Work Matters

"Punitive Damages Gone Wild" -- Safeshred Inc. v. Martinez

On April 20, the Texas Supreme Court held 9-0 in Safeshred Inc. v. Martinez that a plaintiff in a Sabine Pilot case (where an employee is terminated for refusing to perform an act that would land him in jail) can recover punitive damages; however the plaintiff in Safeshred did not establish sufficient evidence to recover punitive damages. In doing so, the court reversed the Austin court of appeals' decision to let the plaintiff keep the punitive damages award.

So, is all well in Corporate Texas? In its holding in Safeshred, the court went out of its way to broadly discuss what does or does not constitute sufficent evidence of punitive damages in employment cases, not just Sabine Pilot cases. And the court reaffirmed the old standby that in a retaliation case, the plaintiff -- to establish the necessary malice for a finding of punitive damages -- must show more than the "mere intent" to fire an employee, or else every jury's finding of retaliation would warrant punitive damages.

But in Footnote 6, the court said that malice could be established if an employer, when firing the employee, was aware that the law does not permit employers to fire employees for refusing to perform illegal acts. What? So, now an educated employer, one who understands what the law prohibits, won't be able to wiggle out of a punitive damages award simply because it knows the law. It will be punished for wisdom, and insulated for its ignorance.

Because there is no reason not to apply Footnote 6 to other types of retaliation claims, the court has opened the door to a new reality show: "Punitive Damages Gone Wild." I think perhaps the court meant to say that there must be evidence that the employer thought: 1. We know we are terminating the employee in violation of the law and 2. we are going to do so anyway. But that is not what the Safeshred opinion says.

The Buddha and the Fair Labor Standards Act

Let's talk the Buddha and the Fair Labor Standards Act. First, the Buddha. I just finished "The Buddha Walks Into A Bar. . . : A Guide To Life For A New Generation" by Lodro Rinzler. In keeping with his new generation theme, he tackles Buddhism and smart phones. He writes that a smart phone is supposed to free us up by allowing us to check email while on the move; instead it enslaves us: "You are constantly checking your phone in a panic, wondering what is going on at work. If you work in an office building, watch your colleagues when they get in an elevator . . . many people will get out their phones and check their email, already fearing what the day might bring." Been there, Lodro.

Solution? Understand that all is impermanent. The shining new phone is just metal and wires and buttons and will fall apart someday. The happiness you get when you buy it fades. "An object you thought would bring you more freedom has in fact limited you, and it has become another source of anxiety in your life." My advice to my colleagues when meeting with a client: leave the device in the car or in your office. There is nothing more important than the moment you are in, with the client who is paying you money for your time and attention, They deserve 100 percent of both.

And, the legal issues of nonexempt employees checking their smart phones when off duty are becoming a big deal under the FLSA. If they do it as part of their job, they must be paid, unless the time is minimal. So, manage the expectation of the nonexempt employees; employers should tell them that they do not expect more than a minimal amount of time checking messages from outside the office while off duty, and that they should report on their time sheets any time spent off duty doing so.

The Buddhist lesson: Yes, the Buddha would knock back a couple, but mindfully and with right intention (or so says Rinzler). A portable lesson for employers and the FLSA: Yes, its requirements are often onerous, but seek to comply mindfully and with right intention. Cheers.

Seeing the nonlegal components of clients' concerns

Recently, I met with a new client, who had just started her own business. One of her clients had paid most, but not all, of an invoice.

We talked. What the talking revealed was the paradigm shift from being a contractor not paid on a job to being a CEO with a broader perspective of customer relations, industry reputation, and lessons learned about pricing models and contract language.

I’ll leave the final words to Jack W. Burtch Jr., whose article I discussed in yesterday’s post. He writes that law is a multidisciplinary profession, and few legal problems have only legal components. The other issues are there, even if the lawyer can’t immediately see them, and the wise attorney-as-counselor needs to take them into account. He ends his article: "We have a reminder of our calling near at hand. Just look up at the license hanging on your wall. It reads "Attorney and Counsellor at Law."

Applying insights from psychology to law practice: the lawyer's role

Yesterday, I blogged about a book, "The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations," that discusses a concept from psychologist Carl Rogers. 

Jack W. Burtch Jr. (pictured), an employment lawyer, writes about how lawyers can use the insight of Rogers in "The Lawyer As Counselor," Virginia Lawyer, April 2010. The first lesson: Not every legal problem has a legal solution. When attorneys make this assumption, we restrict our role to that of a technician.

Burtch writes that the Rogers approach compels lawyers to focus on the client's needs, values and attitudes. It forces us to focus on client-centered counseling, not lawyer-centered counseling. He writes: "Rogers believed that human beings seek to become self-actualized --- to achieve their full potential. The counselor's job is to show empathy, respect and understanding so clients can make healthy decisions for themselves and develop their own potential to the fullest extent."

Tomorrow, I’ll share an example when I was able to do this in my own practice.

Insight from psychology: what counselors can teach counselors at law

I am very interested in how lawyers give advice to clients, so I zeroed in on a passage in "The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations" by Ori Brafman and Rod A. Beckstrom, discussing the work of psychologist Carl Rogers.

For them, this is Rogers' big idea: A counselor's role is to help the client find her own wisdom in her own time. They describe the essence of this approach: "When people feel heard, when they feel understood and supported, they are more likely to change. A catalyst [counselor] doesn't prescribe a solution, nor does he hit you over the head with one. Instead, he assumes a peer relationship and listens intently.”

The authors explain that assuming the role of all-knowing advice-giver creates a destructive hierarchy between the giver of the advice and the recipient of the advice. Communication turns out to be a one way street, not a two lane road.

So how has one employment lawyer suggested lawyers utilize Rogers’ insight? Check back tomorrow.

Reaching in-house counsel with your blog

A recently released study of the social media habits of corporate counsel contains some interesting findings. Greentarget, a strategic communications firm, performed the study in conjunction with InsideCounsel magazine and the Zeughauser Group. Some findings: 76 percent of respondents (in-house lawyers) attribute some level of importance to a lawyer's blog in deciding which firms to retain. And the percentage who say a law firm's blog can influence hiring decisions went up from last year's study to 55 percent from 50 percent. Reflecting what the study believes are increasing work demands on corporate counsel, the percentage of respondents who were daily readers of blogs dropped from 27 percent to 17 percent. But blogs were not being abandoned. Rather, the reading habits were changing: Weekly and monthy readers increased from 20 percent to 26 percent, and overall frequency of reading blogs made up for the drop in daily exposure. Lesson for bloggers from the study: "Since daily readership is less frequent, posts can be more intermittent and still have the same effect, as long as they are highly relevant to in-house lawyers." A full version of the report can be obtained at info@greentarget.net.

A lesson in managing a workplace mistake

A recent case from the 6th U.S. Circuit Court of Appeals teaches us a little about the Family Medical Leave Act, but a lot more about how an employer should manage a workplace mistake. The facts of the Jan. 20 decision by the 6th Circuit in Thom v. American Standard Inc. are simple and set out by the court. The plaintiff worked for the defendant for 36 years as a molder. He needed shoulder surgery and went out on FMLA leave. The company fired him because it determined that he exhausted his FMLA leave and had no other leave to use. He sued, claiming interference with his FMLA rights. The company determined he had exhausted his leave under the "rolling year" method (calculates employee leave backward from the date the employee uses leave), and not the calendar method (employee gets 12 weeks of FMLA leave in a calender year). The court said the employer has the right to use whatever method it wants, but it must tell the employee the method it has elected. It did not in this case. And when an employer does not, it must use the method most favorable to the employee. Had the employer used the calendar method, the plaintff would have had enough leave. This fact popped up after the lawsuit was filed. The district court granted summary judgment to Thom on the issue of liability, which the Circuit affirmed, but the Circuit reversed on the issue of liquidated damages (designed to punish an employer), which the trial court refused to impose. Listen to the 6th Circuit: "In this case, after-the-fact reliance on the ‘rolling’ method of calculation should not grant American Standard immunity from liquidated damages, and the company's obdurate refusal to correct an obvious mistake that constituted a wrongful discharge of this 36-year employee reinforces the case for liquidated damages." Here is the bigger lesson: If you make a mistake as an employer, fix it. I know our wired response when an employer gets a demand letter from a plaintiff’s lawyer or an EEOC charge or a lawsuit is to circle the wagons and fight. Wired — but wrong.