Archive | May, 2013

EEOC Receives Its Largest Verdict In Its 48 Year History

The EEOC recently secured its largest verdict in its 48 year history in the amount of $240,000,000.00 from a federal jury in Iowa when 32 mentally disabled turkey processing plant workers were awarded this verdict against their employer, which was found to have violated the Americans With Disabilities Act (“ADA”) by creating a hostile work environment, imposing discriminatory conditions of employment, and acting with malicious and reckless indifference to the civil rights of these employees. In this case, the employer oversaw the work, lodging and care of these 32 employees. However, these individuals were alleged to have been housed in a dilapidated and bug infested bunk house which failed to meet applicable code requirements. They were paid $0.41 an hour which equated to $65.00 per month even though the employer was allegedly being paid more than $500,000.00 per year for their service. It was further alleged that the employer subjected the employees to verbal and physical abuse. By way of example, they were allegedly subjected to strict punishment such as being forced to walk in circles carrying heavy weights and were locked in their bedrooms at night. While working, they were allegedly denied bathroom breaks and were forced to work long hours. Many of them allegedly required immediate medical care, which had been denied to them by their employer.

Although this case presents a unique situation as few employers oversee the care, work and lodging of their employees in this era, this case is notable as it confirms that the potential still exists for significant verdicts to be issued by juries when presented with an appropriate set of facts.

Case Alert: Bowman v. Sunoco Permits an Employer to Use Disclaimers to Protect its Clients from Employee Personal Injury Suits

The Pennsylvania Supreme Court recently issued the above decision, which provides employers with a mechanism for protecting the interests of their clients.  In this case, the plaintiff was employed as a private security guard.  She was performing services on the site of one of her employer’s clients, Sunoco, when she fell and sustained injuries.  She sought and secured workers’ compensation benefits from her employer, Allied Barton Security Services.  She also filed suit against Sunoco alleging negligence and failure to maintain safe conditions.  At the time of the commencement of her employment, she signed a disclaimer barring her from filing such suits against her employer’s clients.  Plaintiff alleged that this disclaimer was void as against public policy and that her suit against Sunoco should be permitted to proceed. She specifically argued that the disclaimer violated Section 204(a) of the Workers’ Compensation Act and that the disclaimer was invalid because it waived a cause of action that had not yet accrued.

The Supreme Court rejected both of these arguments.  As it pertains to Section 204(a) of the Workers’ Compensation Act, the Court found that this provision was not violated as the disclaimer did not seek to divest plaintiff of her rights under the Act to seek compensation from her employer, but only to file suit against a third party.  The Court rejected her other argument that the disclaimer should be considered invalid as it waived a cause of action that had not yet accrued on the basis that this principle only applies when the potentially waived cause of action is different from those causes of action contemplated by the parties at the time of the disclaimer.  Here, this cause of action is the kind of action that was contemplated.

Accordingly, this case indicates that it is permissible for an employer to enter into an agreement with its employees waiving the right for the employees to sue its clients for any injuries subject to the Workers’ Compensation Act.  However, we do caution employers that this issue will likely be subject to further revision as this practice becomes more common and litigated.  For example, this disclaimer was entered into at time of hire.  When looking at general contract law as well as the law governing employee non-competition agreements, I suggest that such a disclaimer could be subject to challenge if it was entered into at a time other than hire unless specific consideration was given.  In addition, this case contemplates injuries subject to the Workers’ Compensation Act.  If the injury was not covered by the Workers’ Compensation Act, then it is possible that the disclaimer may not effectively bar suits against the employer’s client.