Thank you to everyone who has submitted posts during the past several weeks. Here are some of the latest opinions from the 4th Circuit and North Carolina appellate courts:
Weckesser v. Knight Enterprises S.E., LLC, No. 17-1247 (4th Cir. June 12, 2018) (unpublished): What’s in a name? When it’s a party’s name in an arbitration agreement, then it’s everything. Using South Carolina contract law, the 4th Circuit upheld the district court’s ruling that the parties never entered into an arbitration agreement since the arbitration agreement referred to defendant’s parent company. Since there is no arbitration agreement, plaintiff’s case and purported class action alleging improper classification (and owed overtime, back pay, and treble damages) must be heard in court.
Pender v. Bank of America Corp., No. 17-1485 (4th Cir. June 5, 2018) (unpublished): I don’t have a better summary than the court in this ERISA accounting action: BOA “advances a simple, if somewhat surprising, argument—that the Pension Plan’s investment strategy for the unlawfully transferred funds, which was developed and implemented by the Bank’s trained asset managers, performed far worse than Plaintiffs’ investment strategies, as reflected in their 401(k) account investment allocations. Because Plaintiffs’ investment allocations outperformed the Bank’s investment strategy—and the Pension Plan was responsible for making up any shortfall between the performances of the Bank’s investment strategy and Plaintiffs’ allocations—the Bank maintains that it did not profit from the transfers.”
Cannon v. Bald Head Island, No. 17-1847 (4th Cir. May 30, 2018): Are the legal contours of government employees’ rights under the First Amendment sufficiently clear? Not yet, says the 4th Circuit, as it reverses the district court’s denial of qualified immunity for two individual defendants in this case dealing with the termination of three Bald Head employees who contributed questionable texts to a group text-message chain (but the individuals aren’t out of the woods yet, as two other claims survive).
Gordon v. CIGNA Corp., No. 17-1188 (4th Cir. May 15, 2018): When the employer is the plan administrator, has responsibility for the day-to-day administration of the plan, and only gives the insurer information on the total number of employees in the plan and the premiums due, insurer is not a fiduciary under ERISA. Summary judgment upheld for CIGNA on claim for difference in the amount of life insurance coverage deceased employee paid for ($250,000) and the amount for which he had been approved ($100,000) (but the employer is not off the hook).
Bakery & Confectionary Union & Industry International Pension Fund v. Just Born II, Inc., No. 17-1369 (4th Cir. April 26, 2018): Labor and benefits attorneys rejoice; this one is (almost) all ERISA and NLRA! Employer cannot escape contributing to a severely underfunded multi-employer pension plan just because the employer has declared a good-faith impasse during negotiations on a new CBA and unilaterally implemented the terms of its last, best offer. The employer remains a “bargaining party” and must contribute to the pension plan under the rehabilitation plan in effect, even after the CBA has expired.
For all attorneys: the court also held that affirmative defenses sounding in fraud must be pled with specificity in accordance with Rule 9(b) of the Federal Rules of Civil Procedure.
Mnadozie v. Genesis Healthcare Corp., No. 17-1272 (4th Cir. April 17, 2018) (unpublished): Voodoo is a “big thing” for a new manager who allegedly told one plaintiff that Africans were going to make her sick by using voodoo, who kept a “voodoo catcher” outside her office, and who performed a ritual at her office door. Also, she made derogatory comments about Africans, including “how she didn’t like the Africans and wanted them all out of the building.” The court reversed summary judgment on one plaintiff’s § 1981 discrimination claim (and directed the lower court to determine if the other two plaintiffs should be allowed to amend their complaints) since “race” under § 1981 is broader than the modern understanding: § 1981 prohibits discrimination based on ancestry or ethnic characteristics as well.
McMillan v. Cumberland County Board of Education, No. 16-2249 (4th Cir. April 3, 2018) (unpublished): Tenured teacher resigns in lieu of termination, then sues (§ 1983 14th Amendment due process, negligence, negligent and fraudulent misrepresentation, and tortious interference with contract). Unfortunately for her, 14th due process is not an onerous standard to meet and her own testimony shows Cumberland County provided her due process. Her state law claims fail because she couldn’t show the requisite level of malice or improper purpose or that she justifiably relied on defendants’ statements. 4th Circuit affirms the district court’s summary judgment ruling (and denial to amend the complaint a third time).
Smith v. Loudoun County Public Schools, No. 16-2435 (4th Cir. Mar. 1, 2018) (unpublished): Trial court properly granted summary judgment on Smith’s ADA retaliatory-termination and wrongful-discharge claims. Smith’s remaining claim of failure to provide reasonable accommodations results in a $310 jury verdict. (The legal analysis in this opinion is sparse—one paragraph—but if you’re looking for fact patterns, the recitation of facts is several pages.)
Tully v. Wilmington, No. 348A16 (N.C. Mar. 2, 2018): NC Supreme Court upheld the court of appeals’ decision, which was previously discussed on this blog.
Swauger v. University of North Carolina at Charlotte, No. COA17-1303 (N.C. Ct. App. May 15, 2018): In what is becoming a common occurrence, yet another career state employee failed to follow the proper procedure in appealing an ALJ decision. Superior courts do not have subject matter jurisdiction of employment-related ALJ decisions; all such appeals must be filed with the court of appeals.
Lambert v. Sylva, No. COA17-84 (N.C. Ct. App. May 1, 2018): Police chief allegedly ridicules and fires plaintiff, a police officer, for running for sheriff as a Republican. Plaintiff appealed his termination to the town manager, who affirmed the termination and told plaintiff the decision was final. In his complaint, plaintiff raised claims under § 1983 based upon Constitutional rights to free speech and association. At the close of plaintiff’s evidence at a jury trial, judge issued directed verdict on all claims and specifically stated the § 1983 claims were dismissed since the defendant did not have a custom or policy that violated the law.[i] In reversing the trial court, the court of appeals stated that plaintiff’s § 1983 claim could succeed without identifying a policy since the claim was based on an allegedly unconstitutional firing by an official with final policy-making authority.
Peterson v. Caswell Developmental Ctr., No. COA17-1139 (N.C. Ct. App. April 3, 2018): Can a career state employee be suspended without pay for five days when she has been late to work twice in a roughly two-month period? Not if she has “eight years of positive employment history,” the state can’t show actual harm (as opposed to theoretical harm), and the defendant’s own policies don’t support the suspension.
Antico v. N.C. Dept. of Public Safety, No. COA17-1085 (N.C. Ct. App. April 3, 2018) (unpublished): Corrections officer with three prior disciplinary actions refuses a “reasonable, lawful” command to remain at the prison after his shift. The court of appeals has no problem upholding officer’s termination.
[i] The trial judge also dismissed based on qualified immunity, which was never pled or raised, and failure to join necessary parties, who were never identified. The court of appeals reversed these rulings as well.