deep within an arbitration agreement and gives the employee the opportunity to avoid arbitration by providing written notice to the employer within 30 days of signing the agreement or receiving arbitration training. By inserting an opt-out provision, employers are hoping to convince judges that arbitration is not unconscionable, because the employee had an opportunity to avoid it. The employer is gambling that the employee never discovers the opt-out language buried in the arbitration agreement.
Recently, however, CVS Drug Stores learned that an opt-out provision can create as many problems as it cures. See Hall v. CVS Health Corp., No. 2:17-cv-00289-KOB, 2018 WL 1182603 (N.D. Ala. Mar. 7, 2018). In that case, Roy Hall sued CVS for, among other things, age and race discrimination. But, Mr. Hall previously participated in a CVS-sponsored course called Arbitration of Workplace Legal Disputes, and he read and understood materials which informed him that he would be required to arbitrate all employment disputes unless he opted out. Judge Karen Bowdre, however, found a factual dispute on whether Mr. Hall actually opted out of the arbitration agreement.
Mr. Hall testified that that he mailed a written letter to CVS within 30 days of training, and he opted-out of the arbitration agreement. Yet, he did not send the letter by certified mail, and he could provide no proof, other than his testimony, that he actually sent the letter. In contrast, CVS could not “prove a negative.” It provided Judge Bowdre with affidavits from employees saying that they never received Mr. Hall’s alleged letter. But, other unidentified employees could have possessed the letter and lost it.
Judge Bowdre decided to resolve the factual dispute by ordering a jury trial. Under her ruling, a jury will decide whether Mr. Hall actually mailed the opt-out letter, and whether CVS actually received it.
Employers typically want arbitration because it helps to streamline the dispute process and it avoids many of the pitfalls associated with jury trials. But, the opt-out clause in CVS’s arbitration agreement has caused the exact opposite outcome. CVS will now have to face the uncertainties of a jury trial, and that trial will further delay the process.
Employers should think carefully before putting an opt-out provision in their arbitration agreement. For nationwide employers like CVS, an opt-out provision might make sense, because it helps with enforcement in fickle jurisdictions like California. But, in Alabama, where the courts have been zealously enforcing arbitration agreements, an opt-out provision might actually be counter-productive.
When I was a young lawyer, the Alabama Supreme Court really disfavored arbitration. They would find almost any excuse to give somebody their “day in court,” instead of enforcing contractual dispute resolution. Times have certainly changed. Binding decisions from the United States Supreme Court, and election of pro-business candidates to the Alabama Supreme Court have lead to a sea-change. Now, the Alabama Supreme Court almost always enforces arbitration agreements.
This point recently hit home in Bridgestone Americas Tire Operations, LLC v. Adams, No. 1160877, 2018 WL 1355966 (Ala. Mar. 16, 2018). Ottis Adams was hired by BFS Retail and Commercial Operations (“BFS”) in 2006. When he was hired, Adams signed BFS’s Employee Dispute Resolution Plan which required arbitration of almost all employment disputes. At some point, Adams changed employers from BFS to a sister company — Bridgestone Americas Tire Operations, LLC (“Bridgestone”). Adams left Bridgestone in 2016 and began work for a competitor — McGriff Tire Company. Bridgestone then sent a letter to McGriff stating that Adams’s employment violated a noncompetition and nonsolicitation agreement signed by Adams. Bridgestone also suggested that Adams violated a duty of loyalty by selling tires for McGriff while still employed by Bridgestone.
McGriff terminated Adams’s employment, and Adams sued Bridgestone for interference with his business relationship with McGriff and for defamation. Bridgestone moved to dismiss the lawsuit and compel arbitration. Adams convinced the trial court that Bridgestone was not a named party to the the BFS agreement, and that court denied the motion. So, Bridgestone appealed.
The Supreme Court compelled arbitration for two reasons. First, the BFS agreement required arbitration of “all disputes covered by that plan, not just disputes with BFS.” Second, the agreement applied to all “sister companies,” “related companies,” and “affiliate companies” of BFS. Even if Bridgestone was not a named party to the agreement, it fell within the definition of a “sister company,” “related company” or “affiliate company.”
Adams provides guidance to employers who want to avoid trial courts and jury trials. By broadly wording an agreement to cover all disputes related to employment, and by making the agreement applicable to any sister companies or affiliates, employers can avoid litigation and compel arbitration.
Sometimes, a client will call me and ask whether there are any legal issues if they utilize unpaid “interns.” Usually, my answer is: “yes.” Some employers see job-hungry college students as a source of “free” labor. But, free labor is exactly the problem that the Fair Labor Standards Act (“FLSA”) was designed to prevent.
Nevertheless, the United State Department of Labor (“DOL”) recognizes that there are circumstances in which a student truly obtains an academic benefit from working-for-free in industry. So, the DOL has developed a test for distinguishing “employees” (who should be paid) from “interns” (who may work for free). Under the Obama Administration, the DOL adopted a restrictive six-factor test in 2010. Under that test, an unpaid intern would be considered an “employee” under the FLSA unless each of the six factors was met. As a matter of practicality, if the company received any economic benefit from the “intern’s” services, the DOL considered the intern to actually be an “employee” entitled to minimum wage and overtime.
The DOL’s six-factor test was generally criticized by federal courts around the country, including the Eleventh Circuit Court of Appeals, which reviews cases from Alabama. See Schumann v. Collier Anesthesia, P.A., 803 F.3d 1199, 1209 (11th Cir. 2015). Rather than following the DOL’s strict, six-factor test, the Eleventh Circuit follows a more-flexible seven-factor test, borrowed from the Second Circuit Court of Appeals. That test considers the following elements, none of which is conclusive:
1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
On January 5, 2018, the DOL formally scrapped its six-factor test in favor of the more-flexible seven-factor test. The DOL’s fact sheet with the new test can be found here: DOL Intern Fact Sheet. In short, if analysis of the seven factors “reveals that an intern or student is actually an employee, then he or she is entitled to both minimum wage and overtime pay under the FLSA. On the other hand, if the analysis confirms that the intern or student is not an employee, then he or she is not entitled to either minimum wage or overtime pay under the FLSA.”
Merry Christmas! At about this time last year, I tried to provide some insight on the dangers of Christmas hams in the workplace: The Dangers of Christmas Hams. This year, in my never-ending quest to provide hard-hitting legal updates, I bring you a cautionary tale of assault by a department store Santa Claus: Honeycutt v. Louis Pizitz Dry Goods, Co., 235 Ala. 507 (Ala. 1938).
This case is from 1938, so it’s what a lawyer might call “well-established law.” As part of its holiday advertising, the Pizitz Department Store in Birmingham sent out into the community a truck with a full band playing music and an employee dressed as Santa Claus. The band attracted a crowd and the Santa Claus threw presents and candy. Unfortunately, an “all day sucker” struck Mrs. Linnie Honeycutt in eye. Here is the Supreme Court’s recitation of the facts:
The evidence is without dispute that the defendant’s advertising scheme attracted several hundred women and children, who surrounded the truck carrying the band; defendant’s servant dressed as Santa Claus. That some of those in the crowd stood from seventy to seventy-five feet away from the truck; and that defendant’s servant standing in the truck threw with great force the articles being distributed into the crowd, and one of said “lollypops” struck plaintiff in the eye, producing an abrasion of the sclera of the eyeball across the pupil, resulting in an infection causing much pain and suffering and, there is evidence tending to show, causing partial dimness of the sight necessitating the use of spectacles which plaintiff had not before had to use.
Honeycutt, 235 Ala. at 509 (emphasis added).
A jury found in favor of Mrs. Honeycutt and Pizitz appealed, arguing that this was just an “accident.” Unfortunately, the Supreme Court disagreed: “If the missiles thrown — the lollipops — were of such nature and character as that they were liable to produce injury, and were thrown into the crowd of women and children with such force as to cause injury, the jury was warranted in finding the defendant liable under the [claim of assault and battery].”
The Honeycutt case doesn’t provide any earth-shaking principles of law. But, it does reinforce one lesson which employers should already know: employers can be held responsible by a jury for the actions of their employees — even if the employee is Santa Claus.
Last week, the Alabama Supreme Court ruled that Alabama taxpayers can sue to void “illegal” government employment contracts. Ingle v. Adkins, No. 1160671, 2017 WL 5185288 (Ala. Nov. 9, 2017). At issue was an employment contract between the Walker County Board of Education and the Superintendent of the Walker County Schools. After he was re-elected as Superintendent in 2014, Jason Frank Adkins signed an employment contract with the Walker County school board. The contract provided: a $159,500 salary with annual pay raises; a $1,000 per month travel stipend; reimbursement for a cell phone; and, a promise to allow him to return to his previous job as a tenured employee.
Apparently, Sheila Mote Ingle thought that contract was excessive. So, she sued, claiming that, as a taxpayer, she was entitled to have the “unconstitutional, illegal and void” contract vacated. Ms. Ingle also sought to recover monetary amounts that she claimed were improperly paid to Mr. Adkins. Mr. Adkins and the school board immediately moved to dismiss Ingle’s law suit. They claimed that the Alabama Constitution of 1901 confers immunity from law suits to them, and that Ms. Ingle had no “standing” to challenge the contract, because she was not a party to it. Without giving a specific reason, a trial court in Walker County granted that motion to dismiss and Ms. Ingle appealed.
The Alabama Supreme Court found that Ms. Ingle was entitled to pursue her claims to vacate the contract, but not her claims for money. The Court reiterated a string of cases holding that Alabama School Boards and Superintendents are absolutely immune from claims for money damages under the Alabama Constitution. But, the Court refused to extend that immunity to claims for declaratory and injunctive relief. In short, the Court found that immunity could not bar Ms. Ingle’s claim to have the employment contract declared invalid.
The Supreme Court also rejected the Board’s standing defense. The Court found that its cases have “continually held that taxpayers have standing to seek an injunction against public officials to prevent illegal payments from public funds.”
Accordingly, the Supreme Court reversed dismissal of Ms. Ingle’s case to allow her to pursue her theory that the contract between Mr. Adkins and the School Board is illegal. At the same time, the Court refused to comment on whether her actual theories had any merit. That decision will come at a later date after the parties fully litigate the issue.
A federal judge in Alabama ruled last week that President Donald Trump is not legally responsible for potential discrimination by private employers. See Williamson v. Trump, No. 7:17-01490-LSC, 2017 WL 4536419 (N.D. Ala. Oct. 11, 2017). On August 15, 2017, President Trump issued a Presidential Memorandum for the Secretary of Defense and Homeland Security. That memorandum prohibits accession of transgender employees in the United States military and authorizes the discharge of such individuals. Cassandra Williamson is a transgender veteran living in Tuscaloosa, Alabama. Ms. Williamson sued, claiming that the memorandum violated her rights to equal protection under the United States Constitution.
Ms. Williamson did not argue that she is a part of the class of military personnel directly affected by the memorandum. Instead, she claimed that President Trump’s memorandum had an immediate and chilling impact on her “ability to get work,” because it was “seen by the community and prospective potential employers … as justification to not consider her for employment and to mistreat her when she goes out to get food, go to church, and deal with other issues in the community, or even to walk her dog.”
United States District Court Judge Scott Coogler dismissed Ms. Williamson’s complaint. Judge Cooger relied upon a legal doctrine called “standing.” In summary, the standing doctrine required Ms. Williamson to demonstrate that she was injured by President Trump’s memorandum, and that the court could prevent future injuries. Ms. Williamson’s complaint failed to surmount that obstacle: “Plaintiff’s allegations are that employers, not the President, have caused an injury to Plaintiff through employment discrimination. Although the memorandum does order that the accession of transgender persons in the military eventually be ceased, it in no way directs the hiring practices of private individuals or companies.”
Ms. Williamson lost her case because she is not directly affected by the memorandum. Several other law suits have been filed in other parts of the country directly challenging the ban on behalf of service members. The United States Department of Justice filed a motion two weeks ago seeking to have one of those cases dismissed. Here’s a link discussing that motion. DOJ Moves To Dismiss Transgender Ban Lawsuit.
Alabama’s Workers’ Compensation Act provides employers with an interesting trade-off. Employees who are injured on the job are entitled to have their medical bills paid by the employer and receive compensation for any resulting disability. But, the amount of disability benefits are specifically set-out and limited by the Act. Workers’ Compensation is a no-fault system. If an employee is injured, he or she is entitled to benefits. Here’s the trade-0ff. In the vast majority of cases, the Workers’ Compensation Act prohibits employees from suing their employer for negligence, wantonness or punitive damages. In short, the Workers’ Compensation Act makes it easier for employees to recover for their injuries, but limits the ability of employees to sue their employers and the amount they can recover.
Of course, there are always exceptions to any law. The Workers’ Compensation Act also recognizes a limited set of cases in which the employee can sue his or her co-employees for punitive damages. If a co-employee engages in “willful conduct” that causes injury to another employee, the co-employee can be sued. Generally, the Act recognizes four types of “willful conduct”: (1) acting with a purpose, intent or design to injure another; (2) willful and intentional removal from a machine of a safety guard or safety device provided by the manufacturer of the machine with knowledge that injury or death would likely or probably result from the removal; (3) intoxication that causes injury or death of a co-employee; and, (4) willful and intentional violation of a specific written safety rule of the employer after written notice.
Over the years, employees have attempted to expand the reach of those four examples of “willful conduct.” Last week, the Alabama Supreme Court rejected such an attempt in Saarinen v. Hall, No. 1160066, 2017 WL 3821732 (Ala. Sep. 1, 2017). In that case, Louis Hall was injured by a power saw, which was manufactured with a guard that was insufficient to protect Hall. At least a month before he was injured, his employer purchased a replacement saw with a better guard from a different manufacturer. But, the replacement saw was not installed because his employer was too busy to change out the saws.
Hall injured his hand on the saw with the insufficient guard, and then sued his supervisors for “willful conduct.” Hall claimed that their failure to install the new saw was equivalent to the willful and intentional removal of a safety guard. The Alabama Supreme Court rejected that argument: “Under the facts in this case, the failure to install another, presumably safer, saw that was present on the premises but that had not been put into operation and that was manufactured by a different manufacturer than the saw that injured the plaintiff is not the equivalent of the removal of a safety guard so as to constitute willful conduct ….” Saarinen, 2017 WL 3821732 at *3. Interestingly, the Supreme Court expressly refused to decide whether the failure to install a replacement machine manufactured by the same manufacturer might be equivalent to removal of a safety device.
Yesterday, United States District Court Judge Amos Mazzant struck down a Department of Labor overtime regulation which increased the threshold for salary exemption under the Fair Labor Standards Act from $23,000 per year to $47,476 per year. Here’s an article from The Hill discussing Judge Mazzant’s ruling: Texas Judge Strikes Down Obama Overtime Rule
I wrote about the overtime regulation when it was released, here: Overtime Rule Released. After the regulation was released, numerous interested parties filed suit in Judge Mazzant’s court challenging the regulations, and he issued a preliminary injunction, which prevented the regulation from going into effect: Judge Halts Overtime Regulation
The DOL under the Obama administration was not satisfied with Judge Mazzant’s ruling and filed an appeal with the Fifth Circuit Court of Appeals: DOL Appeals Overtime Ruling That appeal remains pending, but many attorneys believe that the DOL under the Trump administration may abandon the appeal. I will keep you updated as the appeal progresses.