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Technicians for Sears tried to find a loophole in order to get their overtime wages

Some service technicians whose job it was to repair appliances in customers’ homes brought a class action lawsuit against their employer, Sears, alleging it failed to pay overtime compensation in violation of the Fair Labor Standards Act (FLSA) and the Texas Minimum Wage Act (TMWA).  Sears moved for summary judgment.  Prior to 2001, technicians reported to work each day at a centralized location to pick up the company van and perform various other activities in preparation for the day’s service calls, such as planning the service route and loading parts into the van. In 2001, Sears implemented the voluntary Home Dispatch Program (HDP). Under the HDP, technicians did not report to a centralized location to start their work day; instead they report directly to the first customer in the morning and return home from the last customer at the end of the day, thus the technicians kept the company van at their homes overnight.  Chambers v. Sears, Roebuck & Co., CIV.A.H-08-3676, 2010 WL 6785485 (S.D. Tex. Apr. 30, 2010).

Sears paid for all of the commuting expenses related to the van, including gas, maintenance, and insurance.  However, technicians participating in the HDP were not paid for the first thirty-five minutes of their morning and evening commutes, that is, they were not paid for the first thirty-five minutes of the travel to the location of the first customer of the day, nor for the first thirty-five minutes of the trip to the technician’s home from the last service call of the day.  The technicians were compensated for time spent commuting from the first and last service calls in excess of thirty-five minutes, and are compensated for all trips to service calls in between the first and last calls of the day.  Id. Thus, assuming that a technician’s travel to the first assignment of the day did not exceed thirty-five minutes, the technician’s compensable work day begins when he arrived at the first customer’s location.  Similarly, assuming that the commute from the last stop of the day did not exceed thirty-five minutes, the technicians’ compensable work day ended when he finished his activities at the last customer’s location.

The technicians that brought this suit participated in the HDP, and claimed that their morning and evening commutes and other “off-the-clock activities” should have been paid for under the Texas Minimum Wage Act (TMWA), which requires that employers pay employees the federal minimum wage.  Id. The technicians’ also couple this claim with a prayer for relief under the Texas Payday Law for payment of past wages due.  However, the TMWA expressly provides that its provisions “do not apply to a person covered by the Fair Labor Standards Act of 1938.”  Id. Consequently, the technicians argued that if the court finds that the disputed activities in this case “are not covered by the FLSA,” then the TMWA must apply.

Subsequently, the technicians’ contention was rejected by the district court.  It found that there was no dispute that their employment with Sears was covered by the FLSA. The court held that if the technicians’ interpretation of the TMWA was correct, an absurd result would occur- “A plaintiff would automatically be entitled to compensation under the TMWA for any activity that is not compensable under the FLSA.”  Id. Thus, the TMWA did not apply to the technicians’ employment with Sears, and Sears was entitled to summary judgment.

Male flight attended with psoriasis was terminated after failing to appear to work

A male flight attendant brought an action against an airline claiming that his termination violated Title VII of the Civil Rights Act and the Americans with Disabilities Act (ADA).  A district court dismissed the suit for lack of subject matter jurisdiction.  On appeal, the Court of Appeals reversed and remanded the decision.  On remand, the district court, accepted a jury verdict in favor of the employer (Southwest Airlines) on the Title VII claim and granted judgment as a matter of law in favor of employer on the ADA claim. Consequently, the employee appealed to the Fifth Circuit again.  The employee in question, Edward Carmona, was diagnosed with psoriasis when he was twelve or thirteen years old.  Carmona v. Sw. Airlines Co., 604 F.3d 848, 850 (5th Cir. 2010).  Psoriasis is a skin disease characterized by thickened patches of inflamed, red skin, often covered by silvery scales.  Although individual attacks of psoriasis can be completely relieved, the disease itself is not usually curable, and it tends to recur in attacks of varying severity.  Carmona began working as a flight attendant at Southwest Airlines in 1991.

In 1998, Carmona was diagnosed with psoriatic arthritis, which is a condition that develops in about thirty-five percent of people who have psoriasis.  During flare-ups of his psoriatic arthritis, Carmona could not walk or move around without great pain.  Id. at 852.  Carmona’s psoriatic arthritis flared up three or four times every month, and each flare-up lasted for three or four days.  He filed for intermittent Family and Medical Leave Act (FMLA) leave so that he could be excused from work during these flare-ups.  Southwest’s third-party FMLA administrator, Broadspire Administrator Services, Inc. granted this leave in 1998.  Broadspire renewed the leave periodically until April 2005, when it found that Carmona had not worked enough hours to be eligible for renewal.  Id. at 853.

On April 30, 2005, Carmona’s FMLA leave expired. He was unable to renew it, because, according to Southwest and Broadspire, he had not worked enough hours that year to be eligible to renew it.  Accordingly, after May 1, 2005, he was no longer able to excuse absences caused by his psoriatic arthritis with FMLA leave. Thus, Southwest sent Carmona three letters of counsel on April 7, April 26, and May 4, 2005.  Id. In early May, a flare-up of his psoriatic arthritis caused him to miss several days of work.  These absences were not excused, because Carmona had been unable to renew his FMLA leave and had already used his doctor’s note for the second quarter of 2005 in April. On May 10, 2005, Southwest sent Carmona a written warning.

Then on June 21, 2005, Carmona sprained his thumb at home. He did not report to work the next day as scheduled, but went to the hospital instead to have his thumb examined. The hospital released him around midnight of June 23.  However, he did not return to work until June 27, because of the swelling in his hand.  At trial, it was disputed whether or not this absence was in accordance with the hospital’s instructions.  Carmona testified that he faxed two doctors’ notes to Southwest, one of which said that he should return to work the morning of June 23, and the other of which said that he would need to stay home for three or four days.  Southwest contended that it had only received the note saying he could return to work the morning of June 23.  Id. at 854.

On June 23, 2005, Southwest sent Carmona his final warning. It issued him a termination level notice on June 27.  Under the agreement between the flight attendants’ union and Southwest, a flight attendant must be terminated within seven days of the termination notice.  Southwest’s In-Flight Base Manager for Houston, requested an extension of this deadline, because he was unable to find a time within seven days of June 26 when he, Carmona, and a representative from Carmona’s union could meet to hold the fact-finding meeting to which Carmona was entitled.  At trial, Carmona testified that his union representative told him that he had to grant Southwest the extension or it would terminate him immediately. He decided to grant the extension.

After his termination, Carmona worked as a customer service agent for Jet Blue airlines on a part-time basis, which did not exceed twelve hours per week.  This job required him to stand behind a desk and check in passengers, meet flights on the jet way, and check baggage. After nine months, he left Jet Blue and began working at Dillard’s. This job required him to sit behind a desk all day, which aggravated his condition. However, Carmona admitted at trial that he did not miss work at either Jet Blue or Dillard’s as a result of his psoriatic arthritis.

Consequently, the Fifth Circuit reversed the portion of the district court’s order granting Southwest’s motion for judgment as a matter of law, vacated the portion of the district court’s order denying Carmona’s motion for reinstatement, and remanded the case with instructions that judgment be entered for Carmona in accordance with the jury’s verdict and that Carmona’s motion for reinstatement be reconsidered in light of this new decision.

Employee sued his employer alleging that it breached his employment agreement

On or about May 26, 2008, Michael Houlihan accepted Capital Airways’ offer of employment to assume a position as its Director of Maintenance.  In connection with its offer, Christopher Credno, Capital Airways’ Chief Operating Officer, sent Houlihan a letter denoting the key terms of his employment with Capital Airways.  Specifically, by way of the offer letter, Houlihan was advised that: “(1) his annual compensation would be $93,000, which would be paid in equal semi-monthly installments in accordance with Capital Airways’ standard payroll schedule; (2) Capital Airways would advance relocation funds to him once his relocation became necessary; (3) he was eligible to participate in Capital Airways’ employee benefits‘ programs; (4) he was entitled to 10 days of annual paid time off (PTO) during his first two years of service and that his PTO would increase as his years of service increased; (5) his offer of employment was contingent on his submission of satisfactory proof of his eligibility to work in the United States as well as on the results of a pre-employment background check; and (6) he maintained an at-will employment status subject to the express conditions contained in the letter.”  Houlihan v. Capital Airways, LLC, CIVA H-09-CV-0883, 2010 WL 1427275 (S.D. Tex. Apr. 8, 2010).

With respect to his at-will employment status, the letter expressly stated:  “Except as provided below, your employment with the Company is at-will, meaning that you or the Company may terminate the employment relationship at any time and for any reason not prohibited by law, with or without notice. Notwithstanding the foregoing, we agree that your employment will continue for a period of not less than two (2) years for so long as: (i) you faithfully, effectively and diligently perform your duties in accordance with Company policies and applicable law, and as directed by the Company’s management and (ii) the Company operates aircraft and has a regulatory need for a Director of Maintenance.”  Id. Houlihan was required to sign and date the letter signifying his acceptance of Capital Airways’ terms of employment.

Houlihan testified that beginning June 1, 2008, and continuing thereafter until December 5, 2008, he faithfully, effectively and diligently performed his duties as Director of Maintenance in accordance with Capital Airways’ policies and applicable law. Nonetheless, he argued that on December 5, 2008, Capital Airways notified him that he was being “layed off” for economic reasons, effective that date.  Id. Consequently, on or about February 3, 2009, the plaintiff instituted an action against Capital Airways alleging that it breached its employment agreement when it terminated him without cause.  Capital Airways subsequently moved for summary judgment.

Capital Airways moved to strike certain portions of Houlihan’s affidavit submitted in response to its motion for summary judgment on the grounds that the referenced portions contain inadmissible expert testimony and legal conclusions.  However, the court denied this motion.  Furthermore, the court denied Capital Airways’ motion for summary judgment as it found that there were issues of fact that needed to be determined by a fact finder.

A terminated employee could not prove retaliation in her Title VII claim

A former Texas Alcoholic Beverage Commission (TABC) employee, an African-American legal secretary who was terminated for allegedly poor job performance and behavioral issues, sued TABC under Title VII of the Civil Rights Act for race discrimination, race harassment/hostile work environment, and retaliation.  A district court granted summary judgment in favor of TABC, and thus the employee appealed.  Pinkie Lyles was hired by the TABC on May 1, 2007, to perform work as the legal secretary for its Houston office.  Almost immediately, Lyles began to have problems with one of her supervising attorneys, Ramona Perry, also an African-American female.

According to Lyles, Perry subjected her to “unrelenting verbal and non-verbal abuse through direct and indirect comments and criticisms; confrontational and threatening beratings; and open ridicule in front of fellow employees.”  The alleged harassment came to a head in September. Lyles describes the encounter as follows:  “On September 10, 2007, Lyles attended a meeting and decided to express her dissatisfaction with the way Perry was treating her.  Perry with aggression verbally attacked Lyles and she became nervous, afraid and tearful and could not recount all that she wanted to say.  Perry began yelling, humiliating and belittling Lyles and stated ‘I will not work with her…. I do not want you here,’ and expressed that she had told this to others whom Lyles also believed to be management.  The demeanor of Perry at that time was such that it frightened Lyles and she feared a possible physical attack.”

Following the September 10 incident, Lyles filed a verbal and written complaint against Perry with TABC’s Office of Professional Responsibility.  Lyles’s complaint discussed Perry’s “non-professional” and abusive conduct-but noticeably, the complaint did not contain any explicit or implicit allegation that Perry’s hostile and harassing conduct was race-based.  Then on September 13, 2007, TABC terminated Lyles for allegedly poor job performance and behavioral issues.  On October 4, 2007, Lyles filed a charge of “race” and “color” discrimination against TABC with the Texas Workforce Commission Civil Rights Division.

On October 10, 2007, Lyles filed a similar charge with the Equal Employment Opportunity Commission (EEOC).  After exhausting her administrative remedies, Lyles filed the instant action, alleging race discrimination against TABC on May 23, 2008.  Lyles accused TABC of retaliating against her for lodging a complaint with its internal Office of Professional Responsibility (OPR).  However, to establish a prima facie retaliation claim, Lyles must prove that: “(1) she engaged in an activity that Title VII protects; (2) TABC carried out an adverse employment action; and (3) a causal nexus existed between her protected activity and TABC’s adverse action.”  Id.

Consequently, on appeal, the Fifth Circuit found that the district court did not err in its judgment as Lyles never established a prima facie case for her retaliation claim since she never engaged in an activity that Title VII protects.  Lyles’s complaint before the OPR, however, did not oppose any unlawful employment practice pursuant to Title VII because her complaint did not contain any explicit or implicit allegation that Perry’s hostile and harassing conduct was race-based. Since Lyles’ complaint did not oppose or protest racial discrimination or any other unlawful practice under Title VII, she did not, prior to her termination, engage in a protected activity.

District Court finds that former employee could amend his cmplaint in his discrimination and retaliation case

A former employee brought an action against his former employer, alleging breach of contract and violations of the Age Discrimination in Employment Act (ADEA), Texas Commission on Human Rights Act (TCHRA) and Americans with Disabilities Act (ADA).  The employer filed a motion to dismiss.   OmniGuide employed Charles Marquis as a commissioned salesman.  It terminated his employment two years after he was hired.  Marquis was in his early 40′s when he was hired, and was in his mid-40′s when he was terminated.  Marquis v. Omniguide, Inc., 714 F. Supp. 2d 640, 642 (N.D. Tex. 2010).  Marquis alleged that OmniGuide discharged him due to discrimination based on his age and “night blindness” disability.  He stated that he is owed unpaid commissions and that OmniGuide made two defamatory statements about him that constituted libel and slander.  Marquis also testified that OmniGuide retaliated against him by failing to pay him the commissions and by making defamatory statements.

OmniGuide moved under Rule 12(b)(1) to dismiss Marquis’ claims for discrimination and retaliation arising under the TCHRA, asserting that the court lacks subject matter jurisdiction because Marquis failed to exhaust administrative remedies with the Texas Workforce Commission (TWC) before filing suit.  Id. at 643.  OmniGuide maintains that Marquis failed to file his notice of discrimination with the TWC within 180 days of his termination, and to seek and obtain a right-to-sue letter from the TWC.

The court found that Marquis had adequately pleaded a plausible claim for disability discrimination.  He alleged that he suffered from “severe night blindness”; his ability to see after dark or in dim light is greatly impaired; this condition affects the major life functions of exercising, walking, and seeing; and he is unable to drive in the late afternoon or at night.  Id. Finally, he claimed that OmniGuide began engaging in discriminatory behavior shortly after he informed his supervisor of the driving restrictions necessitated by his vision impairment.

Marquis requested leave to amend if the court determines that any portion of his complaint is inadequate. The court previously held that, in view of the consequences of dismissal on the complaint alone, and the pull to decide cases on the merits rather than on the sufficiency of pleadings, district courts often afford plaintiffs at least one opportunity to cure pleading deficiencies before dismissing a case, unless it is clear that the defects are incurable or the plaintiffs advise the court that they are unwilling or unable to amend in a manner that will avoid dismissal.  In this case, it is not clear that all of the defects in Marquis’ complaint are incurable. Thus, the court allowed Marquis to file an amended complaint.  Consequently, the district court granted in part and denied in part OmniGuide’s motion to dismiss.  Thus, Marquis could file an amended complaint within 30 days to keep his claim alive.