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.

Unpaid Overtime Prompts Lawsuit Against Nevada Construction Employer

Fourteen current and former employees filed suit against Building Materials Holding Corp.in Federal Court yesterday alleging numerous violations of wage and employment laws.  Seeking class action status, the complaint alleges that employees were routinely asked and/or coerced into signing blank timesheets, travel between job sites without pay and were routinely paid for little or none of the overtime worked.

Building Materials Holding Corp. reported $2.3 billion in revenue in 2007 and states on its website that it is "one of the largest providers of building materials and residential construction services in the United States."

One of its subsidiaries named in the lawsuit, SelectBuild Construction, provides residential construction services in Nevada, California and Arizona.

Complaints by the workers were first made to the Laborers' International Union of North America (LiUNA), which had been trying to organize SelectBuild's workers.  LiUNA is not a party to this lawsuit.

Building Materials Holding Corp., based in San Francisco, said in a statement "BMHC and SelectBuild fully comply with federal and state wage practices and believe this suit is without merit," the statement said. "We intend to defend against it vigorously."

BMHC’s statement continued, "This appears to be part of an ongoing union campaign to force the company to recognize it as the bargaining agent for employees.”

If class action status is granted, there will likely be hundreds more plaintiffs added to the lawsuit. Nevada employers should take note of this lawsuit.  If your hourly employees are working overtime, pay overtime wages.

EEOC Issues Q&A Guide to Performance and Conduct Under the ADA

This month the U.S. Equal Employment Opportunity Commission released a comprehensive document designed to reduce confusion related to the performance and conduct of employees protected by the Americans with Disabilities Act.

Employers will be pleased to see that this document clearly answers many ADA related performance and conduct questions.  The document includes 30 questions with answers using 48 examples of actual cases, documented by 90 footnotes.

For your convenience, you will find the Table of Contents below, including direct links to each section.    You will find the entire document HERE.  As always, if you have questions related to employment lawsuits, feel free to contact me.

TABLE OF CONTENTS

    I.     Introduction

    II.    Basic Legal Requirements

    III.   Application of ADA Legal Requirements to Performance and Conduct Standards

        A. Performance standards

        B. Conduct standards

        C. Questions pertaining to both performance and conduct issues

        D. Seeking medical information when there are performance or conduct problems

        E. Attendance issues

        F. Dress codes

        G. Alcoholism and illegal use of drugs

        H. Confidentiality issues arising from granting reasonable accommodation....

        I. Legal enforcement

In case you missed the latest EEOC religious discrimination guidelines, you can read about them HERE.

BLM Whistleblower Wins Lawsuit Over Mismanagement of Nevada Toxic Mine Cleanup

Earle Dixon was hired by the US Bureau of Land Management in October 2005 to oversee the cleanup of the Anaconda Mine in Yerington Nevada.  His employment included a 1 year probationary period. 

On September 9, 2004 Dixon’s immediate supervisor certified that Dixon’s performance, conduct and general traits of character had been satisfactory and recommended Dixon be retained beyond the probationary period.

In October 2006, one week before the end of his probationary period, Dixon was fired.
  
Dixon filed a whistleblower lawsuit.  The complaint outlined violations of numerous federal laws including the Safe Drinking Water Act, the Clean Air Act, Superfund, the Toxic Substances Control Act and the Occupational Health and Safety Act.
 
The complaint also outlines a number of problems which were not addressed by his superiors because they would drive up remediation costs and cause political problems.

In September 2006 an administrative law judge ruled that the U.S. Bureau of Land Management illegally fired Dixon for speaking out about the health and safety dangers at the toxic Anaconda Mine site.  The judge ordered the BLM to pay Earle Dixon two years worth of back pay and benefits totaling over $120,000.

The BLM appealed the decision to the U.S. Labor Department's Administrative Review Board.  The Board upheld the decision.  The board also upheld the judge's order for the BLM to reimburse Dixon for $10,000 in moving expenses after he was fired in October 2005 as well as attorney fees and costs expected to exceed $50,000.  The final ruling may be viewed HERE.

The review board determined that the BLM fired Dixon because he "raised concerns that the contamination at the Yerington site was much greater than previously documented," and "refused to back down from his conclusions about worker health and safety issues."

Dixon had requested punitive damages of up to $1 million.  The board rejected that request stating "Nothing in this record would support an award of any amount of punitive damages…”

US Court of Appeals Upholds Employment Contract Despite Language Barrier

After being terminated by Sun Constructors (Sun) in 2006, Juan Morales filed a wrongful termination lawsuit.  Sun claimed that Morales was bound by an arbitration clause in the employment agreement signed upon his employment.  Morales claimed that since the agreement was in English, he did not understand its terms when he signed it, thus he could not be bound by it since he does not speak or understand English.  The District Court agreed with Morales.  Sun appealed.

According to the opinionwritten by Judge Michael A. Chagares of the US Court of Appeals Third Circuit, when Morales was hired in  2004 he passed a written exam in English and attended a 2 ½ hour orientation which explained the employment agreement.  Sun provided a bilingual employee to translate for Morales during the orientation.  The bilingual employee testified that he did not specifically explain the arbitration clause to Morales.

Judge Chagares ruled in favor of Sun, and remanded the case back to District Court with instructions to enter a stay pending arbitration.  In his opinion, Judge Chagares cited an 1875 US Supreme Court decision, Upton v. Tribilcock that said: "It will not do for a man to enter into a contract, and, when called upon to respond to its obligations, to say that he did not read it when he signed it, or did not know what it contained."

Judge Chagares continued “Morales, in essence, requests that this Court create an exception to the objective theory of contract formation where a party is ignorant of the language in which a contract is written. We decline to do so. In the absence of fraud, the fact that an offeree cannot read, write, speak, or understand the English language is immaterial to whether an English-language agreement the offeree executes is enforceable.”

Smith Barney Agrees to $33 Million Gender Discrimination Settlement

Female financial advisors employed by Smith Barney (now part of CitiGroup) between August 30, 2003 and March 1, 2008 are likely to qualify for part of a $33 million settlement stemming from a 2005 class action lawsuit.  The lawsuit, originally filed by 4 female financial advisors, alleged that Smith Barney branch managers “allocated a disproportionate share of account distributions and other benefits to male financial advisors, impairing female advisors' ability to build a business.”

The settlement also includes a diversity manager and industrial psychologist to oversee changes in account distribution, partnership, branch manager promotions, diversity training and complaint processing.

Outlined in May of this year, U.S. District Court Judge Phyllis Hamilton approved the final settlement earlier this month.  As of the date of approval, 1219 current and former Smith Barney (female) financial advisors were part of the class.

Amounts of individual payouts will vary based on the length of time an individual was employed by Smith Barney between 2003 and 2008, and the severity of emotional distress.

Smith Barney has claimed no wrong doing.  The suit was filed less than 10 years after it settled another class action discrimination lawsuit which was known as the “Boom Boom Room” lawsuit. 

There are certain industries and professions which have less than stellar track records in the area of gender discrimination.  As such, when gender discrimination occurs, lawsuits follow.  The greater the number of employees telling stories portraying even a perception of discrimination, the larger the settlement. 

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.”

 

US Court of Appeals Upholds Termination of Employee Found “Sleeping” on Job

David McNary suffers from Diabetes and Graves’ Disease.  He worked for Schreiber Foods as a sanitation employee on its dairy equipment.  His co-workers knew of these conditions and would occasionally pitch in to help when he needed it.  He was free from any work restrictions related to his health.

In September 2005, while cleaning trash compactors, McNary felt dizzy and light headed.  He left the compactor area, put his feet up on a table and closed his eyes.

Two supervisors found him with his head back, his mouth open, and his eyes shut.  McNary explained his medical conditions and denied he was sleeping. The Company subsequently terminated him for sleeping on the job.

In January, 2006 McNary filed a complaint against Schreiber alleging a violation of the Americans with Disabilities Act (ADA).  McNary claimed discrimination based on his physical condition.  He also claimed to have informed management and co-workers about his conditions and need to take brief breaks to relieve eye pain and dizziness.

Following discovery, The District Court found that Schreiber provided a legitimate nondiscriminatory reason for McNary’s termination; sleeping on the job in violation of company policy and granted Schreiber’s motion for Summary Judgment.

McNary appealed. 

The United States Court of Appeals for the Eighth Circuit stated “We review de novo the district court's grant of summary judgment to [Schreiber]. Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.”

Notably, the Court of Appeals added,

"[F]ederal courts do not sit as a super-personnel department that reexamines an entity's business decisions." One reason we emphasize this point is that a number of plaintiffs present a sympathetic situation in which the employer's judgment in imposing discipline may appear poor or erroneous to outsiders. It is tempting to think that the role of the federal courts is to offer a remedy in that sort of case. Whether we might believe that [Schreiber] was unduly harsh in its treatment of [McNary], however, is not a matter to be considered in deciding this appeal. Our authority is to determine only whether there is a genuine issue for trial on the question whether [Schreiber] discharged [McNary] because of his [disability].

It could be inferred from that statement that McNary might have seen a better result if he had claimed that Schreiber failed to provide reasonable accommodation for his disability.  But, he sued for wrongful termination and lost in District Court and on appeal.

McNary v. Schreiber Foods, Inc. (8th Cir. 8/1/08)