Rights of Inmates

Even the most chronic or hardened inmates have basic rights that are protected by the U.S. Constitution. If you are facing incarceration, you should know your rights. If you have a family member or friend who is in prison or jail, you should know what their rights are, as well.

    • Pre-trial detainees (those citizens who are too poor to afford bail and who are therefore held pending trial) have the right to be housed in humane facilities. In addition, pre-trial detainees cannot be “punished” or treated as guilty while they await trial.
    • Inmates have the right to be free, under the Eighth Amendment, from inhuman conditions because those conditions constitute “cruel and unusual” punishment. The term “cruel and unusual” was not defined at the time the Amendment was passed, but it was noted by the Supreme Court in 1848 that such punishments would include “drawing and quartering, embowelling alive, beheading, public dissecting, and burning alive,” among other things. Today, many of these punishments may seem antiquated, but the basic scope of the protection remains the same. Any punishment that can be considered inhumane treatment or that violates the basic concept of a person’s dignity may be found to be cruel and unusual.

Example: In 1995, a federal court in Massachusetts found that inmates’ constitutional rights were violated when they were held in a 150-year-old prison that was infested with vermin, fire hazards, and a lack of toilets.

    • Inmates have the right to be free from sexual crimes, including sexual harassment.

Example: A federal court in the District of Columbia found prison officials liable for the systematic sexual harassment, rape, sodomy, assault, and other abuses of female inmates by prison staff members. In addition, the court found that the prison facilities were dilapidated, that there was a lack of proper medical care available, and that the female inmates were provided with inferior programs as compared to male inmates within the same system.

    • Inmates have the right to complain about prison conditions and voice their concerns about the treatment they receive. They also have a right of access to the courts to air these complaints.

Example: A federal court in Iowa recently awarded a prisoner over $7,000 in damages after it was found that he was placed in solitary segregation for one year and then transferred to a different facility where his life was in danger just because he complained about prison conditions and filed a lawsuit challenging the conditions of his confinement.

    • Disabled prisoners are entitled to assert their rights under the Americans with Disabilities Act to ensure that they are allowed access to prison programs or facilities that they are qualified and able to participate in.
    • Inmates are entitled to medical care and attention as needed to treat both short-term conditions and long-term illnesses. The medical care provided must be “adequate.”
    • Inmates who need mental health care are entitled to receive that treatment in a manner that is appropriate under the circumstances. The treatment must also be “adequate.”
    • Inmates retain only those First Amendment rights, such as freedom of speech, which are not inconsistent with their status as inmates and which are in keeping with the legitimate objectives of the penal corrections system, such as preservation of order, discipline, and security. In this regard, prison officials are entitled to open mail directed to inmates to ensure that it does not contain any illegal items or weapons, but may not censor portions of correspondence which they find merely inflammatory or rude.

Note: Inmates do not have a right to have face-to-face interviews with news reporters or media representatives. The rationale for this limitation is that the media are not entitled to have access to inmates that members of the general public would not be able to have.

    • Inmates have the right to be free from racial segregation in prisons, except where necessary for preserving discipline and prison security.
    • Inmates do not have a reasonable expectation of privacy in their prison cells and are not protected from “shakedowns,” or searches of their cells to look for weapons, drugs, or other contraband.
    • Inmates are entitled, under the Due Process Clause of the Constitution, to be free from unauthorized and intentional deprivation of their personal property by prison officials.
    • The Supreme Court has held that inmates who are the subject of disciplinary investigations or proceedings are entitled to advance written notice of the claimed violation and a written statement of the facts, evidence relied upon, and the reason for the action taken. The inmate is also entitled to call witnesses and present documentary evidence if allowing him to do so would not risk order, discipline, and security. In that regard, inmates are rarely allowed to confront and cross-examine adverse witnesses in an internal disciplinary proceeding.

Note: In most cases, an inmate is not entitled to representation by counsel in a disciplinary proceeding.

  • Inmates are entitled to a hearing if they are to be moved to a mental health facility. However, an inmate is not always entitled to a hearing if he or she is being moved between two similar facilities.
  • A mentally ill inmate is not entitled to a full-blown hearing before the government may force him or her to take anti-psychotic drugs against his or her will. It is sufficient if there is an administrative hearing before independent medical professionals.

In 1996, Congress passed the Prison Litigation Reform Act (PLRA), which has been seen by many critics as unfairly limiting inmate access to the federal court system. The PLRA contains five major provisions:

    1. Prisoners must exhaust internal prison grievance procedures before they file suit in federal court.
    2. Prisoners must pay their own court filing fees, either in one payment or in a series of monthly installments.
    3. Courts have the right to dismiss any prisoner’s lawsuit which they find to be either “frivolous,” “malicious” or stating an improper claim. Each time a court makes this determination, the case can be thrown out of court and the prisoner can have a “strike” issued against them. Once the inmate receives three “strikes,” they can no longer file another lawsuit unless they pay the entire court filing fee up front.

Note: If the inmate is in risk of immediate and serious physical injury, the three strike rule may be waived.

  1. Prisoners cannot file a claim for mental or emotional injury unless they can show that they also suffered a physical injury.
  2. Prisoners risk losing credit for good time if a judge decides that a lawsuit was filed for the purpose of harassment, that the inmate lied, or that the inmate presented false information.

Have Your Civil Rights Been Violated?

From race discrimination to sexual harassment and fair housing rights violations, if you believe you have been the victim of a civil rights violation, you most likely have questions about your situation and your options. Following is an overview of initial questions to ask and steps to take if you believe that your civil rights have been violated.

(Note: In any potential legal situation involving civil rights, you should speak with an experienced Civil Rights Attorney at the outset. Legal issues involving civil rights can be very complicated, and can be very difficult to resolve without proper expertise.)

Was a “Protected Right” Violated?

The first question you should ask is whether a “protected right” has been violated. You may feel that your rights have been violated, but it doesn’t necessarily follow that your civil rights were violated. Only certain rights are protected under civil rights and anti-discrimination laws. Some apparent “rights violations” are in fact perfectly legal, and cannot form the basis for a civil rights case. The examples below point out the difference between lawful discrimination and an unlawful civil rights violation, in the area of housing rights.

Example 1: Applicant 1, an owner of two dogs, fills out an application to lease an apartment from Landlord. Upon learning that Applicant 1 is a dog owner, Landlord refuses to lease the apartment to her, because he does not want dogs in his building. Here, Landlord has not committed a civil rights violation by discriminating against Applicant 1 based solely on her status as a pet owner. Landlord is free to reject apartment applicants who own pets.

Example 2: Applicant 2, an African-American man, fills out an application to lease an apartment from Landlord. Upon learning that Applicant 2 is an African-American, Landlord refuses to lease the apartment to him, because he prefers to have Caucasian tenants in his building. Here, Landlord has committed a civil rights violation by discriminating against Applicant 2 based solely on his race. Under federal and state fair housing and anti-discrimination laws, Landlord may not reject apartment applicants because of their race.

If a Protected Right Was Violated: Your Options

If you believe that a protected right was violated, you likely have a number of options available to you — including resolving the matter through informal negotiations, filing a claim with the government, and filing a private lawsuit in civil court.

Informal Negotiations

As with most legal disputes, your civil rights matter can be resolved without your having to file papers in court, or face the prospect of a lengthy legal battle. For example, a potential employment discrimination matter can be resolved by both sides (typically through the employer and employee and their respective attorneys) sitting down and drafting an agreement in which the employer agrees to pay the employee a certain amount as severance, and the employee agrees to give up any right to sue over the matter.

Filing a Claim with the Government

For most cases involving civil rights violations, one of your options is to file a complaint with the government at the federal or state level, and allow a government agency to take steps to enforce your civil rights. Filing a complaint will usually trigger an investigation into your claims by the agency, and the government may take further action on your behalf. Whether your complaint is handled at the federal or state level will depend on the facts of your case and the claims involved (what laws were allegedly violated, etc.). What matters most is that your complaint gets filed; after that, the agencies will decide where and how your case will be handled. In most cases, neither the offender nor the victim need be affiliated with the government. It is important to note that, for some types of civil rights cases, a claim must be filed with the government before any private lawsuit may be pursued.

Filing a Private Lawsuit for a Civil Rights Violation

If you believe you have been the victim of a civil rights violation, you most likely have the option of filing a lawsuit against those responsible for any harm suffered as a result.

Once you decide to file a lawsuit for a civil rights violation, one of your first considerations will be where to file: in federal or state court. Depending on the specifics of your case, the choice may be yours, or your options may be dictated by an applicable law. Regardless of where the case is handled (federal or state court), in order to begin the case the person claiming a civil rights violation (the “plaintiff”) files a “complaint” with the court. The complaint sets out certain facts and allegations, in an attempt to show that the opposing party (the “defendant(s)”) is/are responsible for the civil rights violations alleged in the complaint, and for any harm suffered by the plaintiff as a result. Remember that, for some types of civil rights cases, you must file a claim with the appropriate government agency before pursuing any private lawsuit.

Civil Rights Violations: Hiring a Lawyer

As mentioned above, if you believe you have suffered a civil rights violation, the best place to start is to speak with an experienced Civil Rights Attorney. Important decisions related to your situation can be complicated — including whether a “protected right” was violated, which laws apply to the situation, whether you must file a claim with the government, and where you might file a lawsuit. A Civil Rights Attorney will evaluate all aspects of your case and explain all options available to you, in order to ensure the best possible outcome for your case.

Entrepreneur’s Guide to Litigation – Blog Series: Introduction

The words “lawsuit” and “trial” usually conjure up images based upon either media coverage of recent, significant cases or trials depicted on television and in movies. A real lawsuit and trial are significantly different than what we see on television or in the movies. Media coverage of a trial does not delve into the frequent reality of a lawsuit – the months and possibly years of pre-trial “discovery” and motion practice that occur before a case can even go to trial.

This upcoming blog series is aimed at removing some of the mystery of a lawsuit and a trial, and also at informing entrepreneurs what really happens prior to and during all those trials you see on television. The next seven blogs cover the basics on a lawsuit, from filing of a “Complaint” through trial and, ultimately, the appeal process. It can provide a complete picture of the litigation process to alert the entrepreneur what to expect as a potential party to a lawsuit.

There are other, important considerations to litigation not addressed in this series, such as insurance coverage, if any, and confidentiality agreements (known as protective orders) between the parties to a lawsuit. Additionally, a corporation usually cannot appear by one of its owners, but must be represented by counsel. Certainly, anyone that is sued or is thinking about suing another, should consult with a lawyer as soon as possible. We hope this blog series helps entrepreneurs develop a better understanding of the litigation process.

Entrepreneur’s Guide to Litigation – Blog Series: Complaints and Answers

A.  The Complaint

Litigation begins with a Complaint. “Complaint” is capitalized because it is a specific legal document, rather than a garden-variety complaint about something. The Complaint lays out the plaintiff’s specific legal claims against the defendant. It needs to contain enough facts that, if everything stated is true and there are no extenuating circumstances, a judge and jury could find in favor of the plaintiff.

As an example, Paul Plaintiff is suing Diana Defendant for violating a contract. Paul files a Complaint with a court claiming several facts: 1) Diana signed a contract to buy widgets; 2) Paul delivered the widgets; and 3) Diana did not pay the agreed-upon amount. If the court finds that these facts are true, then, unless there were extenuating circumstances, Diana probably breached a contract with Paul and should pay damages.

Paul’s Complaint also needs to allege facts showing that he has a right to be in that court. For example, if Paul wants to sue Diana inTexas, he has to show that the case and the parties have some connection toTexas. If he wants to sue her in a federal court, he has to meet a number of other criteria. (Federal court is generally only available if the parties are based in different states and the damages are relatively substantial or if the legal question is one of federal law.)

B.  Response to a Complaint

Once the defendant officially learns of the Complaint, she has a certain limited time to file some sort of response with the court. The time to respond, however, does not run from when the plaintiff filed the lawsuit, but generally when he officially delivered notice of the Complaint to the defendant. (There is a timeline that starts ticking when the defendant becomes aware of a state court lawsuit she wants to “remove” to federal court.) The amount of time for the defendant to respond varies by what court the case is in, but is generally a short period of time.

After receiving the complaint, the defendant has three options: 1) Ignore the Complaint and have the court grant judgment in favor of the plaintiff; 2) Tell the court that the Complaint is defective and ask for dismissal; or 3) Answer the Complaint. Option one is usually not a good plan; courts do not look favorably on defendants who ignore the legal process, and this option prevents a defendant from fighting the plaintiff’s claims.

Option two does not deal with the merits of the plaintiff’s issue. It is simply telling the court that the Complaint is defective for a variety of reasons including, for instance, how it was served, who the parties are (or are not), which court the case is in, or simply that, even if everything is true, the plaintiff cannot win. For example, if Paul sues Diana, but never tells Diana about the suit, Diana can then ask the court to dismiss the case. Also, if Diana works for DefendCo and Paul’s contract was actually with DefendCo and not with Diana, personally, she may be able to have the case dismissed because Paul sued the wrong party. If Paul sued Diana in a federal court inTexaswhen both parties are residents ofCaliforniaand neither has ever been to or done business in Texas, then Diana may be able to get the case dismissed, at least from theTexascourt.

Finally, there is the “So, what?” defense. If the Complaint doesn’t actually allege a cause of action, the defendant can ask the court to dismiss it. This usually happens because the plaintiff simply assumes a fact, but does not include it in the Complaint. If, for example, Paul alleges only that Diana failed to pay him a certain amount of money, but does not allege that a contract existed between them, then Diana can essentially say “So, what?” and ask the court to dismiss the case. She would ask the court to dismiss the case because, even if true (she really did not pay him any money), he did not plead any facts showing that she was supposed to pay him money. The defendant is not admitting the truth of the allegation; she is just saying that even if true, the plaintiff cannot win.

Finally, a defendant can file an Answer. Again, “Answer” is capitalized because it is a specific legal document. In an Answer, the defendant responds, paragraph by paragraph, to each of the plaintiff’s allegations. The defendant must admit, deny, or say that she does not know the answer to each specific allegation. Saying “I don’t know” functions as a denial.

For example, Paul’s Complaint probably alleges that Diana lives at a certain address. Assuming Diana actually lives there, she has to admit that fact. Paul may allege that he delivered the correct number of working widgets to Diana. If the widgets were not what she actually ordered or did not work, Diana would deny that allegation. Finally, Paul may claim that those widgets cost him a certain amount of money. Diana likely has no way to know how much Paul paid for the widgets, so she would say she does not know – thus leaving Paul to prove that allegation.

Also in the Answer, the defendant can claim affirmative defenses. Those tell the court that there were extenuating circumstances so that, even if everything the plaintiff says is true, the court should not find in favor of the plaintiff.

For example, if Paul told Diana not to worry about paying him for the widgets for six months but then turned around and immediately sued her, she would claim that as an affirmative defense.

Finally, the Answer may contain counterclaims. These claims are the defendant counter-suing the plaintiff for something. The counterclaims may be related to the original suit or not. Usually they are related, but they do not have to be. This section follows the same rules as if the defendant were filing a complaint.

For example, Diana may counterclaim against Paul because he sent her the wrong widgets and, perhaps, add a claim that when Paul delivered the widgets to her warehouse, he backed his truck into her building and caused damage. She would then counterclaim for breach of contract and property damage. The court would then sort out the whole mess to decide who owed whom how much.

Social Media and Discovery: Accessing Password Protected Material

Social media is everywhere, including, with increasing frequency, in lawsuits, particularly those involving employment-related claims. For example, employers sued by potential, current, and former employees are seeking social media information to learn if on-line postings by those employees on social media sites contradict statements or contentions made by them in their lawsuit. For their part, plaintiff-employees are seeking social media information to try to bolster their claims, such as looking for information from social mediate sites to show a pattern of allegedly harassing conduct by a supervisor or co-worker that extends beyond the workplace.

In a recent case, Zimmerman v. Weis Markets, Inc., No. CV-09-1535, 2011 WL 2065410 (Pa. Com. Pl. May 19, 2011), the trial court permitted the defendant employer to access the plaintiff’s password-protected on-line information. The plaintiff brought suit against his former employer after he injured his leg on the job while operating a forklift. The plaintiff sought damages for lost wages, lost future earning capacity, pain and suffering, scarring and embarrassment. The plaintiff claimed that he could no longer participate in certain activities and that his injuries affected his enjoyment of life. At his deposition, the plaintiff stated that he never wore shorts because he was embarrassed by the scar on his leg from the accident. However, the employer discovered on various publically-available social media websites, pictures posted by the plaintiff where his scar was clearly visible.

The defendant pursued this matter further, filing a motion to obtain access to private portions of the plaintiff’s social media sites and posts. The defendant argued that there may be other relevant information contained on those sites that would pertain to the plaintiff’s damages claim. The defendant sought the plaintiff’s passwords, user names and login names. Not surprisingly, the plaintiff opposed the defendant’s efforts to gain access to his private social media sites, arguing that his privacy interest outweighed any need to obtain discoverable material.

The court granted the defendant’s motion, finding that the plaintiff’s privacy interests did not outweigh the defendant’s need to obtain the information, that liberal discovery is favored, and the pursuit of truth is paramount. The court noted that it was the plaintiff who placed his physical condition at issue, and the defendant therefore has a right to find out information about the plaintiff’s condition. The court further reasoned that because the plaintiff posted the information to share with others, he could not now claim a reasonable expectation of privacy.

The court was careful to note, however, that its ruling should not be interpreted as a blanket entitlement to dig into employees’ private social media activities in every case, or that the court would allow “fishing expeditions.” Rather, the court clarified that it would consider an application seeking private social media information if the party seeking the material could make a threshold showing that the publicly accessible portions of the site indicate that there would be further relevant postings in the non-public portions. Thus, what the court essentially held was that if the plaintiff opens the door by posting publically-available information relevant to the lawsuit, private portions of a plaintiff’s social media are fair game. At bottom, this makes sense, however, watch for this rationale to be tested further, and perhaps expanded.

Discovery in the Digital Age: Meeting the Challenges of Electronically Stored Information

Anyone who has been involved in a lawsuit understands that the discovery phase is critical. During discovery, each party investigates the claims of its opponents and requires them to produce all documents that support their respective positions. Traditionally, each responding party would produce a box or two containing paper documents that it intended to offer as evidence at trial. Today, with the advent of electronically stored information (ESI), the thought of examining a few hundred pages of documents seems quaint.

Most businesses now create and store all of their information electronically. E-mail, for example, is routinely stored in multiple locations: on the sender’s hard drive, on central and backup servers, and on the recipients’ computers and servers. Many of those servers are periodically backed up to tape. In addition, both the sender and recipients may review, edit and forward an e-mail or attachment from their personal laptops, tablets and smartphones. That original e-mail has now been stored and perhaps modified in multiple locations. If some or all recipients reply to the sender, the process swiftly multiplies.

It is not uncommon for millions of digital images to be produced in discovery in a single lawsuit. To complicate matters further, when a paper document is shredded, the document is irretrievable—end of story. Not so with ESI. Deleting an electronically stored e-mail, spreadsheet or other document simply means that space is available on the computer for overwriting. Until a file is actually overwritten, that deleted document can easily be recovered. Conversely, ESI can intentionally be destroyed if the hard drive or server containing the information is reformatted.

In recent years, courts have developed standards for preserving and collecting ESI. Judges frequently issue opinions regarding the duty of parties to ensure that relevant information is preserved and produced in a timely, efficient and cost-effective manner. If a party does not fulfill its ESI obligations, the consequences can be severe. In the Texas case of Green v. Blitz U.S.A., Inc., when a federal district court judge learned that the corporate defendant failed to produce certain electronically stored documents and preserve other information while the case was pending, he imposed sanctions of $250,000—a full year after the case settled. In imposing the sanction award, the judge said the company “made little, if any effort to discharge its electronic discovery obligations.”

In response to these trends, Much Shelist has established an e-discovery task force that is monitoring developments in ESI and is ready to guide our clients in all aspects of the process, including the following:

  • Preserving all information potentially relevant to a claim or lawsuit;
  • Collecting information in an organized, efficient manner;
  • Determining the scope of ESI to request from opposing parties and implementing appropriate steps to ensure compliance;
  • Addressing privacy concerns associated with information stored by Facebook, Twitter and other social media websites;
  • Evaluating the applicability of the attorney-client privilege;
  • Analyzing metadata and other information hidden in ESI;
  • Rebutting potential claims that evidence has been improperly withheld or destroyed; and
  • Working with opposing counsel, the courts and outside vendors to reduce the cost of responding to requests for ESI.

The days of examining a handful of paper documents produced in discovery are over. Lawyers and clients alike must be prepared to meet the legal and technological challenges of ESI head on. If you are contemplating filing a lawsuit or have reason to believe your business may become involved in litigation, the best time to discuss your ESI obligations with counsel is before the case is filed.

Implementing Effective Litigation Holds

Does your company have an established procedure for issuing timely litigation holds?  Recent court decisions make it clear that employers have a duty to preserve electronically stored information and paper documents they know or should know would be relevant to a current or threatened legal action.  The consequences for failing to do so can be severe.  Events which trigger an employer’s duty to preserve information/documents include, but are not limited to, the following:

  • Receiving notice that the employer is a party to a legal or an administrative proceeding, such as a charge of discrimination;
  • Receiving a letter threatening a claim on behalf of an applicant or current or former employee;
  • A verbal demand from an applicant or current or former employee relating to a legal claim;
  • Other “red flags” exist or a “totality of circumstances” indicate a claim is likely to be made by an  applicant or current or former employee.

A litigation hold notice is best made in writing,  It should instruct recipients to preserve and not destroy (or overwrite) electronically stored information and paper documents that are relevant to current or threatened litigation.

Although the litigation hold notice must be tailored to the facts of each particular situation, at a minimum, it should include the following:

  • Name of the matter or individual involved;
  • Warning of the importance of the hold and the consequences for not complying with it;
  • Direction not to alter or destroy information/documents;
  • Reason for the hold – e.g., legal action;
  • Reason the recipient (see below) is getting the hold notice;
  • Types of information included in the hold and the applicable time period.  (Information subject to the hold could include personnel files and other employment related documents, e-mail and other forms of correspondence and electronically stored information.)
  • Instructions for preserving information/documents;
  • Suspension of any routine document retention/destruction policy;

The hold notice should be issued to all employees reasonably likely to have information relevant to a claim – the “key players” in the matter.  There could also be instances in which outside vendors would also need to be issued a hold notice.

The employer’s IT department should help implement litigation holds, particularly with regard to documents housed or stored in e-mail accounts, or on computers, cell phones PDAs, or on flash drives, as well as with regard to taking control of backup tapes and stopping any automatic overwriting of electronic data.

Finally, employers should enforce litigation holds and, if a violation of the hold is discovered, take prompt action to remedy the violation if possible.  Steps also should be taken to ensure no further violations occur, such as taking disciplinary action up to termination.

Litigation hold notices must be tailored to the facts of each case and should be reviewed by counsel knowledgeable in this area.  If you have a question about litigation hold practices, The Prince Firm attorneys are experienced in minimizing legal risks through the effective use of litigation holds and are available to assist employers with any of their needs.

Online College To Pay $260,000 To Settle EEOC Lawsuit Charging Sex Harassment By Supervisors Online College To Pay $260,000 To Settle EEOC Lawsuit Charging Sex Harassment By Supervisors

Anthem College Online Tolerated a Hostile Workplace, Federal Agency Charged

PHOENIX – High-Tech Institute, Inc., doing business as Anthem College Online, will pay $260,000 as part of a settlement of a sexual harassment lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today. In its suit in U.S. District Court for the District of Arizona (Civil Action No.CV-09-2041-ROS), the EEOC charged that Anthem College subjected female employees to repeated sexual harassment by supervisors.

According to the EEOC, six female admissions representatives working at the Phoenix, Ariz., location were frequently sexually harassed by three supervisors. The EEOC’s allegations included that the supervisors engaged in unwanted sexual touching and comments, writing sexually suggestive e-mails and soliciting sex from employees during unwelcome visits to the employees’ homes in the early morning hours. Some of this abusive behavior was witnessed by other Anthem College employees, the EEOC said.

The EEOC maintained that Anthem College knew or should have known about and tolerated this sexually hostile work environment caused by its supervisors. The agency said the company’s former human resource manager wrote that Anthem College employees were fearful to come forward because an alleged harasser was seen drinking and socializing with upper management and that there was blatant disrespect to employees and rampant poor management.

According to the EEOC, the company unreasonably delayed removing a class member from under the supervision of an alleged harasser who, the company’s own former human resources manager testified, was a “psychopath.” The EEOC argued that despite Anthem College’s knowledge about the harassment, the company failed to take reasonable steps to investigate and remedy the harassment.

“Employees who have an official or strong duty to communicate to management are considered part of management,” said EEOC Regional Attorney Mary Jo O’Neill of the Phoenix District Office, which originated the legal action. “Here, there was a breakdown in reporting by persons whose job descriptions required them to report any issues affecting the normal operation of the admissions department, including sexual harassment. They failed to do so, with serious consequences.”

Sexual harassment violates Title VII of the Civil Rights Act of 1964. The EEOC filed suit after first attempting to reach a pre-litigation settlement through its conciliation process.

In addition to the settlement requiring Anthem College to pay $260,000 to the former employees, Anthem College also must investigate any further complaints of sexual harassment, provide training for managers and supervisors on conducting sexual harassment investigations and post a notice that harassment of Anthem College’s employees will not be tolerated.

EEOC Phoenix District Director Rayford O. Irvin added, “We insist that companies fulfill their obligation to protect employees from sexual harassment and provide the necessary training to ensure this protection.”

Emergency Transport Company Sued by EEOC For Pregnancy Discrimination

CHARLOTTE, N.C. – A North Carolina ambulance service violated federal law by discriminating against several female employees because they were pregnant, the Equal Employment Opportunity Commission (EEOC) charged in a lawsuit filed today.

According to the EEOC’s complaint, SDTM Investments, Inc., doing business as Tarheel Medical Transport, subjected Samantha Holder and other pregnant employees to different terms and conditions of employment from its non-pregnant employees. The complaint alleges that upon learning that an employee was pregnant, Tarheel required the employee to take a leave of absence or be discharged. The EEOC contends that around March 2009, the company refused to let Holder work in her job as an emergency medical technician and discharged her because she was pregnant.

Several months after Tarheel discharged Holder, EEOC alleges that the company also forced office manager and emergency medical technician Christina Berdan to take medical leave from her job. Tarheel informed Berdan that she could not return to work until after the birth of her child in spite of the fact that Berdan was physically fit, had no medical restrictions and could fully perform the duties of her job. As a result of this practice, Holder, Berdan and other pregnant employees were either terminated or forced to take a leave of absence despite the fact that they were fully capable of performing their job duties.

Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act, prohibits employers from discriminating against pregnant employees. The EEOC seeks back pay, compensatory damages and punitive damages for Holder and the other affected employees, as well as injunctive relief. The EEOC filed suit in U.S. District Court for the Eastern District of North Carolina (Equal Employment Opportunity Commission v. SDTM Investments, Inc. d/b/a Tarheel Medical Transport, Civil Action No. 4:11-CV-00080) after first attempting to reach a pre-litigation settlement through its conciliation process.

“Working women who chose to have children cannot be penalized or treated differently from other employees simply because they are pregnant,” said Lynette A. Barnes, regional attorney for the EEOC’s Charlotte District Office. “Employers must remember that paternalistic attitudes toward pregnant employees can result in unequal treatment at work, which violates federal law.”

SDTM Investments, Inc. doing business as Tarheel Medical Transport, operates an ambulance service in Beaufort, Wilson and Craven counties in North Carolina, transporting non-emergency patients from their care facilities or homes to medical appointments. It employs approximately 40 people.

Simple Steps Employers Can Take to Minimize the Risk of Preventable Lawsuits

Employers today are facing a barrage of wage and hour lawsuits on an unprecedented scale.  Indeed, it is not uncommon to see plaintiffs’ attorneys target a particular industry for “special” attention, especially when there appears to be a significant number of employers unclear about or unconcerned with the obligations imposed by the Fair Labor Standards Act (FLSA) and state wage and hour laws.  The hospitality industry has come under just such scrutiny, with single plaintiff and class action lawsuits filed against national chains as well as local “mom and pop” establishments.  With no employer immune, there are several areas where a proactive employer should pay particular attention.

Minimum Wage, Overtime and Off-The-Clock Claims

One issue that turns up time and again, particularly with less sophisticated employers, involves incorrect minimum wage payments.  Under federal and state law, employers are required to pay nonexempt employees the minimum wage.  In many cases, employers do not realize the federal or state minimum wage has changed and that, as a result, hourly employees are not being paid the appropriate minimum wage until a lawsuit has been filed.  Employers often mistakenly rely on HR consulting firms or payroll companies to notify them of any changes in the minimum wage.  However, the wage and hour laws place the onus of compliance on the employer. Unless the employer has an indemnification agreement with its payroll provider, the employer is on the hook for the unpaid wages plus any fees or other penalties that may be imposed.  Employers should periodically verify whether a minimum wage hike has occurred or is planned.

Another easily correctible mistake involves the incorrect payment of overtime to hourly workers.  Instead of paying employees time-and-one-half (1.5x) the hourly rate for hours worked in excess of 40, some hospitality and service industry employers continue to pay employees the straight time rate for overtime hours.  For example, an employee is paid $10 per hour for all hours worked, including overtime hours, even though the federal and state laws require the employee to be paid $15 per hour for all hours over 40.  Some employers erroneously believe that an employee may agree, or even offer (in exchange for more hours) to accept a lesser overtime wage than is required by the law.  The law is very clear, however, that employees may not waive their right to be paid the minimum or overtime wage.

Off-the-clock claims are another headache plaguing hospitality employers.  These lawsuits stem from the nonpayment of wages for time spent working by employees before clocking in and after clocking out (i.e., off-the-clock work), and they are often filed in conjunction with minimum wage and overtime claims.  To succeed on these claims, the employees must prove that the employer knew they were engaging in off-the-clock work activities without compensation.  The success of these claims often hinges on whether the employer has implemented timekeeping rules, notified employees of the rules and disciplined employees who violated them.  Credibility of the supervisors and witnesses is also a major factor.

Employers would be well-served to require employees to clock in and out using a time clock and to have supervisors review the time cards on a weekly basis.  Under federal and state law, employers are required to keep accurate records.  Failure to do so can result in the courts giving more credence than they otherwise would to the employees’ estimate of the hours they worked.  Employers should also make clear to employees that they are not permitted to work overtime without prior authorization and that they will be disciplined up to and including termination if they work unauthorized overtime.  Employers also may want to consider implementing workplace rules requiring employees to start working as soon as they clock in and to leave the premises after they clock out, and depending on the industry and job, prohibiting employees from working at home.

Lest employers think these lawsuits are not a cause of concern, under federal law, employees may be awarded liquidated damages in an amount that is equal to the amount of the unpaid minimum wage or overtime amounts plus their attorneys’ fees.  Thus, lawsuits, often stemming from innocent mistakes, may end up costing employers hundreds of thousands of dollars, not including attorneys’ fees.  Moreover, state or federal departments of labor may decide to audit all of the company’s wage and hour practices.

Be Careful with Tip Credit Arrangements

Treatment of “tipped” employees is another hospitality industry practice that is frequently challenged by plaintiff’s attorneys.  Under federal and most states’ laws, employers may pay tipped employees a reduced hourly rate if the employer follows certain rules.  For example, Illinois law permits employers to pay tipped employees an hourly rate of $4.95 per hour, rather than the statutory $8.25 per hour.  To qualify for this credit under federal law, the employer must satisfy the following requirements:

  • Inform each tipped employee of the “tip credit” arrangement by, for example, posting the federal DOL notices regarding tipped employees and having employees sign a written acknowledgement of understanding.
  • Tipped employees must receive at least $30 in tips per month.  Compulsory service charges determined by the employers are not tips.
  • Tipped employees must be paid at least the minimum wage when the decreased hourly rate and tips are added together.
  •  Employees must be permitted to keep ALL tips, provided that a valid tip-sharing arrangement (or “tip pool”) may be utilized.  Employees may not be required to contribute more to the tip pool than what is “customary and reasonable.”

If the employer fails to satisfy any of the above conditions, the tip credit arrangement is invalid and the employer may be liable for the amount saved by using the tip credit, any additional overtime amounts and liquidated damages.

Most lawsuits challenging the tip credit take issue with the last element.  The general rule is that tip-sharing arrangements typically may not include dishwashers, cooks, managers, maintenance employees, janitorial staff and any other individuals not typically involved in serving customers.  Managers generally may not participate because their primary responsibility is to supervise, not service customers.  Starbucks has been fighting lawsuits all over the country, which claim that various supervisory employees should not be included in the tip pool.  The safest course is to limit the tip pool to employees whose primary responsibility is directly servicing customers.

Another type of lawsuit that could have wide-ranging ramifications for the service and hospitality industries challenges the amount of time that tipped employees spend on non-tip producing activities.  In Fast v. Applebee’s International, the Eighth Circuit Court of Appeals affirmed a Missouri federal district court decision adopting the U.S. Department of Labor’s position that non-tip producing activities, when routine and in excess of 20 percent of the employee’s shift, should be compensated at the minimum wage with no tip credit allotted.  With this decision, employers are confronted with the onerous task of implementing monitoring and record keeping practices aimed at tracking whether minuscule activities, such as cutting lemons, need to be detailed during the employee’s shift.  This case may well prompt the plaintiffs’ bar to pay even more attention to how service and hospitality employers pay their employees.

There is some good news for hospitality employers.  The United States Department of Labor recently reversed a long-standing enforcement rule specifying that, for purposes of how much an employee may contribute to a tip pool, the term “customary and reasonable” meant 15 percent.  In other words, the DOL previously took the position that requiring employees to contribute more than 15 percent of tips into a tip pool would jeopardize the employer’s tip credit arrangement.  The DOL pronounced in its new regulations that there is no maximum contribution percentage that applies to valid mandatory tip pools.  Employers should nevertheless be mindful to establish “tip pool” contribution rates that are consistent with industry standards.

Suburban Chicago Hilton to Pay $195,000 to Resolve EEOC National Origin Harassment Suit

Agency Says Exec Chef Subjected Hispanic Kitchen Employees to Slurs and Insults

CHICAGO – The Equal Employment Opportunity Commission (EEOC) announced today that a federal judge has entered a $195,000 consent decree to resolve a national origin harassment lawsuit brought by the agency against the Hilton Lisle/Naperville Hotel in Lisle, Ill.

In its lawsuit, EEOC charged that the Hilton Lisle/Naperville violated federal law by subjecting Hispanic employees in the hotel kitchen to offensive comments. Specifically, the EEOC charged that the hotel’s executive chef regularly referred to Hispanic employees as “s–cs” and “wetbacks.”

National origin discrimination violates Title VII of the Civil Rights Act of 1964. The EEOC filed suit, captioned EEOC v. Fireside West, LLC d/b/a Hilton Lisle/Naperville, No. 09 cv-5979, on Sept. 28, 2009 in U.S. District Court for the Northern District of Illinois in Chicago, after first attempting to reach a pre-litigation settlement through its conciliation process.

The three-year consent decree resolving the suit, approved by District Judge Edmund Chang yesterday, May 5, 2011, provides that $195,000 in monetary relief, which includes attorney’s fees, be distributed among two employees who filed charges of discrimination with EEOC and another additional employee.

The decree also requires the Hilton Lisle/Naperville to report any further complaints of retaliation or national origin harassment to the EEOC. The decree requires remedial training for all employees at the hotel, and mandates that the executive chef, who was alleged to have engaged in the harassment of Hispanic kitchen employees, receive personal anti-discrimination training. The decree includes an injunction prohibiting further discrimination on the basis of national origin and barring retaliation for reporting or complaining about discrimination.

“Federal law clearly requires employers to take prompt remedial action when they learn of harassment,” said John Hendrickson, regional attorney for the EEOC in Chicago. “In this case, the EEOC was prepared to show that not only did multiple employees report the harassment, but also that the executive chef himself acknowledged doing it. That’s not acceptable, and it’s not legal.”

EEOC trial attorney Aaron DeCamp added, “Over the next three years, EEOC will keep a close eye on how the Hilton Lisle/Naperville implements the consent decree to make certain these issues do not recur.”

In addition to Hendrickson and DeCamp, the case was litigated by Supervisory Trial Attorney Greg Gochanour and Trial Attorney Laurie Elkin. The EEOC Chicago District Office is responsible for processing charges of discrimination, administrative enforcement, and the conduct of agency litigation in Illinois, Wisconsin, Minnesota, Iowa and North and South Dakota, with Area Offices in Milwaukee and Minneapolis.

Donald Trump’s Lawsuits Could Turn Off Conservatives Who Embrace Tort Reform

As billionaire Donald Trump flirts with a run for the White House, his lengthy history of filing lawsuits — often to protect his image or gain a financial edge — is making conservatives wary of excessive litigation wince.

The real estate tycoon has been a party (as defendant or plaintiff) in about 100 federal lawsuits, according to a review of a legal database. Moreover, five of Trump’s major companies have been embroiled in over 200 civil suits in federal courts, according to court records.

A few examples:

  • Trump has filed lawsuits against Palm Beach County, Fla., where he owns a palatial home and private club, called Mar-a-Lago, seeking to block a new runway at a local airport because it could increase the noise levels near his property.
  • He has sued his former New York law firm, Morrison Cohen, for citing him as an ex-client on its website and treating him like a “cash cow.”
  • Trump sued former New York Times  journalist Tim O’Brien and his publisher seeking $5 billion in damages because he was depicted in the journalist’s book as worth much less than what Trump claimed was correct.

Trump lost his lawsuit against O’Brien, failed to block Morrison Cohen from using his name as a former client, and so far has been stymied by court rulings in a multi-year battle to halt Palm Beach County’s runway expansion.

For decades, Trump has used the courts to punish and pressure adversaries. No cause is too trivial — from a small Georgia company producing business cards called “Trump Cards” to a Mrs. Universe beauty pageant he claimed infringed on his Miss Universe trademark.

Trump’s heavy use of litigation against critics or those he’s trying to gain a financial edge against could create image and political headaches for him if he chooses to run for the GOP nomination.

“If he’s taken seriously as a candidate it’s going to be appropriate to look at his record of litigation,” conservative legal scholar Walter Olson of the Cato Institute told iWatch News . He said a big question will be “how consistent is [Trump’s record] with the Republican idea that litigation should be a last resort and not a weapon for tactical advantage.”

Suing your own law firm is a “sign of something very dysfunctional,” observed Columbia University law professor John Coffee in an interview.

Some legal analysts said Trump’s heavy use of the courts is fairly commonplace in the real estate business in New York. “I’d say that real estate owners and builders in New York use the courts as a way of buying time when they need it,” New York University law professor Stephen Gillers said. “The courts are an extension of their business plans.”

Curbing excessive litigation — or tort reform — is an issue that business interests and Republicans have pressed for in recent years. Democrats have generally been more sympathetic to trial lawyers, many of whom have been generous financial donors.

Trump spokesman Michael Cohen said Trump has been involved in thousands of business deals and “I’d say the percentage of lawsuits was minimal.”

“There’s a true distinction between a career politician and a successful businessman like Donald Trump. That distinction is that the politician has never been in involved in business that at times requires litigation,” Cohen said.

Trump not only sues others with considerable frequency. In recent years, he has been hit with a few class action lawsuits, including one filed last year against his eponymous online business school, Trump University, alleging fraud and other misconduct.

In a long running litigation fight going back to the mid-1990s, Trump has filed several suits against Palm Beach County, where his 18-acre Mar-a-Lago is located. Trump bought the historic property in the mid-1980s and later converted much of it to a private club which now has over 400 members. He still has a personal residence there too.

Trump’s three suits against the county include two about the local airport runway, arguing that an expansion violates his privacy and creates too much noise and emissions, which hurt his property values.

Trump has tried to curb planes flying over Mar-a-Lago. In a suit filed last July in a Florida circuit court, Trump cited the noise harassment from the planes and accused Palm Beach County airport director Bruce Pelly of “intentional battery.”

Pointing to several actions taken by Pelly to expand the runway, the complaint calls Pelly’s actions “deliberate and malicious.” The complaint noted that Trump sued Pelly personally in the mid-1990s and alleges that in retaliation Pelly is “attacking Mar-a-Lago from the air.”

Last December, a local circuit court judge ruled in favor of the county, which had argued that the Federal Aviation Administration controls flight paths, but gave Trump the option of refiling his suit, which he did in much the same language as before, but with some tweaks.

Amy Petrick, an attorney for Palm Beach County, told iWatch News that last year in responding to Trump’s suit the county “pointed out that battery is something done to a person and not to a building.” Petrick said that in his new complaint, Trump alleges that “Pelly battered him personally by the airplanes that fly over Mar-a-Lago.”

The county has moved to dismiss the new complaint but no action has been taken yet by the court.

On a separate legal battlefield, Trump was embroiled in multiple complaints against the law firm of Morrison Cohen, which represented him for several years.

One suit that Trump filed in 2007 charged Morrison Cohen with legal malpractice.

In that suit, Trump accused the firm of treating him as a “cash cow” because of fees it sought from him after it won a case where Trump claimed he’d been overcharged by a contractor for work on a golf course.

A Westchester County Supreme Court judge awarded Trump about $2 million in damages for breach of an earth moving contract, but only about $40,000 on another claim he made involving infrastructure charges. And the same judge awarded Trump about $1.3      million in attorney’s fees.

Trump, who had paid the firm $1 million for its work, alleged that his lawyers should have advised him not to file his infrastructure claims because they would not be cost effective. Trump reportedly said he had a “Ph.D. in legal fees” as a result of his extensive litigation experience.

The firm countersued Trump, seeking an extra $470,000 in unpaid legal bills. Ultimately in 2009, Trump settled with the firm for an undisclosed sum.

Then in 2008, Trump sued Morrison Cohen in a New York federal court for invasion of privacy because it used his name on its website after he was no longer a client. This claim too was settled in 2009, without the terms being disclosed, but the law firm was permitted to continue citing Trump as an ex-client.

Trump’s ego was also badly bruised by estimates of how much he was worth in a book published in 2005 by then- New York Times reporter Tim O’Brien and Time Warner Book Group. “TrumpNation: the Art of Being the Donald” cited three unnamed sources who pegged his worth at between $150 million and $250 million. By contrast, Trump claimed he was worth between $4 billion and $6 billion, which prompted his $5 billion defamation suit.

In 2009, New Jersey Superior Court Judge Michele Fox rejected the argument of Trump’s lawyers that he had been the victim of “actual malice” because of what O’Brien wrote.

Trump’s image has been a factor in a lengthy legal battle he’s been waging against Rancho Palos Verdes, a small community on a lovely California peninsula where he developed a golf course in 2002. The town, which has an annual budget of $20 million, was sued in late 2008 by Trump for $100 million in damages for allegedly violating his civil rights and defrauding him.

The suit, filed in Los Angeles Superior Court, charges that the town has been delaying plans for adding 20 luxury homes on the grounds of his Trump National Golf Course, while requiring stringent environmental and safety studies since the area is known to have landslides. Trump’s lawsuit charged that the town has forced him to spend “millions of dollars on unnecessary, repetitive, unreasonable and unlawful geologic surveys.”

Trump was also irked because local officials have balked at renaming a highway Trump National Drive.

In January, Los Angeles Court judge Ann I. Jones ruled against part of Trump’s claims by denying him permission to build another 20 homes on the golf course’s grounds, noting that plans for those homes were never submitted to the city. The judge ruled that since the “plaintiffs never applied for permits, they had no clear, present and beneficial rights to the performance of that duty.” The city has approved plans for 36 other homes.

Trump has also been on the other side in numerous court cases: the billionaire has been the target of several class action suits that allege, among other things, deceptive business practices and fraud.

Last year Trump University, an online business school, was hit with a class action suit charging that students are not given the real estate education that the institution advertises. Tarla Makaeff, a California marketer who filed it, said she spent nearly $60,000 to “Learn from the Master,” in the words of a Trump University flyer. The lawsuit charged that the main lesson centers around how to max out on credit cards.

Makaeff charged that the course is basically an “infomercial. … The primary lesson Trump University teaches its students is how to spend more money buying more Trump seminars.” The suit, which is pending in federal court in California, seeks damages for violations of consumer protection laws.

The school promptly countersued, and said it has tapes of Makaeff describing the program as “awesome.”

Trump University has also come under scrutiny from the New York Education Department. Last year it demanded that the online school cease referring to itself as a university because it was a violation of the state’s education law. Trump changed the name of his institution to the Trump Entrepreneur Initiative.

The bankruptcy courts have also seen plenty of Trump action. His casino companies have filed for bankruptcy four times, a practice that Trump has boasted publicly is a smart business tactic.

“I do play with the bankruptcy laws — they’re very good for me” as a tool for trimming debt, he recently told Newsweek.

Some legal experts argue that Trump’s extensive use of bankruptcy courts seems at odds with the GOP’s efforts to curb consumer bankruptcies.

“He brags about bankruptcy being a good deal,” Stephen Burbank, a law professor at the University of Pennsylvania told iWatch News . “He looks like a serial debt avoider. The GOP has been behind making consumer bankruptcy more difficult. Those people should have a problem with the notion of using bankruptcy as another tool in the quest for business advantage.”

The criticism doesn’t seem to daunt Trump. Speaking at a tea party rally on April 16 in Boca Raton, Fla., Trump boasted of his business smarts and financial acumen. “We need people that win. We don’t need people that lose all the time,” he told a cheering throng.

Time To Review Your Company’s Consumer Disclosures?

A series of recent federal court decisions highlight the importance of making sure your company’s online consumer disclosures are robust and accurate. If done properly, they just might help you avoid a class-action lawsuit.

In Berry v. Webloyalty.com, Inc., the court dismissed a putative nationwide consumer class action, concluding that the company’s business practices were not unfair or misleading as a matter of law because of the company’s disclosures. Slip Opinion, No. 10-1358 (S.D. Cal. Apr. 11. 2011).

The case involved “post-transaction marketing,” the practice of presenting a consumer with an offer from a third party after the primary transaction has been completed. This type of marketing generally involves a data-sharing arrangement, where the company completing the primary transaction passes data to a second company for marketing purposes. After the consumer takes some further action (e.g., entering an email address, checking a box and clicking “yes”), the second company charges the consumer for a new product or service using the payment information provided to the first company.

This practice has been criticized by certain legislators and officials at the Federal Trade Commission. Last December, Congress passed and the President signed the Restore Online Shoppers’ Confidence Act into law, targeting online post-transaction marketing; the law now requires additional disclosures to be made and prohibits third-party sellers from charging consumers for goods or services without the consumer’s express consent and from receiving certain financial information obtained during the initial transaction.

Notwithstanding any public debate over the propriety of these marketing practices, several federal courts have granted motions to dismiss in post-transaction marketing cases based on the companies’ disclosures. The most recent example is Berry, where the court took judicial notice of the company’s disclosures and ultimately dismissed the case, concluding that no reasonable consumer could have been misled, given the disclosures that were made.

After reviewing the online disclosures and terms of service, the court in Berry held that “the explicit and repeated disclosures that defendants made in their enrollment page suffices to defeat” all of the plaintiffs’ claims, including fraud, invasion of privacy and violations of the Electronic Communications Privacy Act, Electronic Funds Transfer Act and California’s Unfair Competition Law. Slip Op’n at 9. The court explained that by completing his transaction after receiving such disclosures, plaintiff had consented to the conduct about which he complained. Id. Although the plaintiff claimed he did not understand he would be charged for the third party’s product (here a membership club providing discounts on products and services), the court emphasized that the enrollment page disclosed more than five times that, by signing up, plaintiff would be charged $12 per month after an initial thirty-day trial period. Id. at 10.

Bsed on these disclosures, the court granted the defendants’ motion to dismiss, thus ending the case and potentially saving the companies millions in discovery costs and other expenditures.

Other federal courts have reached similar conclusions. In Baxter v. Intelius, Inc., No. 09-1031, (C.D. Cal. Sept. 16 2010), the court granted a motion to dismiss, concluding that “[t]he disclosures combined with the affirmative steps for acceptance are sufficient that, as a matter of law, the webpage is not deceptive.” Similarly, in In re Vistaprint, Marketing and Sales Practices Litigation, No. 08-1994 (S.D. Tex. Aug. 31, 2009), aff’d, No. 09-20648 (5th Cir. Aug. 23, 2010), the court held that a “consumer cannot decline to read clear and easily understandable terms that are provided on the same webpage in close proximity to the location where the consumer indicates his agreement to those terms and then claim that the webpage, which the consumer has failed to read, is deceptive.”

A key factor in each of these cases was the courts’ willingness to examine the company’s online disclosures in connection with a motion to dismiss. In each case, the plaintiffs opposed any review of the disclosures, arguing that they were outside the four corners of the complaint and may not be authentic. In Baxter and Vistaprint, the court rejected the argument because plaintiffs came forward with nothing to challenge the authenticity of the disclosures. In Berry, the court took the extraordinary step of allowing discovery on the authenticity and accuracy of the disclosures before ruling on the motion to dismiss. When the plaintiffs were unable to offer any evidence that the disclosures were not authentic, the court considered them in connection with the motion to dismiss and granted the motion.

These cases highlight two strategies that could help your company reduce the risk of class-action lawsuits.

First, the cases demonstrate that, even for controversial business practices, robust consumer disclosures may provide an effective defense against a consumer class-action lawsuit.

Action Step: Consider conducting a comprehensive review of your company’s consumer disclosures to evaluate whether your company is adequately protected and in compliance with existing law.

Second, the cases demonstrate the importance of being able to provide a court with accurate copies of the disclosures individual consumers saw and in a form that is subject to judicial notice in connection with a motion to dismiss.

Litigating a class action can be incredibly expensive and risky. One effective way to mitigate the risk is to have a strategy for defeating them at the earliest stages of the case, preferably on a motion to dismiss. But if you cannot provide accurate copies of the actual disclosures made to the named plaintiff, the court may be unwilling to consider them on a motion to dismiss and you may have lost one of your company’s most effective weapons against class actions.

Action Step: Consider reviewing your company’s systems for documenting consumer transactions to ensure you can provide accurate copies of consumer disclosures for any given transaction.

False Patent Marketing: What You Need to Know

Patentees should implement an effective patent marking program to maximize the recovery of damages resulting from patent infringement. However, in view of recent U.S. District Court and Federal Circuit decisions, such patent marking programs must be periodically reviewed to guard against false marking.

Patent Marking

Federal law specifies that patentees give notice to the public that a patented article be “marked” by affixing to the article the word “patent,” or its abbreviation, “pat.,” followed by the relevant patent number. 35 U.S.C. § 287. Failure to mark the patented article precludes the recovery of infringement damages until notice is given to the infringer. Id. If marking the patented article itself is impractical, then the patentee should mark the packaging of the patented article. Id. The statute does not apply to patented methods.

When the claims of only a single patent cover the patented article, the marking of that patented article, or its packaging, is straightforward. However, when the claims of several patents cover the patented article, compliance with the patent marking statute is more difficult, because the patentee must determine which patent numbers should be affixed to the patented article.

False Patent Marking

False patent marking has been traditionally asserted when the patent marker is alleged to mark articles, either with an incorrect patent number or with a patent number that does not cover the article, and with the intent to deceive the public. Such false patent marking, prohibited under 35 U.S.C. § 292(a), is believed to “wrongfully quell competition…thereby causing harm to the [United States] economy.” Stauffer v. Brooks Bros., Inc., 619 F.3d 1321, 1324 (Fed. Cir. 2010). As provided under the statute, false marking is punishable by a fine of not more than $500 for every such offense. 35 U.S.C. § 292(a) Section (b) of this statute provides for a qui tam suit in which anyone may sue for the penalty and share in half of any judgment with the federal government. 35 U.S.C. § 292(b).

Recently, the false patent marking statute has been asserted against patentees that have failed to remove expired patent numbers from their patented articles. Patentees have attempted to defend against these lawsuits by claiming that just “anyone,” without a false marking injury, lacks standing. However, the Federal Circuit has recently confirmed that the statute provides broad standing for anyone to bring suit on behalf of the federal government. Brooks Bros., 619 F.3d at 1325 (emphasis added). Patentees have also unsuccessfully attempted to lessen the impact of any potential damages by arguing that the $500 fine is per decision and not per article. The Forest Group, Inc. v. Bon Tool Co., 590 F.3d 1295, 1304 (Fed. Cir. 2009) (holding that the fine is $500 per article).

In view of the increase in false patent marking litigation, patentees should establish steps to limit exposure to false marking lawsuits while observing the need to mark their patented articles. As a first step, patented articles should be regularly audited after marking to ensure that the marked patents have not expired or that the claims of the marked patents covering the articles have not been held invalid or been amended in post-grant proceedings to no longer cover the articles. As a second step, patentees should implement a plan for the timely removal of non-compliant patent numbers that are affixed to their articles, even if such removal is not immediate. Consultation with a patent attorney regarding proper patent marking as well as the execution of a written plan to audit marked patent numbers and timely remove non-compliant patent numbers may limit exposure to false marking litigation by creating at least some “credible evidence that [the patentee’s] purpose was not to deceive the public.” Peguignot v. Solo Cup Co., 608 F.3d 1356, 1363 (Fed. Cir. 2010).

The patent law is ever-changing, and future false marking litigation may be curtailed by a patent reform bill pending before Congress and/or by current appeals to the Federal Circuit challenging the constitutionality of the qui tam actions. Nonetheless, patentees should implement a proper patent marking program to maximize the recovery of any patent infringement damages while steering clear of any false marking.

EEOC Sues Owner Of 42 McDonald’s Restaurants For Sexual Harassment And Retaliation

Multiple Women, Including Teens, Were Abused at Reedsburg Restaurant; Some Were Fired for Complaining, Federal Agency Charges

MILWAUKEE — The McDonald’s restaurant in Reedsburg, Wis. , owned and operated by Missoula Mac, Inc., violated federal civil rights laws by permitting male employees to create a hostile work environment of sexual harassment against female employees, the U.S. Equal Employment Opportunity Commission (EEOC) charged in a lawsuit it filed this morning in federal district court in Madison, Wis.

The EEOC filed suit on behalf of a class of women it said were subjected to sexual comments, sexual propositions, or physical touching by co-workers. The suit also alleges that some of the women were fired in retaliation for complaining about the sexually hostile work environment and that the harassment was so intolerable that at least one woman was forced to quit her job to avoid it.

John Rowe, director of EEOC’s Chicago District, which includes Wisconsin, noted that the agency’s administrative investigation, which preceded the lawsuit, revealed that male employees at the Reedsburg McDonald’s made sexual comments about the bodies of female co-workers, propositioned them, and touched them inappropriately. Further, Rowe said, several of the victims were teenaged high school students.

“One of the distressing things is how young some of the victims appear to have been,” said Rowe. “Another is that some of the employees who complained about what was going on were allegedly either fired or ignored. It’s cause for considerable concern, especially at a business which employs so many young and vulnerable women.”

The EEOC’s lawsuit stems from discrimination charges filed by three former employees of the McDonald’s restaurant located at 1500 Main Street in Reedsburg. In total, Missoula Mac owns and operates 42 McDonald’s restaurants in Wisconsin.

The EEOC sued after first trying to reach a voluntary settlement out of court through its conciliation process. The agency seeks lost wages and compensatory and punitive damages for the women who were harassed, retaliated against, or both, and injunctive relief to end the discriminatory practices. The suit, captioned EEOC v. Missoula Mac, Inc., d/b/a McDonald’s Restaurant (Civil Action No. 3:11-cv-00267), was filed in U.S. District Court for the Western District of Wisconsin in Madison. The case will be litigated primarily by attorneys in the EEOC’s Milwaukee Area Office.

John Hendrickson, EEOC regional attorney for the Chicago District said, “McDonald’s is one of the most well-known brands in America and the world, and its image is one of complete reliability, good taste and wholesomeness. What we found was allegedly going on at the McDonald’s in Reedsburg was something completely different and illegal. This litigation is going to put the Reedsburg McDonald’s under a well-deserved microscope, and, if the allegations are borne out, assure that appropriate relief is provided to the victims and that the harassment is brought to a halt.”

The EEOC’s Chicago District Office is responsible for processing charges of discrimination, administrative enforcement, and the conduct of agency litigation in Illinois, Iowa, Minnesota, North Dakota, South Dakota, and Wisconsin with Area Offices in Milwaukee and Minneapolis.