Nevada Complex Litigation

Wynn Dealers Lose Tip Pooling Lawsuit in Nevada Supreme Court

In September 2006, two Wynn Las Vegas dealers Daniel Baldonado and Joseph Cesarz filed a lawsuit claiming that the Wynn Las Vegas tip pooling policy violated Nevada State Law because it forced tip sharing between employees and management.

The lawsuit was thrown out by District Court Judge Douglas Herndon in December 2006 who stated in his decision that there was no contract of employment between the dealers and Wynn, which meant that Nevada law allows an employer to change any tip pooling policies. Herndon noted that the company was not taking away tips, only widening the pool of workers who share in the gratuities.
 
The dealers appealed, and yesterday, The Nevada Supreme Court upheld the lower court ruling.

On behalf of a unanimous Nevada Supreme Court, Justice Michael Douglas wrote:

“In Nevada, labor laws are to be enforced by the Labor Commissioner, who generally must hear and decide complaints that arise under those laws.  Accordingly, we can imply no private cause of action to enforce NRS 608.160, NRS 608.100, or NRS 613.120.  Further, in light of an available statutory remedy, appellants have no standing to independently seek declaratory relief regarding those statutes’ application.  And regarding appellants’ breach of contract claim, they failed to demonstrate a genuine issue of material fact because they failed to show that the March 28 policy constituted unalterable and enforceable terms of employment.
           
Accordingly, the district court properly granted the Wynn’s motion for summary judgment and denied appellants’ motion for partial summary judgment.  Finally, as appellants had reasonable grounds on which to assert their claims, the district court did not abuse its discretion in refusing to award attorney fees.  Consequently, we affirm the district court’s summary judgment and order denying attorney fees.”

The entire opinion can be viewed for 90 days HERE.

While this decision does not put the matter of the Wynn tip pooling policy to rest, it does remove the question from the courts and return it to the Nevada State Labor Commissioner.

Court of Appeals Answers Age Old Question....Employee or Independent Contractor?

In Varisco v.Gateway Science and Engineering, the California Court of Appeals upheld a Los Angeles Superior Court ruling which determined that Al Varisco was in fact an "Independent Contractor", not an employee of Gateway. Plaintiff Varisco alleged that the “at will” clause in his contract with Gateway established employee status.

From the opinion, which can be found HERE:

"Appellant Al Varisco sued respondent Gateway Science and Engineering for wrongful termination of employment and similar causes of action, all of which depended on the allegation that he had been Gateway's employee. Gateway moved for summary judgment on the ground that Varisco was not an employee, but an independent contractor. The trial court found for Gateway, and we affirm. All the undisputed facts add up to an independent contractor relationship. A single clause in the parties' letter
agreement which allowed either party to terminate at will did not transform that relationship into an employment relationship."

The Court of Appeals reviewed the following to before affirming Varisco’s status as an “Independent Contractor”.

Control is the principal factor in determining whether an individual worker is an employee or an independent contractor. "An independent contractor is 'one who renders service in the course of an independent employment or occupation, following his employer's desires only in the results of the work, and not the means whereby it is to be accomplished.'  Thus, the most significant question in the independent contractor/employee determination is "'whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.

Case law has identified secondary indicia of the nature of the relationship. These are:

(a) whether the one performing services is engaged in a distinct occupation or
business;

(b) the kind of occupation, with reference to whether, in the locality, the work is
usually done under the direction of the principal or by a specialist without supervision;

(c) the skill required in the particular occupation;

(d) whether the principal or the worker
supplies the instrumentalities, tools, and the place of work for the person doing the work;

(e) the length of time for which the services are to be performed;

(f) the method of payment, whether by the time or by the job;

(g) whether or not the work is a part of the regular business of the principal;

(h) whether or not the parties believe they are creating the relationship of employer-employee."

Related Citations may be found in the opinion document.  If you have questions related to employment law problems, feel free to contact the Law Office of William E. Cooper.

Please Note:  While the above information can be beneficial for the purpose of employment law, the IRS definition of Independent Contractor status remains to be a question best answered by a Certified Public Account (CPA) or Tax Law professional.

Whistleblower to Receive $56 Million from Amerigroup Settlement

Cleveland Tyson, a former Amerigroup employee filed a lawsuit under the federal False Claims Act and the Illinois Whistleblower Reward and Protection Act as a private party (legally known as a relator).  Tyson’s lawsuit alleged that while administering the Illinois Medicaid program, Amerigroup systematically avoided enrolling pregnant women and those with expensive medical conditions.  These actions were contrary to state and federal laws.

Lawyers from the U.S. Attorney’s Office, Illinois Attorney General’s Office, and Justice Department Civil Division joined the lawsuit against Amerigroup.

Amerigroup claimed that its enrollment policies were responsive to state officials who were concerned about the enrollment of too many pregnant women in their third trimester.

In October 2006 the case went to trial.  An Illinois jury found that Amerigroup defrauded the Illinois Department of Public Aid and a $334 Million judgment was entered against them. Amerigroup appealed.

Federal and state prosecutors announced this week that Amerigroup has agreed to pay $225 Million to settle all claims and will drop the appeal. 

Admitting no wrongdoing, Amerigroup Chairman James Carlson stated, “Our responsibility to our shareholders, associates, members, providers and government partners is to close this chapter now and move toward the future."  Amerigroup has ceased all business operations in Illinois.

Cleveland Tyson, the former employee who filed the whistleblower suit stands to collect a 25% share of the settlement, about $56.25 million.

Will Nevada Equal Rights Commission Sexual Discrimination Ruling Bring Change?

Everyone agrees that in most cases discrimination is wrong.  It is certainly wrong in issues related to employment, education, housing and lending. 

The question is this, when a health club, night club or clothing optional pool charges men more than women, is that discrimination wrong and/or illegal?

In August of 2007, Todd Phillips filed a complaint with the Nevada Equal Rights Commission (NERC).   Phillips claimed that the Las Vegas Athletic Club’s practices of charging women less than men, and providing a private workout area for women but not for men were discriminatory.

On Monday in a five page ruling (found HEREcourtesy of LasVegasWeekly.com) the NERC ruled that the health club enrollment fee structure DID discriminate against men.  It also found that the private workout area for women did NOT discriminate against men.

A similar complaint was filed in May of this year by Adam Russin of New York.  Russin’s complaint is about access to the topless pool at The Mandalay Bay Resort which charges $50 for men and $10 for women. More on that story can be found HERE.

In 1985 the California Supreme Court ruled all such disparities illegal.  Judges in many states have followed suit while judges in Illinois and Washington have disagreed.

It was only 3 years ago that the Nevada Legislature banned sexual discrimination.  

What should area businesses do in light of this ruling?  That is yet to be seen in Nevada.

Gary Peck, executive director of the American Civil Liberties Union of Nevada interprets Nevada statutes as stating that discrimination based on sex is against public policy, but not against the law.

Dennis Perea, NERC administrator agrees that there is some conflict between the law and public policy.  He believes the ruling will reduce confusion.  “This particular issue is completely untested waters,” Mr. Perea said. “I am certain whether through the judicial side or legislative side, the commission will have a lot more clarity in the near future.”

 

Determining the Value of Property in Eminent Domain; Is Enough ever Enough?

Establishing the value of property is always a focal point of eminent domain actions.  The government entity “taking” the property wants to pay the lowest possible fair price which is in the best interest of the taxpayers, whose money is being spent/invested.  Again for the benefit of the taxpayers, the government entity wants to minimize legal costs throughout the eminent domain proceedings.

Of course, the property owner wants as much as possible for the property being “taken”.  Such is the case of Dr. Ira Trocki.

In 1998, Dr. Trocki purchased the historic Armstrong World Industries office building on Lancaster Square in Lancaster PA for $12 Million.

In 2004, Lancaster County acquired the property through Eminent Domain for use as a county office building, and paid Dr. Trocki $8.3 Million.

Trocki sued in Federal Court. 

U.S. District Court Judge James Knoll Gardner appointed a three member panel to determine the fair market value of the property.  Last month, that panel determined the value to have been $14.5 Million when the county took it over.  The judge ordered the County to pay Trocki an additional $6.2 Million (above the original $8.3 Million) plus $1.6 million in interest.

Lancaster County decided not to appeal.  Dr. Trocki has decided that he will.  Dr. Trocki believes that the property was worth $21 Million at the time of the eminent domain “taking”.

Chairman of the Lancaster County Board of Commissioners, Dennis Stuckey said Trocki's appeal was "disappointing" but that the county would defend "to the best of our ability, the taxpayers of Lancaster County."

Eminent Domain on California Ballot

There are two eminent domain related propositions on the California Ballot in the upcoming election.  They are both being promoted as protection for California citizens against eminent domain abuse.  Many believe that the 2005 US Supreme Court “Kelo” decision allows governmental agencies too much freedom in eminent domain actions. 

California voters will have a chance to restore property owners’ rights to a degree by voting on Propositions 98 and 99 on the June ballot.  The biggest difference between them is that Prop 98 contains provisions to eliminate rent control in California in addition to eminent domain reform.

The State of California has a Legislative Analyst's Office which has prepared non partisan descriptions of both propositions and potential ramifications.  You may view them by clicking Proposition 98 and Proposition 99.

Since Nevada lawyers often cite California law when Nevada has no applicable law, these propositions might well have impact on future eminent domain proceedings in Nevada.

Additionally, here is an opinion piece about the abuse of eminent domain law in Missouri in which the author Timothy Sandefur illustrates the need for reform on a state level.

Lastly, here is an article by Ilya Somin an assistant professor of law at George Mason University, who questions why eminent domain/property owners’ rights are not issues in our current presidential campaign. He also suggests steps our next president could take to strengthen property owners’ rights.  Somin’s amicus brief in the Kelo case was cited by the Supreme Court in its opinion.

Whistleblower Earns $47,000 Reward From US Government

The Dallas Independent School District will repay the US Government $336,000 in HIV Education grant money according to settlement terms of a whistleblower lawsuit. 

The whistleblower, Becky Beck had complained to supervisors and filed a grievance stating that the funds paid over a 3 year period were not being used as earmarked, but the district took no action.  

According to her attorney, instead of using funds from a CDC grant to pay for 2 full time employees to provide HIV education in the district, Ms. Beck was doing CPR training and writing curriculum while being paid with CDC funds.

Her attorney also said that the school district took the CDC grant money and "pretty much did whatever they wanted to with it."

School District spokesman Jon Dahlander said the district settled the lawsuit to "avoid delay, uncertainty, inconvenience and expense of protracted litigation."  The district has admitted no wrongdoing.

Ms. Beck has earned a $47,400 reward from the US Government for exposing the school district’s deception.

Where to Find Nevada Laws for Employers

If you are an employer in Nevada, you and your entire HR department should have this website at your fingertips at all times. 

It is NRS CHAPTER 613 - EMPLOYMENT PRACTICES

All employment law in Nevada starts there and if you do, you may not end up in court.

Feel free to contact me if you have any questions.

Bill Cooper

702-382-5111