2nd Circuit Employment Law News - U.S. Second Circuit
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A company can be held responsible for the retaliatory actions taken by one co-worker against another, even when those workers are just low-level employees, the Second Circuit ruled on Monday.

The decision makes it easier for employers to be held liable under a "cat's paw" theory of liability. "A what?" you ask. A cat's paw. That is, the sort of obscure theory of liability coined by Seventh Circuit Judge Richard Posner and relating to an ancient Aesop fable. The gist: as a cat paws one toy, causing it to hit another, so to can employers be held responsible when one employee manipulates them into taking discriminatory or retaliatory action against another.

Lehman Brothers Dodges Another ERISA Challenge in 2nd Cir.

Current and former employees of Lehman Brothers came away disappointed again in their legal battle that first began when the recession started back in 2008. According to the Second Circuit, application of Amgen Inc. v Harris means that the plaintiffs failed to prove that an SEC ban on short selling constituted "special circumstances."

This ruling marks the first time a federal circuit court has applied the 2016 SCOTUS case of Amgen to a pending ERISA case.

2nd Circuit Revives ADA Case, Treats Student Like Employee

The Second Circuit revived a discrimination case that was originally brought in August of 2014 in which the former student accused his medical school of expelling him based on discrimination.

The University at Buffalo School of Medicine and Biomedical Sciences (UBMED) dismissed Dean from the M.D. program after he failed to appear for his third administration of Step 1 of the United States medical Licensing Examination. In Dean's original suit, he alleged UBMED's dismissal of him from the school was based on disability and race; he pled violations of Title II of the Americans with Disabilities Act, the Rehabilitation Act, 42 U.S.C. sec. 1981, and 42 U.S.C. sec. 1983.

This case is notable because it marks possibly the first time the 2nd Circuit has been asked to analyze the ADA in the context of education discrimination. In doing so, the Court clarified the permissible use of the ADA as applied to former students.

The Second Circuit greatly expanded the right to bring retaliation suits against government employees last Thursday. In a unanimous three-judge ruling, the court found that claims of illegal retaliation based on a complaint of discrimination are allowed under 42 U.S.C. sec. 1983, which makes government employees liable for violating constitutional rights under the color of law.

The ruling represents a break from 19 years of precedent which largely found retaliation to be outside sec. 1983's scope.

Every first year law student is familiar with the pleading requirements established by Iqbal v. Ashcroft. Under Iqbal, a complaint must make facially plausible factual allegations that the defendant is liable for misconduct. For some, Iqbal is a betrayal of permissive pleading requirements; for others, it is a necessary protection against meritless litigation.

That holding has been in tension with previous Supreme Court rulings on employment discrimination. Under those precedents, only minimal evidence "suggesting an inference" of discrimination is needed in pleadings. The Second Circuit attempted to reconcile those precedents, holding that Iqbal applies to employment discrimination complaints but does not affect the benefits of the doubt given to plaintiffs by other precedent.

Unpaid internships are some of the most miserable, abusive, and exploitative forms of labor around -- and you can go ahead and take advantage of them again, so long as you meet the new standard announced this month by the Second Circuit.

The Second Circuit's ruling reverses a 2013 district court decision that unpaid interns could file a class action for back wages and overtime. That decision caused many companies to curtail or eliminate their unpaid internship programs. Now, however, the court has proposed seven non-exclusive considerations used to determine when an intern might be entitled to pay, potentially opening the door for a return to widespread unpaid internships.

The Second Circuit heard arguments last Friday on whether contract lawyers are entitled to overtime pay. "Legal practice" is exempt from the Fair Labor Standards Act's overtime rules. However, one lawyer argued that his document review job was so rote and tedious it does not amount to the practice of law, meaning he's entitled to overtime.

The case presents an odd situation where a lawyer stands to make more money -- perhaps substantially more -- should his labor be considered too simple to be the practice of law.

A tipster who reported his firm's securities violations before the passage of the Dodd-Frank Act cannot collect a whistleblower's reward under that Act, the Second Circuit has ruled.

Over a period of five years, Larry Stryker repeatedly informed the SEC about questionable practices at his firm, Advanced Technologies Group, leading to an enforcement action in 2009 and an eventual $20 million settlement.

Under Dodd-Frank, whistleblowers can collect 10 to 30 percent of the money recouped from a successful SEC enforcement action based on their information. In 2011, Stryker filed for just such an award. The SEC refused, arguing that since he offered information before the passage of Dodd-Frank, he was not entitled to to the $2 to $6 million that would otherwise be his share under the Act.

More Ex-Franchisees Dismissed in 6-Year-Old NYC Labor Case

Between the late '80s and the late '90s, Peter Glazman recruited a variety of people to be "franchisees" for his courier business, in which his company delivered packages around New York City. Glazman's franchisees basically paid for everything themselves: a white van, "training" fees, "beeper" fees, insurance, taxes, gas, uniforms, and on and on.

The plaintiffs in this case are several franchisees -- many of whom recently emigrated from Eastern Europe and spoke limited English -- who claimed that they would be promised a 60 percent commission from each package delivery. There was never really any accounting of that, and Glazman claimed there was never any agreement to pay them that.

NBC, Interns Agree to Settlement Over Unpaid Internships

Back in 2013, several interns sued NBCUniversal, alleging unfair labor practices. Basically, they claimed NBC was using unpaid or underpaid interns to do the actual work that properly paid employees should be doing. The lawsuit struck in the middle of a nationwide debate about the role of the "unpaid intern."

Yesterday, NBC Universal agreed to a $6.4 million settlement with the interns. It now goes to Judge Ronald Ellis of the U.S. District Court for the Southern District of New York for approval, according to The Hollywood Reporter.