Friday, June 29, 2012

Don’t Tape Me, Bro!



Hall v. State of Vt., 2012 VT 43.

Employment discrimination cases are often difficult for two reasons. The first are a series of highly technical evidentiary and procedural gates that swing back and forth between employer and employee depending on the stage of the case.  The second is the complicated factual story that precedes the litigation.

Today’s case is much more focused on the second difficulty as the SCOV tries to untangle a complicated web of releases, allegedly retaliatory behavior and a tardy set of decisions from the trial court.


In the early 2000s Plaintiff was a supervisor with the Agency of Transportation.  In 2002, Plaintiff injured his knee and filed a workers’ compensation claim.  Shortly thereafter, he was accused by a female employee of creating a hostile work environment. 

Following an investigation, Plaintiff, with counsel, negotiated a settlement.  Plaintiff was demoted from a supervisory position, but suffered no reduction in salary.  The demotion was not labeled as such. 

In return, Plaintiff released any and all of his claims.  This agreement, modified by his counsel, contained fairly broad and general language—as most releases do. 

At the end of 2003, Plaintiff filed a second workers’ compensation claim based on the same knee.  In 2004, a surgeon replaced the knee, and the State, acting upon a tip, began an investigation into this claim, which included videotaping Plaintiff for the day. 

This investigation does not appear to have led to a negative employment action against Plaintiff, but the State determined that Plaintiff’s physical condition prevented him for performing his job and reassigned him to the finance department at the same rate of pay.  This new job, however, was not eligible for overtime, which meant a de facto pay cut for Plaintiff’s whose old position enjoyed regular overtime. 

You know what comes next.  Plaintiff filed a lawsuit against the State seeking to set aside his 2003 release and alleging discrimination, retaliation, disability discrimination, violation of free speech, violation of fair employment practices, and discrimination for his opposition to discriminatory policies against female employees.

The State cited several affirmative defenses including the expected sovereign immunity as well as waiver, estoppel, accord and satisfaction, and failure to mitigate. 

These various filings were whittled down through pre-trial motions to a claim of disability discrimination and retaliation for filing a workers’ compensation claim.  Following trial, the jury denied the disability discrimination claim entirely but awarded Plaintiff approximately $493,000 for the retaliation claim. 

On appeal, the State seeks to set aside the jury verdict primarily on the basis that the jury should never have had the issue put before them. 

Here is where we can get into the procedural weeds.  The basis of the State’s argument boils down to this.  There were only two allegedly retaliatory actions taken by the State against Plaintiff.  The first was the 2003 investigation into his alleged hostile workplace behavior.  The second was videotaping him for one day in 2004.  The State argues that Plaintiff waived the first with his 2003 release, and the second does not rise to the level of retaliatory behavior. 

The State raised these arguments in pre-trial motions to the trial court, but the trial court deferred making a ruling.  At each critical juncture, the State renewed its motion as a Rule 50 motion, and the trial court deferred.  Do this enough times, and you will eventually find yourself, as the parties did, on the other side of a jury verdict, which transformed the issue into a post-judgment motion to set aside the jury verdict. 

On appeal, the SCOV notes that the trial court never really ruled on this issue but kicked the can down the road until it was able to dispose of it from a post-trial posture.  This is improper, and the SCOV steps into the shoes of the trial court to review the motion from a pre-trial perspective. 

The SCOV looks to the plain meaning of the 2003 release and determines that there is no ambiguity and rules that the 2003 investigation was effectively waived.  This is enough to undermine the jury verdict, and the SCOV vacates the verdict and remands to the trial court to address the Agreement in light of this analysis.

The SCOV then looks at the videotaping to determine whether it alone could have constituted retaliation.  Here the SCOV is confronted with two different standards from the state and federal courts.  Without resolving which test applies, the SCOV determines that the videotaping incident does not trigger either.

The first test comes from Vermont law.  It requires that there be a negative employment action taken and that it be causally connected to the protected activity.  Here there is no connection as the videotaping did not lead to any negative employment action.

The second test from the federal courts comes from Title VII discrimination cases.  This test simply requires the court or a jury to determine whether the retaliatory action would dissuade a reasonable person from filing a legitimate claim.  In this case, the SCOV rules that one day’s videotaping of a person based on a tip that the claim was fraudulent was a reasonable course of action and would only dissuade people from filing fraudulent workers’ compensation claims.  In other words, one day’s unobtrusive videotaping does not constitute retaliation or illegitimate behavior but rather the proper investigation that the State should take to detect and prevent fraud. 

Taken together, the SCOV’s ruling appears to shut down Plaintiff’s claim.  Yet, the SCOV’s ultimate ruling steps back from this edge and remands the case to the trial court to determine if the rulings remove all or part of Plaintiff’s retaliation claims.  The ruling is a bit of hedge as the factual complexity of the case puts the SCOV at a factual disadvantage in making a final ruling. 

Plaintiff can take comfort too in the SCOV’s last paragraph that suggests and offers guidance to the trial court for a successive trial—one that would seem to be precluded if the trial court follows the SCOV’s reasoning to its logical conclusions. 

So the case continues.  Plaintiff’s claims—while hampered—appear to live another day.  

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