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Category: Legal

Posted on November 7, 2019June 29, 2023

‘Smoking Gun’ Email Revives Employee’s Disability Discrimination Lawsuit

Jon Hyman The Practical Employer

Maryville Anesthesiologists fired Paula Babb, an experienced certified registered nurse anesthetist, because it thought she suffered from a visual impairment.

How do we know why it fired her? Because the day after Babb’s termination, one of her co-workers confirmed it in an email (written at the direction of one of the employer’s owners).

As most of you know, [Babb] has been having major issues with her eyesight and as of late, it has seemed to be getting even worse. We have had numerous complaints from [hospital] staff regarding her inability to read the monitor, etc. Over the past several months the group has given her several opportunities to provide documentation from her eye specialist saying that she was safe to practice. [Babb] was unable to provide this documentation. This, in addition to a few other issues, has forced the group to make a very difficult decision. As of today, she is no longer with our group. Sorry to be the bearer of bad news. This was one of the reasons that our meeting was postponed. See you all tomorrow.

Despite this email, the district court granted the employer summary judgment and dismissed Babb’s “regarded as disabled” ADA lawsuit.

On appeal, the 6th Circuit had little difficulty in reviving the claim, in large part because of what it described as the “smoking gun” email.

Maryville has never tried to defend its termination of Babb on grounds that Babb’s vision created a safety hazard, and has instead insisted that Babb’s termination occurred solely because of clinical errors unrelated to her vision. But, yet, just hours after Maryville decided to fire Babb, Crystal Aycocke wrote an e-mail to her fellow CRNAs essentially stating that Maryville was firing Babb because of her impaired vision. More striking still, far from being mindless office gossip, Aycocke admits that she composed this e-mail at the direction of Dr. Proffitt—one of the key players involved in Babb’s termination—shortly after Dr. Proffitt informed her of Babb’s termination. And, of course, all of this occurred in a context in which Maryville’s physicians felt concerned enough about Babb’s vision to discuss it at the meeting at which they decided to fire Babb, and on the official evaluations they wrote about Babb. (“I see her questionable ability to see reflect on how surgeons and the medical staff lack accepting her.”). If this kind of “smoking gun” evidence cannot get an employment discrimination plaintiff past summary judgment on the question of pretext, it is hard to imagine what could.

Employers, if you are short-sighted enough to (a) fire an employee because you believe she suffers from a disability, and (b) confirm that belief in writing, then you deserve whatever fate you suffer in litigation.

Posted on November 6, 2019June 29, 2023

Decision on Positive Drug Test Reveals the Future of Medical Pot and Drug Testing

Jon Hyman The Practical Employer

Richard Turner worked as a crane operator for Phillips 66.

The company’s substance abuse policy allowed for random and post-accident drug testing for “Cannabinoids, Cocaine, Opiates, Phencyclidine (PCP) and Amphetamines,” and mandated termination for any positive test.

On April 24, 2017, Turner was selected for a random drug test and provided a urine sample. Three days later he was involved in a workplace accident and was again tested.

The following day, Phillips 66 learned that Turner’s April 24 sample tested positive for amphetamines. As a result, the company fired him.

According to a letter Turner later provided from his physician, Turner had not been prescribed amphetamines, but had taken over-the-counter medications, including Sudafed, for unspecified “medical conditions.” The April 27 sample, and the sample from a retest Turner himself took, both tested negative. The company’s retest of the April 24 sample, however, again tested positive for amphetamines.

In Turner’s subsequent disability discrimination case challenging his termination, the 10th Circuit Court of Appeals concluded that Phillips 66 did not violate the ADA via its drug testing.

Under the ADA, an employer “shall not require a medical examination and shall not make inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity.” Turner argued that Phillips 66’s drug screen violated this rule because it revealed the potential use of a legally prescribed medication. The 10th Circuit disagreed:

The EEOC has indicated a drug test does not become a medical examination simply because “the results reveal information about an individual’s medical condition beyond whether the individual is currently engaging in the illegal use of drugs,” such as “the presence of a controlled substance that has been lawfully prescribed for a particular medical condition, this information is to be treated as a confidential medical record.” A test for the illegal use of drugs does not necessarily become a medical examination simply because it reveals the potential legal use of drugs.

Pay careful attention to that last sentence:

A test for the illegal use of drugs does not necessarily become a medical examination simply because it reveals the potential legal use of drugs.

Assume for a second that Turner tested positive for legally prescribed medical marijuana instead of amphetamines. Would this result be any different? Marijuana remains federally illegal. If an employer drug tests for marijuana, according to Turner v. Phillips 66, a positive test does not become an unlawful medical exam in violation of ADA merely because it could cause the employee to reveal medical information to justify the positive test.

In other words, drug tests remain 100 percent legal, whether or not they cause an employee to reveal medical information in response to the drug screen.

A great result for employers as we continue to figure out the difficult intersection between the lawful use of impairing drugs and the ADA.

Posted on November 4, 2019June 29, 2023

An Employee’s Disability Is Not a ‘Get Out of Jail Free’ Card for Workplace Misconduct

Jon Hyman The Practical Employer

Does a medical leave of absence grant an employee a free pass for pre-leave misconduct discovered during the LOA?

This question is squarely at the center of the court’s decision in Williams v. Graphic Packaging International (6th Cir. 10/31/19) [pdf]

James “Randy” Williams worked as a department manager for Graphic Packaging. In late 2014 or early 2015, Williams told his supervisor, plant manager Eddie Lee, that he had been re-diagnosed with prostate cancer. In September 2015, Williams requested time off for treatment, which the company granted from Sept. 14 through Nov. 23, 2015. During that leave, however, several of Williams’ subordinates lodged complaints against him of inappropriate treatment. The company investigated, and concluded that “Williams had been using manipulative and coercive tactics to control his employees and prevent them from communicating with upper management.” As as a result, shortly after Williams returned to work, the company fired him.

Williams sued, claiming (among other things) that firing on the heels of a return to work after cancer treatment is tantamount to disability discrimination.
The 6th Circuit court of appeals disagreed.

The evidence demonstrates that Graphic Packaging terminated Williams’s employment after receiving complaints from an employee, which were later corroborated by interviews with fellow employees, an internal investigation, and depositions from Graphic Packaging upper management, Human Resources employees, and employees who reported to Williams. The record reflects that Williams violated Graphic Packaging’s Core Values by mistreating employees both publicly and privately, limiting access to upper management, and propagating troubling and salacious rumors concerning upper management. Williams has even admitted that he committed at least some of the acts which so clearly violated Graphic Packaging’s Core Values.

No employee gets a free pass on workplace misconduct just because he or she suffers the misfortune of having cancer (or any other disability). The company concluded that the allegations against Williams (which its internal investigation corroborated, and many of which Williams himself admitted) merited termination. Those allegations included Williams telling his subordinates that he “owned” them; spreading an unsubstantiated rumor that Lee had molested his own daughter; cheating on a mandatory safety exam; and forbidding his subordinates from speaking to plant management.

Cancer and other ADA-protected disabilities are not “get out of jail free” cards for workplace misconduct. Do your due diligence, and treat the employee the same as you would have treated him or her if the disability didn’t exist. If the misconduct warrants termination, so be it. Terminate, and defend your legitimate, non-discriminatory decision. Otherwise, you risk setting a precedent that the misconduct is OK, which will make it that much more difficult to hold others accountable for that same misconduct in the future.

Posted on October 29, 2019October 28, 2019

Best Practices for ADA Compliance

employee compensation

This summer marked the 29th anniversary of the original Americans with Disabilities Act.

I have Type 1 Diabetes, which makes me a beneficiary of the ADA (as amended). The ADA protects my right to wear my insulin pump on a plane, eat a snack when my glucose is low and bring needles when I go to court. As an individual, I rely on ADA protections on a daily basis.

As an attorney, I regularly counsel employers who feel overwhelmed by administering such a technical law.

Put succinctly, Title I of the ADA requires employers to make certain reasonable accommodations for otherwise qualified individuals with disabilities. This is easier in theory than practice. Even a letter-perfect ADA policy might be insufficient if management is not properly trained or if employees are not given guidelines for how to raise the need for a potential accommodation. There are, however, some steps employers can take to protect themselves and their employees.

The ADA requires employers to engage in an “interactive process” with an employee who signals a potential need for an accommodation.

If a company doesn’t know about the problem, it’s difficult to address the issue or provide the accommodation. Clear policies outlining how employees should request an accommodation are essential. This typically includes specific direction on whom to contact and how. Employees at all levels should be educated on how to address a possible accommodation need.

By contrast, policies that are silent on this point or that direct employees to an “immediate supervisor” or “management” could foster dead-end conversations with someone who inadvertently misinforms an employee or ventures to make his or her own determination of whether the individual has a legally protected disability, creating significant liability for the company.

The corollary is training management at all levels on how to respond to an employee’s remark that “the fluorescent lights give them migraines” or that they “can’t stand at the register for the whole shift.” If the employee’s communication could indicate a need for a medical accommodation, liability could arise for the company even if the individual to whom it is disclosed is not serving in an official HR role.

Also read: A Textbook Lesson on the ADA’s Interactive Process

Consider the company that recently landed in hot water when a well-intentioned but misinformed supervisor unequivocally informed an employee that she could not miss work or take a leave of absence to treat her anxiety. The employee subsequently resigned. By failing to direct the issue through the proper channels, the supervisor misinformed the employee, failed to fulfill the company’s legal obligations, caused the employee to resign and led to costly litigation that could have been avoided with an ADA-compliant response.

Well-intentioned employers may also miss the mark determining whether the individual has a “disability.”

While it may seem straightforward, ADA protections extend to conditions that may not be visible, and the determination is highly fact-specific. For example, migraines, irritable bowel syndrome and mental health issues may be considered disabilities in the right circumstances.

While employers may request certain medical information under appropriate circumstances, it should be handled with care to avoid legal violations for mishandling medical information. This, again, makes it essential to direct employees to the appropriate recipient for such a disclosure.

Even if an individual has a legally protected disability, the ADA does not require that an employer automatically provide the requested accommodation. It does, however, require an accommodation that is reasonable, i.e., one that does not pose an undue hardship for the employer.

Reasonableness is a fact-specific determination that should be made through an interactive process between the employer and the individual. Depending on the circumstances, it could include anything from a modified work schedule to providing accessible workplace equipment, or even a leave of absence from work. The fact that it would cost the company money, or that co-workers will be jealous, or that you’ve always scheduled shifts for specific eight-hour windows, does not automatically mean that the accommodation is unreasonable.

Returning to the example above about the employee with anxiety, the company was not under an obligation to give the employee precisely what she requested. What was not permissible, however, was her supervisor’s immediate rejection of the accommodation that she requested without further dialogue about what she needed to do her job.

Also read: An Expensive Lesson on Disability Harassment

To avoid liability, employers should position employees to navigate complicated medical issues when they arise. At a minimum, everyone should be trained to direct inquiries to the same, central location, such as HR or a member of upper management. Finally, legal advice should be sought when the answer is in doubt; it is cheaper to resolve an issue on the front end than to clean up in litigation.

Posted on October 16, 2019June 29, 2023

The 17th Nominee for the ‘Worst Employer of 2019’ is … The Mauling Manager

Jon Hyman The Practical Employer

worst employer 2019I don’t even know what to say about today’s nominee for 2019’s worst employer, so I’ll just let Newsweek do the heavy lifting.

A Pakistani electrician is filing charges against a client who refused to pay their bill and instead unleashed a pet lion on him.

The Khaleej Times reports that Mohammad Rafique was hired to do a project for the Sada-e-Imam Hussain congregation hall in Lahore. After he finished the job, Rafique went to caretaker Ali Raza for payment.

He did not have the money on hand, so Rafique agreed to come back another day. However, after being put off multiple times, the electrician became frustrated and confronted Raza on September 9.

Instead of paying his bill, Raza unleashed the lion that he kept as a pet. The big cat attacked Rafique, biting and pawing at him as he was helpless to resist.

Neither Raza or three other men on the scene made any effort to help him, Rafique alleges. He says that it was only when bystanders heard his screams and cries and came to investigate that Raza got the lion under control.

According to Gulf News, police say the lion “wounded his face and arm.”

Astoundingly, Rafique returned to try again to collect, this time for his back pay and his injuries. When Raza stonewalled, Rafique eventually went to the police. Raza is now in custody, charged with “voluntarily causing hurt by dangerous weapons or means.”
I’ve  reported on a lot of employers doing some truly awful things. But releasing a lion to attack someone instead of paying them? That is flat out horrendous. And a worthy international nominee for the Worst Employer of 2019.
Previous Nominees:

The 1st Nominee for the Worst Employer of 2019 Is … the Philandering Pharmacist

The 2nd Nominee for the Worst Employer of 2019 Is … the Little Rascal Racist

The 3rd Nominee for the Worst Employer of 2019 is … the Barbarous Boss

The 4th Nominee for the Worst Employer of 2019 is… the Flagrant Farmer

The 5th Nominee for the Worst Employer of 2019 is… the Fishy Fishery 

The 6th Nominee for Worst Employer of 2019 Is … the Diverse Discriminator

The 7th Nominee for Worst Employer of 2019 Is … the Disability Debaser

The 8th Nominee for the Worst Employer of 2019 Is … the Lascivious Leader

The 9th Nominee for the Worst Employer of 2019 Is … the Fertile Firing

The 10th Nominee for Worst Employer of 2019 Is … the Exorcising Employee

The 11th Nominee for the Worst Employer of 2019 Is … the ****y Supervisor

The 12th Nominee for the Worst Employer of 2019 Is … the Disguised Doctor

The 13th Nominee for the Worst Employer of 2019 Is … the Excoriating Executives
The 14th Nominee for the Worst Employer of 2019 Is … the Horrible Harasser
The 15th Nominee For The ‘Worst Employer of 2019’ Is … The Disability Demoter
The 16th Nominee for the “Worst Employer of 2019” Is … the Shameful Wall Builder
Posted on October 14, 2019June 29, 2023

The 16th Nominee for the “Worst Employer of 2019” Is … the Shameful Wall Builder

Jon Hyman The Practical Employer

worst employer 2019If you’re a health care facility whose employees erect a “wall of shame” of disabled patients, and then you drag your feet when an employee, who was also a patient, reports the misconduct, you might be the worst employer of 2019. From the Bangor (Maine) Daily News:

Employees at St. Mary’s Regional Medical Center in Lewiston created a “wall of shame” where they displayed confidential medical records of patients with disabilities detailing issues with their genitalia and bodily functions, according to an investigation by the Maine Human Rights Commission that found the exhibit had contributed to a hostile work environment.

In addition, at least two employees looked at the private medical records of a fellow coworker, MyKayla McCann, whom the hospital had previously treated. She ultimately reported her suspicions about their actions, in addition to the wall of shame, to the hospital’s administration. When she did, it took three to four months for the hospital to remove the display, investigate and punish her coworkers, according to the investigation. …

A human rights commission investigator found there are reasonable grounds to believe that St. Mary’s hospital discriminated against McCann, who is a member of a protected class because she has a disability, when it subjected her to a hostile environment created by her coworkers’ conduct. …

McCann discovered the “shame wall” on the inside of a cabinet door on her first day of work as a laboratory technician assistant at St. Mary’s in June 2015. It had been labeled a “wall of fame,” with the word “fame” crossed out and replaced by “shame.” Portions of medical records had been cut and taped to the door. They “included information detailing patients’ sexual activity, genital dysfunction, bowel movements, bodily odors, and other personal maladies,” according to the investigator’s report.

McCann also provided pictures of the wall in her complaint. In one place, someone had attached strips of paper with diagnoses on them: “cramps/bloated/things to do w/intercourse,” stated one. “Drooping eyelids,” “butt wounds,” “unable to insert tampon,” “sour smell of vagina with occasional itching,” stated others.

For its part, the hospital’s parent company publicly apologized to McCann.

Public apology or not, if you permit a working environment in which this “wall of shame” could exist, you might be the worst employer of 2019.

Previous Nominees:

The 1st Nominee for the Worst Employer of 2019 Is … the Philandering Pharmacist

The 2nd Nominee for the Worst Employer of 2019 Is … the Little Rascal Racist

The 3rd Nominee for the Worst Employer of 2019 is … the Barbarous Boss

The 4th Nominee for the Worst Employer of 2019 is… the Flagrant Farmer

The 5th Nominee for the Worst Employer of 2019 is… the Fishy Fishery 

The 6th Nominee for Worst Employer of 2019 Is … the Diverse Discriminator

The 7th Nominee for Worst Employer of 2019 Is … the Disability Debaser

The 8th Nominee for the Worst Employer of 2019 Is … the Lascivious Leader

The 9th Nominee for the Worst Employer of 2019 Is … the Fertile Firing

The 10th Nominee for Worst Employer of 2019 Is … the Exorcising Employee

The 11th Nominee for the Worst Employer of 2019 Is … the ****y Supervisor

The 12th Nominee for the Worst Employer of 2019 Is … the Disguised Doctor

The 13th Nominee for the Worst Employer of 2019 Is … the Excoriating Executives
The 14th Nominee for the Worst Employer of 2019 Is … the Horrible Harasser
The 15th Nominee For The ‘Worst Employer of 2019’ Is … The Disability Demoter
Posted on October 3, 2019

Ohio Tries Again to Fix Its Broken Employment Discrimination Law

Jon Hyman The Practical Employer

For lack of more artful description, Ohio’s employment discrimination law is an awful mess.

Among other problems, it exposes employers to claims for six(!) years; contains no less than four different ways for employees to file age discrimination claims (each with different remedies and filing deadlines); renders managers and supervisors personally liable for statutory discrimination; omits any filing prerequisites with the state’s civil rights agency; and contains no affirmative defenses for an employer’s good faith efforts to stop workplace harassment.

There have been several prior attempts to fix this law and harmonize it with its federal counterparts. All have died on the legislative vine.

Welcome House Bill 352 [pdf], introduced on October 1. It’s yet another business-friendly attempt at comprehensive reform of Ohio’s employment discrimination statute.

Among its key reforms, H.B. 352:

  • Creates a uniform two-year statute of limitations for all employment discrimination claims.
  • Unites the filing of age discrimination claims to the same procedures and remedies as all other protected classes.
  • Eliminates individual statutory liability for managers and supervisors.
  • Requires individuals file an administrative charge of discrimination with the Ohio Civil Rights Commission as a prerequisite to filing a discrimination lawsuit in court.
  • Prioritizes conciliation for all charges filed with the OCRC, so that all but the most difficult of cases can be resolved efficiently and cost-effectively.
  • Establishes an affirmative defense to certain hostile work environment sexual harassment claims, when 1) the employer exercised reasonable care to prevent or promptly correct the alleged unlawful discriminatory practice or harassing behavior, and 2) the employee failed to take advantage of any preventive or corrective opportunities provided by the employer or to otherwise avoid the alleged harm.

This bill presents a tangible opportunity to fix a very broken law. Ohio’s current employment discrimination statute is so different from both its federal counterpart and the similar laws of other states that it places Ohio at a competitive business disadvantage. By paralleling federal employment discrimination statutes, H.B. 352 restores balance and predictability for Ohio employers, while, at the same time, preserving the crucial right of employees to be free from discrimination in the workplace.

As opponents to these reforms have argued in the past, we can expect to hear that the elimination of individual liability protects sexual harassers. Nothing could be further from the truth. The legislation leaves intact all common-law remedies employees have if they are subjected to predatory behavior in the workplace—assault, battery, intentional infliction of emotional distress, and invasion of privacy—along with the possibility criminal sanctions for the most egregious of misconduct. H.B. 352 merely brings Ohio in line with federal law and the law of almost every other state on this issue. It also harmonizes Ohio law on this issue, as the Ohio Supreme Court has already eliminated individual supervisor and manager liability for public officials.

Now comes the hard part—getting this bill passed into law. If you believe H.B. 352 presents necessary reforms of a broken system, call or email your state representative and urge him or her to support this bill. Passing H.B. 352 is a battle worth fighting for Ohio’s businesses.

For more on H.B. 352, the Ohio Chamber of Commerce has shared its thoughts on its All for Ohio Blog.

Posted on October 2, 2019June 29, 2023

The 15th Nominee For The ‘Worst Employer of 2019’ Is … The Disability Demoter

Jon Hyman The Practical Employer

worst employer 2019An employee tells you he might need to leave work on a moment’s notice to rush home to care for his disabled daughter (born with a severe neurological disorder, Rett Syndrome, which affects the ability to speak, walk, breathe, and eat, among other things).

Do you?

a) Tell him he can’t leave work immediately after his shifts to care for his daughter because he’s expected to remain on site in case of an emergency.

(b) Deny him a raise, telling him, “Your problems at home are not the company’s problems.”

(c) The day after his daughter suffered a near-fatal seizure and was rushed to the hospital, demote him from his position as an Operator, where his responsibilities included running controls on trucks, to a Laborer, where his chief responsibility involved shoveling sewer systems.

(d) Refuse to excuse the employee from overtime so that he can visit his daughter in the hospital.(e) On the employee’s first day back at work after a two and half week absence while his daughter was hospitalized, you send him home for being 15 minutes late, and subsequently fire him.

(f) All of the above.

If you chose (f), you might be the Worst Employer of 2019.

The case is Kelleher v. Fred A. Cook, Inc. (2nd Cir. 9/24/19)
Previous Nominees:

The 1st Nominee for the Worst Employer of 2019 Is … the Philandering Pharmacist

The 2nd Nominee for the Worst Employer of 2019 Is … the Little Rascal Racist

The 3rd Nominee for the Worst Employer of 2019 is … the Barbarous Boss

The 4th Nominee for the Worst Employer of 2019 is… the Flagrant Farmer

The 5th Nominee for the Worst Employer of 2019 is… the Fishy Fishery 

The 6th Nominee for Worst Employer of 2019 Is … the Diverse Discriminator

The 7th Nominee for Worst Employer of 2019 Is … the Disability Debaser

The 8th Nominee for the Worst Employer of 2019 Is … the Lascivious Leader

The 9th Nominee for the Worst Employer of 2019 Is … the Fertile Firing

The 10th Nominee for Worst Employer of 2019 Is … the Exorcising Employee

The 11th Nominee for the Worst Employer of 2019 Is … the ****y Supervisor

The 12th Nominee for the Worst Employer of 2019 Is … the Disguised Doctor

The 13th Nominee for the Worst Employer of 2019 Is … the Excoriating Executives
The 14th Nominee for the Worst Employer of 2019 Is … the Horrible Harasser
Posted on September 30, 2019June 29, 2023

Are Hangovers the Next Frontier of Your FMLA Headaches?

Jon Hyman The Practical Employer

A German court recently ruled that a hangover qualifies as an “illness.”

Which got me thinking … are hangovers the next frontier of your FMLA headaches?

Thankfully, the answer to this question is almost certainly “no.”

But it’s worth reviewing the FMLA’s definition of “serious health condition” to see how I reach that conclusion.

The FMLA defines a “serious health condition entitling an employee to FMLA leave” as “an illness, injury, impairment or physical or mental condition that involves inpatient care …or continuing treatment by a health care provider.”

  • “Inpatient care” means “an overnight stay in a hospital, hospice, or residential medical care facility, including any period of incapacity … or any subsequent treatment in connection with such inpatient care.”
  • “Incapacity” means an “inability to work, attend school or perform other regular daily activities due to the serious health condition, treatment therefore, or recovery therefrom”
  • “Continuing treatment by a health care provider” means “a period of incapacity of more than three consecutive, full calendar days, and any subsequent treatment or period of incapacity relating to the same condition, that also involves” either “treatment two or more times, within 30 days of the first day of incapacity by a health care provider,” or “treatment by a health care provider on at least one occasion, which results in a regimen of continuing treatment under the supervision of the health care provider.”

It’s difficult to imagine a hangover meeting any of these criteria. No hangover should ever require an overnight stay, continuing treatment of three or more days, or a regimen of supervised continuing treatment, even if an employee feels so ill that he or she cannot work or perform other regular daily activities as a result.

HR folks and leave administrators, rest easy knowing that you will not have to grant FMLA to your hungover employees.

Posted on September 27, 2019September 9, 2019

Jimmy John’s No-Poach Policy Leaves Bad Taste

employment law, labor law, overtime records

Sylas Butler was an employee for a Jimmy John’s sandwiches franchise in Illinois.

After Butler’s hours were reduced, he attempted to transfer to another Jimmy John’s franchise. He discovered he could not transfer because the franchises have contracts with Jimmy John’s corporate that contain “no poach agreements,” — agreements that prohibit franchisees from hiring each other’s employees.

Butler brought a class-action lawsuit on behalf of current and former Jimmy John’s employees, alleging the sandwich company violated the Sherman Antitrust Act, and committed unfair and deceptive business practices under state law. The United States District Court for the Southern District of Illinois held that Butler stated a valid claim under the Sherman Act and state law.

The court rejected Jimmy John’s argument that the no-poach agreements were merely “vertical” restraints on trade between Jimmy John’s corporate and franchisees, and not “horizontal” restraints upon trade between competitors, which are typically illegal.

The effect of the no-poach agreements was horizontal, as under the contract, the franchisees had the ability to enforce the no-poach agreements against each other as third-party beneficiaries. Butler v. Jimmy John’s Franchise, LLC, 331 F. Supp. 3d 786 (S.D. Ill. 2018).

IMPACT: Courts are increasingly skeptical of no-poach agreements that restrict the ability of employees to seek gainful employment.

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