Recent Developments from Around the States

In 1997, Virginia Lock Gray, a recreational therapy assistant for Mercy Medical, suffered an on-the-job injury for which she sought workers' compensation benefits. In April 1998, Gray received a letter from Mercy Medical stating that her time away from work had extended beyond that allowed by the Family and Medical Leave Act, and that she was being terminated 'due to the uncertainty of [her] return date and the importance of patient care coverage.' Gray filed suit against Mercy Medical, alleging that it terminated her employment in retaliation for her workers' compensation application. After a trial, the jury awarded Gray $91,160 in punitive damages, in addition to $8840 in compensatory damages. Mercy Medical sought review of the damage award.

Looking to Alabama's three-part test for determining whether punitive damages are excessive, the appeals court affirmed the result in the trial court. Alabama's punitive damages test looks to the reprehensibility of the alleged conduct in question, the ratio of compensatory to punitive damages, and any criminal or civil sanctions that could have been levied for the conduct. 'Gray presented substantial evidence to support the jury's verdict, including evidence that Mercy Medical had engaged in oppressive or malicious conduct in retaliation for Gray's seeking workers' compensation benefits.' The court also found that the ratio of punitive to compensatory damages in the case ' 10.31 to 1 ' was not excessive. With respect to the third prong of the damages analysis, the court found that Alabama provides no criminal or civil penalties for retaliatory discharge.

CALIFORNIA

Age-based Class Action Barred by Filing of Similar Federal Action

A California Superior Court has ruled that a class of television writers over the age of 40 may not bring a class action complaint alleging age discrimination where a comparable federal action had already been filed. Alch v. Time Warner Entm't., No. BC 268836 (Cal. Super. Ct. Jan. 16).

This case began as a class action in federal district court, alleging age discrimination on behalf of a class of 28 television writers, who were joined by 22 more in an amended complaint. See Wynn v. National Broadcasting Co. Inc. (No. CV 00-11248 JSL). The lengthy complaint included extensive allegations to the effect that for more than 20 years, studios, networks, and production companies attempted to keep writers over age 40 from jobs on lucrative prime time network shows. The district court dismissed the suit, holding that the federal case could not be maintained as a single class action. Plaintiff Cecile Alch then sought to recommence the class action in California state court.

Including all 23 related cases in his decision, Judge Charles D. McCoy held that, despite the dismissal of the federal suit, the mere filing of that suit barred the same defendants from pursuing a similar state court claim under the California Fair Employment and Housing Act (FEHA). 'The legislature made a policy judgment, likely for reasons of cost and complexity, that FEHA class actions should not be litigated piecemeal in federal and state court — precisely the result that would obtain here' if the plaintiffs were permitted to pursue their state claims. If Alch were to prevail here, McCoy noted, plaintiffs would be prevented only from bringing simultaneous state and federal class actions but would still be able to pursue successive class actions, which the statute plainly intends to bar.

MICHIGAN

Undocumented Workers Are Entitled to Workers' Compensation Benefits

Workers using false credentials to gain employment in Michigan are 'employees' under Michigan's workers' compensation law and are therefore entitled to benefits when they are injured on the job, the Michigan Court of Appeals has held. Sanchez v. Eagle Alloy, Inc., 2003 Mich. App. LEXIS 25 (Mich. Ct. App. Jan. 7).

Mexican national David Sanchez bought a false Social Security identification card in California and used it to obtain a California driver's license. In March 1997, Sanchez used the Social Security card and illegally obtained license to apply for, and gain, employment as a grinder at Eagle Alloy. In 1998, Sanchez was severely injured on the job when his hand was caught in machinery and crushed. Ultimately released to unrestricted work after recovering, Sanchez was fired by Eagle Alloy when it was discovered that his Social Security card was fake. Sanchez then applied for workers' compensation benefits for the time he was out of work recovering from his injury. (Another Eagle Alloy employee, Alejandro Vasquez, was also injured on the job, was later fired, and applied for unemployment benefits as well.) A Michigan Workers' Compensation Commission magistrate held that both workers were 'employees' under the Michigan Workers' Compensation Act and that, as such, they were entitled to unemployment benefits. The Michigan Court of Appeals consolidated Sanchez's and Vasquez's cases on appeal.

The appeals court agreed with the Workers' Compensation magistrate. Under the state's workers' compensation law, an 'employee' is defined as 'every person in the service of another, under any contract of hire, express or implied, including aliens.' The court reasoned that the Michigan legislature must have intended to bring illegal workers within the Act's protection since the Act made no distinction between legal and illegal aliens. The court also noted that Sanchez and Vasquez worked under a 'contract of hire' within the meaning of the Act because they had done work for Eagle Alloy and received compensation in return. Accordingly, both workers were 'employees' entitled to unemployment benefits such as compensation for medical bills and weekly wage-loss benefits up to the time when their illegal status was discovered by their employer.

$6.4 Million Verdict Affirmed for Toyota Worker Alleging Harassment

The Michigan Court of Appeals has affirmed a verdict of $6.4 million, plus attorneys' fees and costs, for a maintenance technician who claimed he was harassed and denied accommodations for his bad back. Olsen v. Toyota Tech. Ctr., 2002 Mich. App. LEXIS 2323 (Mich. Ct. App. Dec. 27, 2002).

Plaintiff Larry Olsen began working for Toyota in October 1990. At the time of his hire, Olsen had made Toyota aware that he had received a back injury on a prior job, and that the injury had required surgery for which Olsen took medication. In June 1993, Olsen re-injured his back when he and a coworker were ordered to move a pump despite their protests that they needed additional help for the task. When Olsen returned to work a week later, his boss began to criticize his work and harass him about his lifting restrictions. Olsen asked his doctor to remove his lifting restrictions; his doctor reluctantly complied. Olsen injured his back yet again, this time about a year later, and when he returned to work with lifting restrictions, his boss's harassment worsened. In the spring of 1995, Olsen, fed up with his boss's conduct, left a voice mail for an employee in Toyota's personnel division, stating that if the employee did not address his boss's mistreatment of him, he would. Olsen was then forced to undergo a psychological examination in response to this perceived threat, and although the psychologist deemed him not to be a threat, Olsen never returned to work. Instead, he spent most of his time in a severely debilitated state, unable to perform most activities he enjoyed.

Olsen and his wife sued, claiming that Toyota failed to accommodate Olsen's disability, and permitted his boss to harass him. The jury found for Olsen in the amount of $360,000 in lost wages, $5 million for emotional distress, and $800,000 in lost future wages. On appeal, Toyota argued that Olsen had failed to show that his back injuries substantially impaired a major life activity. The appeals court disagreed. As to damages, the court noted that the test for a reduction in damages is whether the evidence adduced at trial supports the award. Here, in light of all the evidence, the lower court did not err in refusing to remit the awarded damages.

ALABAMA

Terminated Employee's Punitive Damages Award Upheld

An Alabama appeals court has held that a medical company that terminated an employee who was injured on the job had properly been held liable under Alabama law for punitive damages by a state trial court. Mercy Med. v. Gray , 2002 Ala. Civ. App. LEXIS 863 (Ala. Civ. App. Dec. 30, 2002).

In 1997, Virginia Lock Gray, a recreational therapy assistant for Mercy Medical, suffered an on-the-job injury for which she sought workers' compensation benefits. In April 1998, Gray received a letter from Mercy Medical stating that her time away from work had extended beyond that allowed by the Family and Medical Leave Act, and that she was being terminated 'due to the uncertainty of [her] return date and the importance of patient care coverage.' Gray filed suit against Mercy Medical, alleging that it terminated her employment in retaliation for her workers' compensation application. After a trial, the jury awarded Gray $91,160 in punitive damages, in addition to $8840 in compensatory damages. Mercy Medical sought review of the damage award.

Looking to Alabama's three-part test for determining whether punitive damages are excessive, the appeals court affirmed the result in the trial court. Alabama's punitive damages test looks to the reprehensibility of the alleged conduct in question, the ratio of compensatory to punitive damages, and any criminal or civil sanctions that could have been levied for the conduct. 'Gray presented substantial evidence to support the jury's verdict, including evidence that Mercy Medical had engaged in oppressive or malicious conduct in retaliation for Gray's seeking workers' compensation benefits.' The court also found that the ratio of punitive to compensatory damages in the case ' 10.31 to 1 ' was not excessive. With respect to the third prong of the damages analysis, the court found that Alabama provides no criminal or civil penalties for retaliatory discharge.

CALIFORNIA

Age-based Class Action Barred by Filing of Similar Federal Action

A California Superior Court has ruled that a class of television writers over the age of 40 may not bring a class action complaint alleging age discrimination where a comparable federal action had already been filed. Alch v. Time Warner Entm't., No. BC 268836 (Cal. Super. Ct. Jan. 16).

This case began as a class action in federal district court, alleging age discrimination on behalf of a class of 28 television writers, who were joined by 22 more in an amended complaint. See Wynn v. National Broadcasting Co. Inc. (No. CV 00-11248 JSL). The lengthy complaint included extensive allegations to the effect that for more than 20 years, studios, networks, and production companies attempted to keep writers over age 40 from jobs on lucrative prime time network shows. The district court dismissed the suit, holding that the federal case could not be maintained as a single class action. Plaintiff Cecile Alch then sought to recommence the class action in California state court.

Including all 23 related cases in his decision, Judge Charles D. McCoy held that, despite the dismissal of the federal suit, the mere filing of that suit barred the same defendants from pursuing a similar state court claim under the California Fair Employment and Housing Act (FEHA). 'The legislature made a policy judgment, likely for reasons of cost and complexity, that FEHA class actions should not be litigated piecemeal in federal and state court — precisely the result that would obtain here' if the plaintiffs were permitted to pursue their state claims. If Alch were to prevail here, McCoy noted, plaintiffs would be prevented only from bringing simultaneous state and federal class actions but would still be able to pursue successive class actions, which the statute plainly intends to bar.

MICHIGAN

Undocumented Workers Are Entitled to Workers' Compensation Benefits

Workers using false credentials to gain employment in Michigan are 'employees' under Michigan's workers' compensation law and are therefore entitled to benefits when they are injured on the job, the Michigan Court of Appeals has held. Sanchez v. Eagle Alloy, Inc., 2003 Mich. App. LEXIS 25 (Mich. Ct. App. Jan. 7).

Mexican national David Sanchez bought a false Social Security identification card in California and used it to obtain a California driver's license. In March 1997, Sanchez used the Social Security card and illegally obtained license to apply for, and gain, employment as a grinder at Eagle Alloy. In 1998, Sanchez was severely injured on the job when his hand was caught in machinery and crushed. Ultimately released to unrestricted work after recovering, Sanchez was fired by Eagle Alloy when it was discovered that his Social Security card was fake. Sanchez then applied for workers' compensation benefits for the time he was out of work recovering from his injury. (Another Eagle Alloy employee, Alejandro Vasquez, was also injured on the job, was later fired, and applied for unemployment benefits as well.) A Michigan Workers' Compensation Commission magistrate held that both workers were 'employees' under the Michigan Workers' Compensation Act and that, as such, they were entitled to unemployment benefits. The Michigan Court of Appeals consolidated Sanchez's and Vasquez's cases on appeal.

The appeals court agreed with the Workers' Compensation magistrate. Under the state's workers' compensation law, an 'employee' is defined as 'every person in the service of another, under any contract of hire, express or implied, including aliens.' The court reasoned that the Michigan legislature must have intended to bring illegal workers within the Act's protection since the Act made no distinction between legal and illegal aliens. The court also noted that Sanchez and Vasquez worked under a 'contract of hire' within the meaning of the Act because they had done work for Eagle Alloy and received compensation in return. Accordingly, both workers were 'employees' entitled to unemployment benefits such as compensation for medical bills and weekly wage-loss benefits up to the time when their illegal status was discovered by their employer.

$6.4 Million Verdict Affirmed for Toyota Worker Alleging Harassment

The Michigan Court of Appeals has affirmed a verdict of $6.4 million, plus attorneys' fees and costs, for a maintenance technician who claimed he was harassed and denied accommodations for his bad back. Olsen v. Toyota Tech. Ctr., 2002 Mich. App. LEXIS 2323 (Mich. Ct. App. Dec. 27, 2002).

Plaintiff Larry Olsen began working for Toyota in October 1990. At the time of his hire, Olsen had made Toyota aware that he had received a back injury on a prior job, and that the injury had required surgery for which Olsen took medication. In June 1993, Olsen re-injured his back when he and a coworker were ordered to move a pump despite their protests that they needed additional help for the task. When Olsen returned to work a week later, his boss began to criticize his work and harass him about his lifting restrictions. Olsen asked his doctor to remove his lifting restrictions; his doctor reluctantly complied. Olsen injured his back yet again, this time about a year later, and when he returned to work with lifting restrictions, his boss's harassment worsened. In the spring of 1995, Olsen, fed up with his boss's conduct, left a voice mail for an employee in Toyota's personnel division, stating that if the employee did not address his boss's mistreatment of him, he would. Olsen was then forced to undergo a psychological examination in response to this perceived threat, and although the psychologist deemed him not to be a threat, Olsen never returned to work. Instead, he spent most of his time in a severely debilitated state, unable to perform most activities he enjoyed.

Olsen and his wife sued, claiming that Toyota failed to accommodate Olsen's disability, and permitted his boss to harass him. The jury found for Olsen in the amount of $360,000 in lost wages, $5 million for emotional distress, and $800,000 in lost future wages. On appeal, Toyota argued that Olsen had failed to show that his back injuries substantially impaired a major life activity. The appeals court disagreed. As to damages, the court noted that the test for a reduction in damages is whether the evidence adduced at trial supports the award. Here, in light of all the evidence, the lower court did not err in refusing to remit the awarded damages.