Whistleblowers May Benefit Under the FCA Law When Defrauders of the Government are Sued

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Typically, whistleblowers report misconduct in the workplace to their employers or to a governmental agency. Whistleblowers often risk retaliation and damage to their careers in the form of discrimination for blowing the whistle on wrongdoing. There are many different kinds of whistleblowers. And, there are a number of specific Texas and federal laws that protect whistleblowers.

The FCA Law Benefits Whistleblowers in Some Instances

The False Claims Act (FCA) is a federal law enacted in 1863 that imposes significant monetary penalties on those who defraud the U.S. government. The FCA permits a special kind of lawsuit known as a qui tam action. This is a civil lawsuit involving a private citizen who has evidence of a fraud. This person can blow the whistle and sue the perpetrator on behalf of the government. If the lawsuit is successful, the whistleblower could be entitled to between 15 and 30 percent of the government’s recovery.

Potential Whistleblowers Take Note

The employment lawyers at Kilgore & Kilgore represent whistleblowers who assert claims under a variety of state and federal laws, including the FCA. If you have evidence of a fraud of the government, you are a potential whistleblower. Click here to learn more about Whistleblower Protection. To connect with an employment lawyer for a free review of the facts of your case, click here Contact Kilgore & Kilgore.

Whistleblowers Can Help the Government Pursue People Who Defraud

A qui tam action encourages whistleblowers to come forward and help the government pursue those who have defrauded it. Liability under the FCA requires that people knowingly present false or fraudulent claims for payment to the government. Qui tam cases might be premised on fraudulent billing practices under the Medicare or Medicaid programs. Other government fraud might be committed by federal contractors or vendors providing goods or services to the government.

After a qui tam action is filed under seal, the U.S. Department of Justice begins an investigation into the allegations and can ultimately intervene in the action. A qui tam action can take many years to make its way through the courts.

The Implied False Certification Theory of Liability

In June 2016, the U.S. Supreme Court issued an important opinion in a qui tam case. In Universal Health Services, Inc. v. United States, the Court held that the implied false certification theory could be a basis for a defendant’s liability under the FCA. Prior to the Court’s opinion, the lower federal appellate courts had disagreed over the validity and scope of this theory of liability.

In Universal Health Services, the alleged violations under the FCA arose under the Massachusetts Medicaid program. The case involved the death of a 17-year-old woman treated at a mental health facility. It was discovered that many of the alleged mental health workers who treated the woman lacked the proper qualifications and licenses to treat her.

A qui tam action was brought under the implied false certification theory of liability. The complaint asserted that reimbursement claims submitted under the Massachusetts Medicaid program showed that specific services were provided by particular professionals. However, these reimbursement claims failed to disclose the defendant’s noncompliance with regulatory staffing and licensing requirements. According to the complaint, the defendant defrauded the state Medicaid program because Medicaid paid defendant’s claims unaware of the staff’s regulatory violations.

An Employment Lawyer Must Prove Two Conditions under the Implied False Certification Theory

The Court held that FCA liability under the implied false certification theory can arise if two conditions are satisfied. First, the defendant must submit a claim for payment to the government that makes a specific representation about the goods or services provided. Second, the defendant must knowingly fail to disclose noncompliance with a material statutory, regulatory or contractual requirement. Further, the defendant’s omission must render its representations misleading.

FCA Liability Can Be Based on a Defendant’s Failure to Disclose

The Court held that a defendant’s failure to disclose its noncompliance with a legal requirement can be a basis for FCA liability. This is true even if that particular requirement was not expressly designated as a condition for payment.

The relevant inquiry, according to the Court, is whether the defendant knowingly violated a requirement that it knows is material to the government’s decision to pay the defendant. The Court emphasized that the materiality requirement is a rigorous standard. Ultimately, the Court vacated the judgment and remanded the matter to the lower courts. It is up to the lower courts to determine whether the complaint was sufficient under the Court’s guidelines.

Does it pay to be a Whistleblower?

Despite possessing proof of a government fraud, potential whistleblowers may have questions and concerns before stepping forward. There is a possibility of receiving monetary compensation if the government recoups damages through the provisions of the False Claims Act. However, achieving success involves a complex legal process. Kilgore & Kilgore can provide the legal assistance needed. Kilgore & Kilgore attorneys have experience with whistleblower protection cases. To learn more about Kilgore & Kilgore’s whistleblower protection law practice, click here Kilgore & Kilgore Whistleblower Protection. To get started on a free review of the facts of your case, click here Contact Kilgore & Kilgore.

Compensatory Damages from FINRA Form U-5 Defamation Claims

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When broker-dealers and other securities industry businesses terminate employees, the persons fired often feel like they are at a disadvantage. This is due to the potential for defamation from the FINRA Form U-5. Most businesses keep reasons for terminations private. However, the reasons for terminations are public in the securities industry business because of the regulatory oversight of the Financial Industry Regulatory Authority (FINRA).

FINRA Form U-5 Allows Public Scrutiny

All securities industry employers are required to file a FINRA Form U-5 within 30 days of an employee termination. This FINRA Form U-5 states the reason for the termination. It must also detail such matters as whether the employee was the subject of consumer complaints or under internal investigation or external investigation for alleged violation of securities industry rules and regulations. The terminated employee has no legal right to provide input regarding the content of the FINRA Form U-5. Therefore, he or she is at the mercy of the employer and the regulatory oversight of FINRA. When the employer includes misleading or false information on the FINRA Form U-5, it can severely damage the terminated employee’s chances for future employment in the securities industry.

Wrongfully Terminated Securities Industry Employees Take Note

If you work in the securities industry and believe your ex-employer included false and defamatory information on your FINRA Form U-5, you should contact a Kilgore & Kilgore attorney to review the facts of your case. Kilgore & Kilgore attorneys have experience with this type of claim. Kilgore & Kilgore attorneys have also been successful in getting the defamation expunged from a FINRA Form U-5. Winning these claims has given back their lives to broker-dealers hurt by the regulatory process. Click here to connect with a Kilgore & Kilgore attorney Contact Kilgore & Kilgore.

In most cases, you cannot contest a FINRA Form U-5 through a lawsuit in court. You must go through the FINRA arbitration process. Kilgore & Kilgore has several attorneys experienced with the FINRA arbitration process and Texas defamation law.

FINRA Form U-4 and FINRA Form U-5

FINRA has regulatory oversight over all securities industry companies that do business with the public. Every individual who works on securities-related matters is required to register with FINRA by submitting a FINRA Form U-4. By filing a FINRA Form U-4, employees agree to settle all disputes with their employers through the FINRA arbitration process. Additionally, the FINRA Form U-4 authorizes securities industry employers to furnish information regarding the history of all employees at the firm and reasons for termination.

Former Employees with FINRA Form U-5 in Public Files

When an employee is terminated, the securities industry employer is required to state the reasons for termination in a FINRA Form U-5. If the terminated employee violated any securities industry rules or regulations, the employer must provide an explanation of the violations. Also, the employer must explain if the terminated employee was under any internal investigation for the violation. The employer must also disclose whether there are any consumer complaints against the employee. The securities industry employer must file the FINRA Form U-5 within 30 days of the termination. The FINRA Form U-5 is stored in FINRA’s Central Registration Depository (CRD) and made accessible to all FINRA member firms. Together, FINRA Form U-4 and FINRA Form U-5 lay the foundation for how FINRA Form U-5 defamation claims must proceed.

FINRA Form U-5 Defamation

Sometimes, when an employer is unhappy with an employee, the employer places false and defamatory information in the FINRA Form U-5. This can have disastrous consequences for the employee. First, all potential new employers have access to, and will certainly review, the FINRA Form U-5. This makes it difficult, if not impossible, for the terminated employee to get another job in the securities industry. Second, potential customers have access to the FINRA Form U-5. Experienced investors often review this public information. Even when a terminated employee manages to get a new job in the securities industry, it is difficult to recruit new customers. When an employer with a bone to pick fires an employee and puts false information in the FINRA Form U-5 disclosure, it can be devastating. It can sabotage a career. This happens more often than you would think.

Compensatory Damage Awards and Expungement of Defamation from the FINRA Form U-5

The aggrieved ex-employee can take legal measures to claim damages and get the defamatory information removed from his or her FINRA Form U-5. He or she can file a claim against the former employer for defamation. Moreover, he or she can request an expungement of the defamatory information on the FINRA Form U-5. Processing such a claim is different from a typical defamation claim. Not just any attorney can successfully handle such a claim. The FINRA Form U-4 requires that all such claims between FINRA member businesses and their registered employees go through FINRA arbitration proceedings. This includes employment disputes that may have an effect on the professional record of a member firm’s employee—including FINRA Form U-5 defamation claims.

FINRA Form U-4 Provides the Basis for a Defamation Claim

The basis for defamation claims by FINRA Form U-4 employees is the false or inaccurate information reported on a FINRA Form U-5. Employees may also request that FINRA expunge such false information from its Central Registration Depository (CRD) records. Terminated employees must file an arbitration demand with FINRA within six years of the recording date of the FINRA Form U-5 in the CRD. One to three individuals chosen by the parties typically comprise the arbitration panel. It generally takes about one year to complete the arbitration process. FINRA arbitration hearings and the evidentiary record are not open to the public. The only information publicly released are the parties’ names, the nature of the claims, the arbitrator’s conclusory findings, and the remedy granted.

State Law Governs the Right to Damages in Defamation Claims

A FINRA arbitration panel hears and rules on FINRA Form U-5 defamation cases. However, state law governs the legal elements of the claim. This means that state law governs the elements of the defamation claim of the employee. State law also governs the defenses available to the employer. And, state laws are not all the same. Damages may include compensatory damages, punitive damages, lost value of benefits, emotional distress, attorneys’ fees, and a recommendation to expunge or amend the FINRA Form U-5.

Accordingly, attorneys often accompany FINRA Form U-5 defamation claims with other claims including wrongful termination, interference with business opportunities, and breach of contract.

The Absolute Privilege Rule

One of the most important rulings the FINRA arbitration panel will make is whether the employer is entitled to an absolute privilege or qualified privilege under the relevant state law. Due to the mandatory nature of the FINRA Form U-5 disclosure requirements and the public benefits they provide, some state courts have ruled that employers are entitled to an absolute privilege. Absolute privilege means that the person making the statement has the absolute right to make that statement at that time, even if it is defamatory. In other words, the person making the defamatory statement is immune from a defamation lawsuit. This makes it very difficult if not impossible to win a claim against them.

In other states, including Texas, either a qualified privilege applies or the law is unclear. A qualified privilege raises the bar for a wrongfully terminated employee to prove a claim. For example, it may be necessary to show the employer was malicious or reckless rather than merely negligent in the FINRA Form U-5.

Kilgore & Kilgore Attorneys Have Won Damage Awards in FINRA Defamation Claims

Despite the presence of a qualified privilege in many states, FINRA arbitration panels have granted significant monetary damage awards and expungement to aggrieved ex-employees. To obtain such an award is a complex legal process involving FINRA rules and procedures plus state defamation law. Kilgore & Kilgore can provide the legal assistance needed. Kilgore & Kilgore attorneys have won damage awards and expungements through FINRA arbitrations. To learn more about Kilgore & Kilgore’s securities industry and FINRA law practice, click here Kilgore & Kilgore Securities Fraud and FINRA Dispute Practice. To get started on a free review of the facts of your case, click here Contact Kilgore & Kilgore.

Employers Use Arbitration to Resolve Employee Disputes

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Arbitration is an Alternative System of Dispute Resolution

Arbitration is a private, alternative system of dispute resolution. In arbitration, the parties present their claims and defenses to one or more arbitrators who decide the matter. Typically, an arbitrator is an attorney or former judge who is paid a fee by one or more parties to serve as the arbitrator. The allocation of fees and expenses between the parties is typically outlined in the arbitration provision in the parties’ employment contract.

Many employers require their employees and executives to sign employment contracts or employment agreements that contain an arbitration provision. Generally, an arbitration provision requires an employee to assert any claims she or he might have against his employer in arbitration, rather than in state or federal court. An arbitration provision is usually, but not always, enforced by the courts.

Our Employment Lawyers Have Extensive Experience with Arbitration

Bill Masterson, a Kilgore & Kilgore attorney, recently successfully set aside an arbitration agreement in court. Bill Masterson argued that the arbitration agreement be voided because the employee who signed the agreement spoke only Vietnamese. The agreement was written in English. The case, Sang Nguyen v. Doskocil Manufacturing Company Inc., was heard recently in the Tarrant County court. The court ruled that, since the plaintiff did not understand the arbitration agreement, it must be set aside. If you have a question about arbitration or an arbitration provision in your employment agreement, click here Contact Kilgore & Kilgore to connect with an employment lawyer for a consultation.

Kilgore & Kilgore’s employment lawyers counsel and represent employees and executives who have arbitration agreements with their employers. We have litigated the enforceability an arbitration provisions. We have represented numerous executives in arbitration proceedings.

There are several private and non-profit organizations that administer arbitration proceedings. These organizations are often identified in an arbitration provision. Such organizations often supply a list of arbitrators that may be used for arbitration. In addition, these organizations often have their own procedural and discovery rules for arbitration.

Arbitration Compared with Trial

One significant difference between arbitration and trial is that the employee or plaintiff is no longer entitled to the right of trial by jury. A trial by jury usually is an employee or plaintiff’s right when a case proceeds in a courthouse. Some jurists or employers believe that arbitration is a faster, more efficient, and less expensive system of resolving disputes. However, in reality, arbitration proceeds at the same pace as a traditional court case. The legal and factual issues in arbitration can be just as complicated as in a court case. Arbitration proceedings are like formal court cases. Both processes can require pleadings, motions, discovery, and hearings. Both can be active for over a year. Thus, arbitration is often no less expensive or time-consuming than a traditional court case.

Arbitration May Be More Relaxed than a Formal Courtroom Trial

At the final hearing in arbitration, the parties present their evidence and examine their testifying witnesses in front of the arbitrator. While there is a fact finder, there is no judge in a black robe, courtroom, or jury. Instead, the final hearing is like an informal trial. The arbitration hearing may be held in an office or hotel conference room. Often, an arbitration provision identifies a specific city where the arbitration is to be conducted.
The rules of evidence may be relaxed at final arbitration hearings. After the final hearing, the arbitrator renders a decision. The arbitrator can also award monetary or other relief to a prevailing party. Often a prevailing party must go to court to enforce an arbitrator’s award. The legal standard in court for overturning an arbitrator’s award is extremely high.

Some Arbitration Agreements May Be Unenforceable

Some arbitration agreements prohibit employees from asserting collective arbitration or collective action in any forum. Many arbitration agreements require employees to bring claims, such as overtime pay claims, only through individual, piecemeal arbitration proceedings. Employers try to force this requirement on their employees to make it difficult for them to organize together and to assert a class action claim.
In an opinion dated May 26, 2016, the U.S. Court of Appeals for the Seventh Circuit held that an arbitration agreement between an employer and its employees for overtime pay claims violates the National Labor Relations Act, or NLRA. The Court also held that such an agreement is unenforceable under the Federal Arbitration Act, or FAA. The case is Lewis v. Epic Systems Corporation.

NLRA, FAA, Worker Rights and Arbitration

The NLRA was enacted in 1935 and provides workers with collective bargaining rights. The NLRA was designed to level the playing field for workers and their employers. Section 7 of the NLRA permits employees to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection. Section 8 of the NLRA enforces Section 7 by stating that any interference by an employer with an employee’s rights under Section 7 is an unfair labor practice.

In Lewis, the Seventh Circuit read the phrase concerted activities broadly to include collective or class remedies. Thus, the Seventh Circuit held that the arbitration agreement at issue in Lewis, which prohibited collective action, was unenforceable and in violation of Sections 7 and 8 of the NLRA.

The Seventh Circuit in Lewis also concluded that the NLRA was not in conflict with the FAA. The Seventh Circuit decided that because the arbitration provision at issue was illegal under the NLRA, the FAA did not require its enforcement. This Court also determined that the right to collective action in Section 7 is substantive, rather than merely procedural. An arbitration agreement that requires a party to waive a substantive right is unenforceable.

Courts are Split

The Lewis opinion is the law only in the Seventh Circuit. That means it is the law only in the federal courts in Wisconsin, Illinois, and Indiana. Texas, on the other hand, is within the Fifth Circuit. Thus, the Lewis opinion is not the law in the federal courts in Texas. In fact, the Fifth Circuit, in D.R. Horton, Inc. v. NLRB, came to the opposite conclusion from the Seventh Circuit. It held instead that Section 7 of the NLRA did conflict with the FAA.

There is a conflict of opinions in the federal circuits. They do not agree regarding the enforcement or not of arbitration and waiver provisions such as those at issue in Lewis and D.R. Horton. Thus, it may be up to the U.S. Supreme Court to decide this issue at a future date.

To learn more about our employment law practice, click here Employment Lawyer. To contact us for a consultation with an employment lawyer, click here Contact Kilgore & Kilgore.

Employment Lawyers Help White Collar Workers Win Overtime Pay

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Employment Lawyers Can Help White Collar Workers Understand the New Labor Rule as it Affects New Eligibility for Overtime Pay

Employment lawyers will soon be busy helping non-exempt employees understand a new rule from the U.S. Department of Labor. This new rule extends the right to overtime pay to 4.2 million additional white collar workers in its first year. In May, President Obama and Secretary of Labor Thomas Perez announced the publication of the Department of Labor’s new rule updating the overtime regulations that apply to white collar workers. We can define these white collar workers as executive, administrative, and professional (called EAP) workers. This also includes certain computer and outside sales employees under the Fair Labor Standards Act. The new rule will become effective on December 1, 2016.

Experienced Employment Lawyers

Our employment lawyers counsel employees covered under the Fair Labor Standards Act. We have litigated numerous unpaid overtime pay claims on their behalf. If you believe that you have a claim against your employer for unpaid overtime pay, click here Contact Kilgore & Kilgore to connect with an employment lawyer for a free review of the facts of your case.

Fair Labor Standards Act Protects American Workers

The Fair Labor Standards Act was originally signed into law by President Franklin Roosevelt in 1938. It provides several important protections for American workers. The Fair Labor Standards Act requires the payment of a minimum wage and overtime pay for eligible employees. Currently the Fair Labor Standards Act’s minimum wage is $7.25 per hour. We can define non-exempt employees as those covered by the Fair Labor Standards Act who are eligible for overtime pay. They are entitled to pay at a rate not less than one and one-half times their regular pay rates for time worked in excess of 40 hours in a workweek. The U.S. Department of Labor administers and enforces the Fair Labor Standards Act.

Exempt Employee Definitions

Under the U.S. Department of Labor’s regulations, an EAP worker is generally exempt from the overtime pay protections of the Fair Labor Standards Act if he or she meets three requirements.  First, the worker must receive a fixed, invariable salary.  Second, the worker’s salary must equal or exceed a specified amount. Third, the worker’s job primarily involves executive, administrative, or professional duties.

Since 2004 and up to December 2016, the weekly salary level for an EAP worker was $455 or $23,660 annually. Bona fide EAP workers who received a fixed annual salary of $23,660 or more were exempt from overtime pay under the Fair Labor Standards Act

Under the new rule, the U.S. Department of Labor will increase the salary level to the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, the South. That level is $913 per week or $47,476 annually. Under the new rule, an employer must pay its salaried EAP workers $47,476 or more annually in order for them to be exempt from overtime pay under the Fair Labor Standards Act. Under the new rule, salaried EAP workers who earn less than $47,476 annually are entitled to overtime pay if they work more than 40 hours in a workweek.

Thousands of Workers in Texas Affected

The U.S. Department of Labor estimates that under the new rule over 370,000 currently-exempt EAP workers in Texas will be entitled to overtime pay. This is only if they work more than 40 hours in a work week. This assumes their employers do not raise their salaries to the new threshold to make them exempt.

Female Workers Affected By the New U.S. Department of Labor Rule

The new rule, according to the U.S. Department of Labor’s estimate, will mean that American workers will earn an additional $1.2 billion in pay. U.S. Department of Labor estimates that approximately 56 percent of affected workers are women and that 61 percent are age 35 or older.

Highly Compensated Workers Also Affected

The new rule also raises the total annual compensation level for Highly Compensated Employees (HCE) above which they would not be eligible for overtime pay. The new HCE salary level will increase from $100,000 to $134,004 annually. In 2020, the salary thresholds for EAP and HCE workers will be updated automatically every three years. The new rule allows employers to use other income received by these workers toward the HCE compensation level. Income from discretionary bonuses, incentive payments, or commissions can satisfy up to 10 percent of the new threshold. However, these payments must be made at least on a quarterly basis.

Employment Practices May Change

Many employers may change their practices as a result of this new rule. With this in mind, employers may be concerned about a potential jump in overtime pay. First, employers could increase some salaries to the new salary threshold to make non-exempt employees exempt. Second, employers may limit some workers to 40 or fewer hours per workweek to avoid overtime pay. Third, employers may reclassify their white collar workers to non-exempt hourly workers. In such cases, hours will be closely monitored and restricted. Nevertheless, some employers could simply choose to pay overtime to their newly non-exempt, salaried workers for their hours worked in excess of 40 in a workweek.
Kilgore & Kilgore has employment lawyers with the skill and experience to counsel and represent you in an unpaid overtime claim ay against your employer. To learn more about our overtime pay employment practice, click here Dallas Wage and Hour Lawyer. To contact us for a free review of the facts of your case with an employment lawyer, click here Contact Kilgore & Kilgore.

Estate Litigation Attorney to Help Protect Inheritance

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An Estate Litigation Attorney Can Help Protect a Potential Heir from Unpleasant Surprises

It is a good idea to involve an estate litigation attorney to protect your interests if you are expecting an inheritance. Estate distribution following the death of a loved one can be complicated, even under normal circumstances. If a blended family resulting from a second marriage of the deceased is involved, or if an unrelated third party such as a caregiver receives an inheritance, a dispute may arise. If you are the spouse or child of someone who just passed away are is elderly, click here Contact Kilgore & Kilgore for a free consultation on how best to protect your interests in your inheritance.

Blended Families Create Inheritance Complexities

When a parent divorces and remarries, the result is a blended family, whether or not the children of the first and second marriages interact with each other. When this parent passes away, it creates a situation with a potential for someone’s legal interest in an estate distribution to be compromised or abused.

Texas law does not always treat a blended family situation the same as a nuclear family for the purpose of estate distribution. An estate litigation attorney has knowledge of the law and how it should be applied. S/he knows of the numerous ways in which a family member could unfairly lose all or part of an inheritance and protect an heir’s interests with great sensitivity in the situation following a death.

Retain an Estate Litigation Attorney if an Inheritance is Anticipated

It is important that you retain an estate litigation attorney as near as possible to the outset of the estate administration process. A delay may seriously compromise one’s protection of interest.

When a spouse in a second marriage, who has children from a previous marriage, passes away without a will, a most critical legal situation arises for the child. Let’s look at how this can lead to a disputed estate distribution. In a normal nuclear family situation, if a married spouse passes away without a will, the surviving spouse will inherit the deceased’s entire estate. Under Texas law, if a person in a second marriage, with children from a previous marriage, passes away without a will, the surviving spouse from the second marriage gets half of the community property in the estate. The children from the first marriage divide the other half in equal shares. Only one-third of the deceased spouse’s separate personal property passes to the surviving spouse, with two-thirds going to any children from outside the current marriage.

Know Texas Law to Avoid Inheritance Surprises

When a person with a spouse and four children with that spouse dies, and there are two children from a previous marriage, the children from the previous marriage will receive half of the community property in the estate. The surviving spouse will receive half of the community property in the estate. The four children from the current marriage will get nothing.

In this example, you can see the tension in this situation. Unfortunately, that tension often creates disputes as to how and whether the estate was properly validated, assessed, partitioned, liquidated, and distributed. Those disputes can be settled or litigated.

Texas Law Follows the Deceased’s Will

If the deceased had a valid will, Texas law requires that the will be followed. Even if the deceased left a will, due to the inherent conflicts of interest in a blended family situation, there is the potential that the will can be deemed invalid because it was created with undue influence by one of the beneficiaries. There are many situations that could invalidate the will. Also, the terms of a will are not always clear. The probate court’s interpretation of ambiguous terms could have significant financial consequences. It is often not clear how an estate should be properly assessed, classified as community or separate property, partitioned, and liquidated. To protect your interests, it is vital that you have an estate litigation attorney monitor the estate administration process and step in to advocate on your behalf when necessary.

Estate Litigation Attorneys Setting Inheritance Disputes

And, of course, there is a situation where an actual dispute over the distribution of an estate occurs. When this happens, or there is any hint that it might happen, it is critical that you have an estate litigation attorney representing your interests from the very outset. A good estate litigation attorney can also help diffuse combustible situations. Often, the estate litigation attorney’s mere presence can dissuade anyone involved from trying to take unfair advantage.

Beware of Caregiver Predators

An especially trying situation both legally and emotionally arises when a caregiver or other third party influences an elder family member to leave all or a substantial part of an estate to the caregiver or third party. The caregiver or third party may have access to estate funds during the elder’s lifetime to use in an attempt to build a legal wall around the estate assets. It may be necessary to retain an estate litigation attorney in an effort to obtain legal redress. Kilgore & Kilgore has successfully handled situations like this, which can require expert testimony from economists, psychiatrists and doctors, litigation in multiple forums, and an extended time to obtain relief.

To learn more about how to protect your inheritance rights to an estate, click here for a free consultation with one of our experienced estate litigation attorneys Contact Kilgore & Kilgore.

Employee Discrimination Cases Involving Job Applicants with Disabilities Now Enjoy a More Lenient Interpretation of Physical Impairment

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Employees with denied disability claims were recently given more hope. A court decision in January 2016 demonstrates the more lenient standards that now apply to disability claims under the Americans with Disabilities Act of 1990 (ADA) and the ADA Amendments Act of 2008 (ADAAA). In a decision in the case Cannon v. Jacobs Field Services North America, Inc., the Fifth Circuit reversed a summary judgment that a lower court had granted in favor of the employer. The U.S. Court of Appeals for the Fifth Circuit decides appeals of the rulings by federal district courts in Texas, Louisiana, and Mississippi.

The ADA prohibits discrimination in the workplace against persons with disabilities. The ADA was significantly amended by the ADAAA. Those amendments became effective in January 2009. The ADAAA relaxed some of the legal standards under the ADA and made it easier for individuals with disabilities to obtain protection and pursue disability discrimination claims against employers.

The lawyers at Kilgore & Kilgore have an abundance of experience in counseling employees under the ADA and litigating denied disability claims on their behalf. If you believe that an employer has unfairly discriminated against you because of your disability, click here Disability Discrimination Attorney  to connect with a Kilgore & Kilgore attorney for a free review of the facts of your case.

In Cannon, the plaintiff Michael Cannon (Cannon) was offered a job by Jacob Field Services (JFS) as a field engineer at a Colorado mining site. However, JFS revoked its employment offer soon after it learned that Cannon had a rotator cuff impairment that prevented him from lifting his right arm above the shoulder. JFS informed Cannon that it was rescinding its employment offer due to his inability to climb a ladder. Cannon’s efforts to show JFS that he could climb a ladder and to discuss his injury and limitations were unsuccessful.

For purposes of the ADA, a person suffers from a disability if that person has “a physical … impairment that “substantially limits” one or more major life activities.” The ADAAA relaxed the definition of disability by clarifying that the substantially limits language is not an especially demanding standard and favors broad coverage. Moreover, the ADA and its regulations now specifically include lifting, reaching, and numerous other activities in its list of major life activities. The Fifth Circuit, contrary to the district court’s conclusion that Cannon was not disabled, found that Cannon had presented sufficient evidence showing that his shoulder injury was a qualifying disability under the ADA.

Furthermore, the Fifth Circuit found that there was a second reason that Cannon satisfied the disability test under the ADA. The ADA not only covers persons with disabilities, but it also covers persons who are “regarded as having … an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.”  The Fifth Circuit found sufficient evidence in the record showing that JFS perceived Cannon’s shoulder injury to be a physical impairment.

Under the ADA, Cannon was required not only to show that he was disabled or regarded as disabled, but also, to show that he was qualified for the job of field engineer. In order to be qualified for the job at issue, a plaintiff must show that he can perform the essential functions of the job in spite of his disability or with a reasonable accommodation of his disability. JFS argued that driving a company vehicle and climbing a ladder were essential functions of the field engineer job that Cannon was unable to do. The Fifth Circuit, again contrary to the district court’s determination that Cannon was not qualified for the job, found sufficient evidence in the record that Cannon was able to drive and some evidence that Cannon could climb a ladder despite his impairment, raising fact issues for a jury to determine. Thus, summary judgment for JFS was inappropriate on this basis, as well. Having reversed JFS’s summary judgment, the Fifth Circuit remanded the case to the district court for further proceedings.

Kilgore & Kilgore has disability claims attorneys with exactly the skill and experience required to counsel and represent you in your denied disability claim against your employer. To learn more about our disability claims practice, click here Employee Rights Attorney. To contact Kilgore & Kilgore through our website, click here Disability Claims Attorneys. We offer a free review of the facts of your case with a lawyer for employee rights.

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Employment Discrimination Cases – The Evolution of Adverse Employment Action

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Employment discrimination under federal laws such as Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, and the Age Discrimination in Employment Act, state it is unlawful for an employer to discriminate against you as an employee with respect to your compensation, terms, conditions or privileges of employment, because of your race, color, religion, sex, national origin, age or disability. The problem—as we’ve discussed in each of our posts in this series on employment discrimination laws covering the workplace—is that the various federal courts often disagree on the meaning of both statutory and judicially created terms and phrases.

For example, the courts must determine what type and level of employment discrimination action your employer must take in order for it to constitute unlawful employment discrimination regarding your compensation, terms, conditions or privileges of employment. For the sake of clarity and simplicity, the federal courts collectively adopted the phrase adverse employment action for this required element of any employment discrimination claim.

But clarity and simplicity flew out the window when those same courts became split about the meaning of their own term. To make matters worse, the U.S. Court of Appeals for the Fifth Circuit, which covers Texas, appears to be a house divided within itself as well, with some judges favoring a stricter interpretation and some a looser interpretation of adverse employment action.

The good news for our clients is that Kilgore & Kilgore has been directly involved in some of the key Fifth Circuit rulings on what constitutes an adverse employment action in an employment discrimination case. Our experienced employment law attorneys are well suited to handle your employment discrimination claim in Texas. If you believe you are the victim of an employment discrimination, contact Kilgore & Kilgore, click here. We offer a free review of the facts of your case.

The division in the federal circuit courts over what constitutes an adverse employment action breaks down into two main camps. The first camp, comprised of a majority of the federal circuit courts, has ruled that an adverse employment action occurs when an employer’s action is materially adverse to an employee. The second camp, which historically has included the Fifth Circuit, takes a stricter approach, ruling that an adverse employment action consists only of ultimate employment decisions such as hiring, granting leave, discharging, promoting, compensating and demoting an employee.

In 2004, Kilgore & Kilgore was successfully involved in one of the most important, and most often cited, cases in this area of employment law. In Pegram v. Honeywell, Inc., Kilgore & Kilgore’s client filed a race discrimination claim in which we argued on his behalf that a transfer to a different position constituted an adverse employment action. In its opinion, the Fifth Circuit panel reaffirmed the strict ultimate employment decision standard and stated that our client’s “claim that his reassignment… was a less prestigious or desirable transfer, without more, does not lift him over the hurdle of summary judgment for the purpose of an adverse employment action.”

However, the court also stated that an employment transfer may qualify as an adverse employment action if the change makes the job objectively worse. Kilgore & Kilgore was able to convince the court that our client’s earnings potential had been reduced as a result of the discriminatory transfer. The Fifth Circuit therefore overturned the district court and ruled in our client’s favor, finding that there was a genuine issue of material fact as to whether the transfer created a demotion sufficient to constitute an adverse employment action, even under its strict ultimate employment decision standard.

Following the Pegram v. Honeywell, Inc. decision, the Fifth Circuit made a series of rulings regarding adverse employment actions based on different fact patterns, the most important of which was its 2007 decision in Alvarado v. Texas Rangers, where the panel ruled that “denial of a transfer may be the objective equivalent of the denial of a promotion, and thus qualify as an adverse employment action, even if the new position would not have entailed an increase in pay or other tangible benefits.”

This set the stage for another case successfully argued by Kilgore & Kilgore in front of the Fifth Circuit. In the 2012 case of Schirle v. Sokudo USA, our client filed a claim for employment discrimination based on national origin when he was stripped of his European executive responsibilities. The Fifth Circuit opinion first cited Pegram v. Honeywell, Inc. in restating that adverse employment actions are limited to ultimate employment decisions. But the opinion then went on to state that “it is recognized that a significant diminishment of material responsibilities, citing the U.S. Supreme Court case, Burlington Indus., Inc. v. Ellerth, that led other federal circuit courts to adopt the looser materially adverse employment action standard… or a demotion, citing Pegram once again, also constitutes an adverse employment action.” Based on this analysis, the Fifth Circuit ruled in favor of our client, stating that the loss of his European sales responsibilities was a diminishment of material responsibilities significant enough to satisfy the adverse employment action element of his prima facie case of employment discrimination.

The Schirle v. Sokudo USA decision laid the foundation for and played a key role in the most recent, and most controversial, of the Fifth Circuit’s line of adverse employment action cases. In its 2014 decision in Thompson v. City of Waco, Texas, the court further extended, in a published opinion, the standard that had evolved through cases such as Pegram, Alvarodo and Schirle, to a situation where an employee’s job responsibilities were significantly diminished, but he retained his same position and title. The Fifth Circuit majority ruling acknowledged previous cases, including Pegram v. Honeywell, Inc., which held that that the mere loss of some job responsibilities does not constitute an adverse employment action.

But the opinion went on to state that, “this does not mean that a change in or loss of job responsibilities can never form the basis of an actionable discrimination claim …. In certain instances, a change in or loss of job responsibilities, similar to the transfer and reassignment contexts, may be so significant and material that it rises to the level of an adverse employment action. See Schirle v. Sokudo USA, LLC.”

The Fifth Circuit noted that the plaintiff in Thompson v. City of Waco alleged more than a mere loss of some job responsibilities. He alleged facts that, taken as true, plausibly suggested that his employer changed his job description to such an extent that he no longer occupied the position he had previously performed, hence it was a de facto demotion. Citing Alvarado v. Texas Rangers, the majority opinion stated that, “we previously have held that an employment decision ‘need not result in a decrease in pay, title, or grade’ to constitute a demotion; ‘it can be a demotion if the new position proves objectively worse, such as being less prestigious or less interesting or providing less room for advancement.’” The majority then concluded that Thompson plausibly alleged that he was subject to the equivalent of a demotion due to the significant changes to his job responsibilities.

The adoption of the easier material adverse employment action standard is good news for those wishing to file employment discrimination claims in the Fifth Circuit. However, this fact did not go unnoticed by those judges on the Fifth Circuit who wish to adhere to the strict standard. First, the justice who dissented from the Thompson v. City of Waco decision accused the majority of using legal smoke and mirrors in order to avoid the strict Fifth Circuit standard of ultimate employment decisions. Subsequently, after the entire Fifth Circuit voted not to rehear the case en banc, another justice filed a dissent complaining that the law governing adverse employment actions in the Fifth Circuit had been subject to such a degree of “panel ping-pong” that “a particular panel can find language, and indeed even legal principles, that likely will support any conclusion that it may reach.” He went on to conclude that “in short, our cases give district judges and litigants no guidance as they attempt to thread their way through our confusion. They deserve better. We should give them better.”

Where does that leave the law regarding adverse employment actions in the Fifth Circuit? At best, it is uncertain. While the state of the law is unclear, what is clear is that the legal standard for what constitutes an adverse employment action has clearly shifted, through the course of Pegram to Alvarado to Schirle to Thompson, in the direction of employees. It is also clear that Kilgore & Kilgore has been instrumental in both protecting the interests of its clients in front of the Fifth Circuit, and in moving the ball forward for all employees who have been discriminated against, making it easier for them to receive justice under the law.

From these high profile cases in the U.S. Court of Appeals for the Fifth Circuit, our employment law attorneys have gleaned a depth of experience in employment discrimination cases in Texas. This includes not just legal experience in a complicated area of employment law, but invaluable practical experience and familiarity with the courts and the judges. This helps every employment discrimination client as we bring claims on behalf of employees against large, medium and small employers in federal and state courts. When it comes to employment discrimination lawsuits, there really is no substitute for experience. To learn more about employment discrimination, click on this link Employment Discrimination Law. To contact Kilgore & Kilgore, click here. We offer a free review of the facts of your case.

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Non-compete Clauses in Employment Agreements in Texas

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Many employers require their executives and key employees to sign employment agreements that identify the employee’s duties, responsibilities, and compensation. Also included in these employment agreements is a statement of the respective termination procedures to be used at the conclusion of the employment relationship. Typically, these employment agreements include a choice-of-law provision stating that they are governed by Texas law.

Employment agreements often include non-compete, non-solicitation, and non-disclosure restrictions, also known as restrictive covenants. Typically, the non-compete restriction becomes effective on the date of the employee’s separation from employment and remains in effect for one to three years henceforth. A non-compete covenant usually contains a geographical area that is off limits to the departing employee. The non-compete clause generally also describes the business activity that is to be restrained. This description is often vague and general. An example of a non-compete covenant might be as follows: From the date of separation from Employer and for two years thereafter, Employee shall not compete within the state of Texas in a business that is similar to Employer’s.

A non-solicitation provision in an employment agreement generally prohibits the departing employee from soliciting current or prospective customers or clients of the employer for a particular period of time, often one to three years. A non-disclosure provision typically prohibits an employee from revealing the employer’s confidential or proprietary information to a third party during and after the employment relationship.

Often, legal disputes arise over certain issues and whether or not the non-compete is enforceable. Texas courts are likely to enforce non-solicitation and non-disclosure provisions, as long as certain contractual requirements are satisfied.

If you have an employment agreement that contains non-compete, non-solicitation, and/or non-disclosure clauses, Kilgore & Kilgore can review your employment agreement and help you understand those provisions. If you have questions about your employee rights under your employment agreement, or if your former employer is threatening to bring, or has already brought, a claim against you, click here to contact us.

Generally, under Section 15.50(a) of the Texas Business and Commerce Code, Texas courts will enforce a non-compete covenant as long as the employment agreement satisfies certain contractual requirements, the temporal and geographical terms, and the activity to be restrained in the non-compete are reasonable and do not impose a greater restraint than is necessary to protect a legitimate business interest.

Although under Texas law a non-compete covenant could potentially be enforceable, a non-compete might not necessarily be enforceable under another state’s such as Oklahoma’s, law should it apply.

In Cardoni v. Prosperity Bank, a 2015 preliminary injunction case from the U.S. Court of Appeals for the Fifth Circuit, the court determined that Oklahoma law applied, rather than Texas law, as provided in the parties’ choice-of-law provision. This ruling specifically addressed the issue of whether or not a non-compete is enforceable against four bankers in Tulsa who left Prosperity Bank and went to work for a competitor. As part of its choice-of-law analysis, after examining the relevant contacts of both parties, with both Texas and Oklahoma, the court initially determined that Oklahoma law had a more significant relationship to the employment agreements, and thus, would apply in the absence of the Texas choice-of-law provision.

The Fifth Circuit also concluded that the bankers were able to avoid the application of Texas law to their non-competes because Oklahoma had a materially greater interest than Texas on the issue of the enforceability of the non-competes. This was because the application of Texas law would contravene a fundamental policy of Oklahoma. Unlike Texas, Oklahoma has a strong, fundamental policy against the enforcement of non-competes. Unlike Texas, Oklahoma is averse to non-compete covenants as restraints on the exercise of a person’s profession, trade, business, and competition. Thus, as in the Cardoni case, the enforceability of a non-compete could hinge on a determination of whether Texas law or the law of another state applies to the non-compete covenant.

Kilgore & Kilgore has employment attorneys with exactly the type of skills and experience required to review your employment agreement and to counsel you on any non-compete, nonsolicitation, and/or non-disclosure provisions. To learn more about the employment law practice at Kilgore & Kilgore, click here Non-compete Agreements. You can contact Kilgore & Kilgore through our website, click here. We offer a free review of the facts of your case with an employment attorney.
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Jury Awards in Employment Discrimination Claims

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In a recent employment discrimination case, a federal district court jury in New Hampshire ordered Walmart to pay a whopping $31.2 million to a female pharmacist for gender discrimination in violation of Title VII of the Civil Rights Act of 1964 (Title VII), as well as gender discrimination, employment retaliation and wrongful termination in violation of New Hampshire state law. By all appearances, it seems that Maureen McPadden, the plaintiff in McPadden v. Walmart, will soon become a millionaire many times over. But wait for the other shoe to drop.

In employment discrimination verdicts, initial appearances are often not the final reality, for many reasons. The first reason is because Title VII limits compensatory and punitive damage awards to a maximum of $300,000; even less for smaller employers.

Judges have discretion to reduce a jury’s damage award if they feel that the awards are excessive or unjustified, based on the evidence and circumstances. As expected, Walmart said it will appeal the verdict and damage award. Because of the Title VII caps, Walmart will likely succeed in having the award reduced. But, how much will McPadden ultimately put in her pocket at the end of the legal proceedings?

Deciding which employee discrimination claims to bring under federal and state law, proving those claims to the jury, convincing the jury to allocate the maximum amount of damages under each award category, and convincing the judge to uphold the jury’s awards, requires the skills of a highly-qualified and experienced employee rights attorney. The employment law attorneys at Kilgore & Kilgore have a track record of bringing and winning employment discrimination cases. Contact us today by phone at (214) 969-9099 or by email to de*@ki********.com for a free review of the facts of your case with an employment law attorney.

The most important factor in how much McPadden receives at the end of the day may involve the quality of her legal representation. Maximizing ultimate damage awards requires effectively presenting, proving and capitalizing on all of the different types of damages available under the various employment discrimination laws such as Title VII, the Age Discrimination in Employment Act, the Americans with Disabilities Act of 1990, Sections 1981 and 1983 of the Civil Rights Act of 1871. Plus, this requires addressing whatever state employee discrimination rights laws apply. Then the judge must be convinced to uphold such awards, subject to statutory caps, based on the evidence and circumstances of the case. All of this is extremely complex and requires skilled, experienced employment discrimination attorneys. Without an experienced employment law attorney, you may leave thousands, perhaps millions, of dollars on the table that you might otherwise have received.

Here is an overview of the common forms of damage awards you may be able to obtain in an employee discrimination claim. Let’s take a look at how the jury allocated McPadden’s $31.2 million award. The jury awarded her $164,093 in back pay, $558,392 in front pay, $500,000 in compensatory damages, $15 million in punitive damages for gender discrimination in violation of Title VII and $15 million in enhanced compensatory damages for gender discrimination in violation of New Hampshire state law.

The judge on appeal will most likely cut the $15.5 million in compensatory and punitive damages under Title VII down to the $300,000 cap. The jury is not told about this cap before making its award. Then, the judge will review the rest of the damage awards to determine whether or not they are reasonable based on the evidence and circumstances. It will take a very good employment discrimination lawyer to convince the judge to uphold these awards as granted by the jury, to not have them reduced.

Under Title VII, back pay includes wages, the value of lost benefits, vacation time, bonuses, etc., for two years before the case is filed and up until the time of judgment. Back pay is not included under the Title VII damage cap, but you do have a duty to mitigate those damages by using reasonable diligence to find a substantially similar job.

Front pay compensates for the future effects of employment discrimination when reinstatement is not feasible, including the lost wages, benefits, bonuses, etc., during the time it takes to find a new job, as well as any pay disparity involved in changing jobs. Once again, this is not subject to the cap, but you do have a duty to mitigate.

In order to receive compensatory damages, you must submit proof of actual non-economic injuries, such as emotional distress, pain and suffering, or harm to reputation, caused by your employer’s unlawful conduct.

Punitive damages may be awarded if your employer acted with malice, willfulness or reckless disregard for your federally protected rights. These are not automatic, even when intentional employment discrimination is proven. The court considers a slew of factors in deciding if punitive damages are reasonable at all, and if they are, for how much.

Attorney’s fees can also be awarded to you if you prevail in the case. One way to avoid the Title VII damage caps is to file and win a claim under Section 1981 or 1983, which have a higher burden of proof, but are not subject to the caps. Regardless, however, your award will always face judicial review for excessiveness and reasonableness based on the circumstances and evidence.

As you can begin to see, deciding which employment discrimination claims to bring under federal and state law, proving those claims and convincing the jury to allocate the maximum amount of damages under each award category is a complex challenge. Then, convincing the judge to uphold the jury’s awards requires the skills of a seasoned employment discrimination attorney.

Kilgore & Kilgore has employment attorneys with exactly the type of skills and experience required to give you the best chance to win your employment discrimination claim and maximize your award. To learn more about Kilgore & Kilgore’s employment discrimination law practice, click here Employment Discrimination Law Practice. You can contact Kilgore & Kilgore through our website, click here Contact Kilgore & Kilgore. We offer a free review of the facts of your case with an employment discrimination attorney. Or, just call us at (214) 969-9099.

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Equal Pay Practices are the Focus of the EEOC’s Recent Proposal

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In January, the U.S. Equal Employment Opportunity Commission (EEOC) published a proposal that targets the collection of pay data in annual reports submitted to it by employers in an effort to create a database of wage information that might be used to identify opportunities for achieving equal pay. The goal of this initiative is to help the EEOC in its investigations of employment discrimination and wage and hour claims. If approved, the new rule would go into effect in September 2017.

Kilgore & Kilgore can help you understand EEOC guidelines and procedures. If you feel you have have a claim concerning your employee rights, click here Contact Kilgore & Kilgore or call us at (214) 969-9099. We offer a free review of the facts of your case with an employment lawyer.

The EEOC enforces the federal laws prohibiting employment discrimination, including pay discrimination. For the last 50 years, pursuant to Title VII of the Civil Rights Act of 1964, the EEOC has collected data from certain employers regarding the number of their employees by sex, race, ethnicity, and job category. This information is submitted annually by employers to the EEOC on a form called the EEO-1. On January 29, 2016, the EEOC published a proposal to broaden the scope of the data required in an EEO-1 form to also include pay data. The proposal would apply to all private employers, including federal contractors, with 100 or more employees, and, subject to final approval, would go into effect with the September 30, 2017 EEO-1 filing deadline.

Pay inequality often goes undetected because of a lack of information about what employees are paid. Through its proposed new EEO-1 form, the EEOC is targeting employer discriminatory employment pay practices. Employers often ignore or retaliate against employees who might suspect discriminatory pay practices and seek information about wages. According to the Chair of the EEOC, collecting pay data will help the EEOC and the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) identify pay disparities across industries and occupations. The EEOC and the OFCCP, according to the Chair, will use this pay data to more effectively focus their investigations of employer pay practices, assess charges of employment discrimination, and identify existing pay disparities that could lead to further investigation.

In addition, the EEOC believes that collecting pay data will encourage employers to examine their own pay practices, take measures to eliminate pay discrimination in their workplaces, and promote fair pay practices.

The information is not publicly available. As required by law, the EEOC holds employer EEO-1 data confidential. The specific data contained in the proposed EEO-1 would not be publicly searchable or available by the name of an individual employer or employee. Instead, the EEOC would publish only aggregate pay data submitted by employers. The EEOC believes that this information would help employers determine whether or not they are paying employees fairly and consistently with industry and regional practices.

The EEOC hopes that its proposed EEO-1 form would further spur employers to self-examine their pay practices and remedy any deficiencies or unfair practices. Some companies already voluntarily analyze their pay data to determine if there are disparities in wages. Intel, the technology company, recently issued a report, based on its analysis of employee compensation, concluding that there was no pay gap in 2015 between men and women in the U.S. who work at the same job-grade level within Intel. The clothing retailer Gap similarly concluded in 2014 that its data showed pay equality for men and women. Employers whose data demonstrate pay equality will likely publicly disclose that fact to win public approval and boost investor confidence.

Under the proposed EEO-1, employers would identify employee aggregate W-2 earnings for a 12-month period going back from a pay period between July 1 and September 30 of the reporting year, as chosen by the employer. For each of the EEO-1 job categories, the proposed EEO-1 would have 12 pay bands. The first pay band would be $19,239 and under. The twelfth pay band would be $208,000 and over. For example, according to the EEOC, on the proposed EEO-1, an employer would report that it employs 10 African American men who are Craft Workers in the second pay band of $19,240 to $24,439.

When it comes to keeping up with changes in the requirements and the procedures at the EEOC, there really is no substitute for experience. Kilgore & Kilgore employment lawyers have a wealth of experience at your disposal. To learn more about Kilgore & Kilgore, click here EEOC Employment Practice. To contact us through our website, click here Contact Kilgore & Kilgore. For a free review of the facts of your case with a Kilgore & Kilgore employment attorney, send an email to de*@ki********.com. Or, call us at (214) 969-9099.

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