Recent Developments from Around the States

Gaye Lively began working at Flexible Packaging Association (FPA) in 1980 as a secretary and was discharged in 1993, having been promoted to director of administration and meetings in 1983. When a new association president and a new director of government relations arrived at FPA in 1986 and 1987, respectively, Lively and other female employees began to experience what they believed to be sexually harassing behavior. Lively, for example, alleged that she experienced a number of demeaning, sexist comments directed either at her or at women as a whole. Lively later filed claims of sexual harassment, unequal pay, and retaliation under the District of Columbia Human Rights Act, and intentional infliction of emotional distress (773 A.2d 1033). The jury awarded Lively $993,816 in compensatory and punitive damages.

Subsequently, however, the trial judge granted the defendant's motion for judgment as a matter of law, finding with regard to Lively's sexual harassment claim that the incidents comprising the purported hostile environment had occurred more than 1 year prior to her suit and thus were time-barred. Lively appealed, and a panel of the appeals court affirmed.

The case was held in abeyance while the U.S. Supreme Court decided National Railroad Passenger Corp. v. Morgan. There, the justices ultimately held that hostile work environment claims under federal law are timely if any act that constitutes part of the hostile environment occurred within the relevant limitations period. The DC court adopted this standard and, considering the evidence in light of the standard, ruled that the jury's verdict on Lively's hostile work environment claim was reasonable, thereby reversing the trial court. “We hold that Ms. Lively filed her hostile work environment claim in a timely manner and that a reasonable person, viewing the evidence in the light most favorable to her, could reach a verdict in her favor,” Judge Inez Smith Reid wrote for a unanimous court. “We also adopt, for cases filed under the DCHRA, the Supreme Court's hostile work environment analysis governing federal civil rights claims as it is set forth in Morgan.”

HAWAII

Employers Entitled to Jury Trial

The Hawaii Supreme Court held that under Hawaii Revised Statutes (HRS) chapter 368 (1993 & Supp. 1998), a respondent before the Hawaii Civil Rights Commission (HCRC) is entitled to a jury trial with respect to claims that seek traditional forms of legal relief, including compensatory and punitive damages. A respondent who appeals a final order of the HCRC pursuant to HRS ' 368-16 is entitled to a jury trial on any claims that form the basis for the HCRC's award of common law damages. SCI Management Corp. v. Sims, 71 P.3d 389 (June 18).

Darryllynne Sims and Tammy Quinata filed complaints with the HCRC pursuant to HRS chapter 368, alleging, inter alia, that they were subjected to sexual harassment by Derek Kim, an employee of SCI Management Corp., Hawaiian Memorial Park Cemetery, and Hawaiian Memorial Life Plan, Ltd. d/b/a Borthwick Mortuaries (the employers), and that they had also been subjected to retaliation because of their resistance to the alleged sexual harassment. The executive director of the HCRC investigated the complaints, and found reasonable cause to believe that discrimination occurred. After failed attempts at informal settlement, the executive director issued his final conciliation demand to the employers, in which the executive director insisted, inter alia, that the employers pay each of the complainants $400,000 as “alleged general damages, including but not limited to emotional distress.” The employers did not respond, and a contested case hearing was scheduled for each complainant. The employees subsequently intervened as parties in their respective cases.

In a letter to the executive director, the employers demanded a jury trial as to all of the allegations raised by the complainants, pursuant to article I, section 13 of the Hawaii Constitution. The record does not reflect whether the executive director ever responded to the employers' request. The employers filed a complaint in the present matter in the first circuit court, alleging various constitutional violations and seeking declaratory and injunctive relief. The employers filed a motion for summary judgment, which the circuit court granted. The two employees, the executive director, and the commissioners (defendants) appealed.

Article I, section 13 of the Hawaii Constitution preserves the right to a trial by jury “[i]n suits at common law where the value in controversy shall exceed five thousand dollars … “The Hawaii Supreme Court stated that by its plain language, HRS chapter 368 empowers the HCRC to award legal forms of relief. Thus, the court held that the employers were entitled to a jury trial with respect to the complainants' allegations of discrimination.

The Defendants urged the court to adopt the “public rights doctrine” articulated by the United States Supreme Court. Without reaching the question whether Hawaii should adopt the “public rights” doctrine, the court held that the public rights doctrine would not assist the Defendants in the present matter. The court held that “under HRS chapter 368, the adjudication of private rights has clear primacy over the adjudication of public rights, as demonstrated, inter alia, by the complainants' right, pursuant to HRS ' 368-12 and HAR 12-46-20, to choose whether to pursue their claims before the HCRC or in the circuit court, where the right to jury trial is available to them.” Accordingly, the court held employers are entitled to a jury trial on any common law damage claims for which they are found to be liable by a final order of the HCRC.

NEVADA

Nevada Labor Commissioner Seeks Prosecution

On July 28, 2003, Nevada Labor Commissioner Terry Johnson asked state Attorney General Brian Sandoval to pursue criminal prosecution against Robert De Maio, president of Dot1Web.com. The company failed to pay more than 60 employees, running up a Nevada record of $429,480 in penalties and back wages. This unprecedented action makes Johnson the first labor commissioner in Nevada history to pursue criminal prosecution against an employer.

Johnson's written request to Sandoval requested help in “sending a message that the type of corporate misbehavior (by DeMaio) will not go unpunished in the state of Nevada and that every effort will be made to protect the interests of Nevada workers.”

Additionally, Johnson filed a formal request for debt collection with the state controller's office. Johnson had earlier won summary judgment in a Carson City District Court on behalf of the company's former employees. Dot1Web.com had laid off the majority of its workforce in December, and over 75 former employees filed wage claims. DeMaio was not in contact with Labor Commissioner Johnson despite repeated demands for wage claims and penalties. Ironically, Johnson and his staff had recently been given the 2003 Cashman Good Government Award by the Nevada Taxpayers Association for their great success in reducing the number of wage claims in the state. By the end of 2002, the Labor Commissioner's Office had reduced the number of backlogged wage claims from 2700 to just 522. In addition, the Labor Commissioner's office collected over $3 million in back wages and penalties last year.

KENTUCKY

Supreme Court Rules Punitive Damages Not Available under KY Civil Rights Act

The Supreme Court of Kentucky has ruled that plaintiffs cannot recover punitive damages under the Kentucky Civil Rights Act (KCRA). The much-anticipated decision reversed the contrary holding of the Court of Appeals and settled an often-debated issue under the KCRA. Kentucky Dept. of Corrections et al. v. McCullough, 2003 WL 21990227 (Ky. Aug. 21).

Patricia McCullough was employed by the Kentucky Department of Corrections as a correctional officer. In 1987, McCullough filed an EEOC complaint alleging that she had been sexually harassed by her superior officer. As a result of her EEOC complaint, her superior officer was demoted and prison policy changed to permit women to work in dormitory units. After filing her EEOC complaint in 1987, McCullough applied for promotions 26 times and was passed over each time. In 1995, McCullough sued the Department, and the warden in charge of the facility at which she was employed, for gender discrimination and unlawful retaliation under the KCRA. At trial, the jury found against McCullough on her discrimination claim and for her on her retaliation claim. The jury awarded $120,000 in compensatory damages and $120,000 in punitive damages, but the trial court set aside the award of punitive damages. On appeal, the court of appeals vacated that portion of the trial court's order setting aside the punitive damages award and remanded the case to allow McCullough to pursue her claim for punitive damages against the warden. The Kentucky Supreme Court accepted discretionary review.

The court began its analysis by noting that the KCRA, KRS 344.450, specifically states that a plaintiff may recover only “the actual damages sustained,” together with attorneys' fees and costs. KRS 344.450 mentions nothing of punitive damages. The Kentucky Supreme Court noted that notwithstanding this “plain language of the statute,” the court of appeals held that punitive damages were available under KRS 344.450.

The Supreme Court rejected the rationale of the Court of Appeals that allowing punitive damages under the KCRA was consistent with KCRA's stated purpose of paralleling the policies embodied in Title VII and the Civil Rights Act of 1991. The court also rejected the court of appeals' interpretation of another statute outside of the KCRA, which, according to the court of appeals, allowed punitive damages in cases in which the statutory elements of fraud, oppression or malice were present. The court of appeals relied on its construction of this statute in allowing McCullough to purse her claim for punitive damages under the KCRA. The Supreme Court reasoned that the more likely interpretation of the punitive damages statute is that it only applies to those cases in which punitive damages are already authorized by common law or statute. The court recognized that the clear language of the KCRA does not, and never did, authorize the award of punitive damages. Moreover, the court noted that the provisions of the KCRA prohibiting discriminatory housing practices did provide for punitive damages. Therefore, if the construction of the court of appeals was correct, the provision of punitive damages in the discriminatory housing statutes would be redundant and unnecessary. Such a result would violate the “universal rule … that in construing statutes it must be presumed that the Legislature intended something by what it attempted to do.” (Citation omitted).

TEXAS

Industrial Client Not Sole Employer

The Texas Supreme Court has held that a worker may have more than one employer for purposes of the “exclusive remedy” provision of the Texas Workers' Compensation Act (TWCA). This ruling may save an employer considerable money and worry, since a company that is classified as an employer under the TWCA and that obtains workers' compensation coverage limits the recovery by its injured employees to that provided by the insurance policy. Wingfoot Enterprises dba Tandem Staffing v. Alvarado, 46 Tex. Sup. J. 959 (July 3).

Tandem, a temporary staffing agency, hired employees to furnish to industrial clients. The agency provided supervisors at the client's facility who monitored arrival and departure times, and instructed its workers about lunch hours and breaks. Tandem also withheld its workers' FICA, paid Social Security taxes, and provided workers' compensation insurance.

Marleny Alvarado was injured while working for Web Assembly, Inc., the industrial client that controlled her specific tasks, assigned her to machinery work, and maintained the machinery. Alvarado applied for workers' compensation with Tandem's carriers, but subsequently sued both Tandem and Web, claiming negligence in failing to properly train her, warn her of dangers, and provide her with a safe workplace. The trial court granted Tandem's summary judgment motion based on the TWCA's exclusive remedy provision; it concluded that the exclusive remedy provision barred Alvarado's claims since the agency was her employer or co-employer. The court of appeals affirmed in part and reversed in part.

The Texas Supreme Court found unpersuasive Alvarado's argument that Web, which controlled the details of her work, was her sole employer. The court noted that the TWCA's decided bias in favor of employers electing to provide coverage for their employees supports the conclusion that the TWCA permits more than one employer for workers' compensation purposes. The court held in favor of Tandem, reasoning that the fact that Web controlled the employee's activities, and that Web was an employer within the meaning of the act, did not preclude the applicability of the TWCA's provisions, including the exclusive remedy provision, to both Tandem and the Web. Although most employees frown on the thought of having more than one boss, the Texas Supreme Court has now made it clear that a worker can have more than one employer for purposes of the exclusive remedy provision of the TWCA.

DISTRICT OF COLUMBIA

District of Columbia Recognizes 'Continuing Violation' Doctrine

Reinstating a $156,600 jury verdict for a former trade association administrative employee on her hostile work environment claim, the District of Columbia Court of Appeals has adopted the continuing violation standard set out by the U.S. Supreme Court in National Railroad Passenger Corp. v. Morgan , 536 U.S. 101 (2002). Lively v. Flexible Packaging Ass'n, 2003 WL 21982013 (D.C., Aug. 21).

Gaye Lively began working at Flexible Packaging Association (FPA) in 1980 as a secretary and was discharged in 1993, having been promoted to director of administration and meetings in 1983. When a new association president and a new director of government relations arrived at FPA in 1986 and 1987, respectively, Lively and other female employees began to experience what they believed to be sexually harassing behavior. Lively, for example, alleged that she experienced a number of demeaning, sexist comments directed either at her or at women as a whole. Lively later filed claims of sexual harassment, unequal pay, and retaliation under the District of Columbia Human Rights Act, and intentional infliction of emotional distress (773 A.2d 1033). The jury awarded Lively $993,816 in compensatory and punitive damages.

Subsequently, however, the trial judge granted the defendant's motion for judgment as a matter of law, finding with regard to Lively's sexual harassment claim that the incidents comprising the purported hostile environment had occurred more than 1 year prior to her suit and thus were time-barred. Lively appealed, and a panel of the appeals court affirmed.

The case was held in abeyance while the U.S. Supreme Court decided National Railroad Passenger Corp. v. Morgan. There, the justices ultimately held that hostile work environment claims under federal law are timely if any act that constitutes part of the hostile environment occurred within the relevant limitations period. The DC court adopted this standard and, considering the evidence in light of the standard, ruled that the jury's verdict on Lively's hostile work environment claim was reasonable, thereby reversing the trial court. “We hold that Ms. Lively filed her hostile work environment claim in a timely manner and that a reasonable person, viewing the evidence in the light most favorable to her, could reach a verdict in her favor,” Judge Inez Smith Reid wrote for a unanimous court. “We also adopt, for cases filed under the DCHRA, the Supreme Court's hostile work environment analysis governing federal civil rights claims as it is set forth in Morgan.”

HAWAII

Employers Entitled to Jury Trial

The Hawaii Supreme Court held that under Hawaii Revised Statutes (HRS) chapter 368 (1993 & Supp. 1998), a respondent before the Hawaii Civil Rights Commission (HCRC) is entitled to a jury trial with respect to claims that seek traditional forms of legal relief, including compensatory and punitive damages. A respondent who appeals a final order of the HCRC pursuant to HRS ' 368-16 is entitled to a jury trial on any claims that form the basis for the HCRC's award of common law damages. SCI Management Corp. v. Sims , 71 P.3d 389 (June 18).

Darryllynne Sims and Tammy Quinata filed complaints with the HCRC pursuant to HRS chapter 368, alleging, inter alia, that they were subjected to sexual harassment by Derek Kim, an employee of SCI Management Corp., Hawaiian Memorial Park Cemetery, and Hawaiian Memorial Life Plan, Ltd. d/b/a Borthwick Mortuaries (the employers), and that they had also been subjected to retaliation because of their resistance to the alleged sexual harassment. The executive director of the HCRC investigated the complaints, and found reasonable cause to believe that discrimination occurred. After failed attempts at informal settlement, the executive director issued his final conciliation demand to the employers, in which the executive director insisted, inter alia, that the employers pay each of the complainants $400,000 as “alleged general damages, including but not limited to emotional distress.” The employers did not respond, and a contested case hearing was scheduled for each complainant. The employees subsequently intervened as parties in their respective cases.

In a letter to the executive director, the employers demanded a jury trial as to all of the allegations raised by the complainants, pursuant to article I, section 13 of the Hawaii Constitution. The record does not reflect whether the executive director ever responded to the employers' request. The employers filed a complaint in the present matter in the first circuit court, alleging various constitutional violations and seeking declaratory and injunctive relief. The employers filed a motion for summary judgment, which the circuit court granted. The two employees, the executive director, and the commissioners (defendants) appealed.

Article I, section 13 of the Hawaii Constitution preserves the right to a trial by jury “[i]n suits at common law where the value in controversy shall exceed five thousand dollars … “The Hawaii Supreme Court stated that by its plain language, HRS chapter 368 empowers the HCRC to award legal forms of relief. Thus, the court held that the employers were entitled to a jury trial with respect to the complainants' allegations of discrimination.

The Defendants urged the court to adopt the “public rights doctrine” articulated by the United States Supreme Court. Without reaching the question whether Hawaii should adopt the “public rights” doctrine, the court held that the public rights doctrine would not assist the Defendants in the present matter. The court held that “under HRS chapter 368, the adjudication of private rights has clear primacy over the adjudication of public rights, as demonstrated, inter alia, by the complainants' right, pursuant to HRS ' 368-12 and HAR 12-46-20, to choose whether to pursue their claims before the HCRC or in the circuit court, where the right to jury trial is available to them.” Accordingly, the court held employers are entitled to a jury trial on any common law damage claims for which they are found to be liable by a final order of the HCRC.

NEVADA

Nevada Labor Commissioner Seeks Prosecution

On July 28, 2003, Nevada Labor Commissioner Terry Johnson asked state Attorney General Brian Sandoval to pursue criminal prosecution against Robert De Maio, president of Dot1Web.com. The company failed to pay more than 60 employees, running up a Nevada record of $429,480 in penalties and back wages. This unprecedented action makes Johnson the first labor commissioner in Nevada history to pursue criminal prosecution against an employer.

Johnson's written request to Sandoval requested help in “sending a message that the type of corporate misbehavior (by DeMaio) will not go unpunished in the state of Nevada and that every effort will be made to protect the interests of Nevada workers.”

Additionally, Johnson filed a formal request for debt collection with the state controller's office. Johnson had earlier won summary judgment in a Carson City District Court on behalf of the company's former employees. Dot1Web.com had laid off the majority of its workforce in December, and over 75 former employees filed wage claims. DeMaio was not in contact with Labor Commissioner Johnson despite repeated demands for wage claims and penalties. Ironically, Johnson and his staff had recently been given the 2003 Cashman Good Government Award by the Nevada Taxpayers Association for their great success in reducing the number of wage claims in the state. By the end of 2002, the Labor Commissioner's Office had reduced the number of backlogged wage claims from 2700 to just 522. In addition, the Labor Commissioner's office collected over $3 million in back wages and penalties last year.

KENTUCKY

Supreme Court Rules Punitive Damages Not Available under KY Civil Rights Act

The Supreme Court of Kentucky has ruled that plaintiffs cannot recover punitive damages under the Kentucky Civil Rights Act (KCRA). The much-anticipated decision reversed the contrary holding of the Court of Appeals and settled an often-debated issue under the KCRA. Kentucky Dept. of Corrections et al. v. McCullough, 2003 WL 21990227 (Ky. Aug. 21).

Patricia McCullough was employed by the Kentucky Department of Corrections as a correctional officer. In 1987, McCullough filed an EEOC complaint alleging that she had been sexually harassed by her superior officer. As a result of her EEOC complaint, her superior officer was demoted and prison policy changed to permit women to work in dormitory units. After filing her EEOC complaint in 1987, McCullough applied for promotions 26 times and was passed over each time. In 1995, McCullough sued the Department, and the warden in charge of the facility at which she was employed, for gender discrimination and unlawful retaliation under the KCRA. At trial, the jury found against McCullough on her discrimination claim and for her on her retaliation claim. The jury awarded $120,000 in compensatory damages and $120,000 in punitive damages, but the trial court set aside the award of punitive damages. On appeal, the court of appeals vacated that portion of the trial court's order setting aside the punitive damages award and remanded the case to allow McCullough to pursue her claim for punitive damages against the warden. The Kentucky Supreme Court accepted discretionary review.

The court began its analysis by noting that the KCRA, KRS 344.450, specifically states that a plaintiff may recover only “the actual damages sustained,” together with attorneys' fees and costs. KRS 344.450 mentions nothing of punitive damages. The Kentucky Supreme Court noted that notwithstanding this “plain language of the statute,” the court of appeals held that punitive damages were available under KRS 344.450.

The Supreme Court rejected the rationale of the Court of Appeals that allowing punitive damages under the KCRA was consistent with KCRA's stated purpose of paralleling the policies embodied in Title VII and the Civil Rights Act of 1991. The court also rejected the court of appeals' interpretation of another statute outside of the KCRA, which, according to the court of appeals, allowed punitive damages in cases in which the statutory elements of fraud, oppression or malice were present. The court of appeals relied on its construction of this statute in allowing McCullough to purse her claim for punitive damages under the KCRA. The Supreme Court reasoned that the more likely interpretation of the punitive damages statute is that it only applies to those cases in which punitive damages are already authorized by common law or statute. The court recognized that the clear language of the KCRA does not, and never did, authorize the award of punitive damages. Moreover, the court noted that the provisions of the KCRA prohibiting discriminatory housing practices did provide for punitive damages. Therefore, if the construction of the court of appeals was correct, the provision of punitive damages in the discriminatory housing statutes would be redundant and unnecessary. Such a result would violate the “universal rule … that in construing statutes it must be presumed that the Legislature intended something by what it attempted to do.” (Citation omitted).

TEXAS

Industrial Client Not Sole Employer

The Texas Supreme Court has held that a worker may have more than one employer for purposes of the “exclusive remedy” provision of the Texas Workers' Compensation Act (TWCA). This ruling may save an employer considerable money and worry, since a company that is classified as an employer under the TWCA and that obtains workers' compensation coverage limits the recovery by its injured employees to that provided by the insurance policy. Wingfoot Enterprises dba Tandem Staffing v. Alvarado , 46 Tex. Sup. J. 959 (July 3).

Tandem, a temporary staffing agency, hired employees to furnish to industrial clients. The agency provided supervisors at the client's facility who monitored arrival and departure times, and instructed its workers about lunch hours and breaks. Tandem also withheld its workers' FICA, paid Social Security taxes, and provided workers' compensation insurance.

Marleny Alvarado was injured while working for Web Assembly, Inc., the industrial client that controlled her specific tasks, assigned her to machinery work, and maintained the machinery. Alvarado applied for workers' compensation with Tandem's carriers, but subsequently sued both Tandem and Web, claiming negligence in failing to properly train her, warn her of dangers, and provide her with a safe workplace. The trial court granted Tandem's summary judgment motion based on the TWCA's exclusive remedy provision; it concluded that the exclusive remedy provision barred Alvarado's claims since the agency was her employer or co-employer. The court of appeals affirmed in part and reversed in part.

The Texas Supreme Court found unpersuasive Alvarado's argument that Web, which controlled the details of her work, was her sole employer. The court noted that the TWCA's decided bias in favor of employers electing to provide coverage for their employees supports the conclusion that the TWCA permits more than one employer for workers' compensation purposes. The court held in favor of Tandem, reasoning that the fact that Web controlled the employee's activities, and that Web was an employer within the meaning of the act, did not preclude the applicability of the TWCA's provisions, including the exclusive remedy provision, to both Tandem and the Web. Although most employees frown on the thought of having more than one boss, the Texas Supreme Court has now made it clear that a worker can have more than one employer for purposes of the exclusive remedy provision of the TWCA.