Masterpiece Cakeshop: Maintaining the Status Quo

In agreeing to review Masterpiece Cakeshop Ltd. v. Colorado Civil Rights Commission, the U.S. Supreme Court faced questions involving both constitutional protections for LGBTQ rights and the free exercise of religious beliefs. In the end, the Court followed the facts of this particular case, making a decision that was narrower than anticipated while still upholding both rights.

In 2012, a same-sex couple visited Masterpiece Cakeshop, a custom bakery in Colorado, to order a wedding cake. The shop’s owner, Jack Phillips, refused because of his religious opposition to same-sex marriages, saying that he would make any other kind of cake, such as a birthday cake. At the time, Colorado did not recognize same-sex marriages since the Court had not yet handed down Obergefell v. Hodges. The couple filed suit with the Colorado Civil Rights Commission alleging discrimination on the basis of sexual orientation in violation of the Colorado Anti–Discrimination Act (CADA). CADA makes it unlawful to discriminate in public accommodations or “place[s] of business engaged in any sales to the public and any place offering services … to the public.” (Colo. Rev. Stat. § 24–34–601(1) (2017)).The Commission determined there was probable cause that discrimination had occurred. Unwilling to ignore his religious beliefs, Phillips stopped selling wedding cakes altogether and his profits fell forty percent. Eventually, Phillips brought his lawsuit to the Supreme Court.

The Court faced two issues: Continue reading »

Missouri On Track to Reform Interpleader Law: House Bill 1531 Unanimously Approved by the Senate

As he was leaving office, Missouri Governor Eric Greitens signed at least 77 bills into law, including House Bill 1531, which may protect insurance carriers subjected to purported bad faith claims.

“Interpleader” is a civil procedure vehicle used to force claimants to litigate a dispute involving two or more claims to a limited amount of money held by a third party, such as an insurance carrier.  A common example is when multiple people are injured in a car accident and the injuries exceed the amount covered by the tortfeasor’s policy limits.  What should the insurance carrier do?

Under the prior law, codified at Section 507.060 RSMo, the tortfeasor’s insurer could interplead the policy limits, but the insurer would remain subject to a purported bad faith claim.  This would put insurers in an impossible situation, choosing between paying claims on a first-come, first-serve basis to avoid time-based bad faith claims, paying the limits on the most seriously injured claim, or gathering all of the claimants’ documentation supporting their injuries or damages in an attempt to globally resolve all claims within the policy limits, and reducing the insured’s exposure to excess claims.

Continue reading »

An Oral Agreement Is Not Worth the Paper It’s Printed On

On June 4, 2018, the U.S. Supreme Court held that an individual’s false oral statement about his assets would not support a finding of fraud under the relevant provision of the U.S. Bankruptcy Code. That provision required the false statement to be in writing if it were to serve as the basis of a fraud claim. (Lamar Archer & Cofrin LLP v. R. Scott Appling, Case Number 16-1215, 584 U.S. ___ (2018), issued on June 4, 2018.)

In this case, Mr. Appling hired a law firm to represent him in some litigation. When he had fallen behind on his legal bill to the extent of some $60,000, the firm threatened to withdraw from the case. He told the firm that he was expecting a tax refund of about $100,000 which would cover that bill and all future fees. Relying on Mr. Appling’s assertion, the law firm continued with the representation.

As you probably have concluded by now, there was no $100,000 refund. It was only $60,000, and Mr. Appling invested it in his business rather than paying his attorneys. Worse, when his attorneys subsequently asked about the refund, Mr. Appling lied and told him that he hadn’t received the refund yet. Continue reading »

Update on the EEOC and the Prohibition of Sexual Orientation and Gender Identity Discrimination

In an article in the inaugural issue of DMPC’s Employment News You Can Use, EEOC: Discrimination Based on Sexual Orientation and Gender Identity is Prohibited, we discussed the state of the current contradictory precedent out of the Missouri Courts of Appeals.

As of the date of this post, the uncertainty of whether employment decisions based on sexual orientation are prohibited remains; however, limited movement was made by the Western District’s Court of Appeals when it reversed a summary judgment ruling in Lampley v. Missouri Commission on Human Rights.

Harold Lampley alleged his employer, the State of Missouri, Department of Social Services Child Support Enforcement Division, discriminated against him based on sex because his behavior and appearance contradicted the stereotypes of males held by his employer and managers. Lampley argued that because he did not conform to the stereotype of males, his employer treated him differently from other employees who conformed with gender stereotypes. Lampley postured his sex discrimination case as supported by evidence of sex stereotyping. It is important to note that Lampley brought his lawsuit against his employer for sex discrimination, not discrimination based on sexual orientation. Continue reading »

Salaries Speak Louder than Words: The Ninth Circuit Holds that Prior Salary Cannot Justify Wage Disparities

In April 2018, the Ninth Circuit Court of Appeals held in Rizo v. Yovino that an employee’s pay history is not a legal justification for a wage disparity under the Equal Pay Act.

The Equal Pay Act (the “Act”) stands for a principle as simple as its title: men and women should receive equal pay for equal work, regardless of sex.  While sex-based wage discrimination has been prohibited under the Act for over fifty years, the pay gap between men and women continues to be a disconcerting reality in our society.

The Act provides that an employer may justify wage disparities if it is able to prove that it relied not on sex, but on one of the following exceptions: (i) a seniority system; (ii) a merit system; (iii) a system that measures earnings by quantity or quality of production; or (iv) a differential based on “any factor other than sex.” It is the last “catch-all” exception that was the subject of Rizo v. Yovino. Continue reading »

The EEOC Catches the Flu: A Cautionary Tale for Employers With Mandatory Flu Vaccination Programs

After enduring one of the worst flu seasons in nearly a decade, there is no question why more employers are instituting mandatory flu vaccination programs. In fact, mandatory flu vaccination programs are increasingly popular for healthcare employees.

No current laws in Missouri or Illinois mandate all health care employees to be vaccinated against the flu. That being said, nursing home employers in Missouri are required to either offer the flu shot to all employees and volunteers who have direct contact with residents, or provide the employees and volunteers with information about how they can obtain the flu shot independently. Similarly, health care employers in Illinois are required to provide all employees with education on influenza, as well as the opportunity to receive the vaccine. Some states, such as California and Maryland, require hospitals to publish their employee vaccination rates to the public.

When instituting a mandatory flu vaccination program, however, an employer should be aware of the possible ramifications of denying or terminating employment for refusal to comply with a mandatory flu vaccination program on the basis of religious beliefs.  Continue reading »

Should I Employ an Attorney to Assist My Real Estate Business?

Part 12 of a 12-part series on Legal Considerations for Your Missouri Leasing Business: What You Should Consider Now, Later, and Throughout the Process

Honestly, it just depends.

For many business owners, employing an attorney may seem like a costly and unnecessary burden. After all, draft formation documents and leases, as well as real estate tips, are available on the internet. No statutory requirement exists in Missouri to employ an attorney to form and operate your business (though, as we discussed in Litigation Considerations, you will likely need to hire an attorney to represent your company in court).

For others, engaging counsel throughout the formation and operation of their company is a critical tool to ensuring the success of their business venture. No attorney can predict, prevent, and avoid all troubles which might affect your business. However, an attorney in the real estate industry (like other industry professionals) may be more likely to identify and help you avoid pitfalls that he or she has seen in past experiences, more knowledgeable as to what tax or management strategy may be best as your company grows, and more apprised of ever changing statutes, regulations and trends. For business owners who see value in those matters, it may make more sense to consult with counsel. Continue reading »

Employment News You Can Use

Welcome to the inaugural issue of “Employment News You Can Use,” Danna McKitrick’s Employment Law Educational Alliance newsletter.

After a busy legislative session, employers may find several reasons to be encouraged.

• “Motivating Factor” Standard Replaces “Contributory Factor”
  The standard for liability has moved from proof that the discriminatory conduct was a “contributing factor” to “the motivating factor.” Read more

• Preventing Sex Discrimination: The Case for Implementing More Guard Rails
  Business owners should consider a few guards rails to create an environment where sexual harassment or sexual discrimination less likely to happen. Read more

• Is a LinkedIn Offer to Connect a Violation of a Non-Solicitation/Anti-Raiding Agreement?
  In our world of mobile devices and social media, business owners may need to revise existing non-solicitation and non-complete agreements. Read more

Continue reading »

“Motivating Factor” Standard Replaces “Contributory Factor”

Over the past decade, Missouri has been viewed as a plaintiff-friendly state in workplace discrimination lawsuits. Effective August 28, 2017, Senate Bill 43 was signed into law by Missouri Governor Eric Greitens, which amends the Missouri Human Rights Act (MHRA). The law changes the applicable standard for liability of an employer and more closely aligns Missouri law with federal policies and law. The standard for liability has moved from proof that the discriminatory conduct was a “contributing factor” to “the motivating factor.”

Under the more strict “motivating factor” standard, a plaintiff must prove, not only that the accused employer was unlawfully biased against the plaintiff’s protected classification, but also that this bias had a “determinative influence” on the employer’s decision to terminate the plaintiff. (Missouri Revised Statutes 213.010(19) 2017). The MHRA specifies that only employers are considered entities, not individuals, subject to liability for proven discrimination.

Also important, the MHRA changes language of the Act and now requires that a complaint must be formally filed by the victim within 180 days of any alleged discriminatory offense. Previously, in Missouri, a victim could file a complaint of discrimination within 300 days of the alleged discriminatory conduct. Continue reading »

When Bad Guys Attack: Data Breach and Legal Exposure

Cyber criminals hack businesses for a myriad of reasons: to rob bank accounts by hacking email accounts and intercepting wire transfers; to file fraudulent tax returns using stolen customer or employee personal data; to commit health insurance or Medicare fraud; to steal intellectual property; to destroy  property; and to deny service.  Websites are also hacked as a mechanism to cyber hack other businesses. (See data protection tips here.)

Cyber hackers include your employees, identity thieves, contractors and vendors, business competitors, terrorists, state-sponsored actors and others. The success of your business and its very existence could be placed in jeopardy because of unauthorized business account access, loss of ability to execute transactions, regulatory, reputational and litigation costs, and significant remedial costs.

Focusing on the litigation ramifications, let’s use the following fictional ABC Co. case study to understand the various laws involved. Continue reading »