Thomas Paschos and Assoc
December, 2006

“Season’s Greetings and a Happy New Year to Our Clients and Friends from Thomas Paschos & Associates, P.C.”

I.EMPLOYMENT LITIGATION ISSUES

Company Can Fire an Employee Who was Recently “Reinstated” by Court Order

In United Food and Commercial Workers, Local 1776 v. Excel Corp., 2006 WL 3456611 (3d Cir. Pa. December 1, 2006), Union brought Labor Management Relations Act (LMRA) suit seeking to enforce an arbitration award in favor of employee who had been terminated for suspected theft from employer. The material facts of this case are as follows: On October 31, 2002, Excel Corporation, suspended Jose and Sandra Diaz, pending an investigation into the charge that they had attempted to steal meat from Excel by use of a stolen receipt. On November 1, 2002, Excel discharged both Jose and Sandra for "attempting to steal Excel Company meat on the night of October 29th." When informed of his termination, Jose allegedly reacted violently by attacking an Excel security guard, breaking two of his ribs.

The employees' union, United Food and Commercial Workers, Local 1776 (the "Union"), grieved the terminations by letter dated November 4, 2002. Excel's Human Resources Manager responded to the grievance stating: [Jose and Sandra] were terminated for their attempted unauthorized removal of Excel meat on the night of October 29th.

The parties selected an arbitrator to hear the dispute. The arbitrator ruled that the Company did not establish just cause to support termination of Jose and Sandra Diaz for "attempting to steal Excel company meat on the night of October 29th." The arbitrator further ruled that, “The Grievants shall be reinstated to their positions with full seniority and benefits and they shall be made whole for lost wages.”

As to Excel's contention about the employees' post-termination conduct, the arbitrator stated: “The record contains several versions of the Grievants' conduct in the Human Resources office immediately following the notification that they were terminated. In this regard, the Company maintains that the profane, abusive, threatening and violent outbursts of the Grievants constitute independent grounds for termination. However, be that as it may, the Grievants' post-termination conduct is not considered herein as a basis for determining whether the Company had just cause to terminate Jose and Sandra Diaz for "attempting to steal Excel Company meat on the night of October 29th."

Sandra Diaz returned to work, but Jose Diaz was told in a letter that he was not to return because he had been fired a second time - this time for allegedly attacking an Excel security guard, breaking two of his ribs, when he was informed of his first termination. The letter said Diaz would receive back pay from the date of his first suspension through the date of his second firing.

The union filed suit, arguing that Excel was trying to evade the arbitration award by failing to reinstate Jose Diaz. The United States District Court for the Middle District of Pennsylvania ruled that the employer had not violated the arbitration award by paying terminated employee back wages, in accordance with award, and simultaneously terminating him a second time for assault that was independent of, and had followed, suspected theft. On appeal the Third Circuit Judge held that employer did not violate arbitration award with second termination, given arbitrator's having declined to consider assault, and other factors.



II. PROFESSIONAL LIABILITY ISSUES

Worker Can Bring Negligent/Misrepresentation Suit Against Lawyer of Employer Hired to Investigate Worker’s Claims of Harassment

In a split opinion, Spagnola v. Town of Morristown, 2006 WL 3533726 (D.N.J. December 07, 2006), Plaintiff, a municipal employee, brought suit against Michael Rich alleging Rich deliberately misled and misinformed her about her rights regarding complaints she made about the town business manager, Eric Maurer. Defendant Rich filed a motion to dismiss Counts Six, Seven and Eight. In Counts Six, Seven and Eight of her Amended Complaint, Plaintiff alleged (1) that the actions of Defendants constituted an unlawful conspiracy to deprive her, by reason of her gender, of her constitutionally protected rights, in violation of 42 U.S.C. § 1985(3) of the Civil Rights Act of 1871 (hereinafter “Section 1985”); (2) that Defendants neglected to prevent a Section 1985 conspiracy in violation of 42 U.S.C. § 1986 of the Civil Rights Act of 1871 (hereinafter “Section 1986”); and (3) that Defendant Rich is liable for negligent misrepresentation in violation of New Jersey common law.

At all times relevant to this action, Plaintiff reported to Maurer and Mayor DeLaney, and was considered an excellent employee, receiving superior feedback and job performance evaluations. Plaintiff contended that for a period of four years, she endured severe harassment at work by Maurer. The harassment took the form of repeated exposure to Maurer's offensive materials.

Plaintiff began to frequently complain to Maurer and Mayor DeLaney regarding Maurer's explicit materials. Eventually, Mayor DeLaney arranged a meeting for Plaintiff with Defendant Rich, where Plaintiff turned over the explicit materials she had found. Mayor DeLaney allegedly told Plaintiff she was not to speak to anyone besides Defendant Rich about her allegations against Defendant Maurer.

Plaintiff contended that Defendant Rich tried to intimidate Plaintiff and stated that “no real action” would be taken against Defendant Maurer. According to Plaintiff, Defendant Rich affirmatively misled her about her rights relating to harassment.

The Court dismissed Plaintiff’s claims under §1985 and §1986 on the grounds that Defendant Rich was not a state actor.

However, the Court held that the allegations in the Amended Complaint, if true, may establish the first element in a claim for negligent misrepresentation. The Court also found that Plaintiff may also satisfy the second element which requires a plaintiff to demonstrate justifiable reliance on the misrepresentation. Plaintiff alleged in the Amended Complaint that Defendant Rich's representation that the Town of Morristown had no duty to protect her caused Plaintiff to remain in her position and continue to be exposed to offensive materials. The third element requires Plaintiff to demonstrate that her reliance caused a loss or injury. Here, Plaintiff alleged that her repeated exposure to the offensive materials caused Plaintiff economic loss, emotional distress, psychological injury, pain and suffering, humiliation and damage to her reputation. Accordingly, the Court denied Defendant Rich's motion to dismiss Plaintiff's negligent misrepresentation claim.



Copies of the full text of any of the cases discussed in this Newsletter may be obtained by calling our office.  The articles contained in this Newsletter are for informational purposes only and do not constitute legal advice.



©Thomas Paschos & Associates, P.C. (2006) All Rights Reserved.