Appellate Update

By Joe Murray

The court opinions have been sparse lately, and none of them are earth shattering. But here they are:

Davis v. NC Dep’t of Health & Hum. Servs., No. COA19-449 (N.C. App. Dec. 17, 2019) (unpublished) (Human Resources Act): DHHS terminated Davis for manually lifting a patient from his wheelchair to his bed in violation of specific medical orders. While Davis’s actions provide the just cause needed for discipline, DHHS previously suspended a similarly situated employee for the same conduct. Due to the different treatment of similarly situated employees, the court of appeals upheld the ALJ’s ruling to reinstate Davis and suspend her for two days.

Brown v. Fayetteville State Univ., No. COA19-13 (N.C. App. Jan. 7, 2020) (Human Resources Act): The court of appeals holds that the after-acquired-evidence doctrine first announced in McKennon v. Nashville Banner Publishing Co., 513 U.S. 352 (1995), may be used in contested cases under the Human Resources Act. The McKennon rule does not eliminate liability; it only limits the remedy of an employee who was wrongfully discharged.

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Appellate Update

I hope y’all appreciate that I read these opinions so you don’t have to. The employment decisions over the past several months have been fairly pedestrian.

Clehm v. BAE Sys. Ordnance Sys., Inc., No. 18-2010 (4th Cir. Sept. 30, 2019) (unpublished) (Title VII): Clehm was sexually assaulted by a coworker, who BAE terminated and who was ultimately sent to jail. Clehm claimed that after the coworker’s termination she endured workplace harassment from co-workers, including what the 4th Circuit described as “shocking evidence” of a “generally sexualized work environment.” However, the evidence showed that BAE disciplined the harassers and provided support for Clehm. Clehm filed suit against BAE alleging, among other claims, Title VII hostile work environment and retaliation. The 4th Circuit upheld the grant of summary judgment on both claims in favor of BAE due to Clehm’s inability to impute liability to BAE for her co-workers’ conduct. Specifically, there was no evidence that BAE “knew or should have known about the harassment and failed to take effective action to stop it.” Clehm’s retaliation claim also failed since BAE had not taken any adverse action against her.

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Department of Labor seeks to clarify compatibility of bonuses with fluctuating workweek method

By Michael B. Cohen

Among the alternatives for calculating overtime under the Fair Labor Standards Act, the fluctuating workweek method is perhaps one of the least familiar and used techniques. The fluctuating workweek method enables employers to pay overtime to certain non-exempt employees at one-half their regular rate, rather than one and one-half times their regular rate, if certain conditions are met:

(1) the employee’s work hours must fluctuate from week to week;

(2) the employee must be paid a fixed salary each workweek, regardless of the number of hours worked;

(3) the fixed salary must be large enough to compensate the employee at a rate of not less than the minimum wage for all hours worked;

(4) there must be a “clear mutual understanding” between the employer and the employee that the employee’s fixed salary is compensation for all hours the employee may work in a particular week; and

(5) the employee must receive additional pay at one-half the regular rate for all overtime hours worked.

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Shooting the Messenger: Villainizing Whistleblowers Makes Us All Less Safe

By Kevin Murphy

Retaliation subverts the aims of anti-discrimination laws, fair pay rules, safety regulations, accounting requirements, environmental safeguards, and many other laws. Employees cannot invoke the rights provided by these laws or help the government stamp out fraud if they know they will be retaliated against for speaking up or reporting misconduct.

Retaliation is deeply rooted in our culture. Since the Hammurabi Code, the rule has been that one should return whatever harm was done to them with equal vengeance. As the Old Testament decrees, “fracture for fracture, eye for eye, tooth for tooth, shall he repay. Whatever degree of blemish he has inflicted, so shall he be compelled to suffer.” Leviticus 24:19-20; see also Exodus 21:24 (“An eye for an eye, a tooth for a tooth, a hand for a hand, a foot for a foot”). The Greek historian Plutarch tells of kings beheading the bringer of bad news rather than facing the underlying issue itself.

Even the President has suggested executing those that report misconduct (“You know what we used to do in the old days when we were smart with spies and treason, right? . . . We used to handle it a little differently than we do now.”). Maggie Haberman and Katie Rogers, Trump Attacks Whistle-Blower’s Sources and Alludes to Punishment for Spies, New York Times, (Sept. 26, 2019).

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Appellate Case Roundup

By Joe Murray

It’s our semi-regular roundup of appellate decisions:

Dawson-Murdock v. National Counseling Group, Inc., No. 18-1989 (4th Cir. July 24, 2019) (ERISA): National Counseling Group (NCG) made a nifty argument to get this case dismissed at the district court level: Despite the summary plan document stating NCG was the plan administrator and a named fiduciary of the group life insurance plan, NCG argued it was not a fiduciary for the purposes of plaintiff’s ERISA claims. The 4th Circuit found this argument unpersuasive and, while not quite a bench slap,[i] used terms like “logic” and “common-sensical understanding” to find that a plaintiff is “not required to allege that the plan administrator and named fiduciary also satisfies the functional fiduciary test in order to state a plausible fiduciary breach.” Once the 4th Circuit found that NCG was a plan administrator and fiduciary, it had no problem finding that plaintiff’s two claims against NCG could proceed.

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Timing may not be everything, but it’s definitely something with Title VII claims

By Zack Anstett

In a published opinion filed August 27, 2019, U.S. Circuit Court Judge A. Marvin Quattlebaum of the Fourth Circuit affirmed the District Court’s grant of summary judgment brought under Title VII. Judge Quattlebaum’s decision in Perkins v. International Paper Company is another feather in the defense attorney’s cap and illustrates the importance of timely filing at the EEOC and how the Fourth Circuit continues to cling to the adage that “Title VII is not a general civility code.” Specifically, Perkins alleged race discrimination and brought claims for disparate treatment, hostile work environment, constructive discharge, and retaliation.


According to the lawsuit, Perkins, a black male, was hired in 1984 as a technician at the Eastover Paper Mill until he retired in 2014. An important interjection of procedural history is that Perkins did not file with the EEOC until January 8, 2015, which put a time bar on any allegation of deliberate discrimination that occurred more than 300 days before (March 14, 2014). The Fourth Circuit consolidated Perkins’ allegations into three categories: (1) mistreatment in various ways compared to white employees; (2) improper denials of requests for promotions; and (3) racially offensive conduct and statements at work.

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Oral argument scheduled in hospital-physician “unfair trade” case


By Tara Muller

Heads up, North Carolina hospitals and doctors! On Wednesday, September 30, the North Carolina Supreme Court will hear oral argument in Hamlet v. Hernandez. The Court’s decision may have a significant impact on the way physicians work and negotiate with hospitals in North Carolina, and could have ripple effects extending to employment practices in other industries.


A hospital system hired Dr. Pedro Hernandez as an independent contractor and gave him hospital privileges. The contract had a 36-month term and provided that Dr. Hernandez could choose to become an employee of the hospital 18 months into the contract term.

When his private practice failed, Dr. Hernandez tried to exercise his option to be hired as an employee. The hospital did not send him a new contract of employment but apparently believed that his original agreement encompassed the “employment” option. However, Dr. Hernandez began looking for work elsewhere and shut down his practice more than a year before the end of his contract period with the hospital.

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Texas v. EEOC: Sound and Fury Signifying Nothing?

By Joe Murray

On Aug. 6, 2019, the 5th Circuit rocked the EEOC by permanently enjoining the use of the 2012 EEOC Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964 (“Conviction Guidance”) as binding in any respect. Texas v. EEOC, 2019 U.S. App. LEXIS 23498 (5th Cir. Aug. 6, 2019). While at first glance this opinion appears significant—and some commentators have positioned this case as a win for employers, does this injunction really matter outside of Texas or the 5th Circuit?

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Enduring Tedium: The Future of Fights Over Electronically Stored Information

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By Sean F. Herrmann

“Seeking justice often involves enduring tedium.” It’s fitting that North Carolina’s first substantive legal decision on eDiscovery begins with this pithy observation. Employment litigators often lament the virtual hellscape of discovering electronically stored information (“ESI”). But the era when paper was king is long dead, and the fight is now firmly in the cyber world of custodians, native formats, and keyword searches.

For those in federal court, at least rules and precedent exist to help guide them through the dark ESI forest (especially those that find themselves before Chief Judge Frank Whitney in the Western District of North Carolina). North Carolina state court practitioners haven’t been so lucky. That is until this week. On Aug. 6, 2019, the North Carolina Court of Appeals issued its first substantive decision on ESI in Crosmun v. Trustees of Fayetteville Technical Cmty. Coll. (No. COA18-1054). Judge Lucy Inman, who authored the opinion, put it well: “This appeal presents this Court with our first opportunity to address the contours of eDiscovery within the context of North Carolina common and statutory law regarding the attorney-client privilege and work-product doctrine.” The Court ultimately reversed the trial court’s order granting Plaintiffs’ forensic expert direct access to Defendants’ ESI, but the way the Court got there and its recommendations on remand are far more important than the holding itself.

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Court Decision Highlights Importance of ADA ‘Interactive Process’

By Zachary Anstett

In an order filed July 18, U.S. District Court Judge Louise Flanagan of the Eastern District of North Carolina refused to dismiss a lawsuit brought under the Americans with Disabilities Act for failure to make reasonable accommodations. Judge Flanagan’s decision in Murphy v. County of New Hanover illustrates how important it is for employers to engage in the “interactive process” under the ADA and to continue with that process even if the first attempt at accommodation is unsuccessful.


According to his lawsuit, Mr. Murphy was hired as a social worker in the foster care unit at the New Hanover County Department of Social Services in 2016, with the primary function of reunifying families. Mr. Murphy had Attention Deficit and Hyperactivity Disorder, which made it difficult for him to focus, concentrate, communicate, and work with others. Mr. Murphy alleged that he had no problem performing his “reunification” duties but that his ADHD made it difficult for him to complete his required paperwork unless he was in a setting without distractions.

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