Rhodes v. Comcast

Case: Rhodes v. Comcast Cable Communications Management, LLC, No. GLR-14-1824 (District Court of Maryland, August 17, 2016)

Issues: Title VII, Hostile Work Environment, Retaliation

Court Holding: The Court denies defendant’s motion for summary judgment on plaintiff’s Title VII claims.

Employment Counsel: A motion for summary judgment on Title VII hostile work environment claim will be denied if a plaintiff can provide evidence of discriminatory conduct that is sufficiently severe, pervasive or of such a humiliating nature as to interfere with an employee’s work performance. In regards to a retaliation claim, temporal proximity between employee’s protected activity and employer’s negative action gives rise to inference of prima facie case of discrimination.

Case Summary:

This summary focuses on the Title VII claims discussed in this case. From May 2007 through August 2012, plaintiff, Rylinda Rhodes worked as a dispatch representative for Comcast. Throughout her employment at Comcast, Rhodes described experiencing extreme sexualization in her work environment and specific sexually hostile actions directed at her.  Rhodes’ male coworkers used profane and vulgar language, described sexual acts and body parts, and took pictures and manipulated images of female breasts.  Despite Rhodes’ repeated complaints to her supervisor, her coworkers’ behavior persisted. Around August 2011, one of her coworkers grabbed her breasts and later, the same coworker lewdly referenced “missing” them. In May 2012, Rhodes informed a Comcast supervisor she could not return to work due to her coworkers’ vulgarity. Although Comcast said it would investigate her complaints and offered her a position at a different location, it did not offer to reimburse relocation expenses and Rhodes declined the offer. She refused to return to her original employment location and was eventually terminated. She subsequently filed Title VII discrimination claims against the company and Comcast moved for summary judgment.

Title VII prohibits discrimination based on sex and in retaliation for opposing such discriminatory practices. In order to substantiate a hostile work environment claim, Rhodes must show that “the offending conduct (1) was unwelcome, (2) based on her sex, (3) was sufficiently severe or pervasive to alter the conditions of her employment and create an abusive work environment, and (4) was imputable to her employer.”  A workplace is judged as objectively hostile “from the perspective of a reasonable person in the plaintiff’s position” who assesses the circumstances by considering the following factors: the frequency and severity of the conduct, the extent to which it reasonably interferes with the employee’s work, and whether the conduct goes beyond a “mere offensive utterance” and is physically threatening or humiliating.  Conduct can include coworker’s discussions about sexual practices even if such discussions are not directed at the plaintiff.  

In this matter, Comcast argued and presented evidence that it was unaware of the harassment but, the Court pointed out that the evidence presented by Rhodes could establish a hostile work environment. Due to the contradictory evidence presented by both parties, the Court denies Comcast’s motion for summary judgment on this matter.

To establish a Title VII retaliation claim, a plaintiff must demonstrate “(1) that she engaged in a protected activity, (2) that the employer took an adverse action against her, and (3) that a causal relationship existed between her protected activity and the employer’s adverse action.”  The plaintiff must present a prima facie case of discrimination by a preponderance of the evidence.”

In this case, since “temporal proximity between the adverse employment action and the employer’s knowledge of the protected activity ‘gives rise to a sufficient inference of causation to satisfy the prima facie requirement,’” the Court concluded that there was temporal proximity between the time of Rhodes’ complaints and Comcast’s failure to relocate her into a different position. The court held that this court create an inference of causation.  Since Rhodes satisfied the prima facie requirement, the burden shifted to Comcast to provide a “legitimate, nondiscriminatory justification” for its decision to terminate Rhodes. The Court held that based on the evidence presented, Comcast had not yet overcome this burden and denied it’s motion to dismiss the Title VII retaliation claim.

For additional information about this case or other employment law matters, please contact Merritt Green at mgreen@gcpc.com or (703)556-6505.  Mr. Green leads General Counsel, P.C.’s Employment Law Practice and has been representing employers (and occasionally employees) for over 18 years.

 

March 2, 2017 0

Hair Club for Men v. Ehson

Case: Hair Club for Men, LLC v. Ehson, No. 1:16-cv-236 (E.D. Va, District Court for Eastern VA, May 6, 2016)

Issues: Preliminary Injunction for Breach of Contract, Violation of Non-Compete & Non-Solicitation Clauses, Misappropriation of Trade Secrets and Confidential Information, Wrongful Interference with Contract, Tortious Interference with Contractual Relations, and Unjust Enrichment.  

Court Holding: The Court denied plaintiff’s request for an injunction to prevent defendants’ from engaging in hair replacement services because it found that the plaintiff is unlikely to succeed on the merits of its claims against the defendant.  

Case Summary: From 2011 to 2014, Ehson (defendant) was employed by Hair Club for Men (plaintiff). At the outset of her employment, she signed a non-compete and confidentiality agreement. In 2014, Ehson opened her own spa that treated individuals for hair loss. Plaintiff claimed breach of contract and sought injunctive relief.

Legal Standard: In order to obtain an injunction, a plaintiff must establish that “[1] he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest.” Since the Court denied the injunction on the grounds that Plaintiff would unlikely prevail on the merits of its claim and is unlikely to demonstrate irreparable harm. The court declined to address the third and fourth factors.   

  1. Likelihood of Success of Claim: The Plaintiffs presented the following five claims against Ehson:

(1) Breach of Contract:

(a) Non-compete: Defendant claimed that the non-compete was overly restrictive.  In order for a non-compete to be enforceable, the “employer must show that the “restraint [1] is no greater than necessary to protect a legitimate business interest, [2] is not unduly harsh or oppressive in curtailing an employee’s ability to earn a livelihood, and [3] is reasonable in light of sound public policy.”  Since the disputed contract prevented Ehson from “engag[ing] in the business of hair replacement, on [her] own account or becom[ing] interest[ed] in such business…in any relation or capacity whatsoever,” the Court refrained from enforcing the non-compete because several aspects of the clause, including the definition of “business” and types of future positions Ehson was allowed to hold, were overly broad and vague.

(b) Non-solicitation clause: The court held that Plaintiff’s non-solicitation clause was also overbroad. Some Virginia courts have upheld non-solicitation contracts that limit the restriction to those “clients who were contacted, solicited, or served by [the employee] while he was employed by [the employer],” but this Court held that the provision was overly broad because it required Ehson to “know all of the customers that have been invoiced by Hair Club, at any Hair Club location, in the two years prior to her departure.”

(2) Misappropriation of Trade Secrets & Confidential Information: To establish trade secret misappropriation, a plaintiff must prove both that a trade secret (1) exists and (2) that the defendant misappropriated it. To constitute a trade secret, the following factors must be met: “(1) independent economic value; (2) not known or readily ascertainable by proper means; and (3) subject to reasonable efforts to maintain secrecy.”  Plaintiff’s allege that the following were protected trade secrets:

(a) Pricing Information: A price list can be a trade secret when it is “qualitatively different from a standard price list” and is “not even made available to customers,” but Plaintiff’s did not make the argument that its price list fell under this description.

(b) Marketing Information: The claim was deemed unlikely to succeed because Plaintiff’s did not provide information on how it endeavored to keep its marketing strategies secret or how it believed Ehson misappropriated its marketing strategies.

(c) Client Information:  Ehson claimed that since she obtained the client’s contact information “directly from the clients themselves,” she did not misappropriate the client list.  The Court found Ehson’s claim persuasive and held that this constituted an “independent development of a contact list.”   

(d) Technique: Plaintiff argued that its hair replacement techniques were unique. In response, Ehson argued that Plaintiff’s techniques were found on outlets like YouTube. The Court did not accept the Plaintiff’s argument.  

(3) Wrongful Interference with Contract & Prospective Business Advantage: In order to prevail,  the plaintiff most demonstrate: “(1) the existence of a business relationship or expectancy, with a probability of future economic benefit to plaintiff (2) defendant’s knowledge of the relationship… (3) a reasonable certainty that absent defendant’s intentional misconduct, plaintiff would have continued in the relationship… and (4) damage[s].”  The Court held that the Plaintiff had may be able to prevail on this claim. The Court reasoned that a central aspect to Plaintiff’s business is building and maintaining its client base. The Court further reasoned that it is “probable that Hair Club’s clients would have continued to patronize Hair Club for maintenance services and thus continued to provide economic benefit.”

(4) Tortious Interference with Contractual Relations:  In order to esblish that there was interference with a contractual relationship, there must be “existence of a valid contractual relationship or business expectancy.” Since the Court doubted whether Ehson’s and Plaintiff’s non-compete and non-solicitation contract was enforceable, it held that it was unlikely that Plaintiff prevail on this claim.

(5) Unjust Enrichment: The Court was unpersuaded that Ehson was unjustly enriched by Plaintiff’s for two reasons: (1) Plaintiff did not argue that it conferred a benefit on the defendant and (2) under Virginia law there shall be no contractual relationship for an unjust enrichment claim to succeed. In this case., the parties had a contractual relationship.

  1. Likelihood Plaintiffs Will Suffer Irreparable Harm: The Court held that the injuries were not irreparable because monetary damages would adequately compensate the Plaintiff for the type of harm alleged.

For additional information about this case or other employment law matters, please contact Merritt Green at mgreen@gcpc.com or (703)556-6505.  Mr. Green leads General Counsel, P.C.’s Employment Law Practice and has been representing employers (and occasionally employees) for over 18 years.

February 27, 2017 0

12th Anniversary Message to Clients

Dear Clients and Friends,

This week, on December 13th, General Counsel, P.C. celebrated our 12th Anniversary.  This would not be possible without the trust, support and loyalty of our clients and friends.  Thank you.

Personally, as I trust most of you have also experienced over the past 12 years, there have been countless challenges, many victories, and occasional losses.  I hope that these experiences have helped me grow as a business owner and legal advisor.

I often tell clients (and other GCPC attorneys) that as attorneys, our responsibility is to serve our clients.  We must understand and proactively protect our clients’ interests.  We must actively communicate.  We must consistently strive to do our best to serve and satisfy our clients to the best of our abilities.  I sincerely hope that we always accomplish this goal for our clients.

When I started General Counsel, P.C. 12 years ago, I was fortunate to have 5 clients leave my prior firm with me.  They were taking a chance since they were leaving a large national law firm to continue working with a start-up solo practitioner.  My gratitude to these 5 original GCPC clients cannot be understated.  They were the foundation of the firm.  And, I am proud to state that each of these 5 clients remain General Counsel, P.C. clients.

It is this long term client relationship built on trust, support and service that I hope we can build with all General Counsel, P.C. clients.  Yes, there are sometimes challenges, but I hope that our dedication to service and absolute client satisfaction will continue to build the foundation of client relationships.  If we ever do not satisfy such expectation, please never hesitate to contact me immediately.

Finally, if you have not had the opportunity to review our revamped website recently, here is a link:  www.gcpc.com.  We continue to serve our clients with 4 primary practice areas:  (1) employment; (2) corporate; (3) litigation; and (4) government contracts.

In closing, thank you again.  General Counsel, P.C. would not be able to celebrate 12 years without the support and loyalty of our clients and friends.  I wish each of your success in your business and personal pursuits.  And, if we can ever be of service, please contact us.

December 16, 2016 0

Employment Law: Changing Requirements for White Collar Overtime Exemption on Hold

Employment Law: Changing Requirements for White Collar Overtime Exemption on Hold

Introduction

As we told you earlier, the general rule for the white collar overtime exemption was subject to an overhaul this year, with the changes scheduled to go into effect December 1, 2016.  Specifically, the minimum salary level for exempt employees was scheduled to rise from $455 per week, or $23,660 annually, to $921 per week, or $47,892 annually.  The new rule also allowed for salary adjustments every three years.  

Legal Posture

On Tuesday, November 22, 2016, U. S. District Judge Amos Mazzant II issued a preliminary injunction in response to an Emergency Motion for same filed by the State of Nevada and 20 other states.  

In their Emergency Motion for a Preliminary Injunction, the states questioned the lawfulness of the Final Rule, whether the Department of Labor had the authority to promulgate the rule, and whether the automatic update provision complied with certain requirements.  

Preliminary injunctions are fairly rare.  In order to prevail on a motion for a preliminary injunction, the plaintiffs must establish four things, as follows:

  • There is a substantial likelihood of success on the merits;
  • There is a substantial threat to the plaintiffs that they will suffer irreparable harm without the injunction;
  • That the injury threatened outweighs the damage that might be caused by an injunction; and
  • That the injunction does not disserve the public interests.

Likelihood of Success on the Merits

After an analysis of the statutory language governing the white collar overtime exemption, the Court ruled that Congress, not the Department, has the authority to make determinations about raising the minimum salary level.  Consequently, the Court found the plaintiffs would likely be successful on the merits.

Substantial Threat of Irreparable Harm

The plaintiffs argued the implementation of the law would have irreparable harm on the states.  They offered, for example, the state of Kansas’ Department of Children and Families, and the Department of Corrections, both of which had over 50% of their employees affected by the rule.  Plaintiff argued, and the Court agreed, that the budget constraints of these departments were such that they would not be able to increase salaries per the law.  This could lead to lay-offs, which would impact public safety considerations.

Balancing the Injury Against Potential Damage Caused by the Injunction

Plaintiffs argue the substantial sums that would be spent under the rule would not be recoverable if the rule went into effect.  They also argue the rule could impact government services, would cause administrative disruptions, would result in employee reclassifications or terminations, and general harm to the public.  The Court notes that there is little to no harm to the defendant if the rule is delayed, and thus finds on balance, the plaintiffs’ potential injuries tip the scale in favor of the plaintiff.

The Public Interest

The Court noted that due to the rapidly approaching effective date, the Court did not have time to “render a meaningful decision on the merits.”  Because of this, a preliminary injunction would provide the Court the time to review the case more completely.

Conclusion

In light of the above, the Court has issued a nation-wide injunction, prohibiting the implementation and enforcement of the modifications to the white collar overtime exemptions.  

Of course, we at General Counsel, PC will keep you apprised of new developments as they occur.  

You can read the court’s decision in its entirety here.

November 28, 2016 0

Employment Law: Court Determines Gov’t Contractor’s Non-Compete Unenforceable

Case: RLM Commc’ns, Inc., v. Tuschen, No. 14-2351 BL 244020, 41 IER cases 971 (4th Cir. July 28, 2016)

Issue: Non-Compete Agreement Determined to be Unenforceable Because Overly Broad

Court Holding: In litigation between two competing government contractors, Fourth Circuit affirmed district court’s summary judgment against plaintiff.  Former Employee and her new employer did NOT violate non-compete agreement or other obligations because, in part, non-compete was overly-broad and, as such, unenforceable.

Employment Counsel: Employer’s MUST make sure that its non-compete / non-solicitation agreements are narrowly written to protect the legitimate interest of the business.  If not, they will not be enforceable.

Case Summary: The plaintiff, RLM Communications, Inc. (“RLM”) is a government contractor that specializes in cyber security, information technology, and information assurance.  The defendant, Amy Tuschen (“Tuschen”), worked for RLM for six years managing an information-assurance contract with the U.S. Government. She resigned about a year before this contract was due to expire and joined a competitor, eScience and Technology Solutions (“eScience”).  Prior to departing, Tuschen copied several files related to the contract that she managed onto a CD, which she allegedly provided to her successor at RLM.  Initially, RLM did not object to Tuschen’s resignation and new job.  However, when RLM learned that eScience planned to bid against RLM on a government contract similar to the one Tuschen had managed at RLM, RLM filed lawsuit against Tuschen and eScience.

 

RLM’s filed a suit in North Carolina that included multiple claims against Tuschen and eScience, including breach of Tuschen’s non-compete and confidentiality agreements, misappropriation of trade secrets, conversion, tortious interference with contractual relations and unfair and deceptive trade practices, and civil conspiracy.  The district court granted summary judgment on all claims to Tuschen and eScience.  RLM filed an appeal. The appeals court upheld the district court’s decision based on the following analysis:

  1. Non-compete. The court concluded that Tuschen did not violate her noncompete agreement. It found that the agreement itself was overly broad and therefore invalid because it prohibited direct and indirect participation in similar businesses. In relevant part, Tuschen’s noncompete prohibited her from “directly or indirectly” participating in a business similar to RLM and located in the same geographical area.  Specifically, the non-compete provided:

While I, the Employee, am employed by Employer, or for 1 years/months afterward, I will not directly or indirectly participate in a business that is similar to a business now or later operated by Employer in the same geographical area.  This includes participating in my own business or as a co-owner, director, officer, consultant, independent contractor, employee, or agent of another business.

The court concluded that this language created a “restriction on Tuschen’s future employment that is largely unmoored from RLM’s legitimate business interests,” and could be read as preventing Tuschen not only from working with a competitor in a similar position to the one she held at RLM, but also from doing any other job, such as mowing lawns, working as a realtor, etc., for any business that provided similar services.  As such, it was unenforceable.

  1. Confidentiality Agreement. RLM claimed that Tuschen breached her confidentiality agreement when she copied confidential files onto a CD without permission. The court, however, noted that this action would only constitute a breach if it was outside the scope of her professional duties. Tuschen testified that she only copied files in order to give them to her successor and so ease his transition into the job. RLM could offer no contradicting evidence to her testimony. Therefore, the court affirmed summary judgment as to this claim because RLM failed to provide sufficient evidence that Tuschen breached her confidentiality agreement by both copying information without permission and for reasons other than the furtherance of her professional duties to RLM.
  1. Misappropriation-of-trade-secrets. RLM claimed that Tuschen created a copy of the CD to share confidential information with eScience. The court reasoned that multiple interpretations of North Carolina’s misappropriation statute can “produce a rule sufficient to resolve the case: “When an employer brings a misappropriation claim against an employee, admitting that the employee had authorized access to its trade secrets at all relevant times, the employer must raise an inference of actual acquisition or use of trade secrets to survive summary judgment.” Applying this rule, the court rejected RLM’s misappropriation-of-trade-secrets claim because RLM authorized Tuschen to have access to its trade secrets, and it did not establish that she ever accessed them without proper authorization. Moreover, the court dismissed RLM’s claim that an “unexplained leap in technical capacity” permited an inference of misappropriation in this case because the only evidence of such a leap was eScience’s unsuccessful bid for the government contract.
  1. Tortious Interference with Contractual Relations: Citing Peoples Sec. Life Ins. Co. v. Hooks, the court concluded that summary judgment was appropriate on RLM’s tortious interference claim because “competition in business constitutes justifiable interference in another’s business relations” and in the present case, there was no evidence that eScience was motivated by malice or anything other than normal competition in its dealings with Tuschen. 322 N.C. 216 (N.C. 667).  
  1. Other Claims: The court affirmed summary judgment on RLM’s conversion claim using its misappropriation-of-trade secrets analysis. Similarly, it dismissed RLM’s remaining claims of unfair and deceptive trade practices and civil conspiracy, reasoning that those claims relied on analysis that the court had already found meritless.

For additional information about this case or other employment law matters, please contact Merritt Green at mgreen@gcpc.com or (703)556-6505.  Mr. Green leads General Counsel, P.C.’s Employment Law Practice and has been representing employers (and occasionally employees) for over 18 years.

 

October 5, 2016 0

Pregnancy Discrimination: EEOC vs. Dimensions Healthcare Sys., No. PX15-2342

Pregnancy Discrimination: EEOC vs. Dimensions Healthcare Sys., No. PX15-2342

Case:  EEOC vs. Dimensions Healthcare Sys., No. PX15-2342 (D. Md. Sept. 2, 2016).

Issue:  Pregnancy Discrimination

Court Holding:  Employee provided sufficient evidence to defeat employer motion for summary judgment.

Employment Counsel:  Telling employee that she did not get promotion because “you were on maternity leave for a while,” will likely expose employer to pregnancy discrimination liability.

Case Summary:  In a September 2, 2016 decision, the Maryland U.S. District Court denied summary judgment for Dimensions Healthcare System in a case brought by the EEOC.  When discussing why female employee did not receive promotion, manager allegedly stated: “Well, like I said, he had a management background.  Plus, you were on maternity leave for a while.”  When reading this statement, it is easy in hindsight to realize that if actually stated, saying that an employee did not receive a promotion because she was on “maternity leave for a while,” was incredibly foolish and likely will cost the employer (or its insurance company) significantly. 

A plaintiff may survive summary judgment by establishing her Title VII discrimination claim either through direct and indirect evidence of discriminatory animus, or through the burden-shifting framework of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).  Under the direct method of proof, “[t]o avoid summary judgment, the plaintiff must produce direct evidence of a stated purpose to discriminate and/or [indirect] evidence of sufficient probative force to reflect a genuine issue of material fact.” Rhoads v. FDIC, 257 F.3d 373 , 391 (4th Cir. 2001).  

Under the burden-shifting framework, the plaintiff must establish a prima facie case of discrimination by a preponderance of the evidence. Then, the burden shifts to the defendant who [*6] must articulate a legitimate, nondiscriminatory reason for the adverse employment action. If the defendant offers a legitimate reason, the burden shifts back to the plaintiff to demonstrate that the reason offered by the employer is false. See McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).

To establish a prima facie case, a plaintiff must present facts upon which a jury could conclude that, more likely than not, the defendant’s failure to promote was motivated by sex discrimination. More specifically, the plaintiff must produce sufficient evidence to show that: 1) plaintiff is a member of a protected class; 2) defendant had an open position for which she applied or sought to apply; 3) plaintiff was qualified for the position; and 4) plaintiff was rejected for the position under circumstances giving rise to an inference of unlawful discrimination. See Evans v. Techs. Applications & Serv. Co., 80 F.3d 954 , 959-60 (4th Cir. 1996).

In this case, the District Court determined that the plaintiff had presented sufficient evidence to survive summary judgment under both the direct evidence and the burden shifting tests.   The case will now proceed to a jury trial or, more likely than not, the parties will reach a settlement.

For additional information about this case or other employment law matters, please contact Merritt Green at mgreen@gcpc.com or (703)556-6505.  Mr. Green leads General Counsel, P.C.’s Employment Law Practiceand has been representing employers (and occasionally employees) for over 18 years.

September 30, 2016 0

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