Dan Swedlow
Dan Swedlow is an associate in the firm’s Labor and Employment group. In this capacity, Dan handles a wide variety of cases in federal and state courts, private arbitrations and administrative hearings for clients involved in employment related disputes. He has experience in traditional labor law, discrimination, harassment, retaliation, wage and hour claims, non-competition agreements and trade secrets matters. Dan is admitted to practice in Washington.
Washington Supreme Court Upholds Employer's Right to Fire Workers who Protest Bad Boss
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Sometimes the Washington Supreme Court pleasantly surprises employers. Today is one of those days. The Court issued its decision today in Briggs v. Nova Services. The plaintiffs in this case were eight employees of Nova Services, a non-profit social services organization in Washington. The employees apparently had major problems with the executive director who was appointed by the board, Linda Brennan. They sent a letter to the board expressing their disapproval with Ms. Brennan’s job performance. They explained that she “left managers to do work in isolation, failed to delegate authority well, did not hire needed staff, failed to foster open communication, and was poor at managing finances.” The board hired a lawyer who confirmed that regardless of whether Ms. Brennan was a decent manager, she had done nothing illegal. He suggested that the board either fire Ms. Brennan or the two employees who were the ringleaders of the disgruntled group, Ken Briggs and Judy Robertson, because their animosity clearly ran too deep to foster a positive working environment. The board decided to let Ms. Brennan stay. After an unsuccessful attempt to mediate their dispute, Ms. Brennan ultimately fired Briggs and Robertson. The other six employees responded by writing another letter to the board protesting the firing of Briggs and Robertson and threatening, in essence, unless Brennan is fired and Briggs and Robertson are reinstated, we quit. The employees gave the board one day to respond and stated that the deal was “non-negotiable.” The board did not respond and the employees did not report to work.
The at-will employees sued for wrongful discharge in violation of public policy. This cause of action is a narrow exception to the at-will employment doctrine. It only applies where an employee is fired for something like refusing to engage in an illegal act, performing a public obligation like jury duty, exercising a legal right like voting, or in retaliation for reporting employer misconduct (whistle blowing). Relying on RCW 49.32.020, the employees argued that Washington law, like the federal labor laws, protects employees’ rights to engage in concerted activities. In essence, this law protects non-union employees who work together to complain/negotiate/bargain with their employers over terms and conditions of employment. The Court determined that RCW 49.32.020 was not meant to apply to this context of a protest walk out over the firing of two employees and the retention of a disliked boss. The Court focused on the idea that “working conditions includes things like better wages, improved medical coverage, better treatment from supervisors, lunch and rest breaks, layoffs and recalls, production quotas, work rules, on the job harassment, and even food prices at in-plant dining rooms.” The Court determined that management decisions which “lie at the heart of entrepreneurial control” are not terms and conditions of employment. Thus Nova’s decision to replace the employees who walked out in protest was not a wrongful termination in violation of public policy. There was a dissent which focused more on federal labor laws as persuasive. Under federal law, this case might have come out differently. There were also two concurring opinions. Justice Madsen’s opinion focused on the fact that the plaintiffs never raised the RCW 49.32.020 issue until the appeal, which is arguably way too late to bring it up. Justice Johnson’s opinion was a bit more complicated but essentially argued that the Court mixed up two completely separate issues, the wrongful discharge tort and the protected concerted activity statute. He agreed that complaining about a bad boss is not protected.
The bottom line for employers is that in Washington, it is not necessarily “protected concerted activity” (and that is a legal term of art to be discussed with your labor lawyer when necessary) for employees to protest everything in the workplace. There are still going to be some workplace issues that are clearly terms and conditions of employment. Employees can band together to complain about these issues. Other workplace concerns may not be safe for at-will employees to protest. One such concern is clearly who’s the boss. With support from today’s decision, there will be others. Before taking any action in response to employees who act collectively, however, it would be very prudent to consult an experienced labor lawyer.
New proposed rule from Homeland Security will rescind the controversial no-match rule
One of G.W. Bush’s controversial acts as president was issuing the no-match rule. When employers pay social security taxes, the Social Security Administration (SSA) allocates a certain amount to each employee based on that employee’s social security number. All is well and good when the employer provided numbers match the numbers on file with the SSA. When the numbers don’t match, the SSA sends an aptly named no-match letter. The Bush administration’s no-match rule would have required theDepartment of Homeland Security (DHS) to send its own letter to employers along with the no-match letters from the SSA. The DHS letters, rather than simply stating that the numbers didn’t match, would contain a threat to fix the problem or face liability. As a practical matter, most employers receiving such a letter would opt to terminate the employee at issue rather than face liability.
The real problem with this rule is that just because an employee’s social security number, provided on an I-9 card for example, does not match the number on file with the SSA does not mean the employee is an illegal alien. The SSA’s record keeping is not perfect and the no-match might not be the employee’s fault. Moreover, typos are not uncommon in this context and many no-match situations are the result of accidentally switching a single number. In other words, a no-match does not equal an illegal worker. Terminating employment solely on the basis of receiving a no-match letter could expose employers to liability for wrongful termination.
The DHS has a deadline of September 30, 2009 to rescind the no-match rule. If it rescinds the rule before that date it will not run afoul of the bill recently passed in the Senate prohibiting using any part of next year’s appropriated homeland security funds to rescind the rule. The DHS has indicated that it intends to rescind the rule and focus on assuring employer compliance through programs such as E-Verify.
The bottom line for employers - compliance with immigration laws is just as important as ever, but if the rule is rescinded a no-match letter from the SSA should result in a discussion with the employee, perhaps obtaining another copy of their social security card and checking their I-9 form.
Washington Supreme Court Decides Morgan v. Kingen - Bankruptcy is No Defense
The Washington Supreme Court issued a decision today in Morgan v. Kingen, holding that bankruptcy is not a valid defense to a willful withholding of wages under RCW 49.52.070. The plaintiffs in this case worked at Funsters Grand Casino in SeaTac, Washington. The casino was not a success and the owners voluntarily filed for Chapter 11 bankruptcy after only one year in business. After it became clear that the owners were not going to inject badly needed capital, the bankruptcy court converted the proceedings to a complete liquidation under Chapter 7. After the conversion, the owners couldn't have paid their employees even if they had wanted to (at least from the seized Funster assets).
The plaintiffs brought a class action lawsuit on behalf of over 180 employees to recover unpaid wages. The owners of the bankrupt casino argued that while the wages were admittedly owed, the withholding was not willful because the assets were seized in bankruptcy. This distinction is crucially important because willful withholding of wages allows a plaintiff to recover double damages, attorneys' fees and exposes the withholder to personal liability. The owners of the bankrupt casino were thus personally liable for twice the amount of all the unpaid wages plus attorneys' fees unless they could assert a bankruptcy defense. They tried. They failed at the trial level, the appellate level, and as of today, at the Washington Supreme Court as well. Justice Sanders dissented, noting that the owners could not have paid as their assets were seized and unavailable. He was joined by Justice Johnson and Justice Sweeney, pro tem.
The bottom line for businesses in Washington remains unchanged by this decision. A financial inability to pay wages does not constitute a defense to a willful withholding of wages. Today's decision establishes that even a complete liquidation in bankruptcy is no defense. The lesson? If your business is failing and it looks like there may not be enough assets to satisfy all the looming creditors, you might want to seriously consider paying wages before anything else.
Supreme Court Agrees to Hear Case About Meddling International Union
The US Supreme Court just agreed to hear a case asking just how much international unions will be allowed to meddle in the affairs of their local affiliates. In Granite Rock v. Teamsters, the employer sued the International Brotherhood of Teamsters in federal court claiming that the International interfered with the relationship between the employer and the Local Teamsters union.
In Granite, the employer and the Local had reached a tentative new agreement which contained a no-strike clause. The employer alleged that the Local ratified the agreement and then engaged in a strike. Apparently a high ranking official of the International was the motivating force behind the strike. The 9th Circuit held that the employer could not sue the International because the agreement was between the employer and the Local, and did not involve the International. The Supreme Court granted cert and will hear the case, perhaps recognizing that international unions are often working behind the scenes with their local unions.
The Court will probably not hear the case until the 2010 session, and it could be some time before an opinion is issued. It is not uncommon for employers to have good relationships with local unions. Sometimes those relationships are strained through pressure from out-of-town international union officials. Currently, international unions are somewhat insulated from liability for meddling in negotiations and other ongoing business relationships between local unions and employers. Ultimately, this decision could open a new legal avenue for employers to hold international unions accountable for their actions.
