In Perez –Cordero v. Wal-Mart Puerto Rico, Inc. et al., the U.S. District Court for the District of Puerto Rico granted summary judgment, thereby dismissing a sexual harassment claim brought against Wal-Mart.  The male plaintiff alleged that his female supervisor subjected him to unwelcomed physical touching, overt physical and verbal sexual advances, embarrassing sexual remarks, public scolding, exclusion from meetings and trainings, threats of discipline and poor performance reviews, scrupulous examining of his work and the assignment of less desirable tasks.  The 1^st Circuit Court of Appeals overturned the lower court’s decision in favor of the male employee.                Despite the barrage of constant and varying harassment and retaliation, the plaintiff continued to do his job well despite the fact that he was suffering severe emotional distress at the hands of Santiago.   In their argument, Wal-Mart attempted to use the plaintiff’s perseverance against him.  Wal-Mart argued that the boss’ behavior could not have been severe and pervasive if the plaintiff was still doing his job well.  In support of their position Wal-Mart argued that during the time of the alleged harassment Perez-Cordero turned down a promotion, received pay for unused vacation time, and received positive performance reviews. The 1^st Circuit found that those factors did not indicate that Santiago’s behavior was not severe and pervasive as to affect the day to day work conditions.   In fact, the 1^st Circuit is unwilling to find Perez-Cordero’s perseverance at his job, despite the daily sexual harassment and retaliation he was subjected to and the distress it caused him, as a negative.  Rather, the court declared that in order for sexual harassment to be severe and pervasive so as to alter the terms and conditions of employment an employee is not required to falter as a result of the environment.  If the court had found otherwise it would essentially be punishing an employee for their unwillingness to buckle under the pressure of their tormenter; thereby requiring an employee to fail at work before a claim would become actionable.   The 1^st Circuit also reversed the District Court on the dismissal of Perez-Cordero’s retaliation claim.  The Court found that the record showed enough evidence that as a result of Perez-Cordero’s complaints the discriminatory harassment continued to increase.  The fact that some of this evidence is also applicable to Perez-Cordero’s claim of hostile work environment sexual harassment does not bar the evidence from also being considered under a separate claim of retaliation.  The same evidence may be used in assessing the sufficiency of both claims. 

Attorney John Davis has won a case of first impression in the Commonwealth of Massachusetts. Davis convinced the MCAD that his client, a Caucasian employee, was subjected to unlawful race discrimination, by his Caucasian boss, based upon racial slurs directed at the client’s fiancée, who is Jamaican. Davis accused the company’s boss of engaging in unlawful associational race discrimination and the MCAD accepted the theory and awarded Davis’ client $50,000.00 in emotional distress damages. The MCAD also issued a $10,000.00 civil penalty against the Respondents.
While employment-based associational discrimination claims have not gained significant traction in Massachusetts, Davis points out that the theory has been adopted by the MCAD relative to housing and religious discrimination, as well as a number of other jurisdictions. As expected, the decision, which was reported on the front page of Lawyer’s Weekly, fetched a number of disagreeable comments from numerous defense attorneys.

Massachusetts law recognizes that the relationship between employee and employer is an “at-will” relationship unless there is a clear expressed or implied contract. This means that this relationship can be terminated at any time by either the employer or employee with or without reason or notice. However, Massachusetts courts have recognized that it is not always clear whether or not a contractual relationship between an employee and employer exists.

One way in which an unintended implied contract may form is through an employer’s handbook or manual that is distributed to employees at the commencement and through out their tenure of employment. The Supreme Judicial Court has laid out a non-exclusive list of factors which can be used when considering if an employment manual may create an implied contract between employer and employee. Factors indicating that a manual does not create an implied contract are: “(1) the employer retained the right to modify unilaterally the manual’s terms; (2) the manual provided that it was for “guidance” as to the employer’s policies; (3) there was no negotiation between the employer and the employee regarding the terms of the manual; (4) the manual stated no term of employment; (5) the employer called no special attention to the manual; and (6) the employee did not sign or manifest his assent to the manual or acknowledge that he understood its terms.” Buttrick v. Intercity Alarms, LLC, 2009 Mass. App. Div. 97 (2009) (Citation Omitted). The Supreme Judicial Court has concluded that while these factors are helpful in determining if an implied contract is present the central question is “whether an employee would reasonably conclude that the employer was presenting the manual as a statement of the conclude that the employer was presenting the manual as a statement of the conditions under which employment could continue.” Id., citing O’Brien v. New England Te. & Yel. Co., 422 Mass. 686, 664 (1996) (internal quotations omitted).

Massachusetts courts are comfortable finding the existence of an implied contract between employee and employer based upon the terms of their employment manual. Recently, the Massachusetts Appeals Court found in favor of Jeffrey Buttrick when he sued his employer, Intercity Alarms, for firing him in violation of the disciplinary policy set forth in the employment manual provided to him. Intercity Alarms’ employment manual met many if not all of the factors discussed above; however, they placed a strong emphasis on the importance of the employment manual. Including emphasizes the need for the manual to be signed because of the non-compete agreement within the text of the manual. Based upon the requirement to sign the manual, Buttrick believed that all of the terms, not just the non-compete terms, were binding upon him. While Buttrick had not signed the most up to date version of the manual he had signed previous manuals and followed the non-compete clause for two years following his termination. For the Court, Buttrick’s actions gave credence to the fact that he believed the manual was binding. Based upon Buttrick’s belief and Intercity Alarms’ emphasis on the importance of signing the manual the Appeals Court found that it was reasonable to find that there was an implied and binding contract between Buttrick and Intercity Alarms.

Given the courts willingness to find an implied contract based upon an employment manual where an employer may not have intended for one to be present employers may be employing contracted employees without knowing it. The burden has been placed upon employers to carefully craft their employment manuals in order to avoid creating these unintentional implied contracts. It is important for employers to present employment terms and policies in a manner which will not create employment contracts with employees they intend to employ “at-will.”

Though compliance with a state’s applicable wage and hour act is mandatory for employers, some companies try to get around this duty by devising systems where employees are not actually on the clock or are supposed to be on break when actually working. [more on past lawsuits where companies strategized to avoid paying employees proper wages]. A recent Pennsylvania lawsuit against one of that nation’s largest employers proved some tactics to be extremely detrimental to the employer.
In 2006, over 186,000 current and former Wal-Mart employees originally brought a lawsuit for damages resulting from alleged missed rest and meal breaks and mandated “off the clock” work in defendant’s Pennsylvania stores. Pennsylvania’s wage payment and collection law (WPCL) can require employers who fail to pay wages, without a good faith reason to withhold payment, to pay, whichever is greater, liquidated damages of $500 or up to 25 percent of the total amount of wages due. Former employees of Wal-Mart claimed that the company made workers skip more than 33 million rest breaks from 1998 to 2001 to boost productivity and lessen labor costs. Plaintiffs complained that one of Wal-Mart’s secrets for its profitability is its implementation of a system that encourages off-the-clock work for its hourly employees.
Plaintiffs prevailed in the original 2006 class action where Judge Mark I. Bernstein originally awarded the current and former workers over $187 million. A few months ago in October 2007, the judge awarded an additional $62 million in statutory liquidated damages for over 124,000 of the plaintiffs who worked after January 1, 2002. This increased the total award to over $141.1 million in damages that Wal-Mart must pay.