The Law Office of Kurt H King

January 31, 2010

Welcome

Filed under: Welcome — kurthking @ 1:42 pm

Welcome to Kurt’s Take on Law.

Click on the recent posts or categories in the Sidebar to the right to see the blog posts.  Hope you find something new of value.  Enjoy!

Kurt is a licensed attorney in Kansas and Missouri and has been practicing law for over 30 years!  Stop by this blog to expand your mind on legal topics like family law, personal injury, bankruptcy, divorce, malpractice, workman’s comp, and much more!  Remember, knowledge is power!

IMPORTANT:  All the information on this Blog is general.  Law changes and what you read here may become out of date.   Nothing is meant to form an attorney-client relationship as the facts of each case differ and this information is not tailored to apply to any one reader.  You should contact me or another lawyer to determine what applies in your case.  This blog is simply to post information which may be of interest.

Kurt H King
Law Office of Kurt H. King
816.781.6000
20 E. Franklin
Liberty, Clay County, Missouri 64068
http://www.kurthking.com

Bankruptcy, Pesonal Injury,, Child Custody and Support, Divorce and Modification, Workers’ Compensation

www.kurthking.com

September 5, 2018

Contract Workers Are Often Employees of the Company For Which They Work

A staffing agency places you to work fairly long-term for a company.  The company treats you as an independent contractor, and you sign numerous documents to that effect.  The company pays a set amount to the staffing agency which pockets part and pays you, along with payroll taxes and insurance.  Are you the company’s employee?  Often the answer is YES.

Here is some law on the issue:

A.  EEOC

In its “Enforcement Guidance: Application of EEO Law to Contingent Workers Placed by Temporary Employment Agencies and Other Staffing Firms,” EEOC Notice No. 915.002 (December 3, 1997), the agency declares on page 7 (cases in support cited at footnote 14):

A client of a temporary employment agency typically qualifies as an employer of the temporary worker during the job assignment, along with the agency.  This is because the client usually exercises significant supervisory control over the worker.”

               The EEOC there gives this example on pages 7-8:

 

Example 3: A staffing firm hires charging party (CP) and sends her to

perform a long term accounting project for a client.  Her contract

               with the staffing firm states that she is an independent contractor.

CP retains the right to work for others, but spends substantially all

of her work time performing services for the client, on the client’s

premises. The client supervises CP, sets her work schedule, provides the

necessary equipment and supplies, and specifies how the work is to be

accomplished.  CP reports the number of hours she has worked to the

staffing firm.  The firm pays her and bills the client for the time

worked.  It reviews her work based on reports by the client and has the

right to terminate her if she is failing to perform the requested

services.  The staffing firm will replace her with another worker if

her work is unacceptable to the client.

              In these circumstances, despite the statement in the contract that

              she is an independent contractor, both the staffing firm and the client 

              are joint employers of CP.

 

As the EEOC indicates, it makes no difference that documents state that the worker is an independent contractor and not an employee.  Substance trumps form.

B.  Missouri Case Examples 

Wright v. Habco:  Missouri sides with the EEOC, its Supreme Court having dealt with this set of facts long ago in Wright v. Habco, 419 S.W.2d 34 (Mo. 1967).    There plaintiff Wright fell off a scaffold and sued Habco at common law for his injuries.  The trial court sustained Habco’s motion for summary judgment, ruling plaintiff’s exclusive remedy was under workers’ compensation law.  The Missouri Supreme Court affirmed.

When he fell, Manpower, Inc. employed Wright.  Manpower furnished workers to its customers, usually on a temporary basis.   Manpower sent Wright out to work for defendant Habco on a project to extensively renovate a building.

Manpower furnished no equipment to plaintiff Wright, merely instructing him as to who to report to at Habco to begin his work.  Habco’s foreman bossed Wright on the job, directing him as to what work to do.  Without question, Habco controlled the work done by Wright.

Manpower paid Wright $1.25 an hour; Habco in turn paid Manpower $1.97 per hour that Wright worked.  Manpower paid for workers’ compensation and unemployment insurance on Wright and its other workers, and withheld social security and income tax withholdings from Wright’s wages.

Habco’s president stated in his deposition that he did not consider Wright to have been its employee, but rather an employee of Manpower.

Regardless, the Court held Wright to have been an employee of Habco, and his relief limited to that afforded him under Missouri Workers’ Compensation Law.

Tolentino v. Starwood Hotels & Resorts Worldwide:  More recently, the Supreme Court held defendant Starwood (owner of Westin Hotel Management which operates the Westin Crown Center hotel in Kansas City, Missouri) to be the joint employer of plaintiff Tolentino, a housekeeper whose services Starwood contracted with a temporary staffing agency to receive.  437 S.W.3d 754 (Mo. banc 2014).

The arrangement was that Starwood informed GLS (the temporary staffing agency) how many housekeepers the hotel needed and GLS provided them.   Starwood paid GLS $5 per room cleaned.  GLS was to pay the housekeepers and satisfy payroll withholdings requirements.  GLS paid Tolentino $3.50 per room cleaned.

In February 2008, GLS assigned Tolentino to clean at the hotel.  In April of that year, Starwood notified GLS that it no longer wanted Tolentino to work as a housekeeper at the hotel because he failed to complete his work in a timely fashion.

Unfortunately, GLS failed to comply with Missouri’s Minimum Wage Law.  Tolentino ended up filing a class action in Missouri state court against Starwood as his employer liable under the Law.

Starwood moved for summary judgment, denying that it was Tolentino’s employer.  The trial court granted the motion.  Tolentino appealed to the Western District of the Court of Appeals, asserting that there were genuine issues of material fact as to whether GLS and Starwood were his joint employers.

The Court of Appeals analyzed the facts with four “functional” factors used by federal courts in cases involving multiple alleged employers:

(1) who has the power to hire and fire the worker;

(2) who supervises and controls the worker’s schedule and conditions of work;

(3) who determines the rate and method of payment of the worker;

(4) who maintains work records.

 

In Tolentino’s case, the appellate court found issues of fact existed regarding the hotel’s (Starwood) authority to hire and fire, finding that by directing GLS not to assign Tolentino to the hotel any longer, as a practical matter Starwood could prevent the worker from working for the hotel.  Factor One favored Tolentino in the eyes of the Court.

Factor Two regarding supervision and control was also decided in favor of the worker—the hotel assigned rooms to be cleaned by particular housekeepers, upheld its cleaning standards, inspected the rooms for cleanliness, and required unsatisfactory work to be redone.  Further, the work was simple and easily supervised.

The court also ruled Factor Three on rate and method of payment in favor of the worker, noting that the hotel paid GLS, which in turn paid the housekeepers.  But, the hotel established, and raised, the pay per room arrangement, indicating the hotel retained substantial control over the rate and method of pay.

Tolentino also raised issue of fact with regard to Factor Four concerning maintenance of work records, asserting that the hotel maintained time sheets and productivity records which it used to “fire” him from working for the hotel/Starwood.

Based on these factors, the court of appeals reversed and remanded for trial.         

C.  Eighth Circuit

Beaver v. Jacuzzi Brothers, 454 F.2d 284 (CA8 1972):  This diversity case from Arkansas arose when a temporary worker from Kelly Girl, Inc., fell on a greasy floor while on temporary assignment to Jacuzzi Brothers.  She sued Jacuzzi Brothers for common law tort.  The District Court denied her, finding she was an employee of Jacuzzi Brothers and limited to workers compensation benefits based on the right of control of her performance Jacuzzi Brothers had over the work of the temporary employee.

The Eighth Circuit affirmed, observing:

“As a matter of common experience and of present business practice in our economy, it is clear that an employee may be employed by more than one employer even while doing the same work.”

In conclusion, workers may actually be the company’s employee–temporary or permanent–and entitled to protection by law from retaliation and discrimination.

Kurt H. King, Missouri Attorney

816.781.6000

20 E. Franklin, Liberty, Clay County, Missouri 64068

Retaliation & Discrimination, Litigation, General Matters

Missouri’s Whistleblower Law Applies Only to At-Will Employment, and Not Where Contract Provision Limits the Employer’s Right to Discharge/Terminate

Missouri’s new (08.28.2017) Whistleblower Protection Act, 285.575, RSMo, states that it ‘is intended to codify the existing common law exceptions to the at-will employment doctrine,’ ‘limit their future expansion by the courts,’ ‘and provide the exclusive remedy for any and all claims of unlawful employment practices.’”

The words of  the WPA limits its application to “at-will” employment.  What about cases where there a contract provision limits the reasons for which an employee may be lawfully terminated?  Does the WPA apply to wrongful termination for violation of public policy in a contract setting?  Apparently not.

Where a contract limits the reasons for which an employee may be discharged, the employment is not at-will in that regard.  When a labor agreement or other contract (Corporate Integrity Agreement?) prohibits retaliatory firing of an employees in violation of public policy set forth by constitution/statute/regulation, the employment is not at-will and the WPA should not apply. 

Missouri courts have long so held that employment is not at-will where “there is a contract “pertaining to the duration of the employment or limiting the reasons for which the employee may be discharged . . . .”  Maddock v. Lewis, 386 S.W.2d 406, 409 (Mo. 1965) (suit against railroad for breach of union contract); Williams v. Kansas City Public Service Co., 294 S.W.2d 36, 38 (Mo. 1956) (count II against Anheuser-Busch for breach of collective bargaining agreement).

More recently, the Missouri Supreme Court recognized this distinction in Keveney v. Missouri Military Academy, 304 S.W.3d 98, 103 (Mo. banc 2010), where it extended the claim of wrongful discharge in violation of public policy to cover contract employees (a teacher), in addition to at-will employees.

In short, the new whistleblower law should apply only to at-will employees, not reaching claims for wrongful discharge in violation of public policy where a contract limits the employer’s right to terminate an employee.

Kurt H. King, Missouri Attorney

816.781.6000

20 E. Franklin, Liberty, Clay County, Missouri 64068

Retaliation & Discrimination, Litigation, General Matters

 

Reverse False Claims Act Case

Boise v. Cephalon

Courts have allowed individuals who were not a party to a CIA to file civil lawsuits for breach of Corporate Integrity Agreements.  These cases are known as “reverse False Claims Act” actions.  See Boise v. Cephalon, Case 2:08-CV-00287-TON (E.D.Pa. July 21, 2015 Memorandum and Order denying motion to dismiss, Judge O’Neill). 

In Boise, three former employees of Cephalon, a pharma company under a CIA, sued claiming the company breached its CIA by falsely certifying that it had ceased off-label promotion of its drugs.  The employees claimed off-label promotion continued on after Cephalon’s $425 million settlement with the government in 2008 for off-label promotion.  The court overruled Cephalon’s motion to dismiss, allowing the employees to proceed with their reverse FCA claims.

This case may give traction for plaintiffs claiming to be third-party beneficiaries of a Corporate Integrity Agreement or other contract.

Kurt H. King, Missouri Attorney

816.781.6000

20 E. Franklin, Liberty, Clay County, Missouri 64068

Retaliation & Discrimination, Litigation, General Matters

Constructive Discharge of Medical Employee Applied to HIPAA Violations

An informative case regarding constructive discharge of pharmaceutical and medical employees is Smith v. LHC Group, No. 17-5850, 2018 WL 1136072 (6th Circuit March 2, 2018).  There the director of nursing reported to management certain health care fraud by co-employees.  However, the profitable fraudulent practices continued, leaving Smith the choice of turning a blind eye which could cause criminal charges against her and the loss of her nursing license, or resign.  The Sixth Circuit held that plaintiff nurse was constructively discharged, in a thorough and reasoned opinion.

The plaintiff’s case of constructive discharge would have been even stronger had she been personally instructed act in violation of law.

Note that HIPAA provides stiff fines and imprisonment for those that violate its provisions.  Under 42 U.S.C. 1320d-6, violation of HIPAA by unauthorized access to PHI carries a maximum $50,000 fine, up to 1 year imprisonment, or both.  If done for commercial advantage, the fine increases to $250,000 with 10 year imprisonment.

Sales representatives, employees, and contract workers who refuse the employer’s directions due to HIPAA violation concerns may find themselves between a rock and a hard place–eventual discharge or criminal law violations.

Kurt H. King, Missouri attorney

816.781.6000

20 E. Franklin, Liberty, Clay County, Missouri 64068

Retaliation & Discrimination, Litigation, General Matters

           

HIPAA Does Not Bar Missouri Common Law Claim For Wrongful Termination In Violation Of Public Policy–Or Other State Common Law Claims

Both federal district courts in Missouri allow state common law claims based upon HIPAA violations.

In Kusgen v. Lake Regional Health System, No. 2:11-CV-4255-FJG (W.D.Mo. June 11, 2012) (Doc 20), Judge Gaitan of the Western District of Missouri dealt with defendant’s motion to dismiss plaintiff’s Missouri common law claim for wrongful termination for violation of public policy based upon HIPAA anti-retaliation regulation 160.316.  Plaintiff alleged she was terminated for reporting unauthorized disclosure of confidential medical information, violating HIPAA’s anti-retaliation regulation–45 C.F.R. 160.316.  Defendant argued HIPAA did not create a private cause of action for violations of the Act.  Plaintiff countered that the claim was not a federal action made directly upon the HIPAA regulation itself, rather a Missouri common law claim for wrongful termination in violation of public policy.

Judge Gaitan acknowledged Missouri’s four exceptions to the at-will employment doctrine: (1) discharge due to a refusal to perform an illegal act; (2) discharge based on an employee’s act of reporting violations of law or public policy to superiors or public authorities; (3) discharge based on an employee’s participation in acts encouraged by public policy; (4) discharge because of an employee filed a workers’ compensation claim.  The court then held plaintiff stated a claim under the second “whistleblowing” exception, denying defendant’s motion to dismiss that claim.

The Eastern District agrees with the Western District.  The case of I.S. v. Washington University, No. 4:11CV235SNLJ (E.D.Mo. June 14, 2011), arose over unauthorized release of confidential medical information to plaintiff’s employer.  Defendant remanded to federal court and moved to dismiss the count alleging a Missouri common law claim of negligence per se based on breach of confidentiality requirements imposed by HIPAA, contending that court was a thinly-disguised attempt to bring a private cause of action under the Act.  Plaintiff, on the other hand, moved for remand to Missouri state court.

District Court Judge Limbaugh denied the motion to dismiss and remanded the case back to state court, despite exclusive reliance upon HIPAA in the negligence per se claim.  Judge Limbaugh found that while there is no dispute that HIPAA does not create a private cause of action, HIPAA does not provide an exclusive federal remedy and does not preempt such a state common law action.

In his opinion, Judge Limbaugh cited with approval the Western District’s opinion in a similar case, K.V.S.V. v. Women’s Healthcare Network, 2007 WL 1655734 (W.D.Mo. June 6, 2007).  Judge Limbaugh also relied upon the Supreme Court’s decision in Merrill Dow Pharmeceuticals v. Thompson, 478 U.S. 804 (1986), holding that a federal statute which does not provide a private cause of action may be a legitimate element of a state law claim.

Moreover, courts in other states hold likewise.  In Rickman v. Premera Blue Cross, No. 91040-5 (Washington Sup. Ct. banc September 17, 2015), the court upheld plaintiff’s claim for a wrongful termination for violation of public policy based upon HIPAA’s anti-retaliation provision.

See too Byrne v. Avery Center for Obstretics and Gynecology, SC 18904 (Connecticut Sup. Ct.  November 11, 2014) (citing TN, DEL, ME, MN, UT, and W.Va cases);  McPadden v. Wal-Mart Stores East, L.P., No. 14-CV-475-SM (D.N.H. September 16, 2016) (upholding verdict for plaintiff on claims including state claims for HIPAA violations).

Courts in Indiana and New Jersey also allow state law claims based upon HIPAA violations:

INDIANA:

In Walgreen Co. v. Hinchy, No. 49A02-1311-CT-950 (Ind. Ct. App. January 15, 2015), the court of appeals upheld a $1.4 million jury verdict for professional negligence against a pharmacist and Walgreen’s as her employer for unauthorized disclosure of confidential medical information in violation of HIPAA.

NEW JERSEY:

New Jersey’s Appellate Division of the Superior Court affirmed the trial court’s denial of defendant’s motion to dismiss, granting plaintiff’s medical malpractice claim against a doctor for referring to plaintiff-patient’s HIV condition while a unknown third person was in the room, violating HIPAA’s prohibition against such unauthorized disclosure of Patient Health Information.  Smith v. Datla, No. A-1339-16T3 (App. Div. July 12, 2017)

The Smith court cited with approval the 1991 case of Estate of Behringer v. The Medical Center at Princeton, 249 N.J. Super 597, 638, 641-42 (Law. Div. 1991), ruling the medical center committed medical malpractice under state law by failing to take reasonable measures as necessary to ensure confidentiality of a patient’s HIV positive test results.

As these courts have ruled, since HIPAA provides no private cause of action, it does not bar state common law claims for wrongful termination, negligence, medical malpractice, invasion of privacy, etc.

Kurt H. King, Missouri Attorney

81`6.781.6000

20 E. Franklin, Liberty, Clay County, Missouri 64068

Retaliation & Discrimination, Litigation, General Matters

Missouri’s New Whistleblower Law Not Retroactive

Missouri’s newly enacted whistleblower statute, section 285.575, RSMo, has been held not to be retroactive.

The Whistleblower Protection Act (WPA) became effective August 28, 2017, and is not retroactive according to the court in  Meehan v. PNC Financial Services Group, No. 4:17-CV-2876 PLC, 2018 WL 2117655 (E.D.Mo. May 8, 2018).

Kurt H. King, Missouri Attorney

816.781.6000

20 E. Franklin, Liberty, Clay County, Missouri 64068

Employment Retaliation & Discrimination, Litigation, General Matters

Third Party Beneficiaries in Missouri–Pharmaceuticals and Corporate Integrity Agreements

Under Missouri law, persons not a party to a contract may sue for breach of that contract where the parties to the contract intended the party performing the contract (the promisor) have a duty to third parties.  The intent of the parties to the contract is key:

“The question of intent is paramount in any analysis of an alleged third party beneficiary situation.

*                                  *                                  *

The intent necessary to establish the status of a third-party beneficiary is “not so much a desire or purpose to confer a benefit on the third person, or to advance his interests or promote his welfare, but rather an intent that the promisor assume a direct obligation to him.”

Laclede Inv. Corp. v. Kaiser, 596 S.W.2d 36, 41 (Mo. Ct. App. E.D. 1980), citing Stephens v. Great Southern Savings & Loan Assn, 421 S.W.2d 332 (Mo. Ct. App. S.D. 1967).

“The intention of the parties is to be gleaned from the four corners, and if uncertain or ambiguous, from the circumstances surrounding its execution.”  Drury Company v. Missouri United School Insurance Counsel, 455 S.W.3d 30 (Mo. Ct. App. E.D. 2014) (upheld subcontractor’s right to sue, as an intended beneficiary, an insurer on its property damage policy issued to the owner of property).

“Although it is not necessary that the third party beneficiary be named in the contract, the terms of the contract must express directly and clearly an intent to benefit an identifiable person or class.”  L.A.C. ex rel. B.C. v. Ward Parkway Shopping Center Co., 75 S.W.3d 247, 260 (Mo. 2002) (young girl raped at mall sued security company for breach of its contract with the mall; held she may do so as an intended beneficiary of the contract).

The Third Party Beneficiary doctrine may apply in many different situations.  For example, a Corporate Integrity Agreement (CIA), between the pharma company and the government requiring reporting of non-compliance with  laws and regulations, may well protect the employees from retaliation for such reports and for participating in investigations regarding those reports.

Kurt H. King, Missouri Attorney

816.781.6000

20 E. Franklin, Liberty, Clay County, Missouri 64068

Employment Retaliation & Discrimination, Litigation, General Matters

Retaliation against Employee for Participation in Investigation or Other Proceeding

Are employees protected against retaliation for not supporting the employer’s agenda during an internal or governmental investigation or proceeding?  YES, good faith participation or opposition is protected.

The EEOC Enforcement Guidance on Retaliation and Related Issues states at part II.A.2.a:

“It is also opposition when an employee who did not initiate a complaint        answers an employer’s questions about potential discrimination,”

citing at footnote 37 the Supreme Court opinion in Crawford v. Metropolitan Government of Nashville and Davidson County, 555 U.S. 271 (2009).

And, according to the EEOC’s updated guidance of September 2016, a company’s own complaint process “constitutes ‘participation’ protected activity,” noting that in Crawford the Supreme Court did not limit participation to investigations by only governmental agencies.

Furthermore, footnote 35 to the EEOC Guidance cites Aman v. Cort Furniture Rental Corp., 85 F.3d 1074, 1085 (3rd Cir. 1996), for the rule that:

[Re]fusing to fulfill the employer’s request to gather derogatory information about those who complained [is] protected opposition.”

The law recognizes the need to protect employees so they may speak without retaliation.

Kurt H. King, Missouri attorney

20 E. Franklin, Liberty, Clay County, Missouri 64068

816.781.6000

Retaliation and Employment Discrimination, Litigation, General Matters

 

November 16, 2017

Are Damage Caps Constitutional in Missouri’s New MHRA Regarding Discrimination

Missouri’s amendments to the Missouri Human Rights Act (codified in Chapter 213 of the Revised Missouri Statutes) cap employer liability for damages beyond back pay with interest to a scale tied to the number of employees of the employer.  The maximum tier for employers with over 500 employees carries a $500,000 limit on such non-pecuniary damages–a category including punitive damages, pain and suffering, emotional distress, loss of enjoyment of life.  (Section 213.111, RSMo, at subsection 4.)

The question is whether those caps will stand.  Similar damage caps were struck down as to medical malpractice actions in Watts v. Lester E. Cox Medical Centers, 376 S.W.3d 633 (Missouri Supreme Court 2012), as an unconstitutional restriction upon the common law right to trial by jury.

Kurt H. King

Law Office of Kurt H. King, 20 E. Franklin, Liberty, Clay County, Missouri 64068

816.781.6000

Personal Injury & Other Litigation, Workers’ Compensation

 

 

November 15, 2017

Missouri’s New Whistleblower Law

As of August 28, 2017, Missouri’s new Whistleblower law–section 285.575, RSMo–took effect.  Most, if not all, would say it is a step back for whistleblowers.

The new law raises the bar in several respects:

1) The new threshold of proof required is that the whistleblowing have been “the motivating factor” behind the employer’s action adverse to the whistleblowing employee.

2) Subsection 4 states only that that it is an unlawful practice for an employer to “discharge” the whistleblower.  Other retaliatory acts are not declared to be unlawful.   So whistleblowers are only protected if they are fired/terminated/discharged?–apparently so.

3) Subsection 3 declares that no cause of action “shall exist” under section 285.575 if the claimant also has a–[similar?]–private right of action under another statutory or regulatory scheme by federal or state law.  Will whistleblower cases under this new law be dismissed if joined with alternative counts based on other whistleblower laws?  What if the application of the other statutory or regulatory scheme depends on disputed facts for jury?  What if the other private right of action allows only a lesser amount of damages to the claimant?  And, what if . . . what if . . .  what if . . .  ?

4) Subsection 5 also prohibits recovery of punitive damages.

5) Subsection 7 allows only (1) back pay, (2) reimbursement of directly related medical bills, and (3) double damages in cases of clear and convincing evidence of “outrageous” conduct by the employer.  No provision for an award of “front pay” damages appears in section 285.575.

6) Subsection 8 does allow court costs and reasonable attorney fees.

7) Subsection 3 states the whistleblower law of section 285.575, along with chapters 213 (employer-employee matters) and 287 (workers’ compensation) shall be “the exclusive remedy” for any and all claims of unlawful employment practices.  May Missouri claimants NOT also make claim under federal law?  Subsection 3 contemplates claimants making claim under federal law, clashing with this “exclusive remedy” provision.

8)  In subsection 2, the government that makes this new law takes care to exempt itself and a chosen few from its provisions by excluding from the definition of an “employer”: the “state of Missouri” and its agencies, “instrumentalities,” and political subdivisions; and, entities owned or operated by religious or sectarian organizations.  (Why are religious or sectarian organization entities preferred?  What basis justifies such preferential treatment in this law?)

In short, our new whistleblower law–section 285.575–leaves something to be desired in clarity and fairness.

Kurt H. King

Law Office of Kurt H. King, 20 E. Franklin, Liberty, Clay County, Missouri 64068

816.781.6000

Litigation, General Practice

 

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