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Archive for the ‘Whistle Blower – violation of public policy’ Category

Partner, Eric LeBlanc, quoted in Massachusetts Lawyers Weekly Article Regarding an Employee’s Successful Post-Termination Claim of Workplace Retaliation

Posted on: January 11th, 2018 by admin

wwa_eric-117x150Massachusetts Lawyers Weekly sought commentary from Bennett & Belfort partner, Eric LeBlanc, in its article on a recent U.S. Bankruptcy Court decision concerning a contract worker’s claim against her former employer’s Chapter 11 bankruptcy estate for severance pay.  (“At-will worker can seek severance against bankruptcy estate: Company’s failure to offer benefits deemed retaliatory,” Mass. Lawyers Weekly, December 21, 2017.)  Dr. Christine Briggs, while an at-will employee of Genesys Research Institute, Inc., was one of a number of workers who filed whistleblower complaints against the company for alleged misuse of restricted funds.  Although an employer is not required to offer severance pay when laying off an at-will employee, Dr. Briggs discovered that when Genesys terminated at-will employees in a series of layoffs prior to filing for bankruptcy, it had systematically offered severance to those who had not lodged whistleblower complaints but failed to offer severance to those who had made complaints.  In the case, In Re: Genesys Research Institute, Inc., Justice Joan Feeney concluded that the employer’s conduct was retaliatory, and thus Dr. Briggs, although an at-will employee, was entitled to claim severance pay.

Attorney LeBlanc remarked that the Judge’s decision is significant because the court sustained a claim concerning an employer’s retaliatory conduct that occurred after the employee’s termination.  “There are mitigating factors in this case because it was a bankruptcy decision with a different burden-shifting, and the trustee made limited attempts to refute the claim,” Attorney LeBlanc told Lawyers Weekly. “But it could still be applicable in assisting plaintiffs in getting over an initial hurdle regarding a potential retaliatory action that occurs post-termination… Put more simply, you can use post-termination employer behavior to potentially prove either discrimination or retaliatory animus.”

From a common-sense, layperson’s perspective, it goes without saying that retaliation and discrimination by any person or entity against another can post-date the technical termination of the relationship between perpetrator and victim.  The case law in this regard is, however, a work in progress.

The Defend Trade Secrets Act Creates New Employer Disclosure Requirements and Whistleblower Rights

Posted on: June 29th, 2016 by admin

Photo_vaultUnder the Defend Trade Secrets Act of 2016 (“DTSA”),  trade secret misappropriation is now an issue of federal law.  This federal statute takes a field which was once nearly the exclusive domain of state law and adds a number of significant new rights for entrepreneurs seeking to preserve the secrets of their success – and for whistleblowing employees who report trade secret theft to the government.

DTSA Prohibitions And New Remedies.  The DTSA broadly prohibits the misappropriation of trade secrets – a term which includes sensitive financial, business, scientific or technical information.  The owner of the information must take reasonable steps to keep it secret and its secrecy must provide independent economic value to the owner.  State laws are not preempted by the DTSA, so the particular nuances of Massachusetts law regulating trade secrets Mass. Gen. Laws Ann. ch. 93, § 42 and Mass. Gen. Laws Ann. ch. 93A, §§ 1 to 11 still apply.  The DTSA creates an additional federal cause of action which may be in filed in federal court.  Not only does the DTSA allow the victim of trade secret misappropriation recovery of double damages and attorney fees, but in some exigent circumstances the law provides for a procedure to secure court ordered seizure of trade secret data in order to avert irreparable harm and preserve a matter for judicial review.

Employer’s Notice Requirement Under The DTSA.  The DTSA requires employers give employees, independent contractors and consultants notice of their qualified right to disclose trade secrets when done as a whistleblower reporting other violations of law.  Employers are obligated to give such notice “in any contract or agreement with an employee that governs the use of a trade secret or other confidential information,” – an obligation which likely calls for updates to employment contracts, confidentiality agreements, and many employment policy handbooks.  Failure to make this disclosure bars an employer from collecting exemplary damages or attorney’s fees under the DTSA from an employee who steals trade secrets – and may in itself be the basis for a violation of the DTSA.

Whistleblower Rights Under the DTSA.  The DTSA protects whistleblowers who confidentially disclose trade secrets to a federal, state or local government official where such disclosure is solely for the purpose of reporting or investigating a suspected violation of law.  Under the DTSA, qualifying whistleblowers are immune from civil or criminal liability under both federal and state trade secret law.  Furthermore, an employer may not retaliate against an individual for reporting suspected violations of the DTSA.  If an employer retaliates against an employee who is a legitimate DTSA whistleblower, it faces civil liability to the employee for its unlawful employment actions.

The attorneys at Bennett & Belfort, P.C. are pleased to advise you relative to the implementation of the new trade secret rules which protect businesses and whistleblowers.  Should you have any questions on this or any other trade secret legislation, please feel free to contact Bennett & Belfort P.C.

Attorney Belfort Presents at Two MCLE Employment Law Seminars

Posted on: February 29th, 2016 by admin

 

 

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On February 11, 2016, Bennett & Belfort P.C. partner David E. Belfort again chaired and presented at a seminar entitled “Proving & Valuing Damages in Employment Cases” at Massachusetts Continuing Legal Education’s (MCLE) Boston conference center. Joining Attorney Belfort on the panel were his respected colleagues Attorneys Robert S. Mantell, Esq. of Rodgers, Powers & Schwartz LLP, Mary E. O’Neal, Esq. of Conn Kavanaugh Rosenthal Peisch & Ford LLP and Honorable Kenneth W. Salinger of the Superior Court, Business Litigation Session.  Mr. Belfort moderated the panel and presented on how to effectively introduce damages evidence in a failure to pay wages case, proving emotional distress damages in discrimination cases and the efficacy of spousal testimony in proving emotional injury.

MCLE BLOG

On February 25, 2016 Mr. Belfort served as an invited panelist for an MCLE seminar entitled “Top 25 Critical Cases Every Employment Litigator & Counselor Must Know.”  Mr. Belfort’s colleague Nina J. Kimball, Esquire of Kimball Brousseau LLP chaired the seminar and Jaclyn L. Kugell, Esquire of Morgan, Brown & Joy served as a fellow panelist.

The panelists reviewed 25 key cases in Massachusetts employment law and highlighted issues central to effective employment litigation in the Commonwealth, including a detailed discussion of foundational and developing case law in the field.  Attorney Belfort was charged with discussing cases relating to discrimination damages, associational discrimination and wage and hour disputes in addition the fiduciary duty issues and developments in the rights of shareholder – employees in closely held corporations.  There was a rigorous discussion as to a number of other relevant topics, including: proving liability in discrimination cases; retaliation and whistleblower protections; the continuing violation doctrine and Cat’s Paw Theory; and disability and reasonable accommodation law.

Here is a list, by general topic, of the top 25 (really 27) Massachusetts cases that were discussed at the Seminar:

Basic Protected-Class Discrimination Law

1.         Lipchitz v. Raytheon Co., 434 Mass. 493 (2001)

2.         College-Town Div. of Interco v. MCAD, 400 Mass. 156 (1987)

3.         Thomas O’Connor Constructors, Inc. v. MCAD, 72 Mass. App. Ct. 549 (2008)

4.         Mole v. Univ. of Massachusetts, 442 Mass. 582 (2004)

5.         Psy-Ed Corp. v. Klein, 459 Mass. 697 (2011)

6.         GTE Products Corp. v. Stewart, 421 Mass. 22 (1995)

7.         Sarni Original Dry Cleaners, Inc. v. Cooke, 388 Mass. 611 (1983)

8.         Haddad v. Wal-Mart, 455 Mass. 91 (2009)

9.         Stonehill Coll. v. MCAD, 441 Mass. 549 (2004)

10.        Massachusetts Elec. Co. v. MCAD, 375 Mass. 160 (1978)

11.        Flagg v. AliMed, Inc., 466 Mass. 23 (2013)

 

Disability Accommodation, Interactive Dialogue, and Leaves of Absence

12.        Russell v. Cooley Dickinson Hosp., Inc., 437 Mass. 443

(2002)

 

Harassment

[2.]          College-Town Div. of Interco v. MCAD, 400 Mass. 156 (1987)

13.        Muzzy v. Cahillane Motors, Inc., 434 Mass. 409 (2001)

14.        Cuddyer v. Stop & Shop Supermarket Co., 434 Mass. 521 (2001)

 

Defenses

15.           Dziamba v. Warner & Stackpole LLP, 56 Mass.App.Ct. 397 (2002)

16.           Warfield v. Beth Israel Deaconess Med. Ctr, 454 Mass. 390 (2009)

17.           City of Boston v. MCAD, 39 Mass. App. Ct. 234 (1995)

 

Wage & Hour Law

18.        Okerman v. VA Software, 69 Mass. App. Ct. 771 (2007)

19.        Boston Police Patrolmen’s Ass’n, Inc. v. City of Boston, 435

Mass. 718 (2002)

20.        Camara v. Attorney General, 458 Mass. 756 (2011)

21.        Smith v. Winter Place LLP, 447 Mass. 363 (2006)

22.        Crocker v. Townsend Oil Co., 464 Mass. 1 (2012)

23.        Lipsitt v. Plaud, 466 Mass. 240 (2013)

 

Common Law Claims

24.        Awuah v. Coverall, 460 Mass. 484 (2011)

25.        Hobson v. McLean Hosp. Corp., 402 Mass. 413 (1988)

26.        Fortune v. National Cash Register Co., 373 Mass. 96 (1977)

27.        Selmark Assoc. v. Ehrlich, 467 Mass. 525 (2014)

Attorney Belfort Invited Panelist in MCLE’s Top 25 Employment Cases Seminar

Posted on: March 17th, 2015 by admin

2013 David B photo On February 25, 2015, Bennett & Belfort P.C. partner David E. Belfort served as a panelist for an MCLE seminar entitled “Top 25 Keys Cases Every Employment Litigator & Counselor Must Know.” Joining Attorney Belfort on the panel were his esteemed colleagues Attorneys Andrea C. Kramer (Chair) of Hirsch Roberts Weinstein LLP and Nina J. Kimball of Kimball Brousseau LLP.

The panelists reviewed 25 key cases in Massachusetts employment law and highlighted issues central to effective employment litigation in the Commonwealth, including a detailed discussion of foundational and developing case law in the field.  Attorney Belfort was charged with discussing cases relating to discrimination damages and wage and hour disputes.  There was a rigorous discussion as to a number of other relevant topics, including:  proving liability in discrimination cases; retaliation and whistleblower protections; the continuing violation doctrine and Cat’s Paw Theory; and disability and reasonable accommodation law. 

There was a lively dialogue regarding associational discrimination: an evolving and active area of employment law in which the individual experiencing discrimination is not a member of a protected class, but is related to (or associated with) someone who is.  The panelists also discussed the interesting procedural history and standards of appellate review of these central cases – often involving the interplay between various tribunals such as the Supreme Judicial Court’s review of lower Courts’ decisions or the Trial Court’s review of MCAD (Massachusetts Commission Against Discrimination) decisions.  One theme was the fight among litigants as to what standard of review governed each circumstance.  While in some cases the Courts conduct a “de novo” review (completely new trial on the merits) in others there is only a limited 30A administrative review available.  This 30A process is conducted without a jury, is a far more deferential standard to the underlying Agency decision, and considers only facts already in the record.

Here is a list, by general topic, of the top 25 Massachusetts cases that were covered in the Seminar:

 

Discrimination Law – General

1.         Abramian v. President & Fellows of Harvard College, 432 Mass. 107 (2000)

2.         Lipchitz v. Raytheon Co., 434 Mass. 493 (2001)

3.         College-Town Div. of Interco v. MCAD, 400 Mass. 156 (1987)

4.         Thomas O’Connor Constructors, Inc. v. MCAD, 72 Mass. App. Ct. 549 (2008)

5.         Mole v. Univ. of Massachusetts, 442 Mass. 582 (2004)

6.         King v. City of Boston, 71 Mass. App. Ct. 460 (2008)

7.         GTE Products Corp. v. Stewart, 421 Mass. 22 (1995)

8.         Sarni Original Dry Cleaners, Inc. v. Cooke, 388 Mass. 611 (1983)

9.         Haddad v. Wal-Mart, 455 Mass. 91 (2009)

10.       Stonehill Coll. v. MCAD, 441 Mass. 549 (2004)

11.       City of Boston v. MCAD, 39 Mass. App. Ct. 234 (1995)

12.       Massachusetts Elec. Co. v. MCAD, 375 Mass. 160 (1978)

13.       Flagg v. AliMed, Inc., 466 Mass. 23 (2013)

 

Disability Accommodation, Interactive Dialogue, and Leaves of Absence

14.       Russell v. Cooley Dickinson Hosp., Inc., 437 Mass. 443 (2002)

 

Harassment

15.       Muzzy v. Cahillane Motors, Inc., 434 Mass. 409 (2001)

16.       Cuddyer v. Stop & Shop Supermarket Co., 434 Mass. 521 (2001)

 

Wage & Hour Law

17.       Okerman v. VA Software, 69 Mass. App. Ct. 771 (2007)

18.       Boston Police Patrolmen’s Ass’n, Inc. v. City of Boston, 435 Mass. 718 (2002)

19.       Camara v. Attorney General, 458 Mass. 756 (2011)

20.       Smith v. Winter Place LLP, 447 Mass. 363 (2006)

21.       Crocker v. Townsend Oil Co., 464 Mass. 1 (2012)

22.       Depianti v. Jan–Pro Franchising Int’l, Inc., 465 Mass. 607 (2013)

23.       Lipsitt v. Plaud, 466 Mass. 240 (2013)

 

Common Law Claims

24.       Hobson v. McLean Hosp. Corp., 402 Mass. 413 (1988)

25.       Fortune v. National Cash Register Co., 373 Mass. 96 (1977)

 

The webcast of this program can be accessed through the MCLE website (http://www.mcle.org/product/catalog/code/2150165WBA).

MCLE Top 25

SOX WHISTLE BLOWING PROTECTIONS ONLY COVER EMPLOYEES: NOT INDEPENDENT CONTRACTORS

Posted on: March 5th, 2012 by admin No Comments

In a split opinion, the Federal First Circuit Court of Appeals in the matter of Lawson, et. al. v. FMR LLC. et. al. , found that Sarbanes-Oxley (“SOX”) s.806 (18 USC s.1514A) , a statute enacted to encourage the reporting of illegal conduct by employees of publicly traded companies, does not protect contractors of such companies who ‘blow the whistle’ and are punished for raising formal complaints about financial improprieties.   

Plaintiffs, Lawson and Zang, filed suit against their employers, private companies that advise and consult for the mutual fund giant Fidelity, alleging that they were discharged after complaining about inaccurate financial registration statements and illegal accounting methods, which were believed to be securities law violations, prepared specifically for Fidelity.  The Court’s two-judge majority focused on the fundamentals of statutory interpretation in declining to apply a broad reading to the definition of “employee” in the statute and thereby following what they believed to be Congress’ legislative intent when drafting SOX.  The Court concluded that because Congress did not define ‘employee’ to specifically include outside contractors, claims by such contractors were outside the scope of SOX’s whistleblower protections.  Fidelity successfully argued that if contactors were included under the umbrella of SOX, even the parking lot attendant could conceivably claim protections, far over-reaching, they suggested, the SOX drafters’ initial intent.

However,  Justice Thompson penned a scathing dissenting opinion, vehemently disagreeing and, in pertinent part, stating, “Not only does Sarbanes-Oxley s806 by its terms protect employees of contractors of public companies, but the agency that handles every s806 whistleblower complaint has issued formal regulations recognizing that straight forward interpretation…”  The dissent goes on to suggest that in excluding contractors (who do not work for publically traded companies), the majority ignored applicable precedent, the deference courts must give regulations and the broad language of the SOX statute.  Justice Thompson concludes that that majority disregards “not only our own precedent but also the views of the other branches of government, to say nothing for grammar and logic.” 

Employee advocates suggest that this decision is particularly dangerous because it discourages the reporting of illegal activity.  This is of particular concern in an industry historically rife with reporting fraud and bookkeeping deceit (e.g. Enron), which SOX was enacted and amended to reform.  Financial  transparency and corporate honesty are fundamental in our free market system as they level the playing field between competitors by providing accurate data to those considering and trading in their shares.  It is thought that SOX encourages the reporting of cheaters, those firms that intentionally submit tainted information to unfairly advance their self-interest.  Lawson will continue to receive attention for some time given these core policy considerations, that is SOX’s goal to foster public confidence in the stock market by cleaning up public companies that cook the books.  As such, preventing retaliation against contractors that have access to and are willing to bring to light potentially tainted financial information might well have been a logical extension of SOX’s reach.  If this central aim is to be upheld relative to publicly traded companies, the Plaintiffs asked, should it really matter when that individual, someone who risks their standing for the greater good and reports wrongdoing that might broadly damage the public, is a contractor?

It is important to note that almost across the board, employment laws carve out clear distinctions and afford varying rights for employees vs. independent contractors.  For example, wage laws, payroll taxes and insurance coverage all depend on the characterization of workers as either employees, who can claim the protections of those laws, or contractors, who cannot.   The holding in Lawson that SOX whistleblower provisions apply only to employees of publicly traded companies, and not their private contractor advisor colleagues, significantly narrows the scope of the statute in the mutual fund industry and elsewhere.  It continues a trend wherein courts distinguish those rights afforded to contractors v. employees. 

Stay tuned to the Bennett & Belfort Docket Blog for further unfolding developments in the hot employment law areas of retaliation, whistle blowing, public policy and The Sarbanes-Oxley Act.