Thomas Paschos and Assoc
May, 2006

I. Employment Law Issues.

Employers Must Have Age-Neutral Reasons for Deciding to Lay Off Certain Employees During a Reduction in Force.

In Tomasso v. The Boeing Co., 445 F.3d 702 (04/19/06), the U.S. Third Circuit Court of Appeals held that an employer must have age-neutral reasons for deciding to lay off certain employees during a reduction in force (RIF), and that the employee can challenge the reasons as pretextual.

In this case, the trial level granted the Motion for Summary Judgment on behalf of The Boeing Co. The Third Circuit Court of Appeals reversed the trial court and concluded that Tomasso produced evidence efficient to create a genuine issue of material fact as to whether Boeing’s preferred reasons were pretextual. The court stated that Tomasso had shown sufficient implausibilities and inconsistencies in Boeing’s primary rationales to avoid summary judgment. Second, a rationale fact finder could dismiss the secondary reasons as pretextual, not because it played no role in Tomasso’s layoff, but because they could not explain the lay off sufficiently.

In this case, Tomasso began working for Boeing in 1962 when he was 18 year old. In October 2001, after having working at Boeing for nearly 40 years, Tomasso received a 60-day notice of possible layoff. Afterwards, although he had been a salaried employee, he was offered only an hourly position in a different department. He refused to accept this position. Tomasso was thus laid off in January 2002 at age 59, following 22 years in the Supplier Quality Department. He was able to retire and collect a pension. Tomasso’s lay off resulted from Boeing’s decision in 2001 to reduce operating costs and overhead by 20% at the site where Tomasso worked. Boeing decided which employees to layoff by having managers rate them on evaluation forms. Tomasso received the lowest score of the employers in the Supplier Quality Department. He was rated in such things as organizational skills, problem solving, quantity of work and quantity of time, leadership and attitude.

The court further stated that an employer must have age-neutral reasons for deciding to lay off certain employees, and that the employee can challenge these reasons as pretextual. In order to create a genuine issue of material fact as to whether the proffered reasons are pretextual, Tomasso must “point to some evidence, direct or circumstantial, from which a factfinder could reasonably either (1) disbelieve the employer’s articulated legitimate reasons; or (2) believe that an invidious discriminatory reason was more likely than not a motivating or determinative cause of the employer’s action.” The court went on to say that Tomasso must do more than show that Boeing was “wrong or mistaken” in deciding to lay him off. He must “present evidence contradicting the core facts put forward by the employer as the legitimate reason for its decision”. In other words, Tomasso must “demonstrate such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer’s proffered legitimate reasons for its action that a reasonable factfinder could rationally find them ‘unworthy of credence,’ and hence infer ‘that the employer did not act for [the asserted] non-discriminatory reasons.’” (Citations omitted)

The court ruled that Tomasso was able to raise sufficient genuine issues of fact by disputing Boeing’s assertions that Tomasso was allegedly not interested in the new subcontractor evaluation system and that he was allegedly unwilling to share technical information with his co-workers and to train his co-workers.

This case points to the fact that employers must have age-neutral reasons for deciding to lay off certain workers, especially during a RIF.

II.Insurance Law Issues

A New Jersey Supreme Court Has Lessened the Burden of Proof for Insurance Companies to Prove Insurance Fraud.

In Liberty Mutual Insurance Co. v. Land, 186 N.J. 163, 892 A.2d 1240 (03/14/06), the New Jersey Supreme Court held that the standard of proof that an insurance company must utilize in order to prove fraud is a “preponderance of the evidence” standard. This reversed previous rulings in the Appellate Division, which indicated that the standard was a “clear and convincing evidence” standard, which is a higher standard of proof than proof by preponderance of the evidence.

In this case, the defendant, Land, owned a small cabin that she and her husband used as a vacation home. On the morning of December 12, 2000, a tree located on the property of the Land’s next door neighbor fell onto the roof of the Lands’ cabin. After the next door neighbor informed Mr. Land of the accident, Land telephoned his nephew, a licensed public adjuster in the State of New Jersey, to assess the damages to the structure. In addition, the next door neighbor informed the insurance company of the damage, and the insurance company sent an inspector to inspect the damage later that day. During the inspection, the insurance company representative observed that the tree, “significantly damaged” a portion of the Lands’ roof.

Shortly hereafter, the next door neighbor informed the insurance company that she saw the public adjuster and two other men on the top of the cabin, “doing some additional damage”. The next door neighbor video taped the public adjuster and his associates working on the cabin’s roof. The video tape depicted the three men taking a portion of the falling tree, estimated to be about 600 lbs., and slamming it at least 10 times against the roof, creating further damage to the roof and shattering a skylight.

Based on the above evidence, suggesting fraudulent activity on the part of the defendants, including the video taping noted above, Liberty Mutual Insurance Co. filed suit against the defendants, asserting Insurance Fraud Prevention Act (IFPA) violations. (N.J.S.A. 17:33A-1 to 30)

In holding that the preponderance of evidence standard applies as the proper burden of proof under the IFPA, the court looked to the Legislature’s intent and purpose in promulgating the Act. The court stated that the Legislature’s stated purpose in enacting IFPA was “to confront aggressively the problem of insurance fraud in New Jersey by facilitating the detection of insurance fraud, eliminating the occurrence of such fraud through the development of fraud prevention programs, requiring the restitution of fraudulently obtained insurance benefits, and reducing the number of premium dollars used to pay fraudulent claims. (N.J.S.A. 17:33A-2)

III.General Liability Issues

The Pennsylvania Superior Court Reverses Contempt Citation Against Defense Attorney for Speaking to His Expert Witness During a Break, During His Direct Examination.

The Pennsylvania Superior Court, in the case of Yoskowitz v. Yazdanfar, MD, 2006 WL 1412905 (Pa. Super. 05/24/06), reversed the contempt citation against the defense lawyer who spoke to his expert witness during a break, in the course of the expert’s direct examination in a medical malpractice trial.

In this case, the defense attorney was found in contempt and fined $5,000, which was later reduced by the trial court to $1,000. However, the trial court did not vacate the finding of contempt. In this case, the Court observed the defense attorney having private conversations with the defense expert during a break in the expert’s direct examination. Initially, defense counsel indicated that he completed his direct examination of the witness, and the Court found it a good time to break. Shortly thereafter, the defense attorney’s technical staff arrived to assist him. Defense counsel had indicated that, due to the arrival of the technical staff, he would have liked to continue the examination of the defense expert after the break, using the video. During the break that ensued, the Court observed the defense attorney speaking privately with the defense expert in the back of the courtroom. The Court was disturbed by this behavior and questioned counsel on the record. When questioned, defense counsel responded that he thought it perfectly appropriate to have private conversations with his witness, regardless of whether it was during direct examination. The defense attorney defended his actions, telling the Court that he was merely informing the defense expert that he would not use a video.

The trial court in issuing the contempt citation against the defense attorney stated that, “it would be difficult for the Court to view the evidence which followed the ex parte conversation as anything but suspect”. It also relied in the federal case of Hall v. Clifton Precision, 150 F.R.D. 525, 528 (E.D. Pa. 1993), which stands for the proposition that during a deposition, a lawyer may not consult with a witness.

The Pennsylvania Superior Court reversed the trial court’s contempt citation against the defense attorney, and held that Hall was not controlling precedent in this case. It further stated that this case involves a defense attorney talking with his own expert witness during a break, and not during questioning, in defense counsel’s direct examination of the expert witness at trial. The Court went on to say that the record reflected a lack of any evidence demonstrating that the conduct of the defense attorney was intended to obstruct the proceedings. Further, the record failed to reflect a significant disruption of the proceedings.

The Court further noted that the Pennsylvania Rules of Evidence do not deal with the right of a witness to consult with counsel for the witness during the witness’ examination. However, they do point out that the Pennsylvania Trial Guide provides some guidance as to the customary practice in Pennsylvania regarding conduct during direct examination. The Guide states, in relevant part, “More as a matter of custom than as a matter of recognized legal procedure, courts frequently instruct the witness not to discuss his testimony if he is in the course of cross-examination when the recess occurs but refuse to impose the limitation of the witness if he is in the course of direct examination.”

In reaching its conclusion to reverse the contempt citation, the Pennsylvania Superior Court noted that, the conduct described in this case, did not demonstrate that the conduct of the defense attorney was intended to obstruct the proceedings.

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.