A disabled employee who is doing a poor job should anticipate getting fired if he has not told his employer he needs an accommodation for his disability. Such a firing led to the Massachusetts Federal Court lawsuit of Peter Kinch v. Quest Diagnostics, Inc. Kinch had worked for Quest for approximately 25 years before he was fired on November 2005. At that time, he worked as a Processor in Quest’s Specimen Processing Department. Kinch has had Hepatitis C since the early 1990s.
Quest began experiencing problems with Kinch in 2002 wherein he received several poor annual reviews and written and oral warnings following from 2002 through 2004 criticizing him for, among other things, failing to consistently meet production standards, taking too many breaks, demonstrating little initiative, and failing to adhere to performance standards. The deficiencies continued in 2005. On two occasions in April 2005, Kinch received verbal warnings. When he failed to show improvement, in May 2005 Quest placed him on a personal improvement plan. On June 8, 2005, Kinch received another verbal warning. Over the next several weeks, Kinch satisfied Quest’s production requirement, but, unfortunately, that did not last long and on July 15, 2005, Quest issued Kinch a final written warning due to his poor production. Kinch refused to sign the warning and told his supervisors that the medications he was taking for Hepatitis C were affecting his work. They referred him to Disability Services which granted him a leave of absence effective July 18, 2005. Kinch returned to work on October 6, 2005 and his poor production resumed. On November 9, 2005, when his supervisor spoke to him about his failure to meet production requirements, Kinch explained that he was unhappy with “what he does.” Quest thereafter terminated him and he sued stating that Quest discriminated against him because of his disability and failed to accommodate him.
Prior to Kinch’s termination on or about March 2005, he told his team leader that he was starting treatment with the drug Pegintron for his Hepatitis C and gave his team leader a booklet describing possible side affects of the medication. Kinch also told his co-workers about the treatment and possible side affects. He submitted to the Court that was enough to put Quest on notice that he needed a reasonable accommodation so that he would be able to perform the essential functions of his position. The Court disagreed. Typically, an employee must request an accommodation as an employer is not required to accommodate a need that it does not know exists, unless the need for an accommodation is obvious.
In Kinch’s situation, he only gave his supervisor a booklet describing possible side affects of the medication he planned to take. He provided no evidence to the Court that he brought to Quest’s attention that the medications were actually having a negative impact on his work after he had returned from his leave of absence. In fact, instead of Kinch stating that his medications were negatively affecting his production, he stated he was unhappy with the work he does. Given the evidence submitted to the Court, it found that Kinch did not have a right to go to a jury with his claims against Quest and summary judgment was granted in favor of Quest against Kinch’s claims.
It is possible that Kinch’s medication was causing him to be depressed and distracted from his job or otherwise causing his poor performance, yet, his employer should not have had to guess what the cause was for his poor performance. It is also possible that Kinch just did not like his job and no reasonable accommodation could change that fact.
J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com
Thursday, December 10, 2009
Wednesday, December 2, 2009
Permanent Estate Tax Bill To The U.S. House Floor?
According to the Congressional Quarterly Today, House Democratic leaders intend to bring a permanent estate tax bill to the House floor next week. The estate tax, which is set to disappear for a year on December 31, is the subject of numerous bills pending in the House.
The legislation (HR 4154), which is slated for House action as early as Wednesday, Dec. 2, 2009, would extend indefinitely the current estate tax exemption of $3.5 million and the top tax rate of 45%. If Congress does nothing by the end of this year, the estate tax will disappear Jan. 1 and then return in 2011 with a return to the $1 million exemption and a 55% top rate.
Republicans and some Democrats have long sought total repeal of the estate tax, but Democratic leaders want to prevent the estate tax from expiring even for a single year. Support for the permanent estate tax bill remains unclear among both Democrats and Republicans. Democratic moderates support a permanent estate tax fix, but some liberals oppose a tax cut from scheduled 2011 levels that would benefit many upper-income families in the middle of a recession.
On the other hand, as I have previously reported, business groups are supporting a bill that would gradually raise the exemption to $5 million, cut the estate tax rate to a 35% rate and index the exemption for inflation. Last week, after a series of closed-door meetings, House Ways and Means Democrats were considering either a one-year or a two-year extension of the 2009 estate tax structure, which would push the decision about a long-term restructuring to next year, after the mid-term elections. This year there has been virtually no public discussion of the estate tax among lawmakers who have been consumed by the health care debate.
Joseph W. Kenny is a director and shareholder of Hamblett & Kerrigan, P.A. and practices in the areas of estate planning and taxation. He is also a Certified Public Accountant with certification as a Personal Financial Specialist. You can reach Attorney Kenny by email at jkenny@hamker.com.
The legislation (HR 4154), which is slated for House action as early as Wednesday, Dec. 2, 2009, would extend indefinitely the current estate tax exemption of $3.5 million and the top tax rate of 45%. If Congress does nothing by the end of this year, the estate tax will disappear Jan. 1 and then return in 2011 with a return to the $1 million exemption and a 55% top rate.
Republicans and some Democrats have long sought total repeal of the estate tax, but Democratic leaders want to prevent the estate tax from expiring even for a single year. Support for the permanent estate tax bill remains unclear among both Democrats and Republicans. Democratic moderates support a permanent estate tax fix, but some liberals oppose a tax cut from scheduled 2011 levels that would benefit many upper-income families in the middle of a recession.
On the other hand, as I have previously reported, business groups are supporting a bill that would gradually raise the exemption to $5 million, cut the estate tax rate to a 35% rate and index the exemption for inflation. Last week, after a series of closed-door meetings, House Ways and Means Democrats were considering either a one-year or a two-year extension of the 2009 estate tax structure, which would push the decision about a long-term restructuring to next year, after the mid-term elections. This year there has been virtually no public discussion of the estate tax among lawmakers who have been consumed by the health care debate.
Joseph W. Kenny is a director and shareholder of Hamblett & Kerrigan, P.A. and practices in the areas of estate planning and taxation. He is also a Certified Public Accountant with certification as a Personal Financial Specialist. You can reach Attorney Kenny by email at jkenny@hamker.com.
Keep Your Eyes On Employees' Actions
A boss may have to pay for her employees' mistakes. Under the legal doctrine of respondeat superior and as well as under principal and agency law, an employer may be held liable for the negligent or intentional actions of her employees if the actions are committed by the employee within the scope of his employment. This legal doctrine attempts to allocate the risk to business enterprises for the accidents and damages which are a foreseeable result of the employee's employment.
An employee's act is within the scope of his employment if it is incidental to the employer's business and is done to further the employer's interest. The employer may also be responsible for the employee's actions if the employee was trying to serve the employer's business to some extent even if the primary motive of the employee's action was to benefit himself or another.
For example, companies may have employees use their own vehicles to handle company business. If the employee, while driving on company business, negligently hits and injures a pedestrian, the employer is vicariously liable for the employee's negligence. The fact that the employer did not expect or encourage her employee to drive negligently is irrelevant.
In this case the employee is acting as the agent of the employer. The driver is also directly liable to the injured person for the negligence but, as a practical matter, the injured person, if intent on pursuing an action for damages, will more likely pursue it against both the employee and the employer to enhance his chances of financial recovery.
Many employers have a general commercial automobile policy or other insurance which specifically covers the employee's actions. An employee's personal automobile policy may have a business purpose exclusion which excludes coverage when the vehicle is being used for a business purpose. The employer must be aware of this risk and make a business decision, after meeting with the insurance agent, as to what insurance is critical or prudent for the business.
In some cases, an employee's willful or malicious act may also be held to be legally within the scope of employment and thus subject the employer to liability. For example, if a salesperson knows that a competitor has a contract with a customer and the salesperson then convinces that potential customer to breach its contract with the competitor and go with your company, your employee as well as your company could be sued by the competitor for wrongful interference with contractual relations. Under those circumstances, it is highly unlikely there would be any insurance coverage available for either the costs of the defense of the claim or payment of any damages.
The foregoing issues illustrate some of many reasons why employers must be diligent in training employees on safety procedures and monitoring employees’ actions.
J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com
An employee's act is within the scope of his employment if it is incidental to the employer's business and is done to further the employer's interest. The employer may also be responsible for the employee's actions if the employee was trying to serve the employer's business to some extent even if the primary motive of the employee's action was to benefit himself or another.
For example, companies may have employees use their own vehicles to handle company business. If the employee, while driving on company business, negligently hits and injures a pedestrian, the employer is vicariously liable for the employee's negligence. The fact that the employer did not expect or encourage her employee to drive negligently is irrelevant.
In this case the employee is acting as the agent of the employer. The driver is also directly liable to the injured person for the negligence but, as a practical matter, the injured person, if intent on pursuing an action for damages, will more likely pursue it against both the employee and the employer to enhance his chances of financial recovery.
Many employers have a general commercial automobile policy or other insurance which specifically covers the employee's actions. An employee's personal automobile policy may have a business purpose exclusion which excludes coverage when the vehicle is being used for a business purpose. The employer must be aware of this risk and make a business decision, after meeting with the insurance agent, as to what insurance is critical or prudent for the business.
In some cases, an employee's willful or malicious act may also be held to be legally within the scope of employment and thus subject the employer to liability. For example, if a salesperson knows that a competitor has a contract with a customer and the salesperson then convinces that potential customer to breach its contract with the competitor and go with your company, your employee as well as your company could be sued by the competitor for wrongful interference with contractual relations. Under those circumstances, it is highly unlikely there would be any insurance coverage available for either the costs of the defense of the claim or payment of any damages.
The foregoing issues illustrate some of many reasons why employers must be diligent in training employees on safety procedures and monitoring employees’ actions.
J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com
Thursday, November 19, 2009
Poetry in Motion (click to read court decision)
College faculty have fiduciary responsibilities to their employers just like any other employees. A decision entered by the New Hampshire Federal Court on October 23, 2009 sets forth a set of circumstances upon which a college sued its former faculty member and that faculty member’s new college for attempting to take an academic program, along with faculty and students, to her new college.
The facts as alleged by New England College (“NEC”) are as follows. NEC sued Drew University (“Drew”) and Anne Marie Macari (“Macari”) alleging that while Macari served as the interim director of NEC’s graduate poetry program, she secretly conspired with Drew to develop a similar program and solicit NEC faculty and students to affiliate with Drew. NEC brought claims of breach of fiduciary duty, breach of contract, and intentional interference with various contractual and other relationships including between NEC, its faculty, and students. The Court humorously categorized the case as a dispute over “poetry in motion.” While the actual decision only denied Drew’s request that the litigation occur in New Jersey rather than in New Hampshire, a review of the facts as alleged by NEC provides employers and employees with a good example of when competitive acts have gone too far and will result in litigation.
In March 2007, Macari had accepted an offer to become the Interim Director of the poetry program at NEC in Henniker, New Hampshire where she had been a faculty member. The program involved long-distance learning punctuated by brief periods of residency with prominent poets and was billed by NEC as the only all-poetry program of its kind. Macari one month later, without telling NEC, met with Drew’s President and other representatives of Drew to discuss the possibility of developing a similar poetry program there. In advance of her plan to move the poetry program to Drew, Macari provided Drew with background materials regarding the proposed program such as a potential faculty list that included various NEC faculty members, budget notes that were based in part on the budget from NEC, and a curriculum similar to that of NEC’s program. At the meeting, Macari discussed with Drew’s representatives bringing most of the faculty from NEC. Drew also agreed to accept NEC transfer students with full credit for their prior course work and the “same tuition and scholarships that were given to them at NEC.” At a later meeting, Macari provided a budget which included detailed information about NEC’s tuition rates, scholarship funding, advertising methods, and faculty salaries.
Macari told Drew that the cost of linens during residency periods were the only details she could not pin down without giving herself away too much to her coworker who is the Program Administrator at NEC. Macari’s sales pitch to Drew was that the program had used NEC as the institutional home for the past 15 years and that she was seeking to find a new institutional home for the program. Ultimately, Macari made the move that attracted both faculty and students to Drew’s program.
Macari was free to leave NEC and go to work for Drew and thereafter validly compete, but if the allegations alleged by NEC are true that she took confidential information of NEC while working there and used it to directly compete with NEC and Drew knowingly accepted that confidential information, Drew and she may be liable for damages to NEC. The courts, in general, will readily protect a company’s confidential information from being misappropriated by an employee for use in competition against that employer. Further, an employee’s duty of loyalty to her employer prevents her from setting up competition with her employer while still employed by that employer. If the facts as alleged against Macari and Drew are true, this is a perfect example of what an employee should not do when transitioning from one employer to another.
J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com
The facts as alleged by New England College (“NEC”) are as follows. NEC sued Drew University (“Drew”) and Anne Marie Macari (“Macari”) alleging that while Macari served as the interim director of NEC’s graduate poetry program, she secretly conspired with Drew to develop a similar program and solicit NEC faculty and students to affiliate with Drew. NEC brought claims of breach of fiduciary duty, breach of contract, and intentional interference with various contractual and other relationships including between NEC, its faculty, and students. The Court humorously categorized the case as a dispute over “poetry in motion.” While the actual decision only denied Drew’s request that the litigation occur in New Jersey rather than in New Hampshire, a review of the facts as alleged by NEC provides employers and employees with a good example of when competitive acts have gone too far and will result in litigation.
In March 2007, Macari had accepted an offer to become the Interim Director of the poetry program at NEC in Henniker, New Hampshire where she had been a faculty member. The program involved long-distance learning punctuated by brief periods of residency with prominent poets and was billed by NEC as the only all-poetry program of its kind. Macari one month later, without telling NEC, met with Drew’s President and other representatives of Drew to discuss the possibility of developing a similar poetry program there. In advance of her plan to move the poetry program to Drew, Macari provided Drew with background materials regarding the proposed program such as a potential faculty list that included various NEC faculty members, budget notes that were based in part on the budget from NEC, and a curriculum similar to that of NEC’s program. At the meeting, Macari discussed with Drew’s representatives bringing most of the faculty from NEC. Drew also agreed to accept NEC transfer students with full credit for their prior course work and the “same tuition and scholarships that were given to them at NEC.” At a later meeting, Macari provided a budget which included detailed information about NEC’s tuition rates, scholarship funding, advertising methods, and faculty salaries.
Macari told Drew that the cost of linens during residency periods were the only details she could not pin down without giving herself away too much to her coworker who is the Program Administrator at NEC. Macari’s sales pitch to Drew was that the program had used NEC as the institutional home for the past 15 years and that she was seeking to find a new institutional home for the program. Ultimately, Macari made the move that attracted both faculty and students to Drew’s program.
Macari was free to leave NEC and go to work for Drew and thereafter validly compete, but if the allegations alleged by NEC are true that she took confidential information of NEC while working there and used it to directly compete with NEC and Drew knowingly accepted that confidential information, Drew and she may be liable for damages to NEC. The courts, in general, will readily protect a company’s confidential information from being misappropriated by an employee for use in competition against that employer. Further, an employee’s duty of loyalty to her employer prevents her from setting up competition with her employer while still employed by that employer. If the facts as alleged against Macari and Drew are true, this is a perfect example of what an employee should not do when transitioning from one employer to another.
J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at dmarr@nashualaw.com
Thursday, November 5, 2009
Email Storage and Policy Issues
It was disconcerting to learn that the City of Nashua School District was unable to honor a recent request by the Nashua Telegraph to produce emails created and sent between its former Superintendent of Schools Christopher Hottel and Chief Operating Officer James Mealey. That failure led to an equally disconcerting disclosure that the city and the state’s Right to Know Commission are of the opinion that the law and policies in this area are vague, unclear and in need of revision. While that may be so, I would suggest that the basis for the appropriate policy is readily available and has been for some time.
South of our border, Mayor Menino has problems due to what appears to be a failure on his aide’s part to retain emails in compliance with Massachusetts’ state law which cites a two year retention period. Massachusetts may be ahead of New Hampshire in its statutory articulation of the storage period, but it is my position that both are out of whack with what should be the guiding principle. One need look no further for that principle than what is required to be produced at least in federal court if you are a party to litigation there. To the extent state courts may be behind on this issue, be assured that they are catching up quickly. Emails are discoverable in every court, assuming they bear some pertinence to the case. In federal court, emails were one of the discoverable items that rule writers had in mind when they revised federal Rule 34(a) in 2006. That Rule includes “Electronically Stored Information” in its title as one of the things which parties may request in the discovery phase of a lawsuit.
In the Notes regarding the 2006 Amendments the authors state that the Rule is “expansive and includes any type of information that is stored electronically. A common example often sought in discovery is electronic communications, such as e-mail.” I would submit to you that all it will take to immediately change the policy is for the Boston Mayor’s office or the City of Nashua School District’s office to be involved in a single lawsuit where this email material is requested and is not able to be produced because it has been destroyed. That is because it is likely that the requesting party will seek sanctions against the nonproducing party, sanctions that are likely to be granted by the judge presiding over the case. The sanctions for such spoliation of evidence are of wide array, ranging from a minor slap on the wrist to harsh and eye-opening, for example facing the prospect of a jury being instructed by the judge that they can assume that the destroyed evidence was harmful to the nonproducing party’s case. Worse yet, there are instances where it is reported that the destroying party’s sanction was that they were simply and finally defaulted on the lawsuit as in game, set and match!
I suspect that one such lawsuit would quickly straighten out any question policy makers have about how long emails should and must be stored. As to the City of Nashua, I have no great fear that this problem, now uncovered, will not be quickly solved. This is because the new City Attorney is James McNamee, a bright and capable attorney who has spent thirty years in litigation, the first several in the office next door to mine when he was here at Hamblett & Kerrigan. I rest assured that with this problem out in the open, he will resolve the issue in a fashion that protects his client and the public now and going forward.
If you have a question about your company’s email policy or other electronic storage concerns, you should give one of the experienced lawyers at Hamblett & Kerrigan a call to set up a meeting to discuss and analyze the issues to make sure the issue is properly addressed.
Timothy G. Kerrigan is a director at Hamblett & Kerrigan, P.A. His present practice focuses on complex legal situations both in the litigation and in the ADR context. He is available as a litigator, client advocate or as an ADR neutral. Mr. Kerrigan is certified by the State Office of Mediation and Arbitration both as a mediator and as an arbitrator. You can reach Attorney Kerrigan by e-mail at tkerrigan@nashualaw.com
South of our border, Mayor Menino has problems due to what appears to be a failure on his aide’s part to retain emails in compliance with Massachusetts’ state law which cites a two year retention period. Massachusetts may be ahead of New Hampshire in its statutory articulation of the storage period, but it is my position that both are out of whack with what should be the guiding principle. One need look no further for that principle than what is required to be produced at least in federal court if you are a party to litigation there. To the extent state courts may be behind on this issue, be assured that they are catching up quickly. Emails are discoverable in every court, assuming they bear some pertinence to the case. In federal court, emails were one of the discoverable items that rule writers had in mind when they revised federal Rule 34(a) in 2006. That Rule includes “Electronically Stored Information” in its title as one of the things which parties may request in the discovery phase of a lawsuit.
In the Notes regarding the 2006 Amendments the authors state that the Rule is “expansive and includes any type of information that is stored electronically. A common example often sought in discovery is electronic communications, such as e-mail.” I would submit to you that all it will take to immediately change the policy is for the Boston Mayor’s office or the City of Nashua School District’s office to be involved in a single lawsuit where this email material is requested and is not able to be produced because it has been destroyed. That is because it is likely that the requesting party will seek sanctions against the nonproducing party, sanctions that are likely to be granted by the judge presiding over the case. The sanctions for such spoliation of evidence are of wide array, ranging from a minor slap on the wrist to harsh and eye-opening, for example facing the prospect of a jury being instructed by the judge that they can assume that the destroyed evidence was harmful to the nonproducing party’s case. Worse yet, there are instances where it is reported that the destroying party’s sanction was that they were simply and finally defaulted on the lawsuit as in game, set and match!
I suspect that one such lawsuit would quickly straighten out any question policy makers have about how long emails should and must be stored. As to the City of Nashua, I have no great fear that this problem, now uncovered, will not be quickly solved. This is because the new City Attorney is James McNamee, a bright and capable attorney who has spent thirty years in litigation, the first several in the office next door to mine when he was here at Hamblett & Kerrigan. I rest assured that with this problem out in the open, he will resolve the issue in a fashion that protects his client and the public now and going forward.
If you have a question about your company’s email policy or other electronic storage concerns, you should give one of the experienced lawyers at Hamblett & Kerrigan a call to set up a meeting to discuss and analyze the issues to make sure the issue is properly addressed.
Timothy G. Kerrigan is a director at Hamblett & Kerrigan, P.A. His present practice focuses on complex legal situations both in the litigation and in the ADR context. He is available as a litigator, client advocate or as an ADR neutral. Mr. Kerrigan is certified by the State Office of Mediation and Arbitration both as a mediator and as an arbitrator. You can reach Attorney Kerrigan by e-mail at tkerrigan@nashualaw.com
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