Litigation and arbitration

Supreme Court Clarifies Where Multi-State Employers Can Be Sued

In what could be hailed as a victory for employers, the U.S. Supreme Court has made it less likely that a company can be sued in state court just because it conducts business in that state.  Under federal statute, a corporation is to be considered a citizen of any state in which it has been incorporated and the state where it has its principal place of business.  If sued in state court, a corporation can seek to have the case moved to federal court - a move often deemed advantageous for employers - if the parties are from different states.

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English Courts Broadly Interpret the Territorial Reach of U.K. Employment Legislation

The territorial reach of U.K. employment legislation has come under scrutiny recently.  Two judgments handed down from the Court of Appeal and the Employment Appeal Tribunal (EAT) have broadly interpreted the territorial reach of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (the "Fixed Term Regulations"), the Race Relations Act 1976 (RRA) and the Employment Equality (Age Regulations) 2006 (the "Age Regulations").  In the first case, the Court of Appeal held that the Fixed Term Regulations could be enforced by a U.K. national who worked overseas.  More worryingly in the second case, the EAT held that the RRA and the Age Regulations could be enforced by foreign nationals who work partly in England.  These two judgments potentially will have significant impact on U.S. companies operating in the U.K. and/or employing U.K. nationals.  For a detailed discussion of these two judgments, as well as recommendations for multinational employers, continue reading Littler's ASAP English Courts Broadly Interpret the Territorial Reach of U.K. Employment Legislation, written by John Kloosterman and Anita Vadgama.

Increase in Private-Sector Discrimination Charges Indicates Emerging Trend

The record number of certain employment-related discrimination claims filed in 2009 indicates the emergence of a trend for which employers should be prepared.  The Equal Employment Opportunity Commission's (EEOC) newly-released enforcement and litigation statistics show that 93,277 workplace discrimination charges were filed during fiscal year 2009, the second-highest annual total for the agency.  Private sector charges alleging disability, religion and/or national origin discrimination reached record highs, while the most frequent charges filed in 2009 alleged discrimination based on race (36%), retaliation (36%), and discrimination based on sex (30%).  This year-end data also indicates that claimants received $376 million in total monetary relief through litigation, administrative enforcement and mediation.

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Belgium-Based Employee Files Complaint in U.S. Alleging DCHRA Violations

As previously reported, a recent opinion by the District of Columbia court of appeals, Monteilh v. AFSCME, 107 FEP Cases 561 (D.C. 2009), expanded the reach of the District of Columbia Human Rights Act (DCHRA) by holding that the DCHRA's anti-discrimination provisions apply to any discriminatory decision made within the district, even if the employee at issue lives and works outside the district.  Filing a claim under the DCHRA is an attractive option for plaintiffs because the DCHRA covers 18 protected categories, has no requirement that an administrative claim be filed first, and only requires a plaintiff to show that discrimination was a motivating factor in the adverse employment decision.

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Change to UK Whistleblowing Regime: Tribunals to Have Power to Alert Regulator

Under draft legislation due to come into effect on 6 April 2010, claimants to UK employment tribunals will be able to tick a box on their claim form indicating whether their claim involves allegations of a protected disclosure and, if so, whether they wish the tribunal to pass on such allegations to the relevant regulatory body.  If the tribunal accepts the claim and considers it appropriate to do so, it may send a copy of the claim, or part of it, to one or more regulators set out in a prescribed list. The tribunal would then write to the claimant and respondent to confirm that a copy of the claim form, or extracts from it, has been disclosed.

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Employers Faced with Defending SOX Whistleblower Claims in Multiple Forums Following Fourth Circuit Decision

In a landmark decision issued December 31, 2009, the U.S. Court of Appeals for the Fourth Circuit held that an individual bringing a whistleblower claim against his former employer has the right to pursue this action de novo in federal court - even after losing his case at the administrative level - because a final administrative decision was not issued within 180 days, contrary to statutory requirements.  In Stone v. Instrumentation Laboratory Co. (No. 08-2196, Dec. 31, 2009) (pdf), David Stone, a former employee of Instrumentation Laboratory Co. (ILC), alleged that he was fired in retaliation for complaining that his superiors were not accurately tracking, reporting, and paying certain administrative fees, which he believed impacted the accuracy of ILC's financial reporting to shareholders.  Pursuant to the Sarbanes-Oxley ("SOX") Act, Stone filed a retaliation claim with the Occupational Safety and Health Administration (OSHA).  OSHA filed its preliminary findings - which Stone objected to - more than 180 days after Stone filed his charge.  Stone then requested a hearing before an administrative law judge (ALJ).  The ALJ ultimately granted ILC's motion for summary decision, and Stone appealed to the Administrative Review Board (ARB).  Before the ARB considered the matter, Stone filed a notice stating his intent to file his case anew in federal court.  Once the matter was brought in federal district court, the judge dismissed the action, finding that the ALJ's dismissal of Stone's administrative complaint amounted to a final judgment on the merits, and that re-litigating the action would be wasteful.  Stone appealed this decision, and the Fourth Circuit sided with him, concluding that the express language of the SOX Act entitled him to de novo review in federal court.

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New York Court Rejects Foreign Corporation's Attempt to Dismiss Employment-Related Claim on Jurisdictional Grounds

It appears that the reach of New York's long-arm statute just got a little longer.  In a $15 million employment-related dispute between a Greek citizen and a Liberian company based in Athens, the Supreme Court of the State of New York held (pdf) that the state has jurisdiction over the matter because - in conjunction with other factors - the company traded its stock exclusively on the New York Stock Exchange (NYSE).

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Second Circuit Clarifies Standard for Finding "Aiding and Abetting" Liability Under the Alien Tort Claims Act

The Second Circuit Court of Appeals recently took a large step toward making Alien Tort Claims Act (ATCA) claims more difficult to establish against corporate entities.  In The Presbyterian Church of Sudan v. Talisman Energy, Inc., No. 07-0016-cv (2nd Cir., Oct. 2, 2009), the court clarified the standard under which "aiding and abetting" liability will attach under the ATCA, and held that for such liability to attach, the defendant must act with the "purpose" of committing a violation of customary international law.

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Ninth Circuit Issues Its First Ruling Setting Forth the Elements for Sarbanes-Oxley Whistleblower Claims

The Sarbanes-Oxley Act of 2002 ("SOX") protects employees of publicly traded companies from retaliation for providing information related to possible acts of fraud against shareholders. In Van Asdale v. International Game Technology, No. 07-16597 (9th Cir. 2009), the U.S. Court of Appeals for the Ninth Circuit, addressing for the first time the substantive elements of a SOX whistleblower claim, ruled that employees do not have to prove that actual shareholder fraud has occurred to maintain such a suit. Rather, plaintiffs need only establish that they had an actual and objectively reasonable belief that shareholder fraud occurred. In addition, the Ninth Circuit held that concerns about the potential disclosure of attorney-client privileged information would not bar in-house attorneys from asserting SOX whistleblower claims. While the ruling is ultimately a conservative one that closely tracks the existing case law and regulations, it is an important decision for the Ninth Circuit. Continue reading "Ninth Circuit Issues Its First Ruling Setting Forth the Elements for Sarbanes-Oxley Whistleblower Claims," written by Patrick H. Hicks and Deborah L. Westbrook.

Ontario Court of Appeal Upholds Solicitor-Client Privilege in Internal Accident Investigation Reports

The recent decision of the Ontario Court of Appeal in R. v. Bruce Power Inc. ("Bruce Power") affirms that where an employer has taken the important step of protecting an internal accident investigation report with solicitor-client privilege, that report is not subject to seizure by the Ontario Ministry of Labour (MOL).  In Bruce Power, the Court held that the Crown's seizure of a solicitor-client privileged accident investigation report was prejudicial to Bruce Power's right to a fair trial and all charges against Bruce Power and two of its supervisors under the Ontario Occupational Health and Safety Act ("OHSA") were stayed.

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