Author: John Canoni

Privacy rights have been with us forover a century. They date back to a highly influential 1890 law review article(“The Right to Privacy,” 4 Harvard Law Review 193) by Professors Brandeisand Warren. They vary widely from state to state. Some states (such as New York)do not recognize any common law privacy rights. Other states (such asMassachusetts) have either enshrined the right to privacy in special legislation(Mass Gen. Law Ch. 214,1b) or in the state’s constitution. Moreover, nearlyeveryone believes there is an innate “right” of privacy regardless of whattheir state’s laws say. Employers must tread carefully when their employeesassert privacy rights because the jury that will decide their employment casewill likely be privacy devotees.

    The jury that heard Linda Fletcher’sprivacy case clearly believed in privacy rights. They awarded $5,000compensatory and $50,000 punitive damages against her former employer, PriceChopper Foods. Fletcher worked as a deli cook at a Price Chopper grocery storein Trumann, Arkansas. Her manager, Marlene Sawyer, took impermissible legal andinvestigatory short-cuts in an effort to document the reasons for Fletcher’stermination. Despite these employer mistakes and the adverse jury verdict, PriceChopper won this case before the Eighth Circuit, Fletcher v. Price ChopperFoods of Trumann, Inc., 2000 U.S. App. LEXIS 19072 (8th Cir., August 9,2000). Privacy rights may be ubiquitous but they are not unassailable.

    Perceptive readers should spot the twomistakes over-zealous Manager Sawyer made. Fletcher was diagnosed with diabetestwo years after she began work as a deli cook at this grocery store. Fifteenmonths later, her left leg had to be amputated below the knee. After sevenmonths’ rehabilitation and a prosthetic limb, Fletcher returned to work as adeli cook. Her medical troubles continued. She then developed a diabetic ulcerin her right foot which had to be treated and dressed at a local hospital threetimes a week. While at work, she spilled hot gravy on that same right foot. Acoworker helped her remove her sock and applied burn cream to the exposedportion of her foot.

    Fletcher filled out a Arkansasworkers’ compensation form for this hot gravy incident as Price Chopper policyrequired. That form contained an authorization that permitted the release ofFletcher’s medical information. However, Fletcher never followed through andfiled a workers’ compensation claim for this incident. A few weeks later,Fletcher learned her right foot had developed a staph infection. She immediatelytold this to two coworkers who promptly told Manager Sawyer. Arkansas healthregulations prohibited anyone with a communicable disease (such as staph) fromworking in food preparation. Sawyer then terminated Fletcher.

    The employer mistakes were about tohappen. Fletcher filed for unemployment, claiming she did not have a staphinfection at the time Price Chopper fired her. This claim upset Sawyer whodecided to become an amateur detective rather than relying on what Fletcher hadtold her two coworkers. Sawyer called Fletcher’s doctor and spoke to NurseFlemon. Flemon said she could not release any information without a medicalauthorization form. Sawyer replied she had one because all Price Chopperemployees sign medical information waivers when they begin work. Sawyer thenfaxed Flemon a copy of Fletcher’s unsubmitted workers’ compensation formwith its medical authorization. Sawyer also told Flemon Fletcher had removed thebandage from her foot during work. That information upset Flemon because thedoctor had warned Fletcher not to expose her infection to the air. Based onSawyer’s two statements, the doctor wrote Sawyer informing her Fletcher wasindeed infected with the staph virus. His letter also reiterated that she shouldnot remove the bandage.

    The good news was that Price Chopperwon the unemployment case hands down. The bad news was that Fletcher immediatelysued the company under the Americans with Disabilities Act. Ten months later,Fletcher amended her complaint to add a state law invasion of privacy claim.Both claims went to the jury. Price Chopper obtained dismissal of the ADA claimbut, as noted, was assessed $55,000 total damages on the privacy claim. Thedistrict court struck out the jury’s $50,000 punitive damages award. That leftonly the $5,000 compensatory damages for what the jury found was an unlawfulinvasion of Fletcher’s privacy. That, in turn, was struck down by the EighthCircuit because privacy rights are particularly fragile.

    Arkansas, like the majority of thestates, follows Restatement (Second) Torts, which lists four distinct tortsunder the general heading “invasion of privacy.” Fletcher might have chosenthe third privacy category (“unreasonable publicity given to a person’sprivate life”) but did not. Presumably, the disclosures by Sawyer to the nursewere not “public” enough and were also information the nurse already knew.Fletcher and her attorney chose to rely on the first privacy category,unreasonable intrusion upon the seclusion of another. There was a clearintrusion. Sawyer used a workers’ compensation form’s medical authorizationto gain information from Fletcher’s doctor about her staph infection. This wasemployer mistake number one. Fletcher applied only for unemployment. She did notfile for workers’ compensation. Sawyer’s representation to the nurse thatthe unsubmitted workers’ compensation medical authorization form was “goodfor all purposes” was false.

    The second mistake was that Sawyer toldthe nurse Fletcher had removed the bandage from her foot ulcer in violation ofthe doctor’s orders. The coworker’s report to Sawyer said only thatFletcher’s sock had been removed and burn cream had been applied tothe exposed portion of Fletcher’s right foot. The jury very likely foundSawyer had grossly misrepresented to Nurse Flemon what Fletcher had done at workespecially after hearing Fletcher herself testify without contradiction she didnot remove her bandage.

    The intrusion on someone’s seclusionmust also be unreasonable. At this point, the Eighth Circuit judges partedcompany. Two panel members found Sawyer had not acted unreasonably because thedocumentation of Fletcher’s staph infection that Sawyer zealously sought“could otherwise have been obtained by other means.” Price Chopper couldhave easily obtained a subpoena for Fletcher’s doctor’s testimony during theunemployment benefits application process that Sawyer was so determined to win.Yet because an alternative legal means to obtain the exact same information wasavailable even though never used, Sawyer’s conduct in cutting a fewcorners was not “highly offensive” as this invasion of privacy categoryrequires.

    To support this conclusion, themajority cited an interesting Kansas case, Werner v. Kliewer, 238 Kan.289 (1985). There, a husband embroiled in a divorce and child custody battleurged his wife’s physician to write to the trial court disclosing his wife’sseveral suicide attempts. The physician wrote that letter and the wife promptlysued claiming invasion of privacy. The Kansas Supreme Court granted summaryjudgment to the physician holding that nothing in the letter “was not alreadyknown” by the husband and his failure to follow “standard court anddiscovery procedures” was not highly offensive.

    The Eighth Circuit did not have to goto this extreme to excuse Sawyer’s “morally reproachable” conduct. Privacyis an expectation, not a right. It can be defeated in many ways. Here, Fletcherimmediately told two coworkers that her right foot had developed a staphinfection. The information Sawyer was zealously trying to document by impropermeans was no longer “private” information. All three panel members readilyagreed that Fletcher’s “revelation of private information to coworkerseliminated Fletcher’s expectation of privacy by making what was formerlyprivate a topic of office conversation.” Thus, long before Sawyer, acting asan amateur detective to defeat Fletcher’s minor unemployment claim, contactedFletcher’s doctor, “the proverbial cat had escaped from the bag. . . .”Fletcher no longer had any expectation of privacy after she told her two on-sitecoworkers who, not being restricted by Fletcher, immediately passed on the newsabout Fletcher’s staph infection to Sawyer, who was located in anotherArkansas town.

    Even at this point, the majority againdeparted from the concurring Judge. Fletcher’s staph infection obviouslyprecluded her from working as a deli cook under Arkansas and ADA rules. Thatinfection also had the potential to infect her coworkers. The majority thereforeheld, alternatively, that “an employer’s need to know trumps an employee’sright of privacy.” This was a further reason why Fletcher did not have areasonable expectation of privacy with respect to knowledge of her staphinfection.

    This case shows the vast differencesbetween employees’ (and jurors’) privacy expectations and legal realities.Privacy expectations can be defeated by employer policies and by theemployee’s own contrary actions. At the same time, employers need to ride hardon over-zealous managers such as Marlene Sawyer. A short-cut that wins a minorunemployment battle and yet opens up a protracted and costly ADA-privacy legalwar is not worth taking.

Reprinted with permission from Employment Law Alert, a publication of Nixon Peabody LLP. Copyright© 2000 Nixon Peabody LLP. Allrights reserved. The information contained in this article is intended toprovide useful information on the topic covered, but should not be construed aslegal advice or a legal opinion.

Union employees have ameasure of job security. Under most union contracts, they cannot be discharged“without just cause.”

By way of contrast, theemployer can fire a non-union employee (who does not have a protectiveemployment contract) at the drop of a hat as long as non-discrimination andother applicable laws are obeyed.

Complicating matters forunionized employers is that, under most labor contacts, a third party, anarbitrator, sits in judgment to determine whether the employer’s dischargedecision was truly for just cause. Not only do unionized employers not have afree hand in discharge matters, their decisions can be overruled by anarbitrator.

Arbitrators overrulecountless employer discharge decisions. They rule against the employers onprocedural grounds, because the employer was compassionate and didn’t dischargean earlier employee who engaged in similar conduct or, as many employersbelieve with considerable justification, arbitrators substitute their judgmentfor the employer’s because they think discharge is too harsh a sanction.

Additionally, no arbitratorwill stay in the arbitration business very long if he/she rules for one side oranother too frequently.

This basic principle ofarbitrator survival manifests itself particularly in discharge cases. Thearbitrator will reduce the employee’s suspension or reinstate the employeewithout back pay. Arbitrators who reduce the employer’s discharge decision to asuspension probably think they are pleasing both sides and enhancing theirchances of being selected again.

The bottom line, however, isthat employers end up winning only half of all discharge cases assuming thatthe all-too-frequent arbitral awards reducing a discharge to a reinstatementwithout back pay are correctly counted as employer losses.

There is a solutionavailable to employers who are losing too many discharge and otherarbitrations. Add a clause to your labor contract limiting the arbitrator’sreview power. Provide in your contract, for example, that an arbitrator cannotmodify or overturn the employer’s discharge (or discipline) decision unless theemployer’s decision “constituted a clear abuse of discretion and was notsupported by any rational basis.”

With such language in yourcontract, your discharge decisions would be sustained unless the union showsthey were arbitrary or capricious.

That is a much moredifficult task than simply showing the absence of just cause. Any demonstrablereason would suffice under this heightened review standard. Employers not onlywill win many more cases under this standard but many more will be settledprior to arbitration since the union realizes the procedural mountain it mustnow surmount before an arbitrator is not worth the effort and/or resources.

This clause is legal. In Dayton Newspapers, 26 AMR Para. 36015(November 20, 1998), NLRB Associate General Counsel Barry J. Kearney, for theBoard’s Division of Advice, directed the Board’s Ninth Regional Office todismiss a charge filed by a union. That union charge attacked an employer’scontract proposal permitting arbitrators to overturn discharge decisions onlywhere the employer’s “just cause” determinations constituted an abuse ofdiscretion and had no rational basis.

The union argued thisproposed contract language deprived their members of “meaningful arbitration”over employer discharge decisions and effectively excluded the union fromparticipation in the arbitration process.

The union relied principallyupon San Isabel Electric Services,225 NLRB 1073 (1976). The employer in that case made two proposals. It proposedthat discipline under its safety and work rules would only be subject toarbitration if that discipline was arbitrary or discriminatory and that thearbitrator could not substitute his/her discretion for that of the employerwhen reviewing such discipline decisions.

However, the employer alsoproposed a contract clause giving it the unilateral discretion to determine allsafety and work rules. The Board held these two proposals combined deprived theunion of meaningful arbitration over the employer’s unilateral decisions as towork and safety rules and possible violations of those rules.

The limitations on the 1976 San Isabel decision become apparent fromthe Board’s contrary 1989 decision in CommercialCandy Vending Division, 254 NLRB 908 (1989). In that case, theAdministrative Law Judge faulted the employer for insisting upon a “broad”management rights clause. The Board reversed because the exercise of thosemanagement rights was still subject to the contract’s grievance procedure.

In Dayton Newspapers, the employer also proposed an extensivemanagement rights clause. However, that clause still limited possible employer unilateralactions because among the many enumerated management rights were the right todischarge “for proper cause” and the right to publish and enforce “reasonable”work rules. As in Commercial Candy,this management rights language saved the day.

Against that importantcontractual backdrop, the employer’s other proposal, that an arbitrator couldneither modify nor overturn an employer discipline decision unless thatdecision “constituted a clear abuse of discretion and was not supported by anyrational basis,” was only lawful hard bargaining and not unlawful surfacebargaining.

Associate General CounselKearney concluded both employer proposals will “provide the union with a rolein representing employees regarding discipline and discharge through grievancearbitration.” As in Commercial Candy,the union retained the “opportunity to grieve and arbitrate disputes.”

The union’s chances ofwinning many arbitrations practically disappears because it must nowdemonstrate the employer abused its discretion in determining it had “propercause” for a discharge. Nevertheless, the union remains a participant, even ifan unhappy one, in the arbitration process with a narrowed opportunity toattack and challenge employer discharge decisions.

Two caveats deserve mention.First, the Dayton Newspapers decisionsimply means no unfair labor practice charge issued in that case. The Boarditself could reach a contrary conclusion when the issue is presented to it.

In the interim, AssociateGeneral Counsel Kearney’s determination means the Board’s regional offices willnot issue complaints against employers based on such contract proposals in theabsence of other employer contract. Second, the employer must still convince aunion to agree to this language during contact negotiations.

Unions will fight thislanguage to the death because they realize it effectively removes them from thearbitration process except as repeated losers. In this case, Dayton Newspaperssimply insisted on this language to impasse with the intent of implementing itafter impasse.

Even then, it neither tookaction to implement its proposal nor enforced the new language in any waypending the Division of Advice’s determination. Staying its hand preserved thepristine legal issue, which was then decided in its favor. Every employer witha union contract can now take advantage of this ruling and position itself towin many more discharge arbitrations.

Copyright © 1999 Nixon Peabody LLP. All rightsreserved.

The information contained in this article is intended to provide usefulinformation on the topic covered, but should not be construed as legal adviceor a legal opinion.

Releases are everydayoccurrences in many personnel offices. Employees or ex-employees agree inwriting to surrender and waive their claims against the employer in exchangefor some valuable consideration. These agreements are essential to the smoothfunctioning of any personnel office.

Nevertheless, they fail toblock employee claims if they are not properly drafted. No personnel departmentwants to discover that money was paid to settle an employee claim and, yet, therelease language used was defective.Superiors will certainly want to know why ironclad release language wasnot used.

Title VII and otheremployment statutes allow a “prevailing party to recover a reasonableattorney s fee. Employees and their lawyers rely heavily on this statutoryprovision in the hope of forcing the employer to pay not only its counsel sattorneys fees but the employee s counsel s fees as well. Generally, anyrecovery in the case other than nominal damages entitles an employee to asserthe/she has “prevailed. This rule certainly applies to settlements wheresomething of value is given to the employee.

For this reason, it isessential that any release also release attorneys fee claims. If those claimsare not addressed in the release, the employer runs a major risk. It has likelyidentified the employee as a prevailing party simply by entering into thesettlement agreement conferring benefits. The employee can collect thesettlement proceeds and, once the employer s check clears, sue the employer forattorneys fees as a prevailing party.

This trap was sprung onMetropolitan Life in a recent case, Torresv. Metropolitan Life, 80 FEP Cases 104 (3d Cir., June 24, 1999). Met Lifewas defending an employment discrimination case brought by Edward Torres, whoclaimed he had been unlawfully denied participation in Met Life spre-employment training program.

Torres lost when thedistrict court held he could not sue Met Life under Title VII because he wasnever its “employee. Acting as his own attorney, Torres filed an appeal. TheThird Circuit appointed attorneys for the appeal. Those attorneys agreed withMet Life s attorneys to settle the case for $45,000. A written settlementagreement was prepared and signed. The original case was dismissed withprejudice as mandated by the settlement agreement.

Torres cashed Met Life scheck. He then promptly filed a motion seeking an order requiring Met Life topay attorneys fees and expenses totaling $30,427.14 to the law firm that hadhandled his appeal and negotiated the final $45,000 settlement. Met Lifeprotested that the settlement agreement specifically released “all claims,charges or demands including anyclaims Torres may have under Title VII.They even produced affidavits from the two assigned counsel who handledTorres appeal (they had since left the firm) stating they believed theirsettlement agreement settled all of their client s claims including any potentialattorneys fee claim.

Met Life lost. The ThirdCircuit held that Torres was entitled to have Met Life pay his attorneys fees in addition to the $45,000 finalsettlement. The appeals court majority noted the settlement agreement failed tomention attorneys fees at all. That was a fatal mistake. Citing an earlierThird Circuit case, El Club Del BarrioInc. v. United Community Corps., 735 F.2d 98 (3d Cir. 1984), the panelmajority held that “a settlement agreement that is silent as to attorneys feeswill not be deemed to constitute a waiver regardless of the course ofnegotiations.

The majority thus rejectedthe affidavits from Torres assigned counsel. Such extrinsic evidence was“irrelevant because only the language of the settlement agreement mattered.The majority disagreed with the dissenting judge that the agreement s referenceto all Title VII claims necessarilyincluded attorneys fee claims under that law.

The bright-line rule underthis decision is clear. The court held:
If the parties to a settlement agreement wish to extinguish the prevailingparty s claim for attorney s fees, they must do so specifically and expresslyin the terms of the agreement.

Employers should leavenothing to chance. Examine your release agreements. They must “specifically and expressly release all attorneys fees claims under any laws by additional language orby an additional stipulation.

The language of thesettlement agreement controls on thispoint. The parties negotiations and beliefs as to what is being released donot. They are, as the Third Circuit held, legally irrelevant. You must havespecific language within the four corners of your settlement agreement clearlywaiving and releasing all attorneys fee claims. If you don t, that “finalsettlement you thought you had will suddenly become much more expensive. No personnel director wants that.

Copyright © 1999 Nixon Peabody LLP. All rightsreserved.

The information contained inthis article is intended to provide useful information on the topic covered,but should not be construed as legal advice or a legal opinion.