Netflix, the internet media giant, sued its former vice president of IT Operations, Mike Kail, in California Superior Court, claiming that he “streamed” kickbacks from vendors and funneled them into his personal consulting company. According to the complaint, Kail—who is currently the CIO of Yahoo—exercised broad latitude in both vendor selection and payment.  Netflix alleges that he took in kickbacks about 12-15% of the $3.7 million that Netflix paid in monthly fees to two IT service providers, VistaraIT Inc. and NetEnrich Inc. According to the Wall Street Journal, one line in particular from the complaint piqued experts’ interest: “Kail was a trusted, senior-level employee, with authority to enter into appropriate contracts and approve appropriate invoices.” According to Christopher McClean, an analyst at Forrester Research Inc., this suggests Netflix allowed Kail too much freedom. McClean opined that when individuals are empowered to both choose a vendor and then approve payment, corporate malfeasance can follow.  This is particularly important in the field of information technology, where tech companies vie for business in an ever-competitive market by lavishing incentives on CIOs. Companies that do not incorporate an audit function into vendor selection and payment should consider revisiting their policies going forward.

We recently discussed the hefty $185 million judgment against AutoZone in favor of a former store manager who alleged discrimination and retaliatory discharge following her pregnancy. While this case arose in California, it appears the auto parts retailer is zoned for another similarly-themed legal showdown, this time across the country in West Virginia. In the recent complaint, the plaintiff, Cindy DeLong, claimed that she was placed on a 30-day performance improvement plan for hiring too many women in the stores she managed. She was ultimately fired before the 30 days expired. As you may recall, in the California case, plaintiff Rosario Juarez claimed AutoZone enforced a “glass ceiling” for its female employees, denying them opportunities for promotion. It seems Ms. DeLong managed to chip away at the ceiling as a district manager. But, according to Courthouse News, she now alleges that her practice of hiring women rendered her “not a good fit for the company.”

• Discrimination
• Noncompete Agreements ‎
• Religious Discrimination‎
• The Inbox
• White Collar Crime
• Wrongful Termination

On Monday, AutoZone found itself on the wrong end of a $185 million verdict in favor of a former store manager, Rosario Juarez.  Yes, you read that right.  $185 million.  This stunning verdict appears to have been the result of Juarez’s allegations of discrimination and retaliatory discharge, combined with an insider turned witness who provided extremely damaging testimony against the auto parts retailer.

In her complaint, Juarez alleged that AutoZone had a “glass ceiling” for women employees, which it kept in place through a hidden promotion process where open positions were not posted.  According to Juarez, she succeeded in cracking the glass ceiling, securing a store manager position, but when she became pregnant, she was treated differently by her district manager.  After giving birth, she complained about the unfair treatment and was soon demoted by the manager, who told her that she could not be a mother and handle her job.  Later, she was terminated as the result of a loss prevention inquiry, in which she refused to participate in a “Q&A” statement about a theft at the store.  Juarez alleged that the loss prevention department’s request for a statement was a pretext to fire her. 

We’ve spent a lot of time on this blog discussing allegations of pregnancy discrimination like these.  The short of it is that a company can’t treat pregnant women, or women who have  given birth, differently than it treats other employees.  But we’ve never covered a verdict for pregnancy discrimination that looked more like a Powerball win than a litigation result.

• Civil Litigation
• Discrimination
• Pregnancy Discrimination
• Wrongful Termination

We at Suits by Suits are so excited by American Apparel’s dispute with its recently-fired CEO and founder Dov Charney that we can barely keep our shirts on.  After all, the dispute between the clothing manufacturer and its controversial former leader is bursting at the seams with takeaway points for feuding companies and C-suite employees (and those wanting to avoid having feuds).  For example, as we described in an earlier post, the dispute illustrates that terminating a key company officer may jeopardize company financing.  The dispute also presents the question:  can a company like American Apparel, which knew that Charney was apparently known for not being able to keep his pants on, decrease its exposure to the inevitable sexual harassment lawsuit by having all of its employees acknowledge in writing that the company’s workplace is sexually charged?   It depends.   

• Discrimination
• Termination With or Without Cause

Did you hear the one about the Buddhist marketing director who refused an order to add Bible verses to the daily morning e-mail he sent to all employees – and then got fired the next day, after an otherwise successful eight-year career?

This is, of course, not an opening line to a joke, but another installment in our occasional series about the intersection of religious beliefs (of all types) and employment – also of all types.  Religion and employment issues – whether it’s an employee in the C-suite or someone further along the hierarchy – almost never mix well.  Just this week, of course, nine of our fellow lawyers who happen to sit on the Supreme Court are hearing arguments in two cases about whether a company with a religious belief about contraception is exempt from the Affordable Care Act’s requirements for employer-provided health insurance. 

Far away from the hallowed marble home of the Supreme Court (which, by the way, we think is in a fine building -- unlike former Justice Harlan Fiske Stone) and down in the Eastern District of Texas, a new suit raises an interesting question of prohibited religious discrimination under Title VII: namely, can a fired Buddhist employee win damages from a company that, he says, fired him after eight years because he refused to put Bible quotations in the daily e-mail his employer had him write and send to all of the company’s 500 employees? 

• Civil Litigation
• Discrimination
• Religious Discrimination‎
• Title VII

Ah, the smells of the holiday season: fresh-cut evergreen trees, just-baked cookies and other goodies, bowls of tasty fruit punch.  Take a deep whiff wherever you are.  Breathe it in deep. 

But be careful about sniffing those smells, though. 

That is the apparent lesson from the Fifth Circuit Court of Appeals’ decision in Tonia Royal’s retaliation lawsuit against her employer, an apartment management company named CCC&R Tres Arboles.  The appellate court held that the trial court incorrectly gave the apartment company summary judgment, because too many material facts about the basis for Ms. Royal’s firing were in dispute.  And many of those facts relate to the behavior of other CCC&R employees, who Ms. Royal alleged sexually harassed her by sniffing her in a rather curious and uncomfortable manner.  

• Civil Litigation
• Discrimination
• Summary Judgment
• Wrongful Termination

A Baltimore police officer claimed she was fired because she got married.  The police department agreed.  The problem was that the officer married Carlito Cabana, an incarcerated murderer and the “supreme commander” of a prison gang called Dead Man, Inc.  The question presented was whether the police department’s action violated the officer’s “constitutional right to marry and to engage in intimate association.”  The Maryland courts didn’t think much of that claim, see Cross v. Baltimore City Police Dep’t, and it does seem as though the police department had a point. 

But what about Mr. Cabana?  Surely Cabana’s “employer,” nominally a private corporation, could not have been pleased with his choice of spouse, either.  (Let’s ignore Dead Man’s failure to register to do business in Maryland.)  Could the Dead Man board have fired Cabana for marrying a cop?  Could a legitimate private employer (like the Coca-Cola Co.) have fired an executive for marrying an employee of its mortal adversary (like PepsiCo)? 

• Discrimination
• Wrongful Termination

Those of us who live in or near big cities know the value of a good parking space.  Two years ago, New Yorkers paid an average of $540 a month to park in midtown Manhattan.  And here in Washington, D.C., a permanent space can go for as much as $100,000.

A good parking spot was also important to Pauline Feist, an assistant attorney general with the Louisiana Department of Justice.  Feist, citing a disability (osteoarthritis of the knee), asked the Department for a free space in her building rather than in the garage across the street, but her employer turned down her request.  She filed a complaint with the EEOC, and five months later, she was out of a job.  Feist sued the Department in federal court, alleging that it had discriminated against her by denying her a parking space and then by retaliating against her for filing the EEOC complaint.

The federal trial judge slammed the door on Feist, granting summary judgment on both of her claims.  However, in a ruling last week, the Fifth Circuit reversed the summary judgment ruling on Feist’s discrimination claim, sending the case back to the trial court for a second try.  Feist v. State of Louisiana, No. 12-31065 (5th Cir. Sept. 16, 2013).

• Discrimination

We thought about getting a Putin op-ed to cap off this week at Suits by Suits.  But instead, we decided to stick with our tried-and-true formula of canvassing the week’s headlines in employer-executive disputes:

• Bloomberg Law reported on a recent ruling by the Delaware Chancery Court that a company officer and trustee could not invoke the attorney-client privilege for communications with their personal attorneys and advisors sent from their work e-mail accounts.  The court wrote that the company could access the e-mails because it had reserved the right to do so in its employee manual, and therefore the officer and trustee did not have a reasonable expectation of privacy in the e-mails.

• Pete Brush of Law360 (subscription required) covered the hearing in the New York Court of Appeals, the state’s highest court, on claims by a former Intesa SanPaolo executive, Giuseppe Romanella.  Romanella alleges that the company illegally fired him after he complained of depression.  The company argues that it was allowed to fire him because he refused to provide any reasonable time frame for his return from leave.

• A federal judge tossed a number of claims against Bloomberg LP in an EEOC case alleging that the company discriminated against employees who returned from maternity leave, reported Jonathan Stempel and Jennifer Saba of Reuters.  The court found that the EEOC could not pursue a class action because it failed to show that discrimination was Bloomberg’s standard operating practice.  Further, the judge said that the EEOC had failed to investigate its individual plaintiffs’ claims and unfairly rebuffed Bloomberg’s attempts to settle.  The Wall Street Journal characterized this as a “sue first, investigate later” approach.

• Confidentiality
• Discrimination

The toughest part of this post, for me, is how to categorize this one: does this go in my file of “Things Not To Do At Work?”  Or is this one another example of “Lawyers Behaving Badly?” Or maybe “Generally Unacceptable Management Styles?” 

Well, I’ll let you decide.  But here is the takeaway: however you categorize it, it’s likely a bad idea to tell a woman that works for you that she’s “not that pretty,” that prior female employees were “smart…good-looking…just gorgeous” and used to wear tight sweaters, and that “it’s all been downhill since women got the vote.” 

Statements like that can give rise to allegations of gender discrimination in violation of Title VII of the Civil Rights Act that can survive a motion to dismiss.  That’s what the City of Evanston, Illinois learned last week, in Elke Tober-Purze v. Evanston, pending in federal court for the Northern District of Illinois.  

• Age Discrimination
• Discrimination
• Title VII

In the previous part, we looked at Elke Tober-Purze’s lawsuit against her employer, the City of Evanston.  The federal court hearing the case ruled in Tober-Purze’s favor on Evanston’s motion to dismiss her claim that it had discriminated against her by paying her male colleagues more and ultimately terminating her from her job as an assistant city attorney. 

In the same opinion, the court also denied Evanston’s motion to dismiss Tober-Purze’s claim for age discrimination based on federal law.  That law – the Age Discrimination in Employment Act – requires an aggrieved employee to demonstrate that he or she: 1) is over forty; 2) otherwise meets the employer’s expectations; 3) suffered an adverse employment action – such as being terminated or passed over for promotion; and 4) was treated less favorably than others who are not over forty.  

• Age Discrimination
• Discrimination
• Title VII