Cuyahoga Court Affirms Denial of Unemployment Compensation to Employee Who Was Fired for Excessive Absenteeism.

Last month, the Cuyahoga County Court of Appeals affirmed the denial of unemployment compensation to a phlebotomist who was fired in December 2004 after missing 10 days of work in 2003 and 10 days of work in 2004. Although the employee claimed that the employer was prohibited from firing him by federal and state statutes, he never returned (or produced) his FMLA certification forms to show that his unexcused absences were caused by his alleged migraine headaches and never produced a copy of the subpoena to show that he had been subpoenaed to testify in juvenile court (which was the justification he gave for his last unexcused absence). Therefore, he could not show that his absences were protected by the FMLA or state law. Because the employer followed its progressive disciplinary process in addressing the employee’s excessive absenteeism, he had been on warning that he could lose his job if his attendance did not improve or he failed to provide a legitimate reason (such as a doctor’s excuse or subpoena). Bemak v. Ohio Job & Family Servs., 2008-Ohio-906 (3/6/08).

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/8/2008/2008-ohio-906.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Trade Secrets Claim Reinstated But Not Franchisor’s Non-competition Claims Because Franchisee Was Real Party in Interest

Last month, the Lucas County Court of Appeals affirmed the dismissal of claims (for breach of noncompetition agreements and common law unlawful competition) brought by a special event photography franchisor against several former employees who formed a competing business. The trial court found that the party actually harmed by the breach of the non-competition agreement was the franchisee in exclusive territory, not the franchisor, and dismissed the lawsuit. IPI, Inc. v. Monaghan, 2008-Ohio-975 (3/7/08). However, the Court of Appeals found that the franchisor adequately pled a claim for theft of trade secrets and that it had an adequate interest in bringing that claim in its own name. Therefore, the appellate court reinstated the trade secrets claim.

By way of background, the plaintiff, “IPI, is a company that developed a plan for ‘event’ photography, e.g., Santa Claus programs, golfing events and youth sporting events, which involves not only the taking of the photographs at a special event, but also the production and sale of the photographs on site.” IPI entered into a franchise agreement with Visual Marketing giving it the exclusive right to the Ohio territory. In exchange, Visual Marketing paid IPI a $20,000 fee and a percentage of its profits. IPI employed the three defendants, until one of them (Aaron) went to work directly for Visual Marketing. While working with IPI, all three defendants allegedly signed non-compete agreements. When Aaron became employed by Visual Marketing, he likewise signed a non-compete agreement with Visual Marketing.

The three defendants allegedly formed a competing special event photography business in Ohio and Visual Marketing brought suit (which was mediated to a settlement). IPI then filed suit. However, the trial court found that IPI could not prove that it had a non-compete agreement with the second defendant and could not prove the third defendant had breached her agreement with IPI or was involved with the competing business. As a result, the trial court dismissed all claims against the second two defendants.

As for the first defendant (Aaron), the court found that, notwithstanding the franchise agreement and profit-sharing, the party actually harmed by the alleged breach of the non-competition agreement and theft of trade secrets was Visual Marketing, not IPI. As a result, it found that the lawsuit was not being prosecuted in the name of the real party in interest as required by Ohio Rule of Civil Procedure 17(A) and dismissed the lawsuit.

“The purpose of Civ.R. 17(A) is to allow a defendant to avail himself of evidence and defenses that he has against the real party in interest, and to secure the finality of the judgment so that he is protected against a second suit brought by the real party in interest on the same matter.” While an intended third-party beneficiary of a contract may be a real-party-in interest, “[i]t was Visual Marketing, not IPI, that directly benefited from this agreement; there is no evidence in the record of this cause to establish that the parties to that agreement entered into that contract with any intent to benefit IPI. Therefore, IPI is not a third-party beneficiary/real party in interest and lacks the right to bring suit against on the same matter, that is a non-compete agreement, that was the subject of the contract between and Visual Marketing.”

However, the appellate court agreed that IPI could be the real-party-in-interest for its trade secret claim. “In the present case, IPI alleged that it developed, inter alia, "confidential and specialized techniques for event photography, a business marketing plan for its franchisees, a training program, and proprietary and confidential software that it makes available to its franchise systems." IPI alleged that appellees/cross-appellants misappropriated these systems, techniques, etc., that is, its alleged trade secrets. If it is shown that these are truly trade secrets and that appellees/cross-appellants misappropriated the same, IPI would be directly injured by that misappropriation. Therefore, IPI is the real party in interest on this claim.”

Insomniacs may read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/6/2008/2008-ohio-975.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

EEOC Announces $505K Settlement for Sexual Harassment of Teenagers by Restaurant Supervisor.

Yesterday, the EEOC announced that a Colorado “McDonald’s restaurant franchise will pay $505,000 and provide significant remedial relief to settle a sexual harassment lawsuit” brought by the EEOC “on behalf of a class of young female employees, including teens.”

“The EEOC’s suit, Civil Action No. 06-cv-01871-MSK-CBS, was filed in U.S. District Court for the District of Colorado against JOBEC, Inc., a management company, and the interrelated corporations Colorado Hamburger Company, Inc. and Farmington Hamburger Company, Inc., who operate McDonald’s franchises in Durango and Cortez, Colo., and Farmington and Aztec, N.M. “ The Commission’s suit alleged that Tiawna Shenefield, now known as Tiawna Jacobson, Brandi Michal and a class of females, many of whom were 15 to 17 years old, were subjected to egregious sexual harassment in the workplace by their male supervisor. The harassment allegedly included the supervisor biting the breasts and grabbing the buttocks of the class members, making numerous sexual comments, as well as offers of favors in exchange for sex. Such alleged conduct violates Title VII of the Civil Rights Act of 1964.”

“Under the terms of the consent decree resolving the case, the defendants will pay the two named victims and their attorney, Lynne Sholler, of Durango a total of $450,000 for compensatory damages and attorney fees. An additional $55,000 will be distributed to two other class members represented by the EEOC. The decree also provides for significant non-monetary relief, including letters of apology to the victims; training on sex discrimination in the defendants’ Colorado and New Mexico facilities; posting notices of non-discrimination in all of the defendants’ workplaces; and an injunction prohibiting discrimination and retaliation.”

Insomniacs can read the EEOC’s full press release at http://www.eeoc.gov/press/4-7-08.html.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

EEOC Obtains $904K Settlement on Behalf of 10 Employees Fired in a RIF Who Alleged Age Discrimination and/or Retaliation.

Yesterday, the EEOC “announced the settlement of its age discrimination lawsuit against Lockheed Martin Global Telecommunications for $773,000 for a class of eight older employees” in addition to the severance pay already received by the eight employees. In addition, “through a separate consent decree filed last year to settle retaliation claims brought in the same lawsuit, “Lockheed Martin has paid $131,000 in damages to two former employees whose severance was withheld because they had pursued administrative complaints with the EEOC.”

"In its suit (05-cv-00287-RWT), filed in the U.S. District Court for the District of Maryland, Southern Division, the EEOC charged that the . . . employer violated the Age Discrimination in Employment Act (ADEA) when it discriminated against the employees, ages 65, 62, 61 (three), 53 and 47. The eight workers were fired during a reduction in force implemented in the COMSAT Mobile Communications Division in October 2000. The back pay remedies received by the claimants are in addition to severance pay already received.”

“In Fiscal Year 2007, the EEOC received 19,103 age discrimination charge filings, a 15% increase from the prior year and the biggest annual increase in five years. Allegations of age bias account for 23% of the agency’s private sector caseload.”

Insomniacs can read the EEOC’s full press release at http://www.eeoc.gov/press/4-7-08a.html.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Unanimous Supreme Court: OCRC Must Issue Subpoena Requested by Employer During Preliminary Investigation.

In late March, a unanimous Ohio Supreme Court ruled that Ohio Revised Code § 4112.04(B) requires the Ohio Civil Rights Commission to issue a subpoena requested by an employer during the OCRC’s preliminary investigation. In doing so, the Court invalidated OCRC Rule, Ohio Administrative Code 4112-3-13(B), for conflicting with the controlling statute. State ex rel. Am. Legion Post 25 v. Ohio Civ. Rights Comm., Slip Opinion No. 2008-Ohio-1261 (3/26/08).

The case arose because an American Legion Post was notified by the OCRC that a former employee had filed a Charge claiming to have been sexually harassed and then fired for complaining. The Post asserted that the Claimant had been fired after it received an anonymous letter alleging that the Claimant was a convicted felon. The Post requested the OCRC to issue a subpoena to the Claimant’s parole officer so that it could inspect her criminal and probation records to prove a non-discriminatory/retaliatory reason for firing her. The OCRC declined to issue a subpoena on the Post’s behalf, and instead, issued a subpoena on its own behalf and reviewed the records itself. The OCRC declined to permit the employer to review the subpoenaed records and issued a probable cause finding that the Post had probably committed an unlawful discriminatory practice. When conciliation failed, the OCRC instituted formal proceedings against the Post.

In the meantime, the Post initiated mandamus proceedings in court against the OCRC for refusing to issue the requested subpoena. The trial court granted the OCRC’s motion to dismiss. However, that decision was reversed on appeal. As mentioned, the Supreme Court affirmed the reversal on the grounds that the OCRC was required by statute to issue the requested subpoena.

Insomniacs may read the decision in full at http://www.supremecourtofohio.gov/rod/docs/pdf/0/2008/2008-Ohio-1261.pdf

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.