Abolish the Employment "At-Will" Rule?

THE BATTLE OF THE PUGNACIOUS PUGILISTIC PENAL CODE SECTIONS

In Employment Law cases, a disgruntled employee, anticipating the need to prove some aspect of the case, will secretly record a conversation with an employer.  The employee then sees an attorney, discloses that the recording has been made, and proudly announces that it is proof of the misconduct by the employer. The Plaintiff’s attorney only groans.

Witness the battle of the Penal Code sections. In one corner, Penal Code § 632 prohibits the recording of a confidential communication without the consent of the parties. In the other corner, Penal Code § 632 (c) permits the use of a recording where the communication is made in a public gathering or in other circumstances where confidentiality could not reasonably be expected. 

May a secretly recorded conversation ever be used in a court as evidence? The answer is “sometimes.” If the statement is used for impeachment purposes, exposing that the other party is committing perjury, or something resembling perjury, courts have permitted the criminally procured statement to be admitted. The idea is that the policy against perjury outweighs the policy against secret recordings.

Of course a sticky issue arises where discovery asks for all recordings in the possession or custody of the employee [or employer]. The employer, if it acts quickly, can obtain the identity and fact of the recording, and therefore alert its witnesses to avoid any lying on the witness stand. Further, the employer can use the secret recording as basis to assert an “affirmative defense” cutting off damages [“after-acquired evidence rule”] from the date it discovers that the secret recording was made.  Therefore, the Plaintiff’s attorney should quickly take the deposition of the defense witnesses in the hope that their inconsistencies can be exposed by the secret recording before it is necessary to identify the recording.

In any event, counsel should never participate in a criminal activity of encouraging or condoning the use of a secret recording in the workplace.

See generally Fria v. Superior Court (1988) 203 Cal. App. 3rd 1480 and People v. Crow (1994) 28 Cal. App. 4^th 440.  

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TRAGIC CASE BRINGS HOME THAT O.C. JURIES CARE

Over the years, Orange County juries have developed a reputation for being tightfisted with money. That reputation is undeserved. It simply means that our juries require sufficient evidence to support a large verdict. There been a number of the very substantial verdicts coming out of Orange County.  A recent one is $38.6 million awarded to a man who suffered serious brain injury when falling off a Newport Beach hotel balcony.

No one witnessed the accident. The man was intoxicated at the time he fell off the balcony. The balcony rail was 8 inches lower than that required by California safety regulations. The plaintiff’s attorney represented to the jury immediately that his client was drunk, but that he was attempting to return to his room. He was not breaking the law at the time. The defendant apparently thought that the man's intoxication would result in most of the blame being placed on the plaintiff. The defendant focused on the bad behaviors of the plaintiff. That strategy apparently backfired.

The case was heard in Orange County Superior Court (Santa Ana) before Judge Charles Margines, and is entitled Von Norman v. Newport Channel Inn, 30–2010–00423312.  Verdict date:  7-26-12.

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PUTTING THE BRAKES ON RUNAWAY DEPOSITIONS

A proposed law would change the time to complete a deposition from unlimited duration to 7 hours. Currently the law requires the party objecting to the length of the deposition to suspend the deposition and to seek a protective order.

The new law would allow the parties to stipulate to a longer time of deposition if the nature of the case warranted. The idea is to stop abusive and wasteful interrogations. Interestingly, employment cases are excluded from the proposed legislation as a class of cases. See Assembly Bill 1875 seeking to amend CCP § 2025.010.

 

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$8.5 million Awarded in LA Superior for "Failure to Accommodate" a Disability

$8.5 million has been awarded an Employee who worked at an oil refinery. In 2005, the Employee hurt her knee while working as a Shift Supervisor. Thereafter, the Employer assigned her to a desk job position because of her knee problems.

When another Company acquired the Refinery, the Company changed the Employee's duties, and she was required to go on a medical leave of 22 months. The Employer ultimately terminated her for failure to appear for work in her new job capacity.

The Employee claimed that she should have been allowed to continue in her desk job. The Employer claimed that she had been given adequate opportunity to recover, and that she could not perform the essential functions of the job. Employer also claimed that she was unqualified for the other jobs that she sought within the company.

Some observations:

1) The verdict came out of the Central District for Los Angeles County Superior Court. This venue is known to produce high verdicts.

2) Big does not necessarily mean better or more effective. The defense law firm in the case was Fulbright and Jaworski.

3) The previous Owner/Employer was able to "accommodate" the Employee for a period of time in her desk job probably lead the jury to believe that the new Employer could do the same.

4) The new Employer's changing of the Employee's job duties seems to be a self-serving excuse to find a way to eliminate the Employee's position, that is, to eliminate the previous Employer's "accommodation."

Source: "Daily Journal Verdicts and Settlements" Friday, July 20, 2012, page 5, Michelle Daniel v. Tesoro Refining and Marketing Company, Case BC383531. Verdict: June 21, 2012.

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YOU DECIDE: SHOULD THE PREVAILING PARTY BE ENTITLED TO ATTORNEY'S FEES?

Nearly all states follow the "American Rule" that unless the parties agree, or a statute provides for fees, each side is to bear its own fees in litigation without regard to victory. Some States, and a large number of nations follow the "English Rule" of the losing party paying the fees of the winner. As you consider your vote, here are some "pros" and "cons" of changing the current "American Rule."

Case for keeping the Rule:

1. The "little guy" with few finances faces financial ruin if he loses. Not so with the wealthy or corporations.
2. The incentive to select meritorious cases is already in place because the contingency fee system places much of the burden of losing (and going unpaid) on the contingency fee lawyer, who therefore selects meritorious cases as a matter of self-preservation.
3. Socially beneficial verdicts result from the gamble that a long shot case may pay-off big, and the verdict send a message to other offenders to change their ways.
4. The fear of losing will be greater for persons with fewer assets (i.e., usually individuals taking on wealthy corporations), resulting in settlements that are driven not by justice or principle, but higher financial costs.    

Case for dumping the Rule:

1. A party paying hourly fees to an attorney may have to pay much more in fees than the amount to eventually settle the case or pay the verdict.
2. The prospect of paying not only your attorney, but also the other attorney has a sobering affect for settlement, and sharpens the cost-benefit analysis, thus producing more settlements earlier in the process.
3. The original public policy behind the 'American Rule' of encouraging easy access to the courts no longer applies in an age of diminishing court budgets and congested calendars.
4. People who are angry and want vengeance through litigation may have a moment of religion when they calculate the increased costs. Thus, smaller cases initially driven by negative non-economic factors may now drop out of the system.

Please take a moment and let me know how you come down on this issue.   I'll report the responses in our next edition.    

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ABSOLUTELY MAYBE: THE NEW WORK PRODUCT PRIVILEGE

The California Supreme Court has provided a clarification to the question: can a party obtain the statements taken from witnesses in a case where those statements are procured by the opposing counsel? Stated technically, the question is whether the statements are protected from production under the attorney work product privilege?

The case reviewed by the Supreme Court was one involving a drowning. There were 4 witnesses to the drowning, and the defendant, the State of California, at the direction of its attorney, obtained recorded statements of all witnesses. The attorney for the parents of the deceased child made a motion to obtain those recorded statements. The trial court denied the request, and the Court of Appeal reversed. The Supreme Court in turn reversed the Court of Appeal. The Supreme Court remanded the matter to the trial court to make a determination which parts of the statements were “absolutely privileged” pursuant to Code of Civil Procedure section 2018.030.

It is at this point, in my opinion, that the “clarification” is not so clear. If you use the phrase “absolutely privileged” you muddy the waters by asking further: “Which parts of the statements are “absolutely privileged?” The “problem” arises from the language of Section 2018.030 itself. The “absolute privilege” applies only to a “writing that reflects an attorney’s impressions, conclusions, opinions, our legal research or theories.” The age-old problem is the choice of questions: A trained attorney does not ask random questions. The questions are usually intended to elicit information that goes to specific issues in the case, or specific tactical decisions regarding proof or defenses. Yet, all of those “thoughts” can only be implied from the subtext of the statements.

The Supreme Court ventured to give an example of when an attorney's “thought processes” would not be part of the statement taking procedure. It gave the example of a car accident in which the attorney sent out an investigator, with no direction or instruction, and the investigator asked very few questions, simply allowing witnesses to say what they saw or heard.

Every attorney should read this decision for a comprehensive background on the development and refinement of the attorney work product privilege. The decision generally tends to favor the application of the privilege. I would think that usually any supporting declaration of counsel opposing a motion to compel production will include the procuring attorneys statement that the statement was taken under his direction, and was crafted in accordance with his planning of his case or his defense. In any event, there will be rare situations in which the information cannot be procured by any other reasonable method. In those cases, the court still has discretion to require production of the statements unless the party seeking the statements has failed to act with diligence to obtain information independently.

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“Doctor, Doctor, Give Me the News. I’ve Got A Sad Case of Overtime Blues.” – Christopher v. SmithKline Beecham Corp (June 18 2012) 2012 DJDAR 8040

Outside sales persons are generally exempt from the overtime laws. The question becomes what is a true “outside salesperson”. For one class of workers, pharmaceutical sales reps, the U.S. Supreme Court has provided the answer. At least as far as the Fair Labor Standards Act (FLSA), outside sales reps in the pharmaceutical industry are exempt from overtime. Interesting to me is that the Court based its holding on the most “reasonable” interpretation of the Department of Labor's regulations. In doing so, it disregarded what the Department of Labor itself said was its actual interpretation. The implication is that “changing interpretations” that shift with the political winds are not entitled to deference by the Supreme Court. The DOL argued that because a pharmaceutical rep cannot by law make a direct sale to a physician, he or she is not a true “salesperson”. The Supreme Court took more practical approach saying that the “sale” was a process that was considerably more broad and flexible than an actual signed purchase agreement.

There may be a host of outside representatives who are part of the “sales process” but who do not close the sale with a signed document. This U.S. Supreme Court decision may limit the opportunity of persons not involved in the actual sale of the object or service to obtain overtime pay. For example, what about the highly technical person who provide sales support for the salesperson in the field during a PowerPoint presentation to a customer? Or, what about the salesperson himself or herself who is part of the sales team, but not the specific person who “closes the deal?” In the pharmaceutical industry, the sales rep usually obtains a “nonbinding commitment” from the medical provider. The Supreme Court considered this kind of commitment close enough to a “sale” to bring the employee within the “outside sales” exemption.

The Supreme Court decision will provide guidance in the interpretation by California courts of California overtime law. However, California is permitted to establish more liberal overtime pay regulations. Therefore, the decision is not precedent binding on California courts concerning California wage law.

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