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Wal-Mart Gets Off The Hook Due To Punitive Damages Caps

Jon Allison

Jon Allison’s Monday Blog

Last Spring, a jury awarded a former Wal-Mart manager $5.5 million after finding that he had been retaliated against and fired after complaining about discrimination.  The case was in the U.S. District Court for the District of Connecticut.  It was the first of three cases to go to trial filed by three African-American former managers.  The jury found that, after a number of managers complained about race discrimination, Wal-Mart engaged in a phony restructuring and eliminated the positions of the managers who complained.  Shortly after the positions were allegedly eliminated, similar positions reappeared.  The managers who had complained and been fired were prevented from interviewing for these positions and they were filled by non-African-Americans.  The jury determined there had been widespread retaliation and wanted to discourage Wal-Mart from engaging in similar conduct in the future.  Of the $5.5 million awarded by the jury, the vast majority ($5 million) was punitive damages.  Punitive damages are designed to punish an employer and deter future wrongful conduct.  Often the economic losses of a particular plaintiff don’t amount to a lot of money, particularly for a large corporation.  A couple of weeks ago, a federal judge reduced the punitive damages award from $5 million to 300,000 citing caps on damages under the statute.  These caps ought to be revisited.  Most people don’t ever challenge wrongful conduct by an employer.  Fewer ever retain an attorney and file suit.  Fewer still go through all the steps necessary to get to trial.  It can take many years to get there.  Once there, if a jury finds wrongful conduct on the part of a large company and wants to send a message to it to stop, it should not be prevented from doing so.  If a company is not forced to write a big check in the few instances where wrongful conduct is challenged all the way to a verdict by a jury, there is little incentive for it to change its ways.

Wal-Mart Hit With $5.5M Verdict for Retaliation | Connecticut Law …

Wal-Mart Worker Gets $5.5M Verdict In Retaliation Suit – Law360



Brian Gillan

Thanks to the Ohio Supreme Court and the Hamilton County Court of Appeals, Workers in Hamilton County Can Now Be Fired with Impunity If They Report Any of Several Illegal Activities Engaged in by Their Employer.

Thanks to a recent decision by the Ohio Supreme Court, workers in Hamilton County who witness their employer engaging in insurance fraud, immigration law infractions, the use of underage workers, payday lending law violations, or violations of the federal statute protecting the confidentiality of patient medical records, among other things, may now be fired by their employers without any legal recourse.

The decision was issued in the case McGowan v. Medpace, Case No. 2015-1756, and here are the facts. Dr. Mary McGowan is a nationally recognized physician and researcher who was hired into an executive position at Medpace, a billion-dollar local healthcare company. Shortly after she was hired, she became aware of fraudulent prescription writing practices and patient privacy and confidentiality violations. These concerned her so greatly that she held a meeting with her staff to advise that office practices must change to prevent further violations, and met with Medpace senior management to report those concerns. Rather than investigate her concerns, Medpace fired Dr. McGowan in retaliation for her good faith complaints of insurance fraud and violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).

Dr. McGowan sued Medpace for, among other things, wrongful termination in violation of Ohio public policy. The jury unanimously concluded that Medpace’s retaliatory firing violated Ohio public policy and constituted a wrongful discharge. It awarded Dr. McGowan $300,000 in compensatory damages and $500,000 in punitive damages.

Despite the jury’s unanimous verdict, the First District Court of Appeals (the appellate court for Hamilton County) reversed the judgment based on a legal conclusion that is at odds with numerous other Ohio appellate courts and 25 years of Ohio Supreme Court precedent in this area.

Dr. McGowan asked the Ohio Supreme Court to review the case since it presented important legal issues for workers throughout Ohio, but especially in Hamilton County. The Supreme Court initially agreed to review the Court of Appeals’ decision. The parties filed lengthy briefs and argued the case to the Ohio Supreme Court on February 8, 2017. Then, a few weeks ago, the Supreme Court changed its mind and decided not to review the decision of the First District Court of Appeals after all. Such a decision is highly unusual. Even more unusual is the fact that the court gave no explanation for its decision.

As a result of the actions of the First District Court of Appeals and the Ohio Supreme Court, in Hamilton County it appears employees can now be fired for:

∙ Testifying truthfully, although unfavorably to their employer.
∙ Exercising their right to consult an attorney.
∙ Refusing to commit illegal acts, such as padding customer checks.
∙ Refusing to commit insurance fraud at their employer’s insistence.
∙ Reporting violations of HIPAA’s patient privacy and confidentiality provisions.
∙ Raising concerns about insurance fraud.

Elections have consequences. The voters of Ohio elect their judges, including Ohio Supreme Court justices. The current make-up of this court is decidedly anti-worker. The McGowan decision is just the latest example of that anti-worker sentiment. So the next time you think that your vote doesn’t matter, think again.


Study Finds Connection Between Male Unemployment Rates And Sexual Harassment

Jon Allison

Jon Allison’s Monday blog

Complaints to the Equal Employment Opportunity Commission of sex discrimination are up approximately 10% over the last 20 years. A recent study of EEOC and Bureau of Labor Statistics data shows that complaints of sex discrimination go up when unemployment rates for men are higher than for women. The study looked at sex discrimination claims in each state and the District of Columbia from 2009 through 2016 as well as unemployment rates in each state. When unemployment rates for men were higher than those for women in a particular state, complaints of sex discrimination spiked. And the greater the disparity between men’s unemployment and women’s unemployment, the greater the number of complaints. Conversely, when unemployment rates for women were higher than for men in a particular state, complaints of sex discrimination dropped off. The author of the study argues that as women progress toward economic parity that presents a threat to the way men view their roles at work and in society in general. Sex discrimination is a way to attempt to assert control in response.

When Male Unemployment Rates Rise, So Do Sexual Harassment Claims


Big Win For Equal Pay

Jon Allison

Jon Allison’s Monday Blog

Last week I blogged about how the use of salary at a prior job to set starting salary at a new job often held down compensation for women throughout their careers.  This blog is about an individual win for equal pay that should result in fair pay for the remainder of the career of one woman, Joanna Smith.

Smith held a degree in civil engineering and over 5 years of experience when she was hired into an Engineer III position with Prince George’s County in Maryland.  Smith attempted to negotiate a salary she believed was consistent with her education and experience, but the county refused.  Then just two weeks later it hired a male for another Engineer III position and paid him the higher salary he requested even though Smith and the male employee would be performing the same work.  The county was also paying a male in a lower position, Engineer II, more than Smith despite him having less experience and performing less complex duties.

Smith and the EEOC filed suit in 2015.  In March of this year the district court ruled that the county was, in fact, paying lower wages to Smith than to her male colleagues performing equal work in violation of the Equal Pay Act.  The county has now agreed to pay approximately $145,000 in back wages and other damages.  More importantly it agreed to raise Smith’s salary by $24,723 annually which will put her on equal footing with her male counterparts going forward.  The county also agreed to hire a consultant to assist it in making sure its compensation policies and salary determinations are compliant with the Equal Pay Act.

Prince George’s To Pay $145,402 And Increase Female Engineer’s Salary To Settle EEOC Pay Bias Suit

EEOC Sues Prince George’s County for Pay Discrimination


The Use Of Salary History To Pay A Woman Less

Jon Allison

Jon Allison’s Monday blog

In 2016, California and Massachusetts became the first two states to enact legislation preventing employers from asking job applicants about their salary history.  25 states and the District of Columbia are considering enacting similar legislation.  The reason is that employers’ use of salary history in determining what to pay an employee has resulted in women being paid less than men on a widespread basis.

Last week NPR ran a story on this issue highlighting the experience of Aileen Rizo.  Rizo, after four years of employment with Fresno County, California as a math teaching consultant, learned that a newly hired male employee with less experience and less education had been hired in at about 20 percent more than she was being paid.  When she complained to Human Resources, she was told that her salary was based on previous pay at another job and that her salary would remain as is even though she was doing a good job, had more tenure with the employer, had more experience and had more education.

Rizo filed suit back in 2012 asserting a violation of the Equal Pay Act.  She won at the district court level but the Ninth Circuit Court of Appeals reversed the decision.  In the years after she filed suit, cities and states began looking into passing laws to prevent asking about salary history.  The ruling by the Ninth Circuit shows the need for such legislation.

Proposals Aim To Combat Discrimination Based On Salary History : NPR

Illegal in Massachusetts: Asking Your Salary in a Job Interview – The …