May It Please The Court
Quote of the Day - By working faithfully eight hours a day, you may eventually get to be a boss and work twelve hours a day.
Sue Your Boss? No You Can. Yes You Can't. What's A Body To Do?
It was fun while it lasted, but it won't last long. The California Supreme Court ruled that directors and officers of companies cannot be held financially liable under California labor law for their company's failure to pay its employees overtime compensation. Without a dissent, the Court decided that former employee Steven Reynolds had not stated a cause of action against any of the eight people who were officers or directors of Earl Schieb.
The Court ruled that plain language of the California Industrial Welfare Commission's definition of employer does not expressly impose liability under section 1194 of the California Labor Code on individual corporate agents. The Justices thought that the code section did not define the term "employer." Good news for owners of companies out there. At least for now.
Don't rely on it, though. There is a new law, not in effect when Mr. Reynolds first filed suit, that permits employees to sue officers and directors for unpaid overtime. It's known as the "Sue Your Boss" law, and has yet to be tested in court.
It's a jungle out there.
News Flash: Huckleberry Finn and Jim Not Guilty
You remember Huckleberry Finn and his friend, Jim? They find a corpse, but don't report it to the authorities. Did they violate Missouri law all those years ago? Is Mark Twain rolling over in his grave?
Twain fans will be relieved to know the Missouri Supreme Court doesn't think so. The story has a modern-day twist: a Missouri man convicted for doing so had that conviction overturned based on Twain's tale. An appellate court used the high court's citation to Twain's story to apply the law cited above, and held that William Jones, Jr. did not have an obligation to report to authorities finding the corpse of his friend, Justin Hazlett, lying dead, apparently shot. Jones found Hazlett's deceased body outside Hazlett's home, but didn't tell anyone. Jones was convicted, and sentenced to four years. Like Huck and Jim, he's now free to float on the Mississippi.
In 2002, a Missouri husband failed to report finding his wife's body, and he was also convicted of violating the statute, but his conviction was not overturned. The distinction lies in Twain's story, apparently. According to the Missouri decision reversing Jones' conviction, only relatives have that duty, not friends or strangers. Huck and Jim weren't guilty because they didn't know the person who died.
I'm glad to know all these years later than Huck and Jim weren't criminals in the eyes of Missourians.
Would $500 Cause You To Hang Up The Phone?
After you're done surfing, don't forget to hang up the phone if you're using dial-up to access the internet. You can incur some pretty hefty fees if the phone number you dial is long-distance from your home or business. According to the AP article linked to above, "About 700 consumers in the Rochester area alone were billed more than $200,000 (euro163,760) combined in unexpected Internet access charges in an eight-month period, while others elsewhere were charged $5,000 to $10,000 more than expected because the Internet connection was left open through a long-distance number."
New York, however, just passed a law that fines internet service providers $500 if they fail to warn you that you're using a long-distance line. That'll teach 'em, and certainly do a lot to save consumers money. Right.
This statute is supposedly the first of its kind, and hopefully the last. If legislatures want to protect consumers, it may take more than $500 to dissuade ISPs.
Grading Law School Loan Bankruptcy Discharges
If you used loans to get through law school and have had a tough time paying them back, beware. You can't discharge them in bankruptcy. This new ruling isn't news - we've known for a while now that you can't get out of student loans. Why, then, is it here? Well, this case presented a twist not covered in the previous law.
Our law student's loans here were guaranteed by The Education Resources Institute, a non-profit corporation, who according to its website, "offers loans based on good credit, with no income limitations, for elementary and secondary, undergraduate, graduate and continuing education studies." Former law student Kelli O'Brien borrowed money from Key Bank, and TERI guaranteed that loan.
O'Brien then defaulted on her student loan, and TERI paid it back to the bank under the terms of the guarantee. O'Brien sought to avoid paying TERI by filing bankruptcy, arguing that the statute disallowing the discharge of student loans didn't apply because this debt to the guarantor was not the actual student loan.
Nice try, but no go.
Even though TERI didn't pay the money to the law school for O'Brien's education, the Second Circuit ruled that it constituted a "meaningful contribution" under the terms of the statute, and thus could not be discharged. Maybe it's worth a cert petition, because it's a legal fiction since the money from TERI didn't go to the law school, it went to the bank, even though the Second Circuit saw it differently.
So far, it's an A+ for creativity, F for effectiveness. We'll see if this case goes any further.
Boilerplate May Never Look The Same AgainYou would never think that boilerplate is difficult to draft. (See Fn. 1 below). But, you would be wrong. Here's an example of contract boilerplate from the thesis of the book: "The laws of the State of New York, without giving effect to its choice of law principles, govern all matters with respect to this Agreement." I don't know about you, but I have seen hundreds of agreements with provisions similar to that. So what, you say? So have you? Well, the book answers that unasked question: "Who would have thought that this provision failed to cover all matters? Excluded are tort claims, such as fraudulent inducement."
If you don't want to make that mistake - and several hundred others identified in the 670-page book, throughout its twenty-three chapters, read and learn. You'll never look at boilerplate the same way again.
Fn. 1. Disclaimer here - the book in that last link is an American Lawyer Media book, the parent company of Law.com, and MIPTC is both an affiliate of the Law.com Blog Network and gets a commission if you buy it).
When It Comes To Real Estate Sales Percentages, Let's Be Exact
The Courthouse News Service reports that Oregon real estate sales are very competitive. In a defamation lawsuit filed in Marion County Court in Salem, Oregon, real estate mogul Coldwell Banker Mountain West claims it was damaged by Byron Hendricks, president of a competitor, Prudential Real Estate Professionals. The Salem Statesman-Journal asked Hendricks how much of the local market his company controlled, and he replied in a June 18 article, “We’re probably doing about 33 (percent) or 34 percent. They’re [Coldwell Banker] probably running 24 or 25 percent.” (See Question #4 in the last link.)
In the lawsuit, Plaintiff claims that in the Willamette Valley Multiple Listing Service broker ratings for Salem on June 20, Coldwell Banker actually had “25.35 percent of the volume of sales, year-to-date. Prudential had only 21.17 percent of the sales for that same period of time.” The newspaper reported, "In 2004 in Salem, Coldwell Banker accounted for 28.55 percent of sales and Prudential accounted for 26.27 percent. In Salem and Keizer, Coldwell Banker accounted for 27.89 percent of sales and Prudential accounted for 26.37 percent." The newspaper printed a correction, and it's not a defendant in the suit.
Coldwell Banker demanded more than $1.2 million in damages. Wow. Do you think the dispute between the two real estate companies is about something more than percentages?
Property Law As Viewed By A Toddler
1. If I like it, it's mine.
2. If it's in my hand, it's mine.
3. If I can take it from you, it's mine.
4. If I had it a little while ago, it's mine.
5. If it's mine, it must never appear to be yours in any way.
6. If I'm doing or building something, all the pieces are mine.
7. If it looks like it's mine, it's mine.
8. If I saw it first, it's mine.
9. If I can see it, it's mine.
10. If I think it's mine, it's mine.
11. If I want it, it's mine.
12. If I "need it, it's mine (yes, I know the difference between "want" and "need"!).
13. If I say it's mine, it's mine.
14. If you don't stop me from playing with it, it's mine.
15. If you tell me I can play with it, it's mine.
16. If it will upset me too much when you take it away from me, it's mine.
17. If I (think I) can play with it better than you can, it's mine.
18. If I play with it long enough, it's mine.
19. If you are playing with something and you put it down, it's mine.
20. If it's broken, it's yours (no wait, all the pieces are mine).
"Restating Implied, Perspective and Statutory Easements," Michael V. Hernandez. Real Property, Probate and Trust Journal, (American Bar Association, Spring 2005).
Is *Ugly* A New Class Deserving Of Employment Discrimination Protection?You can add "ugly" to the protected classes of race, color, religion, sex, national origin and age, according to the California Supreme Court, who issued an opinion earlier this week in a case entitled Yanowitz v. L'Oreal. Sure, that's a gross over-generalization, but I'm left with few other ways to characterize it. Although it's a sixty-one page opinion, you can get through the facts in the first nine pages, and that will tell you most of what you will want to know, if you're an employer.
Here's a quick sketch. Yanowitz was a successful, long-time employee of L'Oreal (flash site), and she ultimately became a Regional Sales Manager. Side note here, Yanowitz' husband is a lawyer. This fact becomes important later, one skipped over by the Court. Now, though, back to our story. Until the end of her employment, practically all of her reviews had been very good, even approaching excellent. She had been dinged for only two minor points.
Yanowitz was based in San Francisco, and her bosses, Messrs. Wiswall and Roderick were based in New York. On a tour of a Macy's store in San Jose with Yanowitz, Mr. Wiswall disapproved of the "look" of a 'dark-skinned" sales associate (the Court's words, not mine). Wiswall wanted someone "hot" and more "sexually attractive." He instructed Yanowitz to fire the currrent sales associate and replace her.
Yanowitz did not comply with her boss' directive, and later on a second tour of the same store, Wiswall got even more frustrated when he found out the unattractive (in his mind) sales associate had not been terminated. Despite Yanowitz' numerous requests, her bosses were never quite able to articulate a reason for terminating this sales associate other than that they didn't think she was "hot" enough. From the Court's opinion, it becomes apparent that Yanowitz' bosses gathered negative evidence about Yanowitz - including auditing her expense report and criticizing it - in order to terminate her. They changed her travel schedule and generally made life more difficult for her. Ultimately, she went out on stress leave and never returned to her employment. Interestingly, it turns out that the allegedly unattractive sales associate was that store's highest seller of L'Oreal products.
Here's why it becomes difficult to characterize this case as anything other than establishing attractiveness as a new class deserving of protection under Title VII or Title IX: Yanowitz filed a claim, presumably with the benefit of her attorney husband's advice, for discrimination against L'Oreal on the basis of sex, age (she was 53 at the time) and religion (she's Jewish). Not once in the process of Yanowtz' challenges to her bosses or in her original claim did she argue that attractiveness was a protected class or contend that L'Oreal did not have the right to discriminate based on looks. It was a legal fiction developed by the Court of Appeal.
The Supreme Court observed that employees didn't have to know what classes were "protected," as long as they thought that the adverse action the company was taking was discriminatory. Remember before when I noted that Yanowitz' husband was a lawyer? Well, the point is that she most likely knew from her husband that "attractiveness" was not a protected class, and that consequently L'Oreal's instructions to terminate an allegedly unattractive sales associate was not a protected activity. In other words, had it not been for this case, L'Oreal should have been able to terminate this sales associate based on her looks. Now we know that if you had thought that, however, you would have been wrong based on this new case.
Why did it turn out this way? Read the first nine pages of the opinion, and you'll see that the Court did not like the behavior of Yanowitz' bosses. Bad facts yield bad law.
Now, though, it would appear that you can't get fired for being ugly. But what about jobs that require beauty? Is the entertainment industry going to fold up and move out of Hollywood? Will there be a change in Playboy bunnies? (somewhat safe to open at work) Not likely. But, if you're an employer, be careful why you want to terminate your employees.