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Notes & Trends - Bench & Bar August 2017

Employment & Labor Law
Judicial Law

• Gender surgery; no discrimination claim, but ACA remanded. A challenge by a Minnesota mother to an employer and third party health administrator for denial of coverage for reduction and surgery for her son’s gender reassignment was rejected under federal and state discrimination statutes. The 8th Circuit Court of Appeals in a decision authored by Judge Diana Murphy of Minnesota upheld a ruling of U.S. District Court Judge Richard Kyle in Minnesota that the mother could not pursue discrimination claims on her son’s behalf under Title VII of the Federal Civil Rights Act or the Minnesota Human Rights Act, but remanded the case for determination of her claims under the Affordable Care Act (ACA). Tovar v. Essentia Health, 857 F.3d 771 (8th Cir. 5/24/2017).

Retaliation; whistleblower claim rejected. A claim of retaliatory discharge under the Minnesota whistleblower law, Minn. Stat. §181.932, was rejected by the 8th Circuit. Affirming a ruling of U.S. District Court Judge Ann Montgomery of Minnesota, it held that the claimant failed to show a causal relationship between reporting illegal double billing and his subsequent discharge. Mervine v. Plant Eng’g. Servs, LLC, 859 F.3d 519 (8th Cir. 6/9/2017).

• Termination of employees; disloyalty discharge upheld. The discharge of six fast food employees, along with disciplining three others, due to a public relations campaign they launched to draw attention to the company’s lack of paid sick leave was upheld by the 8th Circuit Court of Appeals. Reversing a determination under an administrative law judge and a divided panel of the National Labor Relations Board (NLRB), as well as a divided three-judge panel of the circuit, the en banc court ruled that the employees’ actions, which included vivid depictions of food prepared by a sick co-worker, compared to that of a healthy one, constituted such “detrimental disloyalty” that it justified their termination, notwithstanding the employees’ right to engage in “concerted activities” under Federal labor law. MikLin Enterprises, Inc. v. National Labor Relations Board, 2017 U.S. App. LEXIS 11792 (7/3/2017) (unpublished).

• Minimum wage claims; release bars action. A claimant who volunteered as a concession worker was not entitled to sue for violation of minimum wage laws because he signed a release form providing for arbitration of any disputes. The 8th Circuit upheld the lower court ruling that the opportunity to volunteer and a contribution made to a university where the activities took place constituted sufficient consideration to uphold the release. Leonard v. Del. North Cos. Sport Serv., 2017 U.S. App. LEXIS 11391 (6/27/2017) (unpublished).

• Unpaid overtime; process server’s claim rejected. A claim by a process server that he was not properly paid overtime under the Fair Labor Standards Act (FLSA) was dismissed on grounds that he was an independent contractor and, therefore, not covered by the law. The 8th Circuit upheld a lower court determination that dismissed the claim, along with the trial judge’s excluding evidence of how much the employer deducted each year in business expenses. Karlson v. Action Process Serv. & Private Investigation, 2017 U.S. App. LEXIS 11377 (6/26/2017) (unpublished).

• Age discrimination; summary judgment upheld for employer. A claimant who was fired from a job as a lab technician was not entitled to pursue a claim for age discrimination. The 8th Circuit upheld a ruling by U.S. District Court Judge Richard Kyle in Minnesota for summary judgment for the employer because the employee did not establish a prima facie case of age discrimination, nor was sufficient evidence presented to show that the employer’s reason for termination was pretextual or for an underlying, unlawful motive. Nash v. Optomec, Inc., 2017 U.S. App. LEXIS 5932 (4/5/2017) (unpublished).

• Race discrimination; claims dismissed, but retaliation claim permitted. The 8th Circuit upheld dismissal of a pair of race discrimination claims, but allowed a retaliation claim to proceed in one of them.

African-American men, working as sanitation workers, were not permitted to sue for discriminatory discharge after they were fired for violating the employer’s time card policy. The 8th Circuit upheld summary judgment because the claimant submitted insufficient evidence that the reason for firing was pretextual. The court also rejected an allegation that the employer’s investigation was inadequate. Edwards v. Hiland Roberts Dairy Co., 2017 U.S. App. LEXIS 11387 (6/22/2017) (unpublished).

An African-American program supervisor also had her race discrimination claim against a state agency dismissed on grounds that her termination did not reflect disparate treatment based on race. But the 8th Circuit remanded dismissal of a retaliation claim on grounds that the allegations made by the claimant allowed more than a mere possibility that retaliation occurred. A concurring and dissenting opinion by Judge James Locken of Minnesota agreed with dismissal of the race claim, but also would have ruled against allowing the retaliation claim to proceed because there was only a “mere possibility” of retaliation without setting forth sufficient factual detail to support that claim. Wilson v. Arkansas Dept. of Human Services, 850 F.3d 368 (8th Cir. 3/1/2017).

• Retirement claim; contract rescission ruling reversed. A store manager was entitled to pursue a breach of contract claim following his termination, despite signing a termination document that the company unduly pressured him to sign, causing him to lose his eligibility for a retirement plan. The 8th Circuit, reversing a ruling of the lower court, held that the manager acted under duress in signing the document, which caused him to lose a retirement package, converting him to an at-will employee. Gilkerson v. Nebraska Colocation Centers, 859 F.3d 1115 (8th Cir. 6/21/2017).

• USERRA; no immunity for state university. A claim by a military veteran that he was wrongfully denied re-employment by Bemidji State University after conducting military service was actionable. Reversing and remanding dismissal of the lawsuit by the Ramsey County District court, the Minnesota Court of Appeals held that the claim of sovereign immunity under the Federal Uniformed Services Employment and Reemployment Rights Act (USERRA) 38 U.S.C. §4301-4335, was inapplicable because a 2012 state law, Minn. Stat. §1.052, subd. 5, expressly permitted such claims against the state and its entities. Breaker v. Bemidji State University, 2017 Minn. App. LEXIS 75 (App. 6/12/2017) (unpublished).

• Unemployment compensation; safety violation bars benefits. A machine operator was denied unemployment compensation benefits due to the violation of his company’s safety policies. The court of appeals held that the transgressions constituted disqualifying “misconduct.” Treptau v. Federal Cartridge, 2017 Minn. App. LEXIS 524 (App. 6/12/2017) (unpublished).

Originally published in the August 2017 issue of Bench & Bar of Minnesota