Employer Discretion Not Unlimited in Deciding What Is “Cause” for Contractual Termination or Severance

Some workers have employment contracts that say their employers can only discharge them for “cause” (or similar concept), and any discharge that’s not for cause requires the employers to pay a severance or contractual penalty payment.  When I see contracts like this, it’s often with professional workers like doctors, executives, etc.

It’s common for such employment contracts to define “cause” very broadly, and to give the employer a great deal of discretion to decide what “cause” is or isn’t. For example, such contracts sometimes define “Cause” to include vague concepts like “Violations of any Company policy as determined in the Company’s discretion.”

Then I get inquiries from professionals who are in fact discharged and, unsurprisingly, their employers conveniently claim the discharge was for “Cause” because there was (surprise!) a “policy violation” in the Company’s assessment.  Worse, employers who do this often fail to give details or specifics, relying on vague accusations along with the vague contractual terms.  Using these tactics, the employers then fail to pay the contract’s defined severance- or penalty- payment, or they offer a drastically reduced payment. When a reduced payment is offered, it’s included as part of a severance contract that requires waiver of potential legal claims, i.e. part of the “deal” for the worker is to waive his or her rights to a legal action seeking the full contractual payment.

If you’re in this situation, you should know that you may have options, regardless of how vaguely “cause” or similar termination- or severance- related terms are defined in your employment contract.

For one thing, Wisconsin Courts have found that an employer with such contract-based termination standards is required to have a true and honest reason for termination. The employer cannot make up a false reason or pretext for termination. These issues are discussed in the Wisconsin Court of Appeals case Hale v. Stoughton Hospital Ass’n, Inc., 126 Wis.2d 267, 275-276. So regardless of the contractual discretion such an employer tries to reserve for itself, it is subject to a baseline standard: honesty.

Further, there are often additional legal standards that apply to a job termination, depending on the circumstances. For example, if the true reason for the employer’s discharge decision involves the avoidance of paying a vested benefit– e.g. the worker earned a bonus that the employer avoids paying via the timing of its discharge– then this is legally-prohibited under Wisconsin law as well. Such issues are addressed in the Wisconsin Court of Appeals case Phillips v. US Bank, 781 NW 2d 540.

There are many additional examples of unlawful terminations– such as discriminatory or retaliatory discharges prohibited under numerous Federal and State statutes and regulations– which also depend on the factual circumstances of a job termination.

To make a long story short, if you have been discharged and have an employment contract that reserves a lot of discretion for the employer when it comes to “cause” or severance issues, you should not assume you’re out of luck.  Please consider having your situation reviewed by a competent employee rights attorney. And no, it doesn’t have to be me, although I’d be glad to review the situation at no charge 🙂

 

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Video: WI Shareholder Rights, 5 Factors to Consider

If you are a shareholder or executive in Wisconsin and have a business-  or employment- related dispute, this video by blog author Michael Brown of DVG Law Partner may be of assistance.

The video covers five factors to consider in a shareholder and/or employment dispute:

WI Shareholder Video Pic-Link

You can also click this article link if you would like to learn more about shareholders’ legal rights.

For a free case evaluation, please contact attorney Michael Brown at 920-757-2488,  mbrown@dvglawpartner.com or www.dvglawpartner.com/contact-dvg-law/.

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Earn a Commission and Not Paid in Full or Discharged Before It’s Paid? You May Have Strong Legal Rights

Sometimes, in order to save money, an employer will try to shortchange a commissioned employee and pay less than the full commissions earned per the parties’ arrangements. Worse, some employers will fire a commissioned employee after the employee earns a commission but before the commission is paid. This is more likely to occur when the commission at issue is large, and the employer is focused on short-term thinking, i.e. perceived cost-savings of not paying the full big commission (while disregarding the big-picture problem of firing an employee capable of making even more big sales).

Some employers who do this, knowing there could be legal problems, present the shortchanged employee with a contract and/or severance agreement in the case of a discharged employee. Typically, the contract or severance agreement seeks to get the employee to accept a much lesser payment than the full value of the commission and/or other income lost as a result of the discharge.

If you have been shorted on a commission and/or fired by an employer looking to avoid paying you your full commission, please know you may have strong legal rights. It is important to examine your potential rights before you sign a severance agreement, as most severance agreements will waive potential legal claims.

What legal rights might you you have?  I represent workers across the U.S. with unpaid wage claims, and there can be quite strong claims, depending on the State, circumstances and commission arrangement or contract. In Wisconsin, for example, there are a number of legal claims that potentially provide strong legal rights to someone who has not been paid earned commissions.  These claims may include breach of contract claims, wage claims under Chapter 109 of the Wisconsin Statutes, equitable claims, or other important case-law rights (e.g. Phillips v. US Bank) that hold companies responsible for discharging commissioned employees or otherwise trying to reduce their commissions.

If you suspect you may have legal rights, you should consider discussing the matter with an attorney before taking action on your own. Some attorneys, including myself, offer free consultations to evaluate commissioned employees’ situations and determine if there are legal options and/or negotiation leverage worth exploring.

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Right to a Written Decision for Dept. of Labor H-1B Wage Complaint

**This post was cross-posted at my other blog www.h1blegalrights.com.

If you’re an H-1B worker and filed a wage complaint with the U.S. Department of Labor (DOL), you have a right to receive a written decision from DOL. DOL’s written decision must state important information, including: (1) if you are owed wages or not; (2) the reasons for the decision; and (3) your rights to appeal the decision, if you feel it is wrong, and the procedure and deadline to appeal it.

The attorney-authors of this blog have had some H-1B workers/ clients tell us that DOL did not issue them a written decision for their wage complaint. In some instances, the DOL investigator only told the H-1B worker the decision over the phone, did not give much detail about the reason behind the decision, and did not describe appeal rights or procedures.

Please know that you do have rights. If DOL is not allowing you to pursue those rights, you may need to tell DOL what they are required to do under the laws and regulations.

Specifically, the H-1B wage complaint regulation at 20 CFR 655.815 describes what a DOL investigator must do after investigating your H-1B wage complaint. In particular, this regulation says DOL must:

1. Mail a written decision (called a “determination) to you, the H-1B employer, and certain other people involved in the case.

2. This written determination must state DOL’s decision about your case and the reason for the decision. If DOL determines the employer has violated the laws or regulations, the decision must describe the remedies, such as back wages owed to you.

3. The determination must also explain appeal rights, how to file an appeal and the filing deadline.

If the DOL investigator has made a decision in your case, but has not given you anything in writing, you can write or email the investigator and mention the above obligations. That is, you can mention that 20 CFR 655.815 requires DOL to provide you with a written decision and notification about your appeal rights.

Please note that the appeal filing deadline is extremely short. So it may be necessary to follow up with DOL as soon as possible, in writing or an email, and seek a prompt written determination. It is important to get clarity, as soon as possible, about an appeal deadline and procedures. If an appeal is not timely filed, you may forever lose your legal rights to appeal.

If you have not received a written determination from DOL and are unable to address your concerns on your own, you could consider consulting with an experienced attorney to determine your options for proceeding with your case and protecting your legal rights.

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Age Discrimination Class Action Lawsuit Filed Against Google

A sixty-four year old worker represented by Kotchen & Low, DVG Law Partner and VK Vandaveer PLLC has filed a federal class action lawsuit against Google, Inc. The lawsuit was filed on behalf of a proposed class of workers age 40 and older whom Google did not hire in alleged violation of Federal and California age discrimination laws. According to the Complaint, as a result of Google’s hiring practices and discrimination, the median age of Google’s workforce is 29 years old.

The attorney-author of this article, Michael Brown of DVG Law Partner, is among the attorneys representing the workers who filed the lawsuit, along with attorneys Daniel Kotchen, Daniel Low and Michael von Klemperer of Kotchen & Low LLP and Vonda K. Vandaveer of V.K. Vandaveer, PLLC.

Please contact attorney Michael Brown at 920-757-2488 or mbrown@dvglawpartner.com if you have any information or questions relating to the case.

Scroll or click the link below to review the Complaint, which details the case’s allegations that Google discriminated against job applicants age 40 and older in violation of age discrimination laws:

The lawsuit has been discussed in these news sources: ComputerworldHR GrapevineLaw360The Mercury News [SiliconBeat]Slashdot, and The Wall Street Journal.

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Class Action Lawsuit Filed Against Tata Consultancy Services, Alleging Discrimination Against U.S. Workers

The attorney-author of this article, Michael Brown of DVG Law Partner LLC, and co-counsel filed a federal class action lawsuit against Tata Consultancy Services, Ltd. (“Tata”). The lawsuit was filed on behalf of a proposed class of non-South Asian individuals who Tata did not hire and/or who faced an adverse employment action once hired by Tata (e.g., termination, demotion, etc.). The lawsuit alleges Tata discriminates against individuals who are not South Asian (or of Indian, Nepalese, or Bangledeshi national origin) in violation of Title VII of the Civil Rights Act of 1964 and the Civil Rights Act of 1866. According to the Complaint, as a result of Tata’s discrimination, its United States-based workforce is approximately 95% South Asian, primarily Indian.

The attorney-author Michael Brown is among the attorneys representing the workers who filed the lawsuit, along with attorneys Daniel Kotchen, Daniel Low and Michael von Klemperer of Kotchen & Low LLP and Vonda K. Vandaveer of V.K. Vandaveer, PLLC.

Please contact attorney Michael Brown at 920-757-2488 or mbrown@dvglawpartner.com if you have any information or questions relating to the case.

Below, you can review the Complaint, which details the case’s allegations that Tata discriminated against non-South Asians in violation of discrimination law:

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Determining Severance Leverage: Five Questions You’d Need Answered

If you’ve been presented with a severance agreement, leverage may exist to negotiate better severance terms and payment.  However, most workers who have such potential leverage do not fully realize it or benefit from it. Before determining (and using) leverage, one must first get answers to these five questions.

(1) What are all of your potential legal claims?

It may not be your goal to file or pursue a legal claim. However, the potential for a legal action, and potential values associated with a legal action, are usually the main driving forces that motivate an employer to offer a severance agreement and to negotiate thereafter. The main thing an employer “gets” from a severance agreement is the employee’s waiver of potential or actual legal claims.

So, do you know all the potential legal claims you should examine, to determine if your pre-severance circumstances (e.g. circumstances of discharge) violated any of their standards?

It is very common for employees to research some potential claims, but fail to research many other potential claims they simply do not know about. For example, many workers fired from a job will research certain Federal discrimination laws (e.g. review EEOC website descriptions of Federal Title VII discrimination claims), but fail to review all potential Federal discrimination claims (e.g. fail to review Section 1981 Federal claims not handled by EEOC, etc.), fail to review State-law discrimination claims, and fail to review the hundreds of non-discrimination laws, Federal and State, that prohibit job terminations on various grounds. For example, some workers who have called me about “discrimination” concerns had in actuality (after I reviewed their facts/evidence and many laws) had strong potential claims under particular anti-retaliation or whistleblowing laws, under certain wage or benefit related laws, etc. etc.

To examine all potential legal claims requires examination of a long list of laws, and usually a much longer list than a discharged worker has ever heard of.

(2) What value does for each viable potential claim have if it were won?

It’s one thing to identify a strong potential legal claim. It’s another thing to know what potential value exists if you were to win such a claim.

For example, a worker could have smoking-gun proof of age discrimination, e.g. he may have written or recorded statements from the firing manager, saying the worker was “fired because you are 70 years old.” But if that same worker picked up a job the next day that paid as much as the job he was fired from, the value of a winning ADEA Federal age discrimination claim, for that worker with all the circumstances above (including perfect proof), would be zero.

Yet some other workers, with less-strong (but viable) proof of age discrimination, have potential age discrimination claims with six- or seven- figure values.

You may be thinking “Huh?!” If so, welcome to the world of employment-law damages (money) assessment. Sometimes, the value of a potential legal claim in the legal world defies common sense in the real world. The value of a potential legal claim depends greatly on a particular worker’s circumstances, and one seemingly small circumstance can make a huge difference in whether someone does or does not have a potential claim with significant value.

(3) What realistic range of results is likely for each potential claim, based on real-world chances of success for those claims and real-world behavior of judges and others potentially involved in the processes at hand?

Some types of employment law claims in some legal forums, when statistically-analyzed as a whole, have very low odds of success. Others fare much better statistically. In my experience and observation of certain judges’ decisions, I am aware of a few particular judges who I have sound reason to believe dismiss over 90% of certain discrimination cases that they are asked to make decisions about. No matter how good a potential legal claim or its value may look on paper, the real-world value of that potential claim may be lower or higher based on the particular legal forums, actors and procedures associated with such a claim.  When I assess the value of a potential claim for a potential client, I consider these real-world factors along with the types of laws referenced above involving case merits and damages.

(4) Why should your opposing employer take you seriously if you mention potential employment law rights or litigation but you are not represented by a employment litigation attorney?

Anyone could tell their former employer, as part of a severance negotiation attempt, that they “could” get an attorney or “could” pursue legal action.  Actually taking these actions requires an additional level of commitment, time, and (sometimes, if a non-contingency attorney is retained) expense. Employers hear these “coulds” a lot and most don’t take such talk seriously or let it affect their severance evaluation. If you feel your situation is different than the norm, you should have very concrete ideas as to why; as a default matter, an employer has more legal and financial resources and experience than does an unrepresented worker that the employer fired.

(5) Is the final offer you’re considering a good one, in light of the factors above?

Answers to the questions above are helpful in identifying a realistic range of potential legal claim values, and range of severance values/offers you may make. But whether a final, bottom-line offer is fair and reasonable is a big determination in and of itself.

For example, sometimes (1) I will tell a worker-client– for whom I have negotiated with an employer and received an increased severance offer– that I feel the employer’s final offer is far less than the likely value of a case pursued in litigation; but (2) the worker still wants to accept that offer rather than take the path of litigation and its associated delays, risks, etc. On other occasions, I tell a worker that an employer’s final offer is in my view better than the likely result of litigation, but the worker nonetheless prefers to pursue litigation rather than accept the offer.

Either scenario, I think, is fine. It’s your decision what your bottom-line expectations for a severance should be. However, it is in your best interests that the decision be an informed decision, and that you have answers to the five questions above before making it.

Obviously, it’s in my interest to say that I can help answer the  questions above and that you can contact me (at no charge) to get answers. But more importantly from your standpoint is that you contact some employee rights attorney — whose expertise and out of pocket costs, if any, are acceptable to you– and get the information you need to make informed decisions for your benefit.

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