Defamation Lawsuits – Anti-SLAPP Dismissals Just Became a Bit More Difficult

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Last month we gave you an overview of the Texas anti-SLAPP law, called the Texas Citizens Participation Act (TCPA) regarding defamation lawsuits. In that post we told you how useful the TCPA was to persons hit with abusive defamation lawsuits and the like, and that the Texas courts to date had given a fairly broad interpretation of the law in favor of persons bringing a TCPA motion to dismiss. At the end of April, however, the Texas Supreme Court made it a bit more difficult to obtain the dismissal of a SLAPP defamation lawsuit under the TCPA. The court did so by clarifying that circumstantial evidence may be introduced by the party defending a TCPA motion to dismiss in order to show by clear and specific evidence a prima facie case for each element of the claim.

The matter before the Texas Supreme Court was In re Steven Lipsky, a relatively well-known case involving alleged well-water contamination by Range Resources Corporation and Range Production Company (Range), which engaged in hydraulic fracturing adjacent to Mr. Lipsky’s property. Lipsky conducted a public battle against Range, at one point purporting to show that he could light his well-water on fire. Range ultimately filed claims of business disparagement and defamation against Lipsky and his wife, and this is the case that ended up in front of the Texas Supreme Court.

Lipsky was easily able to meet his first TCPA hurdle and show by a preponderance of the evidence that the case involved his first amendment rights and involved a matter of public concern. So the motion to dismiss turned on whether Range could establish by clear and specific evidence a prima facie case for each essential element of its business disparagement and defamation claims. In order to do so, Range introduced evidence that was circumstantial, i.e., required inferences to be made to reach a conclusion, as opposed to direct evidence, which would require no such inferences.

Lipsky argued that only direct and not circumstantial evidence should be considered by the court in rendering judgment on whether Range had met its TCPA burden of proof. Range, on the other hand, argued that circumstantial evidence and rational inferences may be considered by the court in determining whether clear and specific evidence exists. Prior to this case, the Texas appellate courts had been split on this issue, which to a non-lawyer may seem technical, but is actually very important. The Texas Supreme Court accepted the case of In Re Lipsky to resolve this dispute among the lower courts.

In a unanimous decision, the Texas Supreme Court ruled that circumstantial evidence could be considered by the court if it met the standard of clear and specific evidence. In this particular case, Range’s ability to introduce circumstantial evidence was the difference between Lipsky’s motion to dismiss regarding the defamation claim being granted, which it was not, or denied, which it was. And this will likely be the turning point in many future anti-SLAPP motions to dismiss as well.

In fact, there is one other such case in front of the Texas Supreme Court right now, and no doubt this particular issue in that case has already been decided. However, KBMT Operating Company LLC et al v. Minda Lao Toledo involved another important issue affecting certain anti-SLAPP motions to dismiss; and that issue remains to be decided. In that case, Toledo filed a defamation claim against KBMT, the owner of a local television station which reported, based on public government statements and documents, that she was a pediatrician who had sexual relations with one of her patients. While this technically may have been true, the full reality was that she had sexual relations with her adult boyfriend who she also provided with medication in an unprofessional manner.

In addition to the circumstantial evidence issue, KBMT v. Toledo involves the fair report privilege, which under the Texas Civil Practice and Remedies Code, provides that publications are privileged (e.g., cannot be subject to defamation claims) as long as they constitute a fair, true, and impartial account of a judicial proceeding or other official proceedings to administer the law. This case turns on whether such a fair, true and impartial account was given by the television station, and possibly on whether a publisher of fair report material has to do any additional research to ensure their account is such.

Finally, at the same time the Texas Supreme Court handed down its In re Steven Lipsky decision, it also delivered an opinion on another anti-SLAPP defamation lawsuit regarding yet another issue. In Lippincott v. Wishenhut, the court ruled that first amendment communications covered by the TCPA do not have to take place in a public forum. They only need to involve a matter of public concern. So communications made in private that involve a public concern can give rise to a TCPA motion to dismiss.

The Texas Supreme Court seems clearly intent on clarifying the TCPA, and realizes its growing importance with respect to defamation, libel, business disparagement and other such claims in Texas. If you are involved in a case like this, it’s important that your attorney realizes this importance and is up-to-speed on the latest developments as well. Kilgore & Kilgore has experienced commercial litigation attorneys ready to evaluate your situation. Call us today at (214) 969-9099 or email de*@ki********.com to set up a free review of the facts of your case with a Dallas attorney.

Defamation Lawsuits – Hit Back When You Get SLAPPed

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Defamation lawsuits were wielded like a club up until a couple of years ago. Companies and individuals with money and legal resources could bring suit against anyone. If you publicly criticized the company polluting your local river, the doctor that took your appendix out and then slipped questionable items into the bill, or the restaurant that gave you food poisoning, you did so at your own risk— because you may have exposed yourself to an expensive court fight with little recourse other than to go through the entire time-consuming process. Even if you won the courtroom battle, you would still lose the war due to the time and cost involved. These lawsuits—some of which rose to the level of pure harassment of people’s rights to free speech—took on the acronym SLAPP, which stands for strategic lawsuits against public participation. The goal was often not to win, but rather to intimidate.

In June 2011, the Texas legislature joined what is now 27 states in giving persons hit with a SLAPP defamation lawsuits their own legal defensive weapon when it passed the Texas Citizens Participation Act (TCPA). Under the TCPA, if a lawsuit claim is based ona person exercising his/her right to free speech, right to petition or right of association regarding a matter of public concern (as defined in the statute), that person may file a motion to dismiss the claim.In addition, if the motion to dismiss is successful, the court must award to the defendant his/her attorneys’ fees and court costs, as well as some degree of sanctions to deter future actions of a similar nature.

This means that frivolous defamation lawsuits intended to intimidate and cost a defendant time, money and embarrassment could actually boomerang back to the individual and/or company, costing the one filing the suit money and embarrassment.

When enacting the statute, the Texas Legislature expressly stated, “The purpose of this chapter is to encourage and safeguard the constitutional rights of persons to petition, speak freely, associate freely, and otherwise participate in government to the maximum extent permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for demonstrable injury.”

The TCPA process is designed to work quickly and set a high hurdle for the plaintiff to clear. For example, if a person exercises his/her right to free speech by starting a website for the purpose of criticizing the dumping of toxic waste into a local river, and as a result, the company dumping the waste files a defamation lawsuit against the website owner, the owner may file a TCPA motion to dismiss.

In most cases, the court must hold a hearing on the motion to dismiss within 60 days of the motion being served. The burden of proof would initially be on the website owner to establish by a preponderance of the evidence that the defamation lawsuit was filed in response to his/her exercise of first amendment rights. Assuming s/he is able to do so, then the burden shifts to the company that filed the claim to establish by clear and specific evidence a prima facie (accepted as correct until proven otherwise) case for each essential element of the claim. If the individual or company is able to do this, the motion can still be won by the website owner if s/he can establish by a preponderance of the evidence each essential element of a valid defense to the plaintiff’s claim.

Very importantly, while all of this is happening there will be a stay of discovery in the original lawsuit. This means that the website owner would not be subject to expensive and time-consuming document production, depositions, etc. while the TCPA motion to dismiss is being argued and decided.

All in all, the TCPA has proved to be an effective shield against frivolous SLAPP lawsuits, as Texas courts have in large part interpreted the act as a difficult hurdle for plaintiffs to clear.Recently, however, plaintiffs have begun to push back harder, and the Texas Supreme Court has taken up two cases that may clarify what a plaintiff has to show to meet the clear and specific evidence standard for the defamation lawsuit to go forward.

This will be the subject of Part 2 of this post. This illustrates how important it is for you to have good legal representation if you are subject to a defamation lawsuit. Remember, if you win a TCPA motion to dismiss, the other party will have to pay your attorneys’ fees and then some, and the claim will go away. But if you lose, you will have to pay both the attorneys’ fees for the motion and the case going forward.

If you are subject to a SLAPP lawsuit, Kilgore & Kilgore has experienced commercial litigation attorneys ready to evaluate your situation. Call us today at (214) 969-9099 or email de*@ki********.com to set up a free review of the facts of your case with a Dallas litigator.

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Personal Injury-Wrongful Death Lawsuit Filed Against General Motors Continues to Reverberate

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In 2010, the family of a Georgia woman filed a wrongful death action against General Motors (GM) after she was killed in a car accident on her 29th birthday due to a defective ignition switch in her 2005 Chevrolet Cobalt. This personal injury lawsuit eventually led to the revelation that GM had known for years about the faulty ignition switch and allowed it to remain uncorrected by what GM’s own CEO called “a pattern of incompetence and neglect.” The publicity following the personal injury lawsuit and the discovery that the defective cars had been left on the roads led to thousands of claims being filed against GM, the creation of a $400 million fund for personal injury claims, and the 2014 recall of 2.6 million small cars with defective ignition switches. One family’s personal injury claim for justice resulted in justice for other victims and protection for millions of people traveling our nation’s roads.

The Georgia family’s wrongful death action and the following flurry of similar personal injury claims had a ripple effect on the entire auto industry. With the spotlight turned on the car manufacturers, they began recalling automobiles in record numbers. In fact, in 2014 alone the automakers sent out more than 64 million recall notices in the United States, more than double the amount sent out in the previous record year.

One of the most highly publicized recalls over the last several years has been of cars containing Takata airbags, of which 24 million have been recalled globally since 2008. This faulty airbag recently claimed a victim in Texas. In January, a man who had bought a used vehicle from a dealership was killed by the airbag defect during a minor traffic accident. The victim of this unnecessary tragedy was the father of a 14-year-old boy and a 13-year-old girl.

Members of the U.S. Congress have proposed a bill that would put more pressure on automakers to correct rather than conceal defects. A U.S. Senate Committee recently approved the bill, labeled the Motor Vehicle Safety Whistleblower Act, which grants incentives to auto industry whistleblowers to come forward with their knowledge of defective parts in cars on the market. If the bill is approved, whistleblowers would be eligible to receive up to 30 percent of penalties that exceed $1 million tied to any motor vehicle defect, noncompliance or violation of reporting requirements likely to cause risk of death or serious personal injury.

Senator Bill Nelson of Florida, who co-sponsored the legislation, said that the “auto industry needs to be held accountable” and “one way to do that is to encourage insiders to come forward and tell the truth.”

The bill now heads to the full Senate for consideration. If it passes there, it would be taken up by the House Energy and Commerce Committee. If passed by Congress and signed into law by the president, which is far from certain, the bill would certainly increase accountability. It would also increase the probability that if a personal injury or wrongful death case was filed in court, if there was a hidden defect, then somebody would come forward and disclose it.

In reality, however, the filing of a personal injury lawsuit or awrongful death lawsuit is what primarily holds the automakers and other manufacturers who are at fault for defective products accountable. If the Georgia family had not filed the case against GM, the faulty ignition switch may never have been discovered. If the defect had remained undetected, the recall may never have occurred and many more people would have died or been seriously injured. In addition, those who had already been injured, and the families of those who were killed, would not have received compensation or justice. So the original personal injury lawsuit and those that followed served several purposes: they held GM accountable for its horrendous failure to protect its customers and the public, they attained just compensation for the victims, and they provided a public service by forcing the recall of defective products.

If you or a loved one are the victim of an accident that caused personal injury or death as a result of a defective part or design in an automobile or any other product, you may be entitled to compensation by the manufacturer, and could also be providing a public service by bringing this defect out into the light of day. Kilgore & Kilgore’s personal injury lawyers are ready to evaluate your situation. Call us today at (214) 969-9099 or email de*@ki********.com to set up a free review of the facts of your case with a Dallas personal injury lawyer.

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Springtime Musings: Getting Married This Year? Go in With Your Eyes Wide Open by Nicholas O’Kelly, Attorney

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Despite their fervent intentions at the time of the marriage proposal, many engaged couples say “I don’t” before signing the marriage certificate. As the first children-of-divorce generation to reach marrying age, today’s twenty-and thirty somethings would much prefer a broken betrothal to a broken home. Breaking an engagement is difficult, but rather than face it with shame, many almost-unhappily-marrieds see it as a wise, even courageous act. Such “disengaged” individuals have become increasingly visible and vocal. Nobody tracks how many engagements are broken each year, and people in the always-upbeat wedding industry are reluctant to even discuss the issue. However, in an online national poll of 565 single adults conducted in August 2003 by Match.com/Zoomerang for Time, 20% said they had broken off an engagement in the past three years, and 39% said they knew someone else who had done so,” writes Pamela Paul, from Time Magazine.1

After the pain and disappointment on one side, and the corresponding sigh of relief on the other, there remains the practical question: Who gets to keep the engagement ring now that there’s no wedding? It depends on the facts, according to Nicholas O’Kelly, attorney with Kilgore & Kilgore and Kilgore & Kilgore PLLC in Dallas, Texas. Texas applies the “conditional gift rule.” In other words, the engagement ring is viewed as a conditional gift given in contemplation of marriage and on condition that the marriage takes place. The future permanent home of the ring is dictated by the answer to the question: Who broke off the engagement and why? If a woman accepts the ring, but later breaks off the engagement for no justifiable reason, such as infidelity or her fiancé’s pre-existing marital status, Texas law requires her to return the ring.

In a recent case, the Court of Appeals in Austin held that this rule applies equally to the man. In that case, the fiancé called off the wedding because of his fiancée’s “sexual hang-ups” and “issues with men.” There was no evidence of infidelity or any other justifiable reason. The court held that the man was at fault and allowed the woman to keep the engagement ring.

This is not the rule in all jurisdictions, many of which have perhaps wisely concluded that it is impossible to determine whether any particular breakup was justified, regardless of the circumstances. However, the law in Texas is clear.

With springtime upon us yet again, our advice to all courting couples, when you say “Yes,” make sure you mean it and don’t give your fiancé(e) a reason to break it off.

Says Christine Steinorth, MA, MFT, a Psychotherapist, and the Author of “Cue Cards for Life: Thoughtful Tips for Better Relationships,” you would be surprised how many women going through divorces tell me they knew they were making a mistake when they walked down the aisle…” Here are her five warning signs you may want to consider before saying “I do.”

1. You don’t get along with his family. Many couples go through with weddings hoping all the family stuff will “just work out.” Don’t fall into this trap because it seldom does.

2. You’ve dated for less than a year. Most people are on their best behavior for the first twelve months of a relationship. After that, people tend to let their guard down a little bit and you get to see what a person is really like.

3. You haven’t come to an agreement about kids, careers, finances and other fundamental issues. So many couples get caught up in wedding planning, that they forget to talk about the basic matters of sharing a life together.

4. You lack conflict resolution skills. A lot of couples write off arguments before a wedding as “wedding day jitters,” but the truth of the matter is that if you have horrendous arguments and fights with your partner and nothing ever seems to get resolved, you may want to consider calling off your wedding until the two of you work on your conflict resolution skills. Long-term relationships require good communication skills. The good news is that this can be learned if both people are committed to doing so.

5. Your gut feeling is telling you to call it off. We have gut feelings for a reason, and where most of us get into trouble is when we don’t listen to them. If your gut feeling is telling you to call off your wedding, it’s probably a good idea to listen to that feeling and postpone your wedding until the feeling goes away. If you are meant to be together, that current gut feeling that is telling you “don’t do it,” will eventually pass.2

If you are contemplating a marriage, you would be wise to consult a therapist or marriage counselor before proceeding. Bringing the thorny issues of a relationship out into the light of day and working through them together will strengthen the bond that binds you. If you are thinking of calling it off, Kilgore & Kilgore has experienced attorneys ready to advise the best course of action for your situation. Email de*@ki********.com to set up a free review of the facts of your case with a Kilgore & Kilgore lawyer.

1 Calling it Off, by Pamela Paul, October 1, 2003, Time Magazine, http://content.time.com/time/magazine/article/0,9171,490683,00.html

2 Calling Off a Wedding – 5 Signs You Should Do It, by Christine Steinorth, MA, MFT, March 16, 2015, Huff Post. http://www.huffingtonpost.com/2012/09/14/calling-off-a-wedding_n_1881407.html

No-Poaching Agreements Between Companies are Illegal and Take Money Out of the Pockets of Employees – by Ted Anderson

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Apple, Google, Intel and Adobe recently agreed to a $400 million settlement to be distributed among more than 64,000 employees who worked at those companies between 2005 and 2009. During that time, each of these companies agreed not to make cold calls to the employees of other companies, as well as other recruiting restrictions. The U.S. Department of Justice (DOJ) found that these agreements literally took money out of the pockets of the affected employees by suppressing employment opportunities and compensation values.

A class action lawsuit was also filed against the companies, which initially demanded approximately $3 billion in lost compensation and treble damages. As a result of the DOJ action, the ensuing civil lawsuit and pending settlement, employers around the country are on notice that restrictive no-poaching practices will most likely violate federal and state anti-trust laws and may lead to harsh consequences that include awards to employees of the amounts they would have made if not for the collusion, not to mention potential treble damages.

Some of the most well-known and powerful companies in the world are learning the hard way that businesses cannot collude to restrict the free market for skilled employees. The trouble for these companies began back in 2010, when the DOJ’s Antitrust Division filed a complaint in U.S. District Court alleging anti-trust violations of the Sherman Act, saying that the companies had reached “facially anticompetitive agreements” that “eliminated a significant form of competition … to the detriment of the affected employees who were likely deprived of competitively important information and access to better job opportunities.” The DOJ found that the companies had in fact agreed not to cold call each others’ employees and had kept “do-not-call lists” to avoid such recruiting.

There is no doubt that these collusive agreements and practices harmed employees. One of the principal means by which many companies with skilled workers competitively recruit employees is to solicit them directly from other companies in the process referred to as cold calling, which is very effective at reaching the best and most satisfied employees regarding alternate career opportunities. Competition in the labor market results in better salaries, enhanced career opportunities and increased mobility for employees. On the flip side, collusive agreements not to solicit or hire certain employees reduce competition and lower salaries. In fact, these restrictive practices have much the same effect as price-fixing or agreements between companies not to compete for certain buyers, both of which are “per se” violations of the anti-trust laws.

After the DOJ investigation, the companies involved agreed to end their anticompetitive practices. However, the DOJ did not extract any compensation for the Apple, Google, Intel and Adobe employees, and so the civil lawsuit was filed to get them their just due. In the end, it appears that that lawsuit will cost the four companies hundreds of millions of dollars that will be distributed among the employees who were harmed by the aforementioned restrictive practices.

Unfortunately, this type of collusion that Apple, Google, et al, thought they could get away with is all too common and occurs in Texas as well as the Silicon Valley. And, if any companies in Texas engage in the same or similar practices in restraint of a free labor market, their employees would be equally harmed and equally entitled to compensation. For example, if large companies in the oil and gas industry agreed not to poach or solicit each other’s engineers and workers without a justifiable reason for doing so, then those workers may have a claim against the companies involved.

Kilgore & Kilgore is highly experienced in these matters and all aspects of employment law. If you have information that leads you to believe that your employment opportunities and compensation packages are being restricted due to collaboration among potential employers, or if you have any other questions regarding employment matters such as non-compete or non-solicitation agreements you may have signed, contact Kilgore & Kilgore today. Our Dallas employment attorneys are ready to evaluate your situation. Call us today at (214) 969-9099 or email de*@ki********.com“>de*@ki********.comto set up a free review of the facts of your case with a Dallas employment lawyer.

Guardianship Grabs by Nursing Homes and Others Cheat Heirs of Inheritances

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Nursing homes are regularly using guardianship petitions as a means of bill collection. Other parties may also abuse the guardianship process to serve their own needs. A recent study of guardianship cases filed over a ten-year period indicated that 12 percent of such cases were brought by nursing homes. Interviews with veterans of the system and a review of guardianship court data conducted by researchers at Hunter College, at the request of the New York Times, show the practice has become routine, underscoring the growing power nursing homes wield over residents and families amid changes in the financing of long-term care. 1

A 2007 study funded by a grant from the Retirement Research Foundation states: “As of 2007, a total of 44 states have specific statutory provisions on public guardianship, whereas seven states include no such reference in their code.”

Seniors can have in place a power of attorney, a health care directive and a will, but all of that planning can be overturned by a guardianship established by a nursing home or other parties. Seniors should be aware of guardianship laws in their state, discuss with an attorney their plans for long-term care, and manage the transition from private pay to Medicaid.2

Guardianship can be a necessary and useful legal means of protecting the rights and assets of a loved one who has lost the ability to make important decisions. Unfortunately, guardianship laws are sometimes abused by persons wanting to protect and enrich their own interests rather than the person in a vulnerable position. This abuse can come from nursing homes, unscrupulous family members, friends, business partners, caregivers, and even persons connected with the court system. In virtually every case, the only way to fight such abuse is to have an experienced and effective attorney on your side who understands the laws relating to elder care and the legal system. Kilgore & Kilgore has attorneys with experience in protecting the elderly and the heirs when the inheritances were compromised by the actions of others.

Guardianship gives a person the legal right and duty to manage the personal and/or financial affairs of someone who is unable to do so for him or herself. In Texas, guardians are appointed by the court for persons who are proven to be “incapacitated.” Because any guardian appointed by a judge will have full control over all or some of the affairs of the incapacitated person (called a “ward”), the appointment process is not easy by design. It almost always requires an experienced attorney to act on behalf of the family member or other person who is requesting that a guardian be appointed.

In the vast majority of cases, guardianships do what they are designed to do: protect vulnerable persons from abuse, neglect and exploitation. Unfortunately, however, in some cases, persons with their own agendas try to use the guardianship laws for their own benefit. A recent report in the New York Times put the spotlight on nursing homes which abuse the guardianship process as a method of bill collecting. The nursing home may petition the court for a guardian to be appointed on behalf of someone in their care who has not paid what the nursing home claims to be the outstanding balance. By doing so, the nursing home initiates an expensive and stressful process that puts pressure on the person in its care to either pay the demanded amount or risk losing control of his or her personal finances.

Persons in Texas have been shown to abuse the guardianship process as well. In 2012, the San Antonio Current published its own exposé on guardianship abuse. The focus of this report was on a process in Texas called “court-initiated guardianships.” Under the laws governing this process, if a judge becomes aware of any person on whose behalf a guardian may need to be appointed, the judge is obligated to commence an investigation to determine whether doing so would be appropriate. If the investigation shows to the court’s satisfaction that a guardian should be named, then the judge may do so regardless of whether any family member has expressed a desire for a guardian to be appointed—and sometimes even over the objections of the person becoming the ward.

In theory, when choosing a guardian, the judge is required to follow a priority list provided by Texas law, but there are ways around this. For example, if the ward is an adult, then the law directs the judge to first look to whether the ward has already designated a guardian in the event of incapacity, and if not the judge looks to the spouse, the next of kin, and so on. However, there are many legal methods for a judge to disqualify a person from becoming a guardian. These include a determination that a person has a claim adverse to the ward’s assets, has engaged in notoriously bad conduct, lacks the ability or education to handle the ward’s affairs, or is otherwise found unsuitable by the court. So in reality, the judge can often overlook the stated wishes of the ward and the family in order to appoint an independent guardian.

Such an independent guardian sometimes acts in a manner detrimental to the ward and the family. Guardian fees, which can be extremely high, are paid directly out of the ward’s assets. Some independent guardians have even limited or excluded contact by family members with the ward. And the ward and his or her family have no control over the independent guardian’s use of the ward’s assets to pay disputed bills such as in the nursing home cases.

As you can see, whether you are in the unfortunate situation of needing to petition for guardianship of a loved one to protect the loved one’s interests, or need to contest a guardianship initiated by another person or the court, you will absolutely need an experienced attorney on your side. If you are in either of these situations, or have other issues relating to elder care abuse, contact Kilgore & Kilgore today. Our commercial litigation attorneys are ready to evaluate your situation. Call us today at (214) 969-9099 or email de*@ki********.com to set up a free review of the facts of your case with a Dallas commercial litigation lawyer.

1 New York Times, January 25, 1025, To Collect Debts, Nursing Homes Are Seizing Control Over Patients,http://www.nytimes.com/2015/01/26/nyregion/to-collect-debts-nursing-home-seizing-control-over-patients.html?_r=0

2 Senior Living Blog, January 27, 2015, by Don Taylor, Nursing Homes: Guardians of the Elderly,

http://www.bankrate.com/financing/senior-living/nursing-homes-guardians-of-elderly/

Retirement Claims – Pension Benefits from Multiple Employers No Longer Sacred

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Until recently, retirees entitled to pension benefits under retirement plans from multiple employers could rest assured that their benefits could not be cut by plan trustees unless plan assets were exhausted, mainly because ERISA (the federal Employee Retirement Income Security Act) made it illegal for trustees to do so. But in December 2014, all that changed. The provisions of a year-end bill called the Multiemployer Pension Reform Act of 2014, which was slipped into the $1.1 trillion Omnibus Spending Bill, allow trustees of at-risk plans to suspend benefits if they can show this would prolong the life of the plan.

Now there is a precedent for allowing retiree benefits to be cut. One question that remains to be answered is whether this will lead to a slippery slope of other solutions in the future. Let’s back up to how this happened.

Multiemployer pension plans typically cover a specific industry such as construction, trucking, mining and food retailing. They are collectively bargained, jointly funded by groups of employers, and administered by a board of trustees. According to the Department of Labor, there are 1,427 multiemployer defined benefit plans covering 10.5 million participants with $431 billion in assets. All of these plansare partially insured by the federal PBGC (the Pension Benefit Guaranty Corporation), which steps in if the plan’s assets are exhausted, although it guarantees benefits at a much lower level than the plans themselves provide.

The purported reason for the controversial Multiemployer Pension Reform Act of 2014 is that many multiemployer pension plans are in serious financial trouble, and they threaten to bring the PBGC down with them. An estimated 1.5 million persons were covered by plans in danger of failing over the next two decades, including the Teamsters’ Central States fund and the United Mine Workers of America fund. The plans in total are subject to an $8.3 billion deficit that is projected to hit nearly $49.6 billion by 2023. This puts at risk the PBGC, which is currently running a deficit in its multiemployer program of over$42.2 billion.

As a result of these troubling conditions, a coalition of multiemployer pension plan sponsors and some major unions developed and promoted a package of proposed reforms known as Solutions, Not Bailouts, and in essence this package became the Multiemployer Pension Reform Act of 2014.

The Act creates a new plan status known as critical and declining status for plans likely to become insolvent in the next 15 to 20 years. The trustees of plans meeting the requirements of this status can apply to the U.S. Treasury Department to suspend benefits for retirees and reduce accrued benefits for active workers. The trustees must demonstrate that they have taken all reasonable measures to forestall insolvency and that the proposed benefit suspension will ensure solvency. If these requirements are met, then the trustees mayreduce benefits, even for current retirees, to 110 percent of what the PBGC guarantee would offer. In addition to determining the size of the benefit reduction, plan trustees make the decision on how to allocate the cuts. For example, they can cut retirees’ benefits more than those of active workers. But benefits for disabled plan participants and retirees older than 80 are protected and reductions of benefits for people between age 75 and 80 have to be phased in.

The trustees, however, cannot cut benefits entirely by themselves. First, U.S. Department of Treasury officials have 225 days to approve a plan’s application for benefit reductions, which must show how cuts would affect all plan participants. In addition, plan participants must vote on proposed changes unless the plan poses a high degree of risk to the PBGC, defined as a claim of $1 billion or more. This would seem like a significant degree of protection. Buta majority of all workers and retirees in a plan – not just a majority of the ones who vote – is required to block cuts. And some argue the right of approval is an illusory protection for retirees.

Because the new provisions puts at risk retiree benefits which had previously been protected, many retiree groups and some unions are in staunch opposition to the new provision. They argue that other alternatives were not seriously considered and that retiree’s perspectives were given enough weight. Finally, they say, any new law that allows potential cuts in benefits should be phased in over time rather than taking effect immediately, so people can adequately plan for the future.

But the reforms had bipartisan support on Capitol Hill, as well as from many employer and labor trustees who were in search of permission to fix their endangered plans. Proponents argued that if a plan failed, the benefits would be cut anyway, so it made sense to give the trustees of at-risk plans a tool to stabilize their plan before it failed. Many also argued that this was a necessary step to shore up the PBGC.

If you are a retiree who expects his/her benefits from a multiemployer pension plan, contact Kilgore & Kilgore today. Our employment benefits attorneys are ready to evaluate your situation. Call us today at (214) 969-9099 or email de*@ki********.com to set up a free review of the facts of your case with a Dallas employment benefits lawyer.

Employee Rights at Work – Political Discussions in the Workplace

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Most employees believe they have a First Amendment right to free speech, and that allows them to discuss political issues whenever they want without restriction, including at work. But while employees do have some protected rights vis-a-vis their employers to discuss some political subjects, these rights are very restricted. First, it is important to remember that the First Amendment applies only to government restrictions on free speech. If you are not a public service employee, then your employer is not the government. So, unless another law gives you the protected right to speak about politics at work, your boss can prohibit you from doing so, or regulate how, when and where you do so. Your employer can fire you at will if you don’t comply with these company rules.

An employee’s right to discuss outside politics in the workplace is defined by the National Labor Relations Act (NLRA). This Act gives employees a narrow window of political subjects that can be discussed in the workplace, but such discussions must be related to workplace issues. Section 7 of the NLRA provides employees the right to engage in “concerted activities” for “mutual aid or protection” regarding specifically identified employment-related concerns. For example, promoting a candidate specifically because of his/her support for unions, increased minimum wage, safety in the workplace, immigration reform, etc. These discussions would fall within a worker’s rights under Section 7. But employees are still employees, and they are expected to first and foremost perform their jobs. So any political discussions or campaigning is restricted to non-working hours in non-working areas.

Section 7 does not protect purely political activity. If you want to wear t-shirts or buttons that support a candidate, or campaign for that candidate in any way, then whatever you wear or say must be specifically linked to the employment-related issue. And, if your employer has neutral policies governing the time, manner and place of the protected speech that is permitted under Section 7, then you have to abide by those rules, as well. Keep in mind that these protections under the NLRA apply to most private businesses, not just to unionized employers. But these rights apply only to non-supervisory employees, not to supervisors or managers.

In addition, federal regulations cut both ways regarding politics in the workplace. Some laws, regulations and rules may themselves restrict employee rights. For example, if an employee’s discussions involve race, national origin, sex, religion, age, sexual orientation or military status — especially when the subject is emotional and the conversation heated — they risk subjecting the employer to claims of discrimination, harassment and retaliation.

While few and far between,there are some states that outlaw some forms of discrimination against employees for engaging in some forms of political activities.

Under Section 276.001 of the Texas Elections Code, an employer cannot retaliate against an employee because the employee voted for a particular candidate or refused to reveal who the employee voted for. In fact, it is a third degree felony to do so. Retaliation includes harming, threatening to harm, or reducing an employee’s wages or another employee benefit. In addition, in Texas an employer cannot prevent or retaliate against an employee for voting, and must allow employees to vote during working hours unless the polls are open on an election day for at least two consecutive hours outside of the employee’s work time.

New York has an “off-duty conduct” statute which prohibits employer discrimination based on an employee’s “political” activities. Such activities include running for public office, campaigning for candidates or participating in political fundraising activities.

One other thing to keep in mind is that if you belong to a union, your contract may prohibit discrimination or retaliation by your employer against union workers based on their political activity, especially for activities outside of working hours and not on the business premises.

All in all, while it’s a given that many employees are going to discuss politics in one way or another at work, especially in the run-up to a heated election, it is also true that employers are recognized as having the right to reasonably regulate how, where and when these discussions take place, and regarding what subjects. Failure to understand this could cost you your job. And if it does there may be nothing you or the best employment lawyers can do about it.