The Inbox: August 2, 2013
This week in Suits by Suits:
- Last month, we discussed in depth the recent Illinois appellate court decision in Fifield v. Premier Dealer Services, which permits employees to challenge the adequacy of consideration when they sign noncompete clauses (and held that employment of less than two years was insufficient consideration). Yesterday, we learned that the Illinois Chamber of Commerce has filed an amicus brief on behalf of Premier's efforts to seek certiorari of the decision to the Illinois Supreme Court. (link; Law360 subscription required) We will of course continue to monitor whether the Illinois Supreme Court takes this case as well as its ultimate disposition, and as soon as we know, you'll know.
- Securities and Exchange Commission Chairwoman Mary Jo White told a Senate Banking Committee that the SEC intends to promulgate a rule requiring publicly-held companies to disclose CEO pay -- a provision required by the 2010 Dodd-Frank Act but yet to be implemented by the SEC -- "in the next month or two." Our previous discussion of "say on pay" can be found here.
- Nearly a year ago, we warned that mandatory arbitration clauses aren't always the boon for the employer that they're perceived to be -- particularly in cases involving high-level employees who have the resources to arbitrate effectively -- because of the difficulty in overturning an arbitrator's findings. That principle played out again this week in Doral Fin. Corp. v. Garcia-Velez, in which the U.S. Court of Appeals for the First Circuit upheld an arbitral award ruling in favor of an employee seeking severance pay despite the fact that the panel refused to permit the former employer to engage in the type of discovery that would have been permissible had the case been taken to trial (here, the issuance of 3rd party subpoenas to the plaintiff's new employer).
- On Tuesday, July 30, the Senate reintroduced the Protecting Older Workers Against Discrimination Act, legislation that would overturn Gross v. FBL Fin. Svcs., Inc., a 2009 U.S. Supreme Court decision that held that a plaintiff bears the burden of proving that age was the deciding ("but for") factor in adverse decisions taken by his or her employer. The Protecting Older Workers Against Discrimination Act would lower the burden to require a showing that discrimination was "a motivating factor" but not necessarily the sole factor. We will keep you posted as to how the bill fares.
- The Wall Street Journal asks whether a July 17, 2013 ruling by the U.S. Court of Appeals for the Fifth Circuit requiring that whistleblowers must report their grievances to the SEC to be protected from retaliation under Dodd-Frank might tee up a successful appeal to the U.S. Supreme Court to resolve a potential split among the circuits.
- Relatedly, a federal court in New Jersey found in favor of the plaintiff, Robert Scull, in his whistleblower lawsuit against The Wackenhut Corp. -- now G4S Secure Solutions -- alleging that he was terminated in retaliation for raising concerns about the company's monitoring of nuclear plants. Scull, a former supervisor, was awarded $400,000 in back pay by the court. But the story doesn't stop there: as a result of Scull's successful lawsuit, the federal Nuclear Regulatory Commission has ordered PSEG Nuclear, which operates nuclear power plants in New Jersey and Pennsylvania, to prepare a report detailing "the company's efforts to protect whistleblowers from retaliation," in an effort to ensure that employees are free and willing to raise safety and regulatory concerns. And yesterday, the House of Representatives conducted a hearing on the Bonneville nuclear power plant's alleged discrimination against veterans and retaliation against whistleblowers.
- The U.S. Court of Appeals for the Fifth Circuit has affirmed a district court's summary judgment against a former ConocoPhillips director of acquisitions and divestitures ("A&D"), John D. Clayton, in his now-unsuccessful effort to seek $600,000 in severance pay. The Fifth Circuit held that Clayton failed to plead with specificity his claims that he had been subjected to a "substantial reduction in responsibilities or position" when his former position (company-wide director of A&D for Burlington Resources, Inc.) was reduced to a single department following a merger with ConocoPhillips. ConocoPhillips successfully argued that there was no such reduction in going from director of all A&D for a smaller company to directing A&D for only one department in a significantly larger company.
- And finally, in a case that's garnered some national attention on both the news and comedy circuits, the City Council of San Diego voted not to pay for Mayor Bob Filner's legal bills incurred in defending himself against charges of sexual harassment brought by a former staffer, Irene McCormack. However, the Voices of San Diego newspaper notes that seven months earlier, the same Council voted to cover the defense costs of a former police officer charged with sexually abusing women during traffic stops, as well as prior city officials charged with wrongful termination.