The most significant penny in the history of American jurisprudence? 6th Circuit remands case over one cent

What caused the court in Freeland v. Liberty Mutual Fire Insurance Co. (6th Cir. 2/4/11) [pdf] to write so eloquently about the fate of the penny?  

The penny is easily the most neglected piece of U.S. currency. Pennies tend to sit at the bottom of change jars or vanish into the cracks between couch cushions. Vending machines and parking meters will not accept them. Many people refuse to bend down to pick up a penny off the ground, deeming the reward not worth the effort. And a member of Congress even introduced legislation that would effectively eliminate the penny by requiring merchants to round their prices to the nearest nickel. See Currency Overhaul for an Industrious Nation (COIN) Act, H.R. 5818, 109th Cong. § 3(a) (2006). In this case, however, the penny gets a rare moment in the spotlight. The amount in controversy in this declaratory judgment action is exactly one penny short of the jurisdictional minimum of the federal courts.

A civil case arrives in federal court in one of two ways: the plaintiff files it, or the defendant removes it from state court. Either way, the federal court must have subject matter jurisdiction over the case—that is, the case either must arise under a federal statute, or all plaintiffs must hail from different states than all defendants and the amount at stake must exceed $75,000.

Make no mistake, these courts take their limited jurisdiction seriously. Need proof? Freeland v. Liberty Mutual Fire Insurance Co. dismissed a case over one cent. The case involved a $100,000 insurance policy, over which the parties did not dispute the first $25,000 in coverage. Therefore, the court concluded that the amount in controversy was $75,000, not $100,000, which fell one penny short of the key necessary to open the gates to the federal courthouse. 

Imagine litigating a case for more than two years, only to learn that the entire case was litigated in the wrong court. The court was sympathetic (to a point), but remanded the case nevertheless:

The Court recognizes that vacating the district court’s judgment and remanding this case is painfully inefficient. This is especially so in light of the substantial resources that been spent litigating the merits of this case and the infinitesimal amount by which the amount in controversy falls short. But the Court simply has no choice in the matter.… The district court lacked the authority to grant Liberty Mutual’s motion for summary judgment. The only proper course is to remand this case back to state court for lack of federal jurisdiction.

In litigation, the little things really do matter.

---

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #163 (the all good things must come to and end edition)

I’m sorry to leave you all alone
you’re sitting silent by the phone
but we’d always known there would come a day
the bus is warm and softly lit
and a hundred people ride in it
I guess I’m just another running away 

I’m gonna pick it up
I’m gonna pick it up today
I’m bound pack it up
I’m bound pack it up and go away 

—I’m Bound to Pack It Up, The White Stripes

Don’t get scared. This blog lives on. But, from this point forward, February 2nd will no longer be know as Groundhog Day, but as the day The White Stripes broke up.


As for me, I’ll always have the memory of the first time I heard the opening chords of Dead Leaves and the Dirty Ground, and was hooked for life.
Here’s the rest of what I read this week:

Discrimination

• Protip: Do Not Buy A Vibrator For Any Lady At Your Office – from Above the Law
  
• There’s That Word Again - Bully – from Michael Fox’s Jottings By An Employer’s Lawyer
  
• Trouble ensues over office artwork with Bible reference – from Work Matters
  
• Is age discrimination running rampant, or is there another explanation? – from Employment and Labor Insider
  

Social Media & Technology

• What Is Facebook, Really? – from Harvard Business Review
  
• An employee filed a complaint? Facebook probably isn't an appropriate place to vent – from HR HQ
  
• Pew Research Center Study Finds Older Americans are Becoming More Active on the Internet Through Social Networking and Blogging – from the Digital Workplace Blog
  
• A Minute to Lose It: Why Every Health Care Professional Needs to Have a Social Media Policy. Now. – from Daniel Schwartz’s Connecticut Employment Law Blog
  
• Sharing The Love On Twitter - Does Courtney Love Become Less Defamatory By Using Social Media? – from Social Media Employment Law Blog
  

Labor Law

• Senators Restate Opposition to Becker Re-Nomination – from Seth Borden’s Labor Relations Today
  
• So Much for Comity: Business Groups To Fight Becker Renomination for NLRB – from Joe’s HR and Benefits Blog
  
• Becker Nomination Redux – from The ChamberPost
  
• 47 Senators oppose Becker nomination to NLRB – from LawMemo Employment Law Blog
  
• Do the New NLRB Rules Really Help Workers Organize? – from Workplace Fairness
  
• The NLRB Is On The Offensive – from The Metropolitan Corporate Counsel
  

Employee Relations & HR

• Can I Throw Away the Paper I-9 Once It's Been Scanned and Saved? – from the Delaware Employment Law Blog
  
• It's a Snow Day! Dealing with Inclement Weather and the Proper Payment of Wages – from Colorado Employer’s Law Blog
  
• More Employees Look To Employers For Medical Advice – from Workplace Diva
  
• Getting Down to Management Basics: My 5 Postulates of Employment Law – from TLNT
  
• Nepotism in the workplace – is this illegal? – from Employment Law Bits
  
• Dealing With Workplace Bullies: “There are a Lot of Fake Tough Guys Around Here” – from The HR Capitalist, Kris Dunn
  
• “Dirty Jobs” in HR – from Michael Haberman’s Omega HR Solutions
  

Wage & Hour

• Record Keeping Requirements Under the Fair Labor Standards Act: How Employers Can Best Protect Themselves – from Wage & Hour - Development & Highlights
  
• You Just Found Out Your Coworker Is Making More Than You. Now What? – from Evil HR Lady
  
• As FMLA Absences Mount, the Employer Must Lay Down the Law – from FMLA Insights
  
• Your employees are using more FMLA – from The Employer Handbook Blog
  

Litigation

• No Triggering Event, No Duty to Preserve – from Bow Tie Law’s Blog
  
• Guess Who’s Coming to the Deposition? – from From the Sidebar
  
• E-Discovery - Litigation Hold Rule on the Way? – from Philip Miles’s Lawffice Space
  

Non-Compete Agreements

• Should You Negotiate Your Non-Compete? Yes, and Here’s 5 Reasons Why – from Legal Developments In Non-Competition Agreements
  
• Why you should negotiate your non-compete – from Rob Radcliff’s Smooth Transitions
  

Are you searching employees’ work computers as part of litigation?

If you’re not searching a plaintiff’s work computer during litigation, this story may cause you to reconsider.

Tim Marcum is the head coach of the Arena Football League’s Tampa Bay Storm. He’s the most successful coach in the league’s history, winning 7 Arena Bowls. He’s now trying to win a different kind of fight, having sued the team’s former owner for unpaid salary. As part of the lawsuit, the defendant examined Marcum’s work computer, which revealed various displays of pornography and racist emails. For example:

• Videos of women having sex with horses.
• A video of two naked women using a funnel and fish to commit an unnatural sex act.
• A picture of Air Force One as Watermelon One.
• An email comparing Michelle Obama to a chimpanzee.
• Frequent use of the “N” word in other parodies and email.

For his part, Marcum does not deny that he received or re-forwarded the offensive emails, pictures, and videos. Instead, he maintains that they would only be considered inappropriate if someone else accessed his email. and that they should not be an issue because he only shared them with friends. Tampa Bay news station WTSP shares excerpts from Marcum’s videotaped deposition:

Proper computer searches that forensically preserve the evidence for trial can be expensive. However, you do not know what you will find until you do the examination. Workplace pornographic and racist emails will be relevant in most employment lawsuits. After acquired evidence, theft of time, and proving a work environment is not subjectively hostile are but a few examples of their possible use. Between social media, emails, and other technology, there are fewer and fewer secrets between parties in litigation. The trick for businesses is to hire attorneys that know how to harness these tools for your benefit and properly advise you of the risks and dangers inherent in your own technology.

---

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

One is the loneliest number – unless you’ve filed an unfair labor practice charge

Lots of employers have lots of policies that they think are legal, but in fact are not. One perfect example is policies that prohibit employees from discussing their wages. Under the National Labor Relations Act, employees, whether unionized or not, have the right to engage in protected concerted activity. Because discussions of wages and other terms and conditions of employment qualifies as protected concerted activities, retaliation for the exercise of that right violates federal labor laws.

Protected concerted activity presupposes that more than one employee is engaged in the conduct. What happens, however, if an employer discovers that an employee is going to engage in protected concerted activity and preemptively terminates the employee before he or she has the chance.

In Parexcel International (1/28/11) [pdf], the NLRB concluded that a preemptive termination—that is, one that attacks an employee who intends to complain about wages—violates federal labor laws, even though the employee has not yet engaged in any concerted activity. As the NLRB explained;

That conclusion is supported not only by the plain text of Section 8(a)(1), by the policies underlying Sections 7 and 8(a)(1), and by the authorities cited, but it is consistent with other lines of Board precedent holding that, under certain circumstances, employees who have engaged in no concerted activity at all are protected from adverse action. For example, an adverse action taken against an employee based on the employer’s belief that the employee engaged in protected concerted activity is unlawful even if the belief was mistaken and the employee did not in fact engage in such activity. Similarly, a mass discharge undertaken without concern for whether individual employees were engaged in concerted activity—where “some white sheep suffer along with the black”—violates the Act. What is critical in those cases is not what the employee did, but rather the employer’s intent to suppress protected concerted activity.

Some commentators are already commending the NLRB for its expansion of employee workplace rights:

Professor Richard Bales, at the Workplace Prof Blog:

It seems to me that the Board is expanding the definition of protected-concerted activity a bit more then it's admitting.  Now, every time an employee complains and is subsequently fired, the employee can file an unfair labor practice charge, and it's a fact issue as to whether the employer was motivated by a desire to nip the complaint in the bud or by something else.

Randy Enochs at the Wisconsin Employment & Labor Law Blog:

This is a major victory for employees across the land and could lead to an increase in litigation but it's not exactly easy to prove that an employer terminated an employee to "nip-it-in-the-bud" or feared the employee would subsequently engage in protected activity making it harder to terminate them. Hopefully the end result is employers perhaps taking the time to ease employee concerns over working conditions instead of simply terminating the cause of stir.

Indeed, it certainly appears that Parexcel expands employee rights by creating a colorable unfair labor practice any time an employee suffers an adverse action after complaining about anything.

Let me take a different approach from the perspective of an employers’ advocate. If the NLRA covers any adverse action taken against any employee who complains about a term or condition of the workplace, why doesn’t the NLRA preempt any state law claim raising the same issue? For example, recently the 6th Circuit used a broad interpretation of federal preemption to dismiss a state law wrongful termination claim. Is it possible that by attempting to expand employee rights, the NLRB actually contracted them? I don’t profess to know the answer to this question, and we will have to wait for some bold employer to litigate the issue. I’m merely tossing it out there as a possible silver lining in an otherwise anti-business decision by the NLRB.

[Hat tip: LaborRelated]

---

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Updating 20th century laws for the 21st century

At his Connecticut Employment Law Blog, Daniel Schwartz argues that it’s time to start modernizing our workplace laws. As an example, Daniel argues that federal labor laws should be updated to account for technologies such as emails and social media. I highly recommend reading Daniel’s full thoughts published in this week’s Connecticut Law Tribune.

For my own thoughts, I recommend two posts I wrote in 2007 and 2008, which discuss the need to modernize federal wage and hour laws:

• Is the 40-hour work week relevant?
• Is the FLSA anachronistic?

We operate our businesses under laws drafted to address the workplace needs of the 1930s. To say that times have changed is an oversimplification of a much deeper problem. Until our legislatures modernize these laws, our businesses will remain saddled with the expensive and time-consuming problem of defending lawsuits over issues such as whether a non-exempt employee who spends a few minutes each night checking emails on his PDA should be compensated for that time. I suggest that we join Daniel’s call for our legislators to start discussing these issues so that we can work towards a meaningful modernization of stagnant laws.

---

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Not every employee needs a noncompete

Noncompetition agreements are fabulous tools. They protect employer’s trade secrets and other confidential and proprietary information, customers, goodwill, and special training and skills your employees acquire at your expense. But, not every employee is worthy of locking down with such an agreement.

For example, consider Mark Philips Salon & Spa v. Blessing (Ohio Ct. App. 1/28/11) [pdf]. The salon hired Blessing as a hair stylist. Blessing signed a noncompetition agreement on her first day of employment. When she resigned to accept a position at a competing salon less than five miles away, she got sued. Even though Blessing admitted that she violated the agreement by soliciting former customers, the court of appeals concluded that it was unreasonable for the salon to enforce the agreement against her:

Blessing testified that she was an experienced hair dresser and had worked for two other salons previous to her employment with MPS. Blessing brought approximately thirty clients with her to MPS, and while there she acquired approximately twenty more. Blessing testified that virtually all of her clients are obtained through referrals from other clients, and there is no evidence that MPS did anything that benefitted Blessing in obtaining any of her clients. Blessing also testified that MPS gave her no particular training or skill that she uses…. Blessing testified that after she left MPS she created a list of all her former clients “from my brain, from my knowledge.” There is no evidence that she obtained that information from a database or list maintained by MPS.

By engaging in competition with MPS as she has, and especially by mailing solicitations to clients she obtained while employed by MPS, Blessing violated her agreement with MPS in those respects. However, on this record there is nothing in the competition with MPS in which Blessing has engaged that makes it unfair. Blessing uses no trade secrets or competitive advantages she obtained from MPS. The competition MPS seeks to prevent is merely ordinary competition. Therefore, the covenant not to compete cannot be enforced.

What lessons can employers learn from this case? Noncompetition agreements are wonderful tools that all employers should have in their shed. Employers, however, should use narrowly drafted noncompetition agreements that only reach those legitimate interests worthy of protection. And, if there is no such interest, consider foregoing an agreement at all. Otherwise, you might end up spending lots of money in court in a vain attempt to enforce an unenforceable contract.

---

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #162 (the bad necktie edition)

I am an expat Philadelphian. When the Eagles came to Cleveland in 2004, I wore my Donovan McNabb jersey with pride inside Browns Stadium, and endures the tirades, insults, curses, and the occasional hails of popcorn, peanuts, and beer from loyal Browns fans. But, if the Eagles were playing the Browns in the Superbowl (I know, I know), I would likely draw the line at wearing my gear to the office. It’s not that wouldn’t enjoy jabbing my co-workers (because I would). But, I work in a service-based industry, and the thought of rubbing even one client the wrong way would my hats, jerseys, and ties at home. One Packers fan selling cars in Chicago thought otherwise last week, and it cost him his job when he refused his boss’s repeated requests to remove his Packers tie. The following blogs have the details:

• Packers Necktie Gets Salesman Punted from Chicago-Area Dealership – from Human Resources News

• Fired for wearing a Packer tie – from Minding the Workplace

• Packers Fan Fired Over Team Necktie; Will Litigation Ensue? – from Above the Law

• Apparently, Someone Isn’t a Packers Fan – from Workplace Prof Blog

• Chicago Car Salesman Fired for Wearing Green Bay Packer Tie – from Wisconsin Employment & Labor Law Blog

• Take Your Tie And Go “Packing” – from HR HQ

• Wearing Packers Necktie Gets Chicago Salesman Fired – from New Jersey Employment Law Blog

• At will and the auto salesman – from Michigan Employment Law Connection

Here’s the rest of what I read this week:

Discrimination

• Jewish Hockey Player Sues Anaheim Ducks Alleging Anti-Semitic Harassment – from Deadspin

• Employees and religious holidays – an employer’s obligation – from Employment Law Bits

• Age Discrimination in 2011 – from Michael Haberman’s Omega HR Solutions

• What Discrimination Looks Like in 2011: It’s Older and Unemployed – from TLNT

• The Genetic Information Nondiscrimination Act and The Mentalist – from Screw You Guys, I’m Going Home

• Is Obesity Covered by the ADA? – from Colorado Employment Law Blog

• Alabama Jury Awards Employee Taunted with KKK Hood – from Alabama HR Law

Social Media

• The Facebook Employment Background Check Curse – from Nick Fishman’s employeescreenIQ Blog

• Facebook Becoming Essential to an Employment Lawsuit – from Tom Crane’s San Antonio Employment Law Blog

• Social Media Research + Employment Decisions: May Be a Recipe for Litigation – from Labor Employment Law Blog

• Employers Can Pay Dearly for Social Media Blunders – from Joe’s HR and Benefits Blog

• More courts ordering access to Facebook posts – from Walter Olson’s Overlawyered

• Following The NLRB On Facebook Firings – from Social Media Employment Law Blog

• Who Do Your Tweets Represent? You? Or Your Employer? – from Fistful of Talent

• Lawyers Can Demonstrate the Need for Social-Media Policies In More Ways than One – from Delaware Employment Law Blog

Workplace Technology

• Behind the Resume – from Attorney at Work

• Judge Says It’s Reasonable For Any Photo Taken To Go Viral. A Dangerous Precedent? – from Kashmir Hill’s The Not-So Private Parts

• 10 Fascinating Facts About Email – from Mashable

• Potential Civil Liability for Unauthorized Access to Another’s Email Account – from Ohio Family Law Blog

Wage & Hour

• MMA Body Slam of $3.2 Million – from Michael Fox’s Jottings By An Employer’s Lawyer

• Fired Employee Entitled To Overtime Pay – from Overtime Lawyer Blog

• MBA Sues DOL Over Whether Mortgage Brokers Are Exempt from Overtime – from Overtime Advisor

• Mootness As A Defense To Extortionate FLSA Collective Actions – from LE Blog

• Ninth Circuit Clarifies Meaning of “Voluntary Departure” Under WARN Act – from World of Work

• Employees who stop coming to work because business is closing are entitled to 60-day notice under the WARN Act – from Employment Law Matters

• FMLA intermittent leave: Why bosses must be observant – from Stephen Meyer’s HR Cafe

Employee Relations and HR

• Do Amazing Things in 2011 – from Ann Bares’s Compensation Force

• PA employee sleeps on the job and still collects unemployment – from The Employer Handbook Blog

• Focus on Workplace Flexibility–Main Themes – from Work and Family Blog

• Deposition jujitsu – from Work Matters

Trade Secrets and Employee Competition

• Does Texas Law Recognize a Claim against Competitor’s Poaching of Employee? – from Texas Employment Law Update

• Fitness Companies Spar Over Unauthorized Access Of Departing Employee’s Personal Email Accounts – from Trading Secrets

• When is it okay for an employee to steal trade secrets? – from Trade Secrets & Non-Compete Blog

• Steelers’ Secret Trick Play May Have Been Shared With Jets By ESPN Reporter – from Trade Secrets Blog

Labor Relations

• Unions are a Dying Breed. Or They’re Making a Comeback – from Daniel Schwartz’s Connecticut Employment Law Blog

• President Obama Re-Submits Nomination of Craig Becker to NLRB – from Labor Relations Today

---

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.