On Thursday, a 4-3 majority of the Virginia Supreme Court held in VanBuren v. Grubb that individuals such as supervisors or managers could be sued as individuals and held personally liable for the common law tort of wrongful termination (also known as wrongful discharge) in addition to whatever corporate liability the employer may have.
As a practical matter, this gives plaintiffs and their lawyers additional leverage when bringing suits that contain a cause of action for wrongful termination in Virginia by being able to name the former employee’s boss as a co-defendant. From the boss's perspective, this decision means that you, personally, could be named as a defendant and ultimately forced to satisfy a judgment for improperly firing an employee from your own pockets -- not just your company's. It also means that employers and their executives who operate in Virginia need to review their D&O insurance coverage with this potential exposure in mind.
In short: whether you're an executive or an employer, you need to know about this case and its implications on the employment relationship.
Starbucks connoisseurs appreciate the difference between a Venti Half-Caf Americano and a Single Grande White Chocolate Mocha. But, when they drop change in the tip box before walking away with their morning caffeine fix, do they appreciate the differences between a barista and a shift supervisor? How about between a shift supervisor and an assistant store manager (“ASM”)? How about between an ASM and a store manager? Starbucks customers may not know these differences, but they are the key to resolving questions that the U.S. Court of Appeals for the Second Circuit has just certified to the highest New York state court in two cases brought against Starbucks. One of the cases was brought by baristas; the other by ASMs.
A recent decision from a federal court in Richmond should serve as a reminder to employers and employees that, even though they may think that they put a dispute behind them with a settlement agreement, in fact, the dispute can be resurrected like a zombie on Halloween. At stake in the Richmond case is a $5,000 settlement payment and fairly serious allegations about sexual harassment by a supervisor at a car washing business. However, the court’s ruling on basic principles of rescission of contract , could have relevance for the Vikram Pandits and Citigroups of the world.
Our hurricane-proof edition of the latest in Suits by Suits news:
As we’ve previously discussed, Section 922 changed whistleblower law in two important ways. First, it created a bounty program, under which qualified whistleblowers can receive payments from the SEC for submitting information about violations of the securities laws. In the first fourteen months of the program, the SEC has handed out the grand total of one award.
Second, Dodd-Frank enhanced the legal remedies for whistleblowers who are victims of retaliation, expanding the scope of prior protections found in the Sarbanes-Oxley Act of 2002 and creating new ones.
Employers, however, have identified a tension in Section 922 that they are seeking to use to defeat whistleblower retaliation claims.
The Dodd-Frank Act, passed in 2010, has been a hot issue on the campaign trail. One provision of Dodd-Frank that hasn’t gotten a lot of play, politically speaking, is Section 922 – the law’s whistleblower protection provision.
But in the federal courts, Dodd-Frank whistleblower law is heating up. We previously covered how a New York federal court allowed one such whistleblower’s claim to proceed. Now, the District of Connecticut brings us the case of Kramer v. Trans-Lux Corp.
The world’s largest wind turbine company, Vestas Wind Systems A/S, recently terminated its former CFO’s severance agreement after it discovered that he entered into unauthorized deals in India. When Vestas announced its termination of its Henrik Noerremark’s severance agreement, it said that his unauthorized contracts cost the company about 18 million euros and that it is seeking to void the deals. The company said it was also considering whether to bring claims against Noerremark.
What kinds of claims might Vestas pursue?
We wrote yesterday about Gallaudet University’s suspension of its Chief Diversity Officer, Angela McCaskill, for signing a petition to place Maryland’s law allowing same-sex marriage up for a public vote via referendum. The action has been criticized, even drawing fire in an editorial in the Washington Post. The McCaskill case raises this important question: Can an executive be fired for political activity at work or outside of work?
The short answer: probably yes, but it depends a lot on the circumstances and the state law that would apply to any claim arising out of the dismissal. This is another case where your mileage may vary, as they say.
Just to reaffirm what My Esteemed Colleague from Baltimore has already said (twice): we are still not a political blog. We look at employment disputes, with a real focus on those involving a contract between an employer and an executive. We keep our political views to ourselves (or at least out of the blog).
But the problem is that many folks don’t keep their political views to themselves, either in or out of the workplace. And that means disputes between companies and executives about political speech – whether it’s companies encouraging employees to vote for a certain candidate, or employees getting fired for their political views – are dominating the field of employment disputes between companies and high-level employees right about now. Maybe it’s because we’re less than three weeks from the election. Maybe it’s pent-up tensions in the workplace caused by economic stress.
We don’t know why. But we do know that here in Washington, coverage of a dispute between Gallaudet University and one of its executives, centered on the executive’s signature on a petition, has dominated the news. Given that there is no more coverage of the Washington Nationals this season, the story is being followed avidly. It draws into sharp relief an issue that comes up often this time of year: can you be fired for your political views?
As the regulatory and business environments in which our clients operate grow increasingly complex, we identify and offer perspectives on significant legal developments affecting businesses, organizations, and individuals. Each post aims to address timely issues and trends by evaluating impactful decisions, sharing observations of key enforcement changes, or distilling best practices drawn from experience. InsightZS also features personal interest pieces about the impact of our legal work in our communities and about associate life at Zuckerman Spaeder.
Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.