Today's Case

Hindering Another's Contractual Performance

2009-02-14T05:49:00.007-06:00

In a recent action for tortious interference, a plaintiff brought suit in the Western District of Oklahoma in which it was alleged that the plaintiff's performance of its contract with various third parties was rendered more costly or burdensome by the actions of the defendant. On February 10, 2009, in Wilspec Technologies, Inc. v. Dunan Holding Group, Co. LTD, 2009 OK 12, __ P.3d__, the Oklahoma Supreme Court (in answer to certified questions from the Federal Court) held that: "[t]oday we recognize a plaintiff's right to maintain a cause of action against an interferor when wrongful acts are aimed at hindering or otherwise rendering plaintiff's performance more costly or burdensome in a contract between plaintiff and a third party."

The Plaintiff had entered into a three-year contract with defendant's predecessor in interest for the manufacture of various heating ventilating and air conditioning parts for sale by plaintiff throughout North America. In turn, the plaintiff had entered into multiple-year contracts to supply those parts to its customers. The Plaintiff alleged that defendant intentionally interfered with plaintiff's contractual or business relations with its customers, in part, by directly soliciting the sale of products to plaintiff's existing and prospective customers in North America and unilaterally changing the contract price and payment terms it charged plaintiff. The plaintiff specifically alleged that it had contracts with numerous customers to supply them with components defendant agreed to manufacture; defendant knew plaintiff had contracted with such customers; defendant knew plaintiff's customers depended on plaintiff to supply them with such components and that a failure on defendant's part to manufacture the components in conformity with the 2002 Agreement would disrupt and possibly destroy plaintiff's customer relations and result in significant economic harm to plaintiff.

The Court explained the basis for its decision as follows: "[w]e believe that where the law provides a remedy against a tortfeasor who induces or causes a third party not to perform the contract, the protection against such tortious acts extends to a party who is unable to perform his/her contract or where such performance becomes more costly or unduly burdensome. To hold otherwise would unjustly enrich a tortfeasor and leave a plaintiff less than whole."

Federal Minimum Wage

2009-01-31T12:11:00.004-06:00

The Federal Minimum Wage: effective July 24, 2008, the federal minimum wage for covered, non-exempt employees was raised to $6.55 per hour, and for July 24, 2009, to $7.25 per hour. A revised Federal minimum wage poster is available from the Department of Labor's website. The Oklahoma minimum wage is equal to the federal minimum wage of $5.85 per hour. The new poster also is available at this link: Poster Image.

Tuffy's, Inc. v. City of Oklahoma City

2009-01-26T11:57:00.011-06:00

On January 20th, the City of Oklahoma City lost an important case before the Oklahoma Supreme Court: Tuffy's, Inc. v. City of Oklahoma City, 2009 OK 4, ___ P.3d ___. In Tuffy's, the Court refused to exempt municipalities from liability for the negligent actions of police officers that are committed within the scope of their employment. As the Court recognized, such claims must be brought under the Governmental Tort Claims Act; and, a specific exemption is provided there for loss that occurs from "enforcement of . . . a law . . .". The specific holding in Tuffy's was that this exemption did not apply there. More critically, however, the Court did not offer any guidance or analysis on how the facts in Tuffy's did not fall within this GTCA exemption. In Tuffy's, the plaintiff was nightclub; and, the nightclub alleged that police officers ". . . physically and verbally attacked, harassed, and assaulted numerous customers (and) used mace on customers and ordered their dogs to bite customers inside the building . . .". The Court's opinion did not provide any additional facts to explain why or the reason the police officers were in the nightclub and/or what criminal activity allegedly had occurred. Significantly, the Court did not suggest or infer that these facts would be important to whether the GTCA exemption for law enforcement activities would be upheld in this kind of case. The only guidance offered by the Court was that a municipality would not be liable if it was alleged that the police officers had acted with "bad faith". The Court held that the case could move forward because the allegations there were limited to the claim that "police officers breached a duty by negligently removing customers from the nightclub, which was the proximate cause of financial injury . . .". The Court further held that the relevant questions of fact for trial would be whether the police officers were, in fact, "negligent when removing customers from the nightclub and, if so, whether the officers were acting within the scope of their employment."

Because of Her Age

2009-01-22T16:29:00.008-06:00

Last October, the Tenth Circuit Court of Appeals held that an age discrimination claim (that stemmed from a reduction-in-force) must go to trial, despite the overwhelming pre-RIF planning that was accomplished by the employer: Sanders v. Southwestern Bell Telephone L.P., 544 F.3d 1101 (10th Cir. 2008). The employer there was a large telephone service provider that had determined, based on its business needs, that the positions of 23 employees had to be eliminated. Detailed management guidelines were in place to guide the reduction in force - establishing a sophisticated ranking process to determine the positions which were to be eliminated. Moreover, the employer substantially followed its established process. Faced with these and other undisputed facts, the District Court granted summary judgment to Sanders on her claims.

However, at the appellate level, that District Court's decision was reversed. The Court of Appeals based its holding, in part, on Sanders' deposition testimony as to what was said by her Manager when he informed her of the outcome of the ranking process; and, she testified that, at that time, he allegedly told Sanders that it was "her age", not her job performance, that was the cause of her ranking. The District Court, apparently, had concluded that "[g]iven the different versions of this conversation . . . , this evidence is at most circumstantial". On the other hand, the Court of Appeals specifically found that the Manager's alleged statement was "direct-not circumstantial-evidence . . . ", and further wrote that "[i]f the jury believes Ms. Sanders' testimony, it could conclude-directly, without the aid of any favorable inferences-that the reason for her surplus [i.e., ranking] was her age."

Consequently, the Court of Appeals held that a genuine issue of material fact existed as to whether Sanders had been discharged because of her age.

Dana Murphy Is Now A Member of the OCC

2009-01-13T08:13:00.009-06:00

Yesterday, January 12th, Dana Murphy became a member of the Oklahoma Corporation Commission; and, here are some significant points that emerge from that event:

- Although the third woman on the OCC, Murphy is the first woman to have begun her tenure at the OCC without have been first appointed by the governor;

- Murphy's election returns the OCC to an all Republican membership; and,

- Murphy is the first ALJ at the OCC to later be elected as a member of the Commission. FYI: Murphy was an administrative law judge at the Oklahoma Corporation Commission for almost six years, when, at the end of 2001, she resigned her ALJ post.

Her successful campaign was very interesting because, during the campaign, she was blistered in several attack ads by her opponent (i.e., the incumbent Democrat that she defeated). She did not, however, respond to those attacks! Although Murphy is exceptionally qualified for the post (maybe the best qualified first-time candidate to every be elected to the OCC), any reasonable observer must agree that: Murphy showed excellent political judgment during her campaign, and that it is judgment that she'll now need as she serves the people of the State of Oklahoma as a member of the OCC.

Here's one of my favorite Will Rogers, Jr.'s quotes: Good judgment comes from experience, and a lot of that comes from bad judgment. - Will Rogers, Jr.

Driving Under the ADA

2009-01-11T17:22:00.007-06:00

The Tenth Circuit Court of Appeals recently held that merely because a person cannot drive does not mean that the person meets the legal definition of "disabled" under the Americans with Disabilities Act: Kellogg v. Energy Safety Services, Inc. 544 F.3d 1121 (10th Cir. 2008). Although the facts of the case are most compelling, it is anticipated that Kellogg will not be the law on this issue for long, as the ADA Amendments Act went into effect January 1, 2009; and, a much broader definition of "disability" is set out in the ADA Amendments Act.

Kellogg, who had epilepsy, sued her employer, alleging disability discrimination. She was a safety technician who, occasionally, drove to oil fields to perform her work. She asserted that, because she was not allowed to drive, due to the risk of seizure, she was substantially limited in the major life activity of "driving." The Court noted that, although driving is an "important daily activity", it is a "means to an end". Consequently, although Kellogg prevailed on her claim before a jury at the District Court level, the Tenth Circuit reversed and remanded the case for a new trial on whether Kellogg was limited in a major life activity.

However, the Kellogg decision will, most likely, not be law for employment claims that arise under the recently passed ADA Amendments Act (possibly the most sweeping change to the face of employment law in over 10 years). The ADA Amendments ACT (which was signed on September 25, 2008) went into effect on January 1, 2009, and makes important changes to the definition of the term "disability". The Act retains the ADA's basic definition of "disability" as an impairment that substantially limits one or more major life activities, a record of such an impairment, or being regarded as having such an impairment. On the other hand, it changes the way that these statutory terms should be interpreted. Moreover, the new law directs EEOC to revise that portion of its regulations defining the term "substantially limits"; and, to date, those new regulations have not been finalized.

The Benefit of the Doubt

2009-01-06T22:09:00.011-06:00

During any investigation of an employee, it is critical that the employer always extend the "benefit of the doubt" to the employee. This was strikingly evident in a recent Tenth Circuit decision: Trujillo v. PacificCorp., 524 F.3d 1149 (10th Cir. 2008). In Trujillo, the Court fired 2 employees (who were husband & wife), the parents of a young man who was suffering from cancer; and, their terminations occurred less than 2 weeks after the young man's cancer had relapsed. The terminations followed an investigation of the parents - that lead the employer to conclude that they had allegedly falsified their time records which, if true, defrauded the company of a combined 40 hours of pay.

The former employees asserted claims under the Americans With Disabilities Act and ERISA. The ADA claim was asserted under the ADA "association provision" - in which the former employees claimed that they had been terminated because of the expense or cost to the company (a self-insured company) associated with their son's illness. Although the District Court granted summary judgment to the employer, the Tenth Circuit reversed. The Tenth Circuit held that, under the totality of circumstances, and considering the evidence presented concerning the employer's concerns about the cost of the son's illness and the temporal proximity between the relapse and the termination, the former employees raised the necessary reasonable inference of discrimination.

The Tenth Circuit cited several specific facts related to the company's investigation of the couple that indicated that, although the couple had served the company for many years, they were never given the benefit of the doubt during the company's investigation: key witnesses allegedly were not interviewed; other employees allegedly were not terminated for other serious offenses, but were placed on progressive discipline; and, the company allegedly had cited certain unreliable records in support of its conclusion of time theft.

The Tenth Circuit's opinion provides an excellent outline of the legal framework for a claim under the ADA "association provision". This case also reveals several practical steps to take and to avoid during an investigation of an employee, including: it is critical that the employer always extend the "benefit of the doubt" to the employee.

Brian Maughn Takes Office

2009-01-05T17:58:00.004-06:00

Guilty. Yes, I'm guilty - guilty of waiting too darn long to begin my blogging experiment. None-the-less, here is my first blog entry.

Today, I attended the ceremonial swearing in of my friend, Brian Maughn, as the next County Commissioner for Oklahoma County, Dist. #2. He is a great fella, full of promise and pride. Yes, he promised honest government, good roads and the rest; and, of course, some of what he had to say sounded familiar - but not everything. Indeed, Brian offered something bold and fresh for an elected official - humility. We could easily agree (and even expect a Court to "take judicial notice") that rarely does an elected official display an ounce of humility. However, there it was, right in the middle of his speech. Humility. Consequently, he made everyone else exceptionally proud. Good job, Brian!