Tennessee Business Litigation Law Blog

Creating an ombudsman position at your business can assist with effectively dealing with internal conflict short of litigation. Most employment litigation is originated because an employee feels like he or she has a legitimate dispute and no one in management either cares or listens. The feeling that "no one will listen to me" gives rise to a sense of disrespect and worthlessness. Lost in the sea of feelings is whether there is a real conflict and how it can be resolved. It seems that once an employee latches onto the negative feelings about either a situation or a particular manager/co-employee, the idea of a resolution becomes second priority.

The ombudsman does not replace the human resources function. The ombudsman is an additional position that is neutral and therefore should be touted as different from human resources, which many employees see as part of management. In other words, employees have an option available if they feel that human resources will simply toe the company line or, for some reason, not give them a fair shake. For example, for years many government agencies have employed an ombuds person for these very reasons.

The ombudsman position can be a very effective tool which provides an outlet for disgruntled employees to air disputes and reinstate respect in the workplace. A large percentage of litigation, including employment litigation, is spawned from misunderstanding. Imagine how much money a business can save by having an experienced neutral person review and assess a dispute before lawyers become involved. An ombudsman can also educate managers about dealing with workplace conflict and identify certain weaknesses in specific managers relating to interpersonal dealings that can be valuable come evaluation time.

The bottom line is that hiring an ombudsman is a little money spent internally to save a lot of money being sent externally to litigators. Read an interesting article on this topic relating specifically to retaliation claims here.

Corporate executives continue to be the subject of government investigations into illegal backdating of stock options. "The inquiries appear to be accelerating as prosecutors home in on cases at companies culled from the 130 or so under investigation by the Justice Department and the Securities and Exchange Commission," according to an AP story on law.com's in-house counsel's page. Other's think the pace is slowing. Read the story here.

There are several blogs I try to review on a regular basis. Today, I was reading the Wall Street Journal's law blog and it had an entry about a blog I hadn't read before. It is very funny -- something I think attorneys and business people need more of in their lives. It is written by Ford & Harrison (Atlanta) employment attorney Julie Elgar based on the popular NBC television series "The Office." Using humor, as well as her employment law knowlege, she critiques the show and most significantly the antics of lead character Michael Scott from an employment lawyer's point of view. Then, she places a price tag on how much Michael's manager misconduct would cost a company in the real world. The blog, called "That's What She Said," is an interesting spin on the routine blog.  Read it here.

By the way, speaking of blogs, a torts-guru and super lawyer I know (colleague John Day), recently posted on his blog a listing of the blogs he regularly reads. See his list here.

An opinion released a couple of days ago from the eastern section of the Court of Appeals highlights the ongoing disagreement about how pro se litigants should be treated by the Courts.  The case, C&W Asset Acquisition v. Oggs, was a simple breach of contract case involving whether the defendant had failed to make payment on moneys advanced to him under a line of credit. 

Mr. Oggs, proceeding pro se, filed an Answer in which he denied owing the debt, stating that he “had no knowledge of the same.”  Subsequently, Mr. Oggs was served a request for admission asking him to admit that an attached balance sheet correctly reflected the charges and credits under his credit agreement with the Plaintiff.  Mr. Oggs did not respond, prompting the Plaintiff to file a motion to have this fact deemed admitted.  The Court denied Plaintiff’s motion and stated that Mr. Oggs would be allowed to respond “in court.”  It is unclear what response, if any, Mr. Oggs ever made to this request for admission, but at trial, he simply testified again that “he had no recollection of the debt and thereby denied owing Plaintiff.”  The Court ultimately held that the Plaintiff had failed to carry its burden of proof and dismissed the case against Mr. Oggs.  The dismissal was affirmed by the eastern section on appeal.

However, Judge Swiney dissented from the appellate opinion and embarked on a sharp criticism of what he viewed as the unfair advantage given to Mr. Oggs because he was a pro se litigant:

Putting aside for now Mr. Oggs’ trial testimony and looking solely at his answer, I am completely at a loss as to what the plaintiff was suppose to have done. Applying the majority’s reasoning, Mr. Oggs, solely because he is a pro se litigant, could in his answer say only that he does not know about or owe the debt and then be allowed to show up at trial, after first having been excused from responding to requests for admission, and raise any of the affirmative defenses set forth in Rule 8.03. Perhaps what Mr. Oggs meant when he said he did not owe the debt was that he had paid it; perhaps that there was duress; perhaps that estoppel or fraud applied; perhaps that a statute of limitations or statute of repose applied; perhaps that some other statute such as truth in lending applied. Under the majority’s decision, plaintiff was required to come to court ready to address whatever possible or potential non-plead affirmative defenses Mr. Oggs as the pro se defendant might for the first time raise during the trial. Such a result totally emasculates Rule 8.03 of the Tennessee Rules of Civil Procedure…

 

Respectfully, I believe this is a situation where the pro se litigant was unfairly advantaged, solely because he was a pro se litigant, both at trial and now before this Court. Both the Trial Court and now the majority in their attempts to insure that Mr. Oggs as a pro se litigant received “fair and equal treatment” have instead allowed “him an unfair advantage because he represents himself.” Frazier, 2006 WL 2506706, at *3. I respectfully suggest that the one lesson to be learned by lawyers and future litigants from the majority’s opinion is that if you find yourself in a situation similar to Mr. Oggs, do not hire a lawyer but instead proceed pro se so that the Rules of Civil Procedure will not be applied to you, and that everything you say in that lawsuit will be construed to mean what it was you might have said as opposed to what you actually did say.

 Read the majority’s opinion here.  Judge Swiney’s dissent is available here. 

I recommend an interesting article about corporate hot issues in 2007, highlighting new SEC rules about executive compensation disclosures and the like. If the following introduction to the article piques your interest, then read the rest of it here. Staying ahead of the curve will be harder this year because the “curve will get a lot a steeper in 2007, thanks to pressure from securities regulators, activist shareholders and hedge funds. In addition to complying with the new SEC compensation disclosure rules, companies will also have to cope with shareholders emboldened by two recent developments: a major change to Delaware's law on majority voting in director elections and a federal circuit court decision on shareholder access to proxy statements. One group of shareholders in particular -- hedge funds -- is expected to cause headaches for management well after the 2007 proxy season ends.”

An important employment law question will be decided by the U.S. Supreme Court with a couple of Nashville lawyers on the case. The issue is “cat’s paw” liability and the employer is represented by Todd Presnell and Kara Shea in the Nashville office of Miller & Martin PLLC.

The so-called cat’s paw occurs in discrimination matters when another person (here the manager/employer) is held liable for the bias of someone else (here a subordinate employee) which influenced the adverse employment decision made by the manager. So, in this situation, an African American employee was terminated by a human resources manager based mainly on information from the employee’s direct supervisor. The HR manager was in a different location and did not know the employee’s race. The EEOC, which brought the case, alleged that the employee’s direct supervisor was racially biased and motivated the HR manager’s termination decision. The cat’s paw comes into play because the decision maker is acting as a conduit for the discriminatory bias of someone else.

The formal question presented to the Supremes is: "Under what circumstances is an employer liable under federal anti-discrimination laws based on a subordinate’s discriminatory animus, where the person(s) who actually made the adverse employment decision admittedly harbored no discriminatory motive toward the impacted employee."

Hopefully, the court will give clear guidance on this issue since the federal circuits have been split. The case is BCI Coca-Cola Bottling Co. v. EEOC and comes from the Tenth Circuit, which reversed the district court’s dismissal. Oral argument will take place in the Spring.

The attached dissent was filed by an associate justice of the Michigan Supreme Court following the recent election of the Court’s Chief Justice.  The accusations are serious.  However, perhaps the most striking part of the dissent is the language and tenor that the Michigan Supreme Court Justices (including both the author of the dissent and the "majority of four" which the dissent decries) have begun to utilize when criticizing one and other.  The document brings several pointed questions to mind.  What is the obligation of our judiciary when they feel that their peers are abusing their power?  Can a Court function effectively when collegiality among its members has broken done to such a severe degree?  As I think you will see, the dissent is serious food for thought.   John Day has posted his thoughts on the issue over at his dayontorts blog.  What are yours...

A federal circuit court has ruled that there is no private right of action for violations of HIPAA (Health Insurance Portability and Accountability Act of 1996). The most recent court to follow the consensus is the Fifth Circuit Court of Appeals with a case out of Louisiana. So far, every district court to consider the issue has ruled the statute does not support a private right of action and no other federal appellate court has specifically addressed the issue.

The Fifth Circuit upheld the dismissal of a patient’s claim that a doctor disclosed medical information without her consent during a deposition. The court based its decision on the fact that HIPAA provides both civil and criminal penalties for the improper disclosure of medical information and gives the enforcement authority to the Department of Health and Human Services. Since HHS can enforce penalties, Congress did not intend to create a private cause of action, according to the court.  Read the opinion here.

An article over at Law.com looks at a significant question facing lawyers in the 21st century: When is it OK to look at the metadata in an adversary's document? The answer is unsurprising (and unsettling): nobody really knows for sure. Metadata reveals information that was not necessarily intended to be saved into the document by the author and/or all others who opened or printed the document by the time it reached the recipient. The Law.com article looks to Bar opinions from the ABA, Maryland, and New York. (The article does not mention the Florida Bar Bar Board of Governors' opinion that reviewing metadata "is something lawyers should not do."

In terms of reviewing metadata, there is a fundamental difference between documents produced by an adverse party that are pertinent to a lawsuit and documents created in litigation by adverse counsel (letters and pleadings sent by email, for example). Any consideration of whether it is appropriate for lawyers to review metadata must take this difference into account.