Long-term Disability Claim Denials Pose Special Problems for Small Business Owners, Doctors, Dentists

Posted on

The challenges that doctors, dentists, and others who own small businesses face if an insurance company denies a long-term disability claim are not unique. But such claims can play out differently from claims made by employees of medium and large companies with long-term disability insurance provided through their companies. The consequences may be especially devastating because of the nature of a solo practice or small business.

The good news is that the law has changed in Texas over the past few years, so that people whose claims were denied now have a much better chance of prevailing in court than they would have had as recently as three or four years ago. If your disability claim was denied, or payments were discontinued, it is important to speak with an experienced disability attorney as soon as possible.

If Your Long-Term Disability Claim Has Been Denied, Talk to Our Disability Attorneys

Our experienced disability attorneys may be able to help. We understand what it is like to be the “chief cook and bottle-washer” of your own business. Just as important, we understand the ins-and-outs of the various insurance policies purchased by many small business owners, professionals, doctors, dentists, and those offered by professional organizations.

If you want to know about long-term disability claims denial legal options, click this link Contact Kilgore & Kilgore to connect with us and get the conversation started. We offer a free evaluation of your case. To learn more about our disability claims denied law practice, click here Dallas Long Term Disability Insurance Lawyer – ERISA.

The Disability Claims Picture is Different for a Small Business and Small Office Practice

Running a doctor or dentist office or a small business hardly seems like dangerous work. After all, it is not like operating heavy machinery. But there are health risks, some of which can be disabling. Many of these disabilities are essentially invisible.

Dentists, for example, are particularly at risk for osteoarthritis and spondylosis of the elbow, neck, and other joints because of the amount of time that they spend standing or sitting in awkward positions. A severed finger that would be a nuisance to an investment advisor can end a doctor’s career.

Furthermore, as professionals and business owners who sell a service like medical care or some other personal service know, you ARE the product. If Mary Smith is a renowned dentist, the value of her reputation and skill is not transferable to anyone else. If she is unable to practice as a dentist, she loses her income. Without her, there is no small business. The whole edifice comes crashing down.

Where Disability Claims Go Wrong

There are a couple of inflection points where disability claims go awry. Sometimes insurers routinely deny claims based on certain diagnoses; fibromyalgia is notorious for this. The same is true for other conditions where the diagnosis depends on self-reported symptoms of pain or distress – like back injuries. Claims for mental health disorders are frequently denied, regardless of documentation.

Secondly, some disability insurance policies use one definition of disability for a preliminary period and another thereafter. Claimants may be entitled to disability payments for the first two years if they are unable to work in their own occupation – as a dentist, for example. Thereafter however, the dentist must demonstrate that he or she is unable to work in any occupation – as a medical coder, perhaps. That is known as the “own occupation/any occupation” turn where a lot of claimants lose benefits.

Finally, in some situations, insurers seek out evidence of a “primary occupation” and a “secondary occupation.” Suppose that Dr. Mary Smith, after patients were done and the receptionist went home, did the books and the billings. An insurance company might take this as evidence of Dr. Smith had a second job as a medical office administrator. That could reduce the payout on the loss of her dentist job.

But of course, as entrepreneurs know and as we understand, it is really all the same job.

Good Legal News from the Court

Until 2018, the rule in Texas, and throughout the Fifth Circuit, was that courts would review administrative decisions to deny long-term disability claims in ERISA plans only when those denials demonstrated an abuse of discretion. Courts used to give great deference to the decisions of plan administrators. Zipping past the legal history of the facts of the claim, the net effect was that long-term disability claimants who were denied benefits at the administrative level had little chance of success in court.

That changed in 2018 because of the Fifth Circuit’s decision in a case called Ariana M. v. Humana Health Plan of Texas, Inc. In that case, which involved a denial of health plan benefits rather than disability benefits, the Fifth Circuit overturned longstanding precedent and held that courts may reexamine the evidence afresh when the initial denial was based on a factual determination. In other words, now courts are not limited to looking for gross malpractice on the part of plan administrators. They can delve back into a claimant’s medical records to consider whether the denial was appropriate in the first case. In legal language, this is referred to as “de novo review.”

This decision brings the Fifth Circuit into line with other federal courts in the country. More importantly, it breathes new life into post-2018 ERISA lawsuits brought by individuals whose claims were denied. In 2019, in Pike v. Hartford Accident Ins. Co., the District Court for the Eastern District of Texas explicitly applied this new rule in a disability benefit denial lawsuit.

Our Disability Attorneys Can Help Professionals and Small Business Owners Whose Long-Term Disability Claims Have Been Wrongly Denied

We get what it is like to run your own medical care or dental practice or other small business, and we know the law. Our Texas disability attorneys can help you assess your situation and advise you on the best strategy. If you want legal advice about a denial of a long-term disability claim, or any other insurance benefit claim, we are here to talk to you. Click here to reach a form on our website to submit your contact information so we can get the conversation started Contact Us.

Covid-19 Business Contract Disputes – Contract Law and “Force Majeure” in Texas

Posted on

Contract law has come to the forefront of legal disputes in Texas. Covid-19 has scrambled lots of plans in Texas and everywhere. Among the legal areas affected are business contracts where performance of long-standing obligations has become senseless, impossible, or hugely burdensome. The pandemic has roiled the energy sector, bankrupted businesses, shuttered restaurants, and scuttled sales of goods. The Texas Republican Party lost its site for an in-person convention in Houston. More terrifying still, consider the bride who must now unbook a wedding venue planned long in advance.

Enter the concept of “force majeure,” a legal doctrine which refers to unforeseeable circumstances that prevent someone from fulfilling a contract. Force majeure may not only excuse performance but protect the defaulting party from penalties associated with a breach of contract. In Texas, however, there are limits to the circumstances under which the doctrine can be invoked. The related common-law concepts of “impossibility of performance” or “frustration of purpose” may provide some relief to a defaulting party.

Kilgore & Kilgore Lawyers Understand Texas Contract Law

It is important to understand that it is still too early for a specific body of Covid-19 law to have developed. But Texas businesses have had long experience with unprecedented events – from hurricanes to international disruptions in the oil industry. There are certain well-developed rules for applying force majeure in contract disputes. Our commercial litigation attorneys can help those caught between the rock of an international pandemic and the hard place of contract compliance. If you have questions on this topic, reach out to us using this link Contact Kilgore Law.

Contract Law and Force Majeure Basics

Force majeure is an old legal idea (hence the French), but as it has evolved, several limits have become fairly standard. In general, in determining whether force majeure will excuse performance under a contract, courts will look at whether:

  • there was a contract (the doctrine has no common-law equivalent in Texas – if there is no contract, there is no force majeure defense);
  • the cause of the failure to perform was an event specified in the contract and not some other event;
  • the risk of nonperformance was unforeseeable or could not have been mitigated; and
  • performance was truly impossible, not just inconvenient or expensive.

Above all, however, courts will look at the specific language of the contract to determine whether it encompasses the unforeseeable event. A generic force majeure clause may read something like:

“Neither party shall be considered in default in the performance of its obligations under this agreement to the extent that performance of its obligations is prevented or delayed by any cause beyond its reasonable control, including, without limitation, acts of God; acts or omissions of governmental authorities; strikes, lockouts, or other industrial disturbances; acts of public enemy; weather; wars; acts or threats of terrorism; blockades; riots; civil disturbances; war, hurricanes, fires, earthquakes, terrorism and any other similar events, acts, or omissions beyond the control of the parties.”

Some contracts, especially in the shipping industry, may also include “pandemics, epidemics or outbreak of infectious disease” in the list of examples, but these additions are relatively rare. So, when does Covid-19 excuse contract performance in Texas?

In Texas, Force Majeure is Construed Narrowly in Contract Law

Texas courts construe force majeure clauses narrowly. If the event is not listed, performance is generally not excused. Frequently, however, as in the example above, the list of specific events in the contract will be followed by a general, catch-all phrase such as “any other similar events, acts, or omissions.”

When interpreting these non-specific provisions, Texas courts may:

  • fill any contract gaps with common-law concepts, including the requirement of
    unforeseeability, and
  • stress that a contractual obligation cannot be avoided simply because performance has
    become more economically burdensome than anticipated.

The application of Texas law is especially important, since many companies in the energy sector, even those not domiciled in Texas, specify that Texas law will be used to resolve disputes. It also tends to be very industry and very fact specific.

For example, with respect to the energy sector, Texas courts have held in the past that market downturns do not generally constitute force majeure events. In a case called TEC Olmos LLC v. ConocoPhillips Co., the Texas Court of Appeals found that the force majeure defense was not available because “fluctuations in the oil & gas market are foreseeable as a matter of law.” However, in a case called Atlantic Richfield Co. v. ANR Pipeline Co., government actions were deemed force majeure events excusing performance.

Under Texas law, an “act of God” usually will not relieve a party to a contract of its obligations under a commercial lease unless the parties expressly provided so in an applicable force majeure provision. Nonetheless, many commercial tenants are currently seeking relief from their lease obligations due to their inability to occupy their premises and conduct business from those premises and generate revenues.

Contract Law, Covid-19 and Force Majeure Circumstances in Texas

Even if a court determines that force majeure is not available, all is not lost for the hapless defaulter. Three related common-law defenses, impossibility, impracticability, and frustration of purpose may provide some relief. All three defenses focus on unforeseeable events. Usually, they are limited to situations where supervening events, not imagined at the time the agreement was made and not caused by the party claiming the defense has made performance impossible, impracticable, or commercially pointless. In some cases, these doctrines may cover intervening government regulation. The Texas Business and Commercial Code specifically permits the impracticability defense in the sale of goods. The defense is less available, if at all, in the oil & gas industry or commercial leases.

Reach out to Kilgore & Kilgore to Learn More About Force Majeure in Contract Law

Our Texas commercial litigators can help you assess your legal situation and advise on the best strategy for tackling this and related situations. If you would like to know more about how Covid-19 or other unforeseen events may affect your contract expectations and obligations, click this link Dallas Commercial Litigation Attorney. We offer a free evaluation of the facts of your case. To get this process started, use this link Contact Us to reach us.

The New Federal FFCRA Act – Issues and Answers for Employees, Employers and Families

Posted on

The Families First Coronavirus Response Act (FFCRA) is a new, temporary federal law that expands paid sick leave and unpaid family and medical leave protections for public employees and most private employees whose employers have up to 500 employees. Because of the way FFCRA interacts with existing federal, state, and local laws, however, some of those who work for larger employers may also benefit. There are also carve-outs for some employers of fewer than 50 employees.

The contours of this new law are not entirely clear, and employees may have questions about whether or how FFCRA can bring relief under trying circumstances. Some employers are still not certain of their obligations. Lawsuits have begun to multiply in Texas and throughout the United States concerning back pay, unpaid employee benefits, wrongful termination, discrimination, required notification in the event of a permanent closure, and so on. Working parents of school-aged children feel a great deal of uncertainty, caught in the confusion as schools have re-opened under a variety of plans that may include online learning and alternate days of attendance.

Our Employment Benefits Lawyers Can Help Sort Out the Provisions of FFCRA and Other Legal Protections in the Workplace

If you have questions about FFCRA, we have answers. Click here to find out about basic Family Medical Leave Act protections. Click this link to learn more about your employee safety and whistleblower protection in the workplace during the COVID-19 pandemic and beyond. If you believe your employer has not accommodated your request for FFCRA benefits, reach out to us using this link Contact Kilgore Law. The way that FFCRA may apply to you depends on the details of your situation.

The Basics of the New FFCRA Law

The FFCRA requires covered employers to provide up to 80 hours of paid leave to employees for certain COVID-19-related reasons under the Emergency Paid Sick Leave Act (PSLA) and expands the Family Medical Leave Act (FMLA) to provide employees with up to 12 weeks of emergency paid leave to care for a child as a result of school or childcare closings due to a public health emergency. By its terms, the requirements of the FFCRA expire on December 31, 2020.

Things Can Get Complicated with the New FFCRA Law

Which employers and employees are covered by FFCRA?

  • Employers of more than 500 employees are not covered — FFCRA is intended to work by providing tax credits to small (but not the smallest) employers. In theory, under the FFCRA, employers with under 500 employees could afford to provide extended paid leave to their employees. Employees of larger businesses, however, may also be eligible for benefits under other provisions of federal, state, and local law.
  • Most private employers of between 50 and 500 employees are also covered by FFCRA — The 500- employee threshold counts full-time and part-time employees within the United States, employees on leave, as well as temporary workers and day laborers supplied by a temporary agency. It does not cover independent contractors or gig workers.
  • Most employees of the federal government are covered by Title II of the FMLA, which was not amended by FFCRA, and are therefore not covered by the extended family and sick leave provisions. However, federal employees covered by Title II of FMLA are also covered by the sick leave provisions in the FFCRA.
  • Healthcare providers and emergency responders, some of whom are also public employees, may be excluded from the paid sick leave or extended family and medical leave entitlements.
  • Employers with fewer than 50 employees may not have to offer emergency paid sick leave and extended FMLA leave to their employees if they can demonstrate that doing so would “jeopardize the viability of the business as a going concern.”

Are part-time workers, independent contractors, and furloughed employees covered by FFCRA?

Part-time workers are generally covered, but the calculation of their entitlement is adjusted to reflect the fact that they work fewer hours. Most employers do not cover independent contractors and gig workers under their existing employee benefits. These workers are not covered by FFCRA either. If you are a furloughed employee because your employer does not have enough work for you, you are not entitled to take paid sick leave or paid expanded FMLA benefits. However, you may be eligible for unemployment insurance benefits.

When taking paid sick leave, can I get my full pay?

Benefits are capped, depending on your reason for being away from work and the length of time you plan to be off. The calculation of your benefit is something that our employee benefits lawyers would be glad to explore with you individually. If you are taking paid sick leave, how much you can get paid will depend on several factors, including:

  • Your regular rate of pay;
  • The reason why you are taking paid sick leave – whether for yourself or to care for another, and whether you have been advised to self-quarantine, or have symptoms; and
  • How much sick leave you have already used.

What if my employer just says no? What can I do?

At best, you may have been denied because of a documentation issue. The Department of Labor issued detailed guidance that may provide a way to solve this problem. To find this information online, enter the following URL into your browser: federalregister.gov/documents/2020/09/16/2020-20351/paid-leave-under-the-families-first-coronavirus-response-act. Beyond that, it is important to remember that HR or accounting personnel at smaller businesses may be struggling with the onslaught of new requirements. Oftentimes, having an employee benefits attorney explain your request regarding FFCRA qualification requirements is a better way to go. To get this started, use this link Contact Us to reach the employee benefits attorneys at Kilgore & Kilgore.

FFCRA Lawsuits Are Multiplying

The Department of Labor has already pursued several investigations. Then, of course, there is the option of an employee benefits lawsuit. FFCRA compliance problems have already spawned many of them in Texas and elsewhere. There will certainly be more. These lawsuits are not always brought under the terms of FFCRA. They may appear as wage and hour claims, retaliation claims, discrimination claims, or wrongful termination claims. It may be too early to discern trends in these lawsuits, except an uptick trend in Covid-19 and FFCRA lawsuits, that there will be more of them in the future. Here are a few examples:

  • In Texas, DOL investigators found that West Texas Paving failed to pay an employee for FFCRA-qualifying paid sick leave after he informed the company about his COVID-19 medical diagnosis and was hospitalized.
  • A Texas attorney who worked as general counsel at a commercial real estate firm near Dallas reportedly filed a lawsuit against her former employer for firing her for refusing to violate a local stay-at-home order during the COVID-19 pandemic.
  • In Michigan, a senior living facility employee claimed that she was terminated after using her approved FMLA leave following a positive COVID-19 test.
  • In Pennsylvania, an employee alleges that he was the victim of a wrongful termination after he told other employees that a co-worker had been exposed to COVID-19.

Parents of School-Aged Children Face Special Challenges

Parents of school-aged children whose schools may be open, or online only, or some variation of both options, or just subject to sudden school changes face particularly bewildering choices. In late August, the DOL released additional guidance under the FFCRA that clarified several issues including the following:

  • If a school is operating on an alternate day or other hybrid- attendance basis, employees are eligible under the law for FFCRA paid leave on days when the child is not permitted to attend school in person and must instead engage in remote learning, as long as an employee needs leave to care for the child during that time, and only if no other suitable person is available to do so. Conversely, FFCRA paid leave is not available to take care of a child whose school is open for in-person attendance, even if the parent is hesitant to send the child to school because of the risk of infection.
  • If a child is under a Covid-19 quarantine order or has been advised by a health care provider to self-isolate or self-quarantine, an employee may be eligible to take paid leave to care for the child.
  • FFCRA leave is not generally available to care for someone else’s child.

Reach out to our Employee Benefits Lawyers for Advice About FFCRA – What You Are Entitled to and How to Get Your FFCRA Benefits

We are living through a time of great uncertainty. This affects our work, our jobs, our families, and our health. Our Texas employment benefits lawyers can help you assess your FFCRA and FMLA benefits situation and advise you on the best way to go forward. We offer a free evaluation of the facts of your case. To get this started, use this link Contact Us to reach out to us.

Whistleblowers Who Report Fraud in Federal Contractor and State Contractor Work Are Protected by Law

Posted on

Fraudsters seem to find federal and state contracts especially tempting because of the size of the potential payoff and the scale of federal or state contracts, making tight oversight seem almost impossible. Defense contractors, highway contractors, and contractors working on oil and gas leases are no exception. Employees who see federal and state contract fraud and raise the alarm are the taxpayer’s first defense. Being a whistleblower is a perilous endeavor. Whistleblowers risk being fired, blackballed, sued, harassed, and may experience retaliation. Fortunately, whistleblowers have many protections provided by federal and state law.

The federal False Claims Act (FCA) does more than protect employee rights. In recognition of the essential role whistleblowers play, whistleblowers may sometimes share in the government’s financial recovery. A successful FCA claim may take painstaking and meticulous work, however.

Whistleblower Lawyers Can Explain Federal and State Whistleblower Procedures

In 1983, the Texas Whistleblower Act was passed for employees of state and local governments. It protects public employees from retaliation, termination, or other adverse actions by their employers. Our whistleblower lawyers help employees who may wish to be whistleblowers assert claims under whistleblower protection laws including the FCA and the Texas Whistleblower Act. Click here to read more about Whistleblower Protection. If you believe your employer is engaged in federal or state contract fraud, reach out to us using this link Contact Kilgore Law.

Fraudsters Find Many Ways to Cheat

It may help to take a clinical eye to shady practices, especially if they happen where you make your living. Federal contract and state contactor fraud can take a variety of forms, as described in part below.

Contractors or subcontractors may deliberately deliver substandard goods or services that are not what is called for in the contract.

One of the most common violations of the FCA involves overbilling the government for the cost of services and goods or charging the government for labor and materials that were not delivered.

At the beginning of the contracting process, contractors may engage in fraud by providing false information about their or their subcontractors’ qualifications or misrepresenting other critical information to win a contract. This practice is commonly known as false certification. It involves deliberately failing to disclose noncompliance with a material statutory, regulatory, or contractual requirement.

Falsely certifying compliance with certain labor standards is a closely related problem. This may involve failing to pay construction workers at least the prevailing wage in the same locality. Contractors are also responsible for submitting wage certifications of payroll for all their subcontractors, commonly known as payroll certification.

Bid rigging and price-fixing involve schemes between ostensible competitors to manipulate the bidding process. These generally involve unlawful agreements not to compete for government contracts or to limit the price on the bids submitted.

Whistleblowers Often Feel the Risk is Worth It

Many whistleblowers embrace the risk to their employment out of a sense of altruism. Their sense of self-sacrifice may be considered unselfishness. Whistleblowers sometimes share in the fines paid by government contractors who were found guilty, but a financial reward may not be a motivating factor.

These types of contractor claims are sometimes referred to as qui tam claims, which is the shortened version of the Latin phrase, “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” meaning “[he] who sues in this matter for the king as well as for himself.” The whistleblower essentially acts on behalf of the government because he or she is often the only person in a position to know about the fraud.

As another oddity of language, the whistleblower is technically known as the relator, as in the one who can tell or relate the facts.

An FCA claim must involve knowing fraud on the part of the contractor or subcontractor. The accidental delivery of nonconforming goods or a good-faith mistake about a subcontractor’s pay scale might give rise to a breach of contract or some other lawsuit, but it would not qualify as an FCA claim. A variety of federal and Texas laws may apply to facts initially brought forward as a potential FCA claim. Even if an FCA claim proves unworkable, that is not necessarily the end of legal options available to an employee who has taken on the task of reporting wrongdoing.

When a whistleblower decides to proceed, a qui tam claim must be filed with the court under seal. The complaint and disclosure of all relevant information about the claim are initially served on the U.S. Attorney for the judicial district where the qui tam claim was filed and on the Attorney General of the United States. The complaint is sealed for a period of 60 days. This means that the identity of the whistleblower is protected. It also protects the alleged fraudster from public disclosure in the event the government decides not to proceed.

During that 60-day period, the government investigates the allegations in the complaint; thereafter, it will notify the court whether it has decided to proceed or not. If the government chooses to intervene in the claim, it takes over the primary responsibility for prosecuting the action. It can dismiss or settle the action even if the whistleblower objects, as long as the whistleblower has a hearing and the court determines that the settlement is fair. If the government chooses not to proceed, the whistleblower may continue alone in the pursuit of justice.

If the government intervenes, the whistleblower can receive between 15 and 25 percent of the amount recovered by the government. If the government declines to intervene in the action, the whistleblower’s share may be larger, but there are also circumstances in which the share may be reduced. If a qui tam action is successful, the whistleblower may also recover legal fees and other expenses.

Other Texas Laws Protect Whistleblowers from Retaliation

Even if the situation an employee brings forward for investigation does not ultimately qualify as an FCA claim, many Texas laws protect whistleblowers from retaliation, including unjust termination of employment. The best recourse for someone who is troubled by questionable workplace practices, especially those involving federal contractors and Texas state contractors, is to reach out to a whistleblower lawyer for a confidential consultation.

Potential Whistleblowers Should Contact Us Before They Take the First Step

Our Texas whistleblower lawyers can help you assess your legal situation and advise on the best strategy for tackling this and related situations. If you would like to know more about whistleblower protection laws, please click this link Dallas Whistleblower Protection Attorney. Here is another article that may be useful to your understanding of whistleblower and retaliation law that you may find interesting, just click here Sabine Pilot Rule Expands Whistleblower Causes of Action. We offer a free evaluation of the facts of your case. To get this started, use this link Contact Us to reach us.

Whistleblowers Can Help Stem Healthcare Fraud and Are Protected Under Texas and Federal Laws

Posted on

Law enforcement authorities estimate that healthcare fraud, including Medicare fraud, costs taxpayers more than $11 billion a year. Texas hospitals and medical treatment facilities are far from immune. But the eyes of the law are not everywhere. Sometimes the only person who knows about a scam is the hospital administrator or a small cadre of employees who sees where the money goes. We can help you understand what you should do if you suspect that something is not right at your hospital or treatment facility.

But there is a dilemma for the potential whistleblower. The Texas Health & Safety Code creates a legal duty for someone who knows about a violation of law to report it to authorities. But whistleblowers can find themselves fired, demoted, harassed or re-assigned to a desk in the basement next to the trash compactor. Employees can be sued in retaliation. Fortunately, federal law and the Texas Health & Safety Code protect employees who report billing malfeasance if the reporting is done in good faith. It is a tricky situation. Failure to report can be a misdemeanor, but a misstep can destroy the protection the law offers whistleblowers.

On the other hand, a successful whistleblower lawsuit can help you get your job back while paying you damages and a share of the financial recovery. The bottom line is that you should speak with a whistleblower attorney before you do anything.

Step One for a Potential Whistleblower: Get Help

The employment lawyers at Kilgore & Kilgore may be able to counsel you on what to do if you believe that you have witnessed Medicare fraud at the hospital or treatment facility where you work. Click this link Contact Kilgore Law to get the conversation started. We offer a free evaluation of the facts of your case. To learn more about whistleblower law, click this link Employee Whistleblower Law.

Houston Whistleblower Reports Malfeasance and Wins Big

Robert McCaslin, a hospital billing department employee in Houston, realized that his employer was billing Medicare for accident victims, even though they had private insurance. The hospital also billed Medicare for prisoners, even though they are not covered by Medicare. When he alerted his boss, McCaslin was told not to bother and assured that that was normal procedure. With his help, the U.S. Department of Justice was able to pursue the case and the Houston Hospital District paid back approximately $15 million. McCaslin received $3 million. For another example of a Texas whistleblower and the Texas Whistleblower Act, click this link Whistleblower Claimant in Texas.

Another Texas Hospital Whistleblower Loses Case

Another whistleblower case involving a medical treatment center in Dallas reported in 2019 tells a more complicated story. The whistleblower filed a lawsuit in 2017 claiming that Baylor Scott & White Health submitted more than $61.8 million in false claims to Medicare over a seven-year period. The whistleblower accused the hospital of inflating Medicare charges by adding secondary diagnosis codes to make treatments appear more medically significant than they were. The federal court dismissed the complaint, finding that there was nothing inappropriate in the hospital’s attempt to take full advantage of coding opportunities to maximize Medicare payment. There was no allegation that the hospital knew that using a particular code was incorrect. In this case, the whistleblower lost.

Fifty Shades of Medicare Fraud

The variety of scams perpetrated at hospitals and other treatment facilities is testimony to the creativity of fraudsters. Federal and state laws, including the False Claims Act, make a wide range of bad actions illegal. The law imposes civil liability on anyone, including corporations, who intentionally uses a false record or statement to get money from the government via fraud, or who conspires to do so. The qui tam provisions of the law allow a whistleblower to act in the place of the U. S. government. A few of the most common scams include:

  • Billing for services not performed – Billing scams are the most common types of Medicare fraud. Think about x-rays and blood tests that were never taken or home healthcare hours never provided. Providers have been known to pad their Medicare claims with personal expenses.
  • Rendering of services not actually needed – Some of the most stomach-churning stories involve elderly, frail patients who are not able to object to or resist treatments that may actually be harmful. Sometimes the nurse or therapist administering the “therapy” can tell that it is wrong, but feels pushed to follow doctor’s orders.
  • Double billing – These are scams whereby a provider bills more that one source such as the patient, Medicare, and private insurance for the same treatment, or alternatively, bills the treatment to the same payers more than once.
  • Unbundling – In this scheme, each component of a medical procedure is billed separately. Think of the difference between ordering a meal and ordering the meal’s components a la carte. Medicare sets reimbursement rates for certain groups of procedures that should be performed together. Medical providers may unbundle the procedures and bill each component of the group separately to increase profits.
  • Upcoding – This is a method of billing for a more expensive service than what was rendered. The Baylor Scott & White Health case described above is example of apparent upcoding.

Texas State and Federal Laws Cast a Wide Net for Malfeasance

By far, the most common form of malfeasance involves Medicare fraud. It may be because Medicare processes a huge number of claims and exercises relatively little scrutiny. It is important to know, however, that federal laws apply to many kinds of violations, including patient abuse.

Most people who bring whistleblower lawsuits act out of a basic desire to work for justice. This is especially true in healthcare. But there is the possibility of a reward, as well. Like Robert McCaslin, the plaintiff in a successful whistleblower lawsuit can receive a reward of up to 30 percent of the proceeds, plus reimbursement for attorney fees, costs, and expenses. But there can be risks. That is why it is so important to work with a whistleblower attorney. To learn more about the protections and benefits that whistleblowers enjoy under the law, click this link False Claims Act Law Benefits Whistleblowers.

Texas Health & Safety Code Protection for Whistleblowers

What happened to the whistleblower at Baylor Scott & White Health mentioned above? The importance of the process of whistleblowing may be the key. Different states have varying requirements. It is important that a whistleblower follow a certain procedure for revealing the malfeasance. This is another reason why it is important to consult with a whistleblower attorney before acting AND not to wait too long to make a report, as there may be a time limit.

In Texas, however, there are protections for good faith whistleblowers. Chapter 161 of the Texas Health & Safety Code makes it unlawful for an employer to act against a whistleblower employee with termination or retaliation for reporting a violation of law. It covers volunteers and contractors as well as employees. An employee who suspects wrongdoing, including but not limited to Medicare fraud, may report the situation to a supervisor, to the agency that licenses the treatment facility, or to the appropriate state health care regulatory agency. The report may be verbal or in writing, but it must be documented. It is best to learn how to make a whistleblower report in Texas before taking the first step.

The person who reports in good faith is immune from civil or criminal liability arising from the report. That immunity does not extend to the individual who caused the abuse or neglect or who engaged in the illegal, unprofessional, or unethical conduct. In addition, a hospital, mental health facility, or treatment facility may not terminate the employment of, or discipline or otherwise discriminate against, an employee who made an appropriate report.

The critical issue is not whether the whistleblower was ultimately right about the existence of a violation of law, but whether he or she acted in good faith. It is important to be able to prove good faith.

Our Employment Lawyers Can Help Employees Who Wish to Report Medicare Fraud

The Texas employment lawyers at Kilgore & Kilgore can help you assess your legal situation and advise on the best strategy for approaching this difficult situation of a potential whistleblower. To learn more about Sabine Pilot, a situation wherein an employee suffers retaliation or termination from refusing to perform an illegal act, click here At Will Employment-Whistleblower. If you find yourself in need of legal advice in a matter involving blowing the whistle on your employer, click here to reach a form for submitting your contact information Contact Us. We offer a free evaluation of the facts of your case.

Supreme Court Rules That LGBTQ People Have Employment Protections Under Federal Title VII Law

Posted on

On June 15, 2020, the U.S. Supreme Court made it unequivocally clear that Under Title VII of the Civil Rights Act of 1964, it is against the law for employers to discriminate against lesbian, bisexual, gay, transgender, and queer employees. This includes firing, harassing, or otherwise retaliating against these employees. This is the law in Texas; it is the law in New York; it is the law throughout the United States. While this is a most welcome Big Win for LGBTQ workers everywhere, we are still not yet out of the woods on employment of LGBTQ people.

Another shoe is about to drop in the U. S. Supreme Court. On the docket is a related matter concerning the ministerial exception of employment claims against churches and religious institutions. This decision is expected within months. While it is good to celebrate the victory for many LGBTQ employees, other LGBTQ employees are still experiencing harassment, discrimination and wrongful termination in workplaces defined as religious organizations.

Our Employment Lawyers Can Help You Fight Employment Discrimination, Retaliation, Harassment and Wrongful Termination

If you believe that you are or were being harassed or discriminated against on the job, or if you were fired because you are lesbian, bisexual, gay, transgender or queer, our employment attorneys will defend your rights so you get the outcome you deserve. To learn about the range of legal options available to you, click this link and get the conversations started Contact Kilgore Law for a Free Discussion of the Facts of Your Case. We have decades of employment law experience that will help you understand your employment rights.

Three Discrimination and Wrongful Termination Cases Heard Together by the Supreme Court

This Supreme Court decision refers to three cases that were considered together. The first case is known as Bostock v. Clayton County. Gerald Bostock ran a program that recruited volunteers to advocate for abused and neglected children. He joined a gay recreational softball league, and then recruited for the league from among his co-workers. Someone complained and Bostock was fired. In his lawsuit, he asserted that he was fired for being gay. His lawsuit was dismissed because lower courts ruled, and the 11th Circuit Appeals Court affirmed, that Title VII of the Civil Rights Act does not cover sexual orientation.

In Zarda v. Altitude Express, Inc., the second case considered, Donald Zarda, a skydiving instructor, told a female client that he was gay in order to make her more comfortable while they were strapped together in preparation for a tandem skydive. After the jump, this female client told her boyfriend about the instructor’s statement, and the boyfriend told Zarda’s boss. He was fired for being gay. Mr. Zarda filed a Title VII lawsuit and the full Appeals Court for the 2nd Circuit ultimately ruled for him.

In the third case, known as R.G. and G.R. Harris Funeral Homes v. EEOC, Aimee Stephens, who had presented as a man prior to 2013, was a funeral director at the Harris Funeral Homes. She suffered from gender dysphoria and, on the advice of her doctors, chose to live entirely as a woman before making the decision to transition. She informed her employer that, on her return from vacation, she would present as a woman in appropriate women’s business attire. She was fired before she could return. Ultimately, the 6th Circuit Appeals Court held that Title VII protects transgender people.

The Supreme Court took the cases together to resolve a split among the Circuits. The Supreme Court’s goal was to make the interpretation of federal civil rights law uniform throughout the United States.

The Supreme Court Justices Wrote Opinions Regarding the Language of Title VII

The Supreme Court’s decision is rooted firmly in the language of Title VII, which states that:

“[it is] unlawful . . . for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”

The question is whether the term “sex” covers issues of sexual orientation or gender identity. It is clearly not what Congress meant in 1964, when the statute was drafted. The Court finds that no impediment, however. When an employer fires an employee for being homosexual or transgender, the Court reasons, it necessarily discriminates against that individual in part because of sex. Further, the plaintiff’s sex need not be the sole or primary cause of the employer’s adverse action. By way of example, the opinion offers this simple observation:

“Consider, for example, an employer with two employees, both of whom are attracted to men. The two individuals are, to the employer’s mind, materially identical in all respects, except that one is a man and the other a woman. If the employer fires the male employee for no reason other than the fact he is attracted to men, the employer discriminates against him for traits or actions it tolerates in his female colleague.“

Supreme Court Blows Apart Employer Arguments About Discrimination

This Supreme Court opinion also pre-emptively demolishes the arsenal of possible counterarguments on which employers frequently rely. First, it is irrelevant what an employer might call its practice of discrimination, how others might label it, or what else might motivate it. If the worker’s sex is a cause without which an action would have been taken, the practice violates Title VII.

Also, the plaintiff’s sex need not be the sole or primary cause of the employer’s adverse action. It is of no significance if another factor, such as the plaintiff’s attraction to the same sex or presentation as a different sex from the one assigned at birth, might also be at work, or even play a more important role in the employer’s decision.

Finally, an employer cannot escape liability by demonstrating that it treats males and females comparably as groups. An employer who intentionally fires a lesbian, bisexual, gay, transgender, or queer employee subjects all male and female lesbian, bisexual, gay, transgender, or queer employees to the same rule.

Future Supreme Court Decisions on Discrimination Against LGBTQ Employees

The Supreme Court’s recent decision does not affect the “ministerial exception” that it put into place in 2012. This leaves many LGBTQ employees of religious institutions unprotected from employer harassment, discrimination, and wrongful termination. But the high court will take up this matter soon under two cases that it accepted involving employment discrimination brought by two different teachers at different religious institutions. In both cases, the 9th Circuit Appeals Court ruled against the schools because the plaintiffs are not ministers but teachers. Stay tuned to learn the outcome of this hearing.

We Have Answers to Your Questions about Workplace Discrimination, Harassment and Wrongful Termination of LGBTQ Employees

If you believe that your employment rights were violated because you are lesbian, bisexual, gay, transgender, or queer, take heart, because a lot has just changed. To learn more about our employment discrimination practice click this link Our Dallas Discrimination Lawyers Hold Employers Liable for Employee Rights Violations. We recently discussed illegal harassment, discrimination, and LGBTQ people in Texas.

Employees Are Harmed by Employer Pay Secrecy Policies Because They Can Lead to Pay Discrimination

Posted on

Many Texas employers tell their employees not to discuss salary information with coworkers. Sometimes this is a verbal direction. Often, the prohibition is written in an employee handbook. Sometimes, the pressure is indirect. Discussing pay is seen as indiscreet, unprofessional and pushy. These are descriptions from the past when people did not share personal information as much as they do now.

There are three problems with pay secrecy. First of all, enforced pay secrecy can lay the groundwork for employment discrimination on the basis of gender, age, race or other legally prohibited grounds. Second, banning salary discussion is clearly illegal under federal law. Third, Texas employees may find it difficult to complain about this practice, since employees can generally be fired for good reason, bad reason or no reason at all, including the all-purpose and hard-to-define bad attitude, although employees cannot be fired for illegal reasons.

Pay Discrimination is Illegal

Workers need a strategy or two to end the practice of pay secrecy. Each employee’s strategy may be different, but everyone’s strategy should include some solid information about prevailing pay, tips on salary negotiation, and accurate information about Texas and federal law and legal trends. The employment lawyers at Kilgore & Kilgore know how to counsel you in your efforts to achieve a fair wage for the work you do. If you are experiencing pay discrimination at your workplace, click this link Contact Kilgore Law. We offer a free evaluation of the facts of your case.

Pay Secrecy Historically and Now

Just to set the record straight, efforts to prevent employees from sharing salary information are illegal. Since 1935, the National Labor Relations Act has prohibited pay secrecy policies in most situations. These protections extend to unionized workers and non-collectively bargained employees as well.

A variety of federal laws and provisions of the Texas labor code prohibit certain employment practices, including pay policies, which discriminate on the basis of race, color, disability, religion, sex, national origin, or age. The Texas Equal Pay Act specifically provides that women employed by the state of Texas must be paid the same as men performing the same kind, grade, and quantity of service, and that no distinctions in compensation may be made based on sex.

Still, gag rules are remarkably common. Not only are employees unaware that the request for silence about salaries is unlawful, but their employers are often unaware as well.

The Harm of Secrecy and Pay Discrimination

Many people today know little about the story of Lilly Ledbetter. The Lilly Ledbetter Equal Pay Act of 2009 allows people who have suffered from pay discrimination to seek redress under federal laws against discrimination. The part of the story that many people forget or never knew about is that the law overturned a U.S. Supreme Court ruling that denied Mrs. Ledbetter back pay for a period of almost twenty years. Mrs. Ledbetter lost her case in the U.S. Supreme Court because she did not sue in time to preserve her claim.

Mrs. Ledbetter never knew that her male coworkers made more than she did. It was a secret. She found out only as she was nearing retirement when someone slipped her an anonymous note. Furthermore, Mrs. Ledbetter never collected back pay. The damage that had rolled on over her many years of employment affected her retirement savings, her Social Security payments and her ability, now at age 82, to afford even modest things.

Perhaps for historical reasons, pay secrecy policies and discriminatory wage schemes affect women disproportionately. According to the Bureau of Labor Statistics, women earn 76 percent of what men earn. The disparity is even greater for black women and Hispanic women. However, the laws protecting workers from wage discrimination and secrecy policies are generally race, age and gender neutral. The protection afforded by law is clear and very broad.

What You Should Do if You Have Been Warned Not to Talk About Salary in the Workplace

The first step is to assess and document your situation. It is important to understand that wage secrecy policies are actionable, separate and apart from pay discrimination practices. The remedies are also different.

You and your colleagues are likely aware of pay discussions that are prohibited. If a supervisor or HR manager advises you verbally not to discuss your pay or your raise with anyone, try to make contemporaneous and complete notes about this conversation restricting your discussions. Try to record the date, names and titles of individuals involved in the discussion, and details of the conversation. Keep your notes at home, not on your work computer.

If you want to discuss this situation with coworkers, you should do so only with trusted individuals and only outside the workplace. If a statement about pay secrecy is included in an employee handbook, get a copy of the employee handbook and keep it at home. Understand that supervisors and certain management employees may be prohibited from having these conversations. Remember too, that some personnel issues, including financial or health information, are legitimately protected from public disclosure.

Pay Discrimination Attorney’s Meeting

If an attorney is able to take your case, you and your attorney may determine that the best choice is to file a charge with the National Labor Relations Board. Some disputes are resolved before they get to a hearing. On the other hand, it may be better to pursue less adversarial options, at least at first. Many employers are genuinely unaware of the requirements of state and federal laws with respect to this issue.

Pay practices that are thought to be discrimination in a legal sense may be harder to discover, particularly if your employer has been successful in enforcing a pay secrecy policy. The advice of your attorney will be invaluable in determining whether your employer is engaged in pay discrimination on prohibited grounds and, if so, which avenues you may have for further action.

Outside Sources of Information to Help Define Pay Discrimination

Knowledge is power, so make sure that you do your research. It does not have to be limited to information available from coworkers. A number of online sources of salary information publish current data. Glassdoor.com is among the best known. Some national employment agencies let you customize your research by job title, state and city. At least one offers information about salary range and midpoint.

A number of professional organizations publish the results of annual salary surveys that are specific to location. Lawyers have done this for years. Some large employers, like universities, voluntarily publish salary information in the interest of fostering a culture of honesty and trust. None of these are necessarily infallible, but taken together they may provide a useful context for salary negotiations.

Negotiating a Pay Raise

If you are uncomfortable negotiating your salary, you’re not alone. Many people feel this way. Many agencies provide useful tips about how to have awkward conversations. Among these are Ladies Get Paid, WorldatWork and the National Women’s Law Center. Any of these may, in fact, lead to other resources that are specifically relevant to your situation.

Legislative Trends Regarding Pay Discrimination

Another aspect of the pay equity environment that you should be aware of has to do with legislative developments outside of Texas. Among these are state law initiatives that would, for example, require employers to disclose not only broad salary ranges for particular positions, but the narrower salary bands within a pay grade. The latter may be a far more useful piece of information for negotiating purposes than a range or particular figure you have in mind, say $50,000, for instance.

Some jurisdictions also prohibit inquiries about existing salary at the early interview stage of interviewing for new hires. This can be especially valuable for mid-career interviewees whose negotiations may otherwise be hampered by a history of pay discrimination through underpayment.

Our Employment Lawyers Can Help Employees Who Experience Pay Discrimination and Pay Secrecy

The Texas employment lawyers at Kilgore & Kilgore can help you assess your legal situation and advise on the best strategy for tackling this tricky situation. Click here to learn more about Employment discrimination, secrecy policies and workplace retaliation. We offer a free review of the facts of your case. Use this link to reach us Contact Us.

Employees Stiffed of Overtime Pay by Misclassification – Double Back Pay Awarded Because of Bad Faith

Posted on

In a recent case, Novick v. Shipcom Wireless, Inc., the Fifth Circuit Court of Appeals affirmed that Texas employees who are shorted on overtime payments are entitled to double back pay – both the unpaid overtime they are rightfully owed AND liquidated damages in the same amount. The liquidated damages are intended to mitigate the likely consequences of a bad faith failure to pay employees properly in the first place.

This is a significant victory for Texas workers. The potential for a generous recovery breathes new life into wage and hour lawsuits that might otherwise settle for less than permitted under the federal Fair Labor Standards Act (FLSA). Make no mistake – misclassification, such as when hourly employees are treated as salaried, or employees are wrongly classed as independent contractors – is a growing form of wage theft. Daryl Sinkule, who is a member-partner at Kilgore Law, played a significant role as lead counsel in finding justice for Justin Novick and other employee plaintiffs.

Our Employment Lawyers Understand the Power of Overtime and Other Misclassification Claims under the FLSA

If you believe you have suffered from misclassification at work as a salaried employee or independent contractor and missed out on overtime or other benefits that you were entitled to, bring your case to the employment lawyers at Kilgore & Kilgore. If you want to know your rights under the federal FLSA statute or Texas law, use this link to contact us through our website. Just click here Contact Kilgore & Kilgore, fill out the form on the website, and send it in. We are happy to provide a free evaluation of the facts of your situation.

Employer Eliminated Overtime Through Employee Misclassification

Shipcom, a supply chain management and technology company, needed to hire quickly in 2013 after it was awarded a major contract by the Department of Veterans Affairs. Justin Novick and others were hired as salaried employees to train hospital clients on the use of the Shipcom system. They worked long hours, but Shipcom treated them as exempt employees in order to avoid paying overtime.

A subsequent internal audit in 2015 led Shipcom to reclassify some of these workers as hourly employees. This employer paid some of the workers back pay equal to the unpaid overtime plus five percent. But Mr. Novick had already left the company and got nothing. The workers later sued, arguing that they had been victims of misclassification under the FLSA. Claiming that the misclassification as salaried employees was done in bad faith, the employees sought liquidated damages in addition to unpaid compensation. A jury issued a verdict in favor of the employees, and the Fifth Circuit ultimately upheld the trial court’s rulings on various evidentiary issues, resulting in a victory for the employees.

How Does a Misclassification Result in an Overtime Lawsuit?

The FLSA requires, among other things, states that employers pay employees the federal minimum wage (currently $7.25 per hour) and time-and-a-half for every hour they work in excess of 40 hours in a workweek. It should be noted that some states have adopted wage and hour laws with a higher minimum wage and additional protections for employees, but Texas is not among these. Texas uses the federal wage standards.

The FLSA also contains a number of exceptions to these requirements. Independent contractors, for example, do not get overtime because they are not viewed as employees. Other exceptions exist for executive, administrative, professional, computer and outside sales employees. These employees are often referred to as exempt employees (as in exempt from legal protection).

In order to fit into any of these categories, an employee must be paid a salary and also meet certain tests. The criteria vary slightly for each of the different white-collar exemptions. To fall within the administrative exemption, as the Shipcom employees were originally classified, an employee must:

  • Earn a salary of not less than $684 (periodically updated) per week;
  • Perform office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
  • Exercise discretion and independent judgment with respect to matters of significance. This must be a primary duty.

Before Mr. Novick went to trial, however, Shipcom had already determined that the set of employees hired to train hospital workers in the use of the new management system really should always have been treated as hourly employees because they did not qualify for the administrative exemption. It had already offered unpaid overtime and an additional five percent to some of these workers.

Several issues remained, however. The most important of these was whether the employees were also owed liquidated damages, in addition to the back pay. This issue turned on the question of whether Shipcom simply made an innocent mistake when it misclassified the workers as administrative in the first place, or whether it acted in bad faith.

Why the Offer of Back Overtime Pay Was Not Enough

At the outset, it may be possible to muster some sympathy for the employer. After all, the argument might go as, Shipcom found a mistake and tried to fix it. That is the state of the law when the mistake was just an innocent error in the first place. But when the attempt to patch up a problem is not innocent, but perhaps an effort to underpay and then avoid detection, that falls below the standard set by the FLSA. Employers can avoid double damages for unpaid overtime only if they can affirmatively show that:

  • their actions were taken in good faith; and
  • they had reasonable grounds for their belief that they were complying with the FLSA.

At trial, Shipcom offered little to no evidence of either of these elements. The jury consequently found that Shipcom had acted in bad faith and awarded full liquidated damages. The trial judge found no reason to second guess the jury.

Unpaid Wages Causes Emotional and Financial Distress for Employees

From a practical point of view, this also makes sense for employees. An employee who is underpaid may find him or herself unable to meet regular expenses. The damage done by a missed mortgage or car payment is hardly undone when an employer catches up and makes wage payments months or years later.

FLSA Is a Powerful tool to Protect Employee Rights

The FLSA is about much more than unpaid overtime. Since 1938, this law has been used by lawyers to rescue workers caught up in a variety of wage, hour and working condition disputes. Other issues that are addressed by the FLSA include:

  • The rights of nursing mothers in the workplace;
  • The misclassification of employees as independent contractors, now famous through the recent litigation involving Uber drivers, truck drivers and contract food delivery people;
  • Undercounting of time for hourly-paid workers, especially those who work in caregiver jobs, either in a client’s home or in a residential care facility; and
  • Failure to pay minimum wage in the construction industry, where the workforce is fluid and individuals may have immigration concerns.

Learn More about FLSA, Employee Misclassification Claims and Unpaid Overtime Lawsuits

If you have been shorted on overtime pay or other legally protected benefits because you were wrongly treated as a management employee or an independent contractor, or you simply were not paid overtime pay for hours you worked in excess of 40 in a work week, the employment law attorneys at Kilgore & Kilgore may be able to help you. We understand that these lawsuits can be about far more than just collecting back pay. Click the following link to learn more about our representation in wage and hour cases. Contact us for a free review of the facts of your case by clicking here and sending us a contact request Contact Kilgore & Kilgore.

Whistleblower Claimant in Texas Wins Wrongful Termination Lawsuit Worth More Than $2.5 Million

Posted on

Disgruntled employee is how a whistleblower is often described. But another version of the same facts is that a public employee sought to expose illegal and dangerous conduct to protect the public. He or she, such a story might go, suffered retaliation and wrongful termination and was subsequently blackballed from future jobs. It’s no myth, of course, this really happened in Texas. It’s unfair and not at all unusual.

If a complaint qualifies under the Texas Whistleblowers Act, however, such wrongful termination is more than unfair. It’s illegal, and workers may have important legal protections.

Wrongful Termination for Filing a Whistleblower Complaint

Carter v. City of Abilene is a recent case in point. Not only did Chad Carter win his wrongful termination lawsuit, but his award was a jaw-dropping $2 million in compensatory damages ON TOP of lost earnings, benefits, and attorneys’ fees. What is so unusual about this award is that the jury awarded such a large amount of compensatory damages, which was to compensate Carter for mental, emotional pain or anguish, loss of enjoyment of life, or other non-economic losses. But only those employees who comply with the requirements of the Whistleblower Act are shielded from retaliation. If you find yourself considering filing a whistleblower claim, protect yourself from the outset against illegal employer activity by reaching out to an employment lawyer before you do anything.

Our Employment Lawyers Can Help Employees Who Experience Wrongful Termination in the Workplace

If you want to make a claim under the Texas Whistleblowers Act, the Texas employment lawyers at Kilgore & Kilgore can help you assess your legal situation and fight for your rights should you experience retaliation or a wrongful termination from your job. Click these links to learn more about whistleblower protection and wrongful termination. We offer a free review of the facts of your case. Use this link to reach us Contact Kilgore & Kilgore.

The Whistleblower Suffered Retaliation, Then Wrongful Termination

Chad Carter worked as an engineer for the City of Abilene. He complained to city officials and ultimately to the Texas Board of Professional Engineers that the City of Abilene did not have a professional engineer overseeing and inspecting certain road construction projects. Instead, the City assigned those tasks to regular city employees in violation of the Texas Engineering Practice Act and the city’s own ordinances. The City then fired Carter, citing performance and attitude issues.

Shortly thereafter, Carter filed a claim under the Texas Whistleblower Act. The City of Abilene never contested the substance of Carter’s complaint – that the road projects were inadequately overseen and inspected. But, for years, it raised procedural objections that the underlying complaint was made to the wrong people. Therein lies the rub with the Texas Whistleblowers Act. There are i’s to be dotted and t’s to be crossed.

The Texas Whistleblower Act and Wrongful Termination

Under the Texas Whistleblower Act, a public employee who experiences retaliation may be entitled to reinstatement to his or her former position, compensation for wages lost during the period of suspension or termination, compensatory damages and reinstatement of fringe benefits and seniority rights. Texas law can provide powerful protection against wrongful termination – the utterly unsurprisingly way that many employers respond to allegations of illegal conduct.

To be protected under the Texas Whistleblower Act:

  • an employee must have believed that another public employee or
    a government entity violated the law; and
  • that belief must have been objectively reasonable
    given all the facts and circumstances.

In other words, the employee does not have to be right, but the complaint must be made in good faith and be well-founded. Being right, however, is pretty good evidence of both those things. In addition, reports must be made to an appropriate law enforcement entity, which is one that the employee reasonably believes is authorized to regulate under or enforce the law allegedly violated, or to investigate or prosecute violations of criminal law generally.

Texas courts have held that an internal report of illegal activity to someone within the public entity (which is what Carter did first) does not qualify as a report made to an appropriate law enforcement authority. The question for litigation was whether the Texas Board of Professional Engineers qualified as a law enforcement authority or whether Carter reasonably believed that it did.

The lawsuit took a long time, but Carter ultimately prevailed. His $2 million compensatory damages award may ultimately be reduced under Texas law. Carter insists that he did not do it for the money, however. He wanted people to know what was going on. What this bodes for future retaliation or wrongful termination lawsuits based on the Texas Whistleblowers Act remains to be seen, but it is certainly a hopeful sign.

Employment-at-Will, Wrongful Termination and Whistleblower Protection

The unfairness of firing someone trying to protect public safety can seem so clear that it may be hard to understand why a retaliation or wrongful termination lawsuit can be hard to win. A little background in employment law is helpful. Texas, like many states, subscribes to the theory that an employer may fire an employee for a good reason, bad reason, or no reason at all. This is called employment-at-will, and it is the default rule.

There are, however, a number of exceptions to the basic employment-at-will doctrine based on violations federal or state statutes. The Texas Whistleblowers Act is one of these exceptions because it explicitly protects whistleblowers from retaliation, including wrongful termination of employment.

If, for some reason, either substantive or technical, a complaint about illegal employer activity fails to qualify under the Whistleblower Act, then the default employment-at-will rule applies. The protections of the law vanish, and whistleblower becomes no more than a disgruntled employee – a former employee.

“If you come at the king, you best not miss.” Mangled for present purposes, that might easily be “if you come as a whistleblower, you best not miss.” This is not a do-it-yourself action. Whistleblowers need legal counsel before they blow the whistle.

It’s Difficult in Texas to Make a Whistleblower Claim

The Texas Whistleblowers Act has had plenty of critics in the 30 years since its adoption. Among the impediments they identify for those who fear or have already suffered retaliation or wrongful termination:

  • No information about who to report problems to: As in Carter’s case, whistleblowers are protected from retaliation only when they report problems to a law enforcement officer. Many government employee policies describe only in-house reporting structures, which do not qualify for whistleblower protection. These employees have no easy way to know what to do.
  • No form: There’s no form to properly document an official complaint and little information about how to file one.
  • No information about the kind of offense that can be reported: The problem reported must be a violation of the law. Not all employees who are in a position to see wrongdoing are fully aware of the ins-and-outs of the law. Reports of financial irregularities, for example, may not be covered.
  • No help: No Texas agency oversees the law or helps an employee who is trying to report possible whistleblower violations.

When someone is disturbed about goings-on at work, getting in touch with a lawyer would be very good idea. The best time for an employee to contact a lawyer about the possibility of workplace wrongdoing is at the very beginning, even before any complaint process is begun. A complaint will trigger a response. Expect it and be prepared.

The best time to contact an employment lawyer is as soon as possible. The attorneys at Kilgore & Kilgore have extensive experience and insight about handling employee claims.

Learn More about Whistleblower Claims, Retaliation and Wrongful Termination

Click on the links in this sentence if you wish to know more about whistleblower claims, retaliation, and wrongful termination. Contact us to request a free evaluation of the facts of your case by clicking here and sending us a contact request Contact Kilgore & Kilgore.

Know What to do Before You Get Fired to Protect Your Employee Rights Should You Wish to Make a Wrongful Termination Claim

Posted on

If you suspect that you are about to be fired, it is wise to tamp down the anger and worry and understand your employee rights, in particular how to support a claim of wrongful termination, discrimination, retaliation or other possible legal action available to you. This is a tough situation, but you are in a unique position to protect your professional reputation, earnings, and benefits. An employment lawyer can help cushion the blow, so reach out to Kilgore & Kilgore.

Our Employment Lawyers Can Help You Protect Your Employee Rights and Pursue a Wrongful Termination Lawsuit

If you believe that you are about to be fired or have been fired in violation of the law, the Texas employment attorneys at Kilgore & Kilgore can help you determine what legal remedies may be available to you and help you fight for your employee rights. Click the following link to learn more about wrongful termination Wrongful Termination. We offer a free review of the facts of your case. Use this link to reach us Contact Kilgore & Kilgore.

Protect Your Employee Rights in an Employment Termination Scenario

Perhaps the signs have been there for a while – negative performance reviews, a frosty relationship with your boss, a cutback in responsibilities. Or perhaps a sudden management change or new cost-cutting initiatives have left everyone scrambling. Either way, if you think you are about to be fired, you should take steps now to protect yourself, your finances, and your professional reputation.

Most firings feel unjust at the time. In Texas, a termination is illegal only if certain criteria are met. For a termination to be illegal, it generally requires that that the former employee be able to show that a statute has been violated, a contract breached or, in rare instances, that the way the employee was fired was so outrageous or abusive as to constitute a tort, like assault.

Suing for wrongful termination is not the only action an employment lawyer can take to protect your employee rights in this situation. It may be helpful to think about this as a three-step process. There are things you can do to protect yourself before you are fired. There are things you can do to preserve your rights as you are being fired. And, there may be steps you can take after the fact.

How a Typical Termination Goes Down

You may be called into your supervisor’s office, there may be a human resources person present, you may be told that your performance has not met company standards or something similar, and that your employment is ending immediately. You may be asked if you have any questions. You may be asked to sign a release or other document. While this is happening, you may be locked out of your work computer and voicemail. Key codes may be changed. Then, the human resources person may escort you to the door or elevator. You may or may not have the chance to collect personal effects. If not, they may be sent to your home address within a few days. You may not have a chance to say goodbye to anyone. Most firings happen on a Friday. There you are – on the street and in shock. Go somewhere quiet, write down detailed notes about what happened – everything you can think of – and go home. Joe’s Bar & Grill is not a good idea.

Tips to Minimize Harm Before you are Fired

Prepare and defend yourself to the extent possible should you anticipate a firing in your future. Here are some actions to consider.

  1. Try to address causes for any dissatisfaction with your performance before they become reasons to fire you. It’s a good idea to ask your supervisor and human resources representative for frank feedback.
  2. Take early steps to prepare your job search. These may include lining up good references and updating your resume. Have lunch with friends in the same field to find out who is hiring. It is best to be discreet. Visit job posting sites. The truth is, though, it is always smart to stay abreast of your industry and to maintain contacts who may be helpful and vice versa. If appropriate, consider joining professional organizations and work those contacts. Stay active and visible in your field.
  3. Prepare 30-second and 60-second talks about you, your abilities, reputation, and skills so you are ready to articulate your strengths when people inquire at networking events.
  4. Gather and save your professional records. These may include offer letters and contracts, performance reviews, proof of raises and bonuses, work schedules, job assignments and any praise that have received from managers, clients, colleagues, business associates, and vendors.
  5. Keep a log of incidents in which you experienced harassment, discrimination, retaliation, or that you believe may support a claim of bias, including similar actions toward co-workers.
  6. Discreetly clean out personal information from your workspace, including passwords to personal emails and social media sites, etc. All records relating to your employment situation should be kept at home, not in the office.
  7. Schedule doctor and dentist appointments while you still have insurance.

Minimizing Harm during the Exit Interview

There may be a few things you can do, even during that awful exit interview, to minimize the damage that losing your job causes, such as:

  • First, try to say as little as possible.
  • Second, do not sign anything. Practice the phrase, ”I’d like to have the chance to review this with my lawyer” so that rolls off the tongue even when you cannot engage your brain.
  • Third, if your termination involves a non-disclosure agreement, non-compete agreement, confidentiality agreement, or another type of separation agreement, review it carefully with an employment lawyer. These documents may have enormous impact on your career, are often negotiable, and may not be legal or enforceable as written.
  • Fourth, since you may see the situation coming, consider this: your employer may want something from you, like a release from liability or a non-compete agreement. Talk to an employment lawyer about the possibility of having an ask of your own, like a severance agreement or an enforceable agreement about a positive or neutral reference. Work out your strategy in advance. Toss negotiations to your lawyer. But, make your ask during that interview. Tell the person conducting the exit interview who will be in touch with the company regarding your situation.
  • As soon as you leave the exit interview, preferably within 20 minutes of leaving, write down detailed notes on everything that happened and what was said. Contemporaneous notes may be helpful later.

Deciding if your Firing Was an Illegal Wrongful Termination

Employment at will – Texas, like many states, subscribes to the theory that an employer may fire an employee for a good reason, bad reason, or no reason at all. Of course, employees may quit under the same rules. This is called employment-at-will, and although it may look fair on paper, it actually is disadvantageous to employees.

Violations of law and public policy – There are, however, a growing collection of exceptions to the employment-at-will rule based on federal or state statutes. Here are a few:

Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and Texas Labor Code Chapter 21 (enforced by the Texas Workforce Commission’s Civil Rights Division) all prohibit employment discrimination, including termination, on the basis of an employee’s race, color, national origin, religion, sex, age, and disability. Pregnancy discrimination, sexual harassment, or other workplace harassment based on a protected characteristic are also prohibited. The point of collecting professional records of promotions or accolades or keeping a log of potentially biased or harassing incidents is to support a claim that an adverse employment action or termination was based on a prohibited reason.

Under the Corporate and Criminal Fraud Accountability Act of 2002 and Title VIII of the Sarbanes-Oxley Act of 2002, an employee of a publicly traded company who is terminated as a result of reporting fraudulent activity, environmental law abuses, or safety violations may be able to sue for illegal wrongful termination. Whistleblowers have also succeeded in pursuing wrongful termination and retaliation claims under the False Claims Act for reporting instances of Medicare fraud cases or other illegal acts against health care institutions.

In Sabine Pilot Service, Inc. v. Hauk, the Texas Supreme Court ruled that an employer in Texas may not terminate an employee for refusing to commit an illegal act. If someone is terminated solely because s/he refuses to commit a crime, they may be able to sue for illegal wrongful termination.

In a more general way, courts have been willing to look to the public policy of the state and federal governments to determine if the termination of an employee violates the interests of the general public. This might include being fired solely for filing a worker compensation claim or being fired for serving jury duty or for complying with a valid subpoena, for example.

Breach of contract – An employee with a written contract may be able to bring a breach of contract lawsuit when the terms of the agreement are violated, including situations where an employee is allegedly fired for cause in order not to pay the employee severance set forth in the employment agreement. Or an employer may refuse to pay earned incentives or bonuses in breach of an employment contract.

Tort claims – In even rarer cases, where the employer’s conduct toward the employee is particularly outrageous – security guards literally tossing a fired employee onto the sidewalk, or the boss cursing up a storm and flinging a stapler which hits the employee – an employee may have a tort claim for assault or intentional infliction of emotional distress.

Realistic Assessment of Wrongful Termination Claims

The employment-at-will doctrine is a stumbling block for wrongful termination lawsuits. Because the facts surrounding a termination are so often ambiguous, only some employees are successful in wrongful termination lawsuits. But that does not mean that the employee has no legal recourse. An employment lawyer may be able to cushion the blow considerably. The employment lawyer may help in the negotiation of a settlement, a severance agreement, or an enforceable agreement about references. Even if the facts are not sufficient to support a wrongful termination lawsuit, they may support another cause of action. Your finances and professional reputation are worth defending and you should take advantage of the opportunity to review your situation with legal counsel.

Read More about Wrongful Termination, Discrimination, Harassment, and the Other Ways an Employee Can Legally Defend His or Her Rights

If you have questions about your employee rights, contact us. Problems at work are common. Click here to read more about how our employment lawyers help resolve employee claims of all kinds Texas Employment Lawyers. Contact us to request a free evaluation of the facts of your case by clicking here and sending us a contact request Contact Kilgore & Kilgore.