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Friday, January 29, 2016

Pharmacist HIPAA Retaliation Claim Results in 31 Million Jury Verdict



By: Thomas Eden

For 18 years, Walmart employed Maureen McPadden as a pharmacist at its store in Seabrook, New Hampshire. It recently terminated her employment for misplacing a key to the pharmacy.

McPadden was not only an employee but also a customer of Walmart’s pharmacy and she chose to have her personal prescriptions filled at the Seabrook location. In order to be a customer, McPadden provided private and protected health information as part of her Walmart pharmacy patient profile record. In her Federal Court lawsuit, McPadden claimed that in the fall of 2012, another Wal-Mart pharmacy technician at the Seabrook store, accessed her private health information and discovered that she suffered from a serious anxiety medical condition, which the technician then disclosed to other employees of the Seabrook store. McPadden complained and claimed this misconduct violated her privacy rights under New Hampshire law and the Health Insurance Portability and Accountability Act (also known as “HIPAA”).

Prior to that episode, in 2011 McPadden thought there were too many mistakes occurring as a result of the high employee turnover in the pharmacy, so she filed a report of such with the New Hampshire Board of Pharmacy. She also reported her patient safety concerns over the staffing issues to store management.

It so happened that McPadden lost a key to the pharmacy in November of 2012, which she immediately reported to store management. McPadden noted in her lawsuit that male pharmacists were never fired when they lost a key. However, she was promptly fired after 18 years of service rather than given a warning.

Put simply, McPadden’s argument to the jury was that Walmart was guilty of disciplining her more harshly than it did male co-workers and firing her when she complained some of her medical data had been improperly disclosed, and because she acted as a whistleblower to the New Hampshire Board of Pharmacy.

On January 27 a New Hampshire Federal Court jury sided with McPadden and awarded $15 million against Walmart for punitive damages in McPadden's Title VII claims and another $15 million in enhanced damages stemming from a similar New Hampshire Law Against Discrimination claim. She also received 1.2 million dollars for back-and-front pay and damages stemming from those bias claims, HIPAA retaliation, as well as whistleblower and wrongful termination claims.

Common Sense Counsel: This is a scary case for any health care employer who is also a health care provider for some of those same employees. The HIPAA confidential lines can get really blurred so conduct your own thorough assessment of the potential risks and vulnerabilities to the confidentiality, integrity, and availability of electronic protected health information held by the organization on anyone who is also an employee. The HIPAA Security Management Process standard in the Security Rule requires organizations to “implement policies and procedures to prevent, detect, contain, and correct security violations.” (45 C.F.R. § 164.308(a)(1).) Risk analysis is the first of four required implementation specifications. Next, put in place your Administrative Safeguards, Physical Safeguards and Technical Safeguards, followed by HIPAA Security Training and Compliance Testing. Failure to do so can put you in the crosshairs of 12 angry jurors as they complete the Jury Verdict Form.

Tommy Eden is a partner with the nationwide Management Labor firm of Constangy, Brooks, Smith & Prophete, LLP, advises and defends Employers, Medical Practices and Laboratories on a variety of HIPAA issues. He can be contacted at teden@constangy.com, 334-246-2901 or 205-222-8030 mobile. Blog at www.alabamaatwork.com.

Friday, January 22, 2016

2016 Top 10 Handbook Updates

By: Thomas Eden


A well drafted Employee Handbook in 2016 should:
Set expectations
Vision and values
Define Benefits
Result in consistent policies & application
Limit supervisory discretion
Reduce litigation risk
Give at-will and/or mandatory arbitration notices
Help win Unemployment Compensation Claims

#1 Handbook Update: Equal Employment Opportunity to include all protected categories listed including sexual orientation and gender identity, with dual track reporting and commitment to accommodate disabilities, dual track Reporting process, and commitment to accommodate for disabilities

#2 Handbook Update: No Harassment not limited to sex or sexual contact, with exactly what will employer do to investigate balancing protected rights and confidentiality.

#3 Handbook Update: Whistleblowing, because there are now over 22 federal laws prohibit retaliation for violations which are investigated by OSHA and there were millions of dollars in penalties in 2015.

#4 Handbook Update: Wage & Hour Classification should set forth multiple classifications stating how status impacts benefits, listing the ACA 30-hour threshold and be ready to pivot based on new DOL Regulations in June 2016.

#5 Handbook Update: Pay Policies should define payday and workweek with strict timekeeping procedures which prohibit off-the-clock and give notice of correction procedures.

#6 Handbook Update: Appropriate Conduct should track Alabama Unemployment Compensation disqualification  grounds with a list of examples of conduct that will warrant step discipline, immediate termination (don’t use “progressive”), and disclaim that nothing is intended to interfere with employee rights protected by state or federal law.

#7 Handbook Update: Be Accommodating on drug or alcohol rehabilitation, pregnancy, lactation breaks, military, ADA, religious observance with an explanation of who to contact to make a request and an open door policy if not satisfied.

#8 Handbook Updates: Workplace Violence Prevention should have no tolerance policy for violence or threats to commit violence drafted as an Alabama compliant Guns in the Parking Lot Policy with a posting of your stance on guns in buildings.

#9 Handbook Update: Protected Activity on Social Media may include:
Complaints about wages sharing,
Complaints about Managers,
Union-related logo displays,
Union support,
Organizing a union,
Discussing terms of employment,
Facebook “likes”, or
Twitter retweets.

#10 Handbook Update: Arbitration Clause
Strong support from U.S. Sup Ct, 11th Circuit, Alabama Sup Court for Employment arbitration that should include class action waivers in signed arbitration agreement, which trumps Title VII, FLSA, wrongful discharges, etc. in a state or federal court.

Common Sense Counsel: When updated correctly, an employee handbook in 2016 should:
1. be an introduction to company policies, procedures, and culture;
2. serve as a benchmark for understanding and consistently following organizational practices;
3. provide legal evidence that the policies are consistent with, and encourage, adherence to the latest employment laws; and
4. reduce the risk of employment litigation.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter where he will be presenting on this topic at the January 26, 11:30 meeting. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

Friday, January 15, 2016

Loose Lips Revive Transgender Discharge Case

By: Thomas Eden
Jennifer Chavez was employed as an automobile technician at Credit Nation Auto Sales who sells and repairs automobiles in Austell, Georgia. At the time of her hire, Jennifer was known as Louie Chavez and presented as a male, according to court documents.

In the summer of 2009, Chavez decided to go through a gender transition because she "did not want to die having lived a lie." Chavez informed Credit Nation of her intention to transition from a male to a female and later testified in deposition that the managers and staff were both extraordinarily kind regarding her decision to transition. The manager made sure that all employees understood the no harassment policy and that anyone who committed an infraction would be terminated.

Chavez claimed in her lawsuit that the supportive environment at Credit Nation ended two weeks after she announced the intended transition and was told to "tone things down" after her visits to the other technicians' stalls, talking about surgeries, including breast augmentation.

Later the Credit Nation President met with Chavez about coming to work or leaving work wearing dresses, skirts, and heels in the service department work area because the attire violated Credit Nation's workplace rules, but also went on to make statements such as “he was very nervous” about her gender transition and the “possible ramifications” and she “was going to negatively impact the business.”
Chavez raised a number of unisex restroom issues for which Credit Nation sought advice of legal counsel. Chavez was also issued two disciplinary warnings.

On January 8, 2010, Chavez arrived at work and clocked in at 7:39 a.m. and decided to sit in the back of one of the cars she was working on to try and get a little bit warm. She then went to sleep in the back of the car for 40 minutes and a photograph of her sleeping was sent to the manager.  On January 11, 2010, Chavez was terminated for sleeping while on the clock on company time in violations of the Employee Handbook, to which she admitted. Another employee, who did not have previous write-ups in his file, had been terminated for sleeping on the clock.

Chavez then filed her transgender sex discrimination Title VII lawsuit in the Georgia Federal District Court. Credit Nation filed a motion for summary judgment, which was granted in its favor in September 2014, based largely on her termination for sleeping on the job and the comparator evidence was critical to the Judge’s ruling.

However, this week the 11th Circuit Court of Appeals in Atlanta reversed finding that Chavez had presented sufficient mixed motive evidence of “heightened scrutiny” and deviation from “normal progressive discipline” to put her transgender discharge case before a federal jury. The case is Jennifer Chavez v. Credit Nation Auto Sales.

Common Sense Counsel: Updating your handbook language to cover gender identification and sexual orientation language should be one of your first priorities, with updated training, deciding now on restroom solutions and finding a source for guidance when confusion reigns in your workplace. Transgender Discrimination is an EEOC litigation hot button issue for 2016.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com with link to decision.




Friday, January 8, 2016

Justice Prevails Against Attorney in Federal Court


By: Thomas Eden

U.S. District Judge Matthew Brann sanctioned plaintiff’s lawyer Donald Russo in his Dec. 29, 2015, 55 page memorandum opinion in which he legally spanked attorney Russo for continuing to pursue an age discrimination lawsuit which suffered from “blatant timeliness defects,” contained allegations that were “unrepresentative of the truth” and was “nothing more than an illusion.” The judge determined that Russo had kept the meritless case alive in “a sort of litigious necromancy conjured up by Russo’s specious filings” who applied a “'see what sticks' approach to briefing.”

The Federal Court Complaint filed in 2013 alleged that his client Ernest Keister had received less favorable treatment than similarly situated younger workers. However, when Keister’s deposition was taken he was not able to identify any such younger worker. The essential age bias theory in the suit was that Keister’s salary did not reflect the type of tasks he was assigned. The Judge found this was “nothing more than a permissible business judgment” by the defendant company.

Both defendants filed motions for summary judgment, which were granted dismissing Keister’s lawsuit. Next they filed motions under Rule 11 of the Federal Rules of Civil Procedure requesting sanctions and attorneys fees. Rule 11 imposes a duty on counsel in federal court to look before leaping into federal court litigation. Or as the judge put it "to stop, think, investigate and research before filing papers either to initiate a Complaint or to conduct the litigation.”  He held that Rule 11 sanctions are appropriate "when the claimant exhibits a deliberate indifference to obvious facts."

Upon investigation, the federal district judge determined that attorney Russo had been sanctioned by other federal court judges in the same district who had determined that his employment discrimination work was "dubious," "ill-conceived”, “poorly presented’’, “silly” and “ridiculed with credibility shortcomings.” Judge Brann has not yet determined the amount of attorney fees that must be paid.

Common Sense Counsel: any litigation is serious. As you can see from Judge Brann, he takes his obligations under Rule 11 to police attorneys most solemnly. Accordingly, it is most important that early on, you and your attorney assess and research the allegations made in the complaint to determine if they have a legitimate factual and legal basis. To comply with these requirements, counsel must conduct a reasonable investigation of the facts and normally competent level of legal research to support the presentation before the court.  Rule 11 is intended to deter baseless filings in Federal District Court and streamlined administration and procedure of the federal courts.

So if you think you are in a baseless lawsuit in federal court, a respectfully-worded  letter to the other side raising Rule 11, or the Alabama Litigation Accountability Act, may be helpful to show the opposing counsel and party the error of their ways.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com and follow on twitter tommyeden3