Newsletters

Legally Speaking

VOLUME 2, ISSUE -, PUBLISHED FEBRUARY 29, 2000

DISCRIMINATION SUITS ARE UP

As was anticipated in this newsletter several months ago, there has been a significant increase in the number of federal employment discrimination lawsuits filed across the country. In an earlier edition, this newsletter analyzed the U.S. Supreme Court's decision in the City of Boca Raton v. Faragher, which severely limited the defenses available to an employer where suit is filed alleging sexual harassment and the offending employee is a supervisor or some other person with successively higher authority. Our prediction at the time was that the number of Title VII federal discrimination suits was going to increase as a consequence of the ruling in Faragher. The reason for our prediction was that the decision in Faragher makes it much easier for a claimant to get to a jury in an harassment or intentional discrimination case. From reviewing recent statistics from the Department of Justice it seems we may have been right.

The Justice Department has recently released statistics, which show that the number of federal employment discrimination suits has steadily increased from 6,936 in 1990 to 21,540 in 1998. This increase has been especially dramatic in the past few years. A large part of this increase has resulted from an increase in the number of discrimination suits filed by private parties, and does not represent an increase in enforcement activity by EEOC. In fact, the number of enforcement suits filed by EEOC has decreased over the same time period.

This increase in the filing of employment discrimination suits by private parties under Title VII has resulted from 2-3 developments. One obvious reason for the increase is the 1991 amendments to Title VII which granted claimants the right to a jury trial in cases involving intentional discrimination, and also allowed awards of compensatory and punitive damages. Previous awards had pretty much been limited to lost compensation and reinstatement. A second reason for the increase is the enactment of new civil rights laws, such as The Americans With Disabilities Act of 1990, which did not take effect until 1992. A third, and more recent, reason for the increase is the already mentioned decision in City of Boca Raton v. Faragher, where the Supreme Court held that employers should be held vicariously liable for the sexual harassment of employees, where the harassment is carried out by a supervisor or some other employee with successively higher authority. As a corollary, employers can no longer defend against vicarious liability for a supervisor's alleged harassment of an employee on the basis that they did not participate in the alleged harassment or were unaware of it. Instead, employees will be entitled to a finding of vicarious liability.

With confirmation that the filing of federal employment discrimination suits are, in fact, on the increase, employers need to be ever vigilant in their efforts to prevent unlawful discrimination and/or harassment and to revisit their anti-harassment and equal employment policies to be sure that they comply with recent statutory changes as well as the Faragher requirement that employers create, publish, and implement an effective anti-harassment/discrimination policy. In other words, employers need to be proactive and not reactive.

LEGAL NOTES

COVERAGE ISSUES

Georgia Farm Bureau Mutual Insurance Company v. Jackson, ____ Ga. App. ____, Case No. A99A0876 (9/22/99). Policy language that states "[T]he company will pay the insured's injury coverage benefits for . . . (b) accidental death benefit incurred with respect to bodily injury sustained by an eligible insured person caused by an accident . . . while 'occupying' or being struck by a motor vehicle" entitled an insured to recover a death benefit for her resident daughter, who was killed while occupying a non-insured vehicle in an accident. The court pointed out that had the insurance company intended for the death benefit to be paid only where an insured person was occupying an automobile insured under the policy, it could have so stated in the policy.

EMPLOYMENT LAW ISSUES

Rau v. Apple-Rio Management Co., Inc., 1:97-CV-2345-WBH (N.D. of Ga. 8/20/99). A trial jury in the United States District Court for the Northern District of Georgia, Atlanta Division, awarded $1.8 million to a woman, who was demoted from her management position with a local Applebee's franchise while pregnant. This award will probably be reduced to $334,000 because of a $300,000 statutory limit on the amount of compensatory and punitive damages, which can be awarded in a Title VII action. The statutory limitation is based on the number of employees working for the defendant/employer.

Reardigan v. Shaw Indus., Inc., ___ Ga. App. ___, Case No. A99A0394 (5/18/99). In determining the legality of a restrictive covenant (not to compete) a court considers the nature and extent of the business, the situation of the parties, and all other relevant circumstances. The specific test applied to determine the reasonableness of restrictions involves a three element test of 1) duration, 2) territorial coverage, and 3) scope of prohibited activity. See, W. R. Grace & Co. v. Mouyal, 262 Ga. 464(1), 422 S.E.2d 529 (1992); and Sysco Food Svcs. v. Chupp, 225 Ga. App. 584, 585(1), 484 S.E. 2d 323 (1997). Territorial restrictions related to the territory in which the employee was previously employed, as opposed to the territory in which the former employer does business, will typically be enforced. In this case, the statistical metropolitan Atlanta area, which includes eighteen (18) counties, was deemed reasonable. Likewise, a restrictive covenant, which limits the employees' competition to circumstances wherein his new responsibilities and duties are substantially similar to those performed for the former employer, will more often than not be enforced.

Instrument Repair Service Inc. v. Gunby, ____ Ga. App. ____, Case No. A99A0388 (5/18/99). An employee breaches no fiduciary duty to an employer simply by making plans to enter a competing business while he is still employed. The employee is not, however, entitled to solicit customers for a rival business before the end of his employment nor can he do other similar acts in direct competition with his employer's business. In this case, an injunction was sought after two corporate officersmade plans to form a competing business. The injunction was denied after the court established factually that neither former employee had undertaken to solicit any of the former employer's customers while still employed. No sort of restrictive covenant was involved in this particular case.

Dong v. Shepeard Community Blood Ctr., ____ Ga. App. ____, Case No. A99A1529 (9/22/99). An employment contract containing no definite term of employment can be terminated at the will of either party, and will not support a cause of action against the employer for wrongful termination. This is, of course, in the absence of a Title VII, etc., violation. This remains true even where the plaintiff/employee alleges that the employer negligently hired the supervisor, who, in turn, terminated the plaintiff/employee. The court held that the lower court's grant of summary judgment to the employer, based on the fact that the plaintiff had been an employee at will, foreclosed any further inquiry into the plaintiff's negligent hiring claim. The court also held that the supervisor could not be sued for wrongfully interfering with the plaintiff's employment contract since the supervisor was not a stranger to the employment contract. One element, which is necessary to establish wrongful interference with business relations is that the alleged tortfeasor be a third-party or stranger to the employment relationship.

Shankle v. B-G Maintenance Management of Colorado, 163 F.3rd 1230 (1999). The Eleventh Circuit (which includes Georgia), and several other federal circuit courts of appeal, have invalidated mandatory arbitration provisions in employment contracts, which require employees to submit any employment-related dispute to binding arbitration, and which also require the employee to pay some, or all of the arbitrator's fees. Universally, courts seem to be concerned that steep filing fees and the compensation paid to arbitrators may prevent employees from pursuing claims against their employers. In this particular decision, the Eleventh Circuit invalidated a mandatory arbitration agreement which required the employee to pay one-half of the arbitrator's fee of $250 per hour. In an earlier case, the Eleventh Circuit invalidated a mandatory arbitration agreement that required the employee to pay a $2,000 filing fee and one-half of any fees charged by the arbitrator.

PREMISE LIABILITY ISSUES

Fallon v. Metropolitan Life Ins. Co., ____ Ga. App. ____, Case No. A99A0152 (5/19/99). Summary judgment was granted to Metropolitan Life Ins. Co. after the plaintiff failed to show that a lack of security in the common area of a shopping mall (owned by Metropolitan) was the proximate cause of her rape which occurred while the plaintiff was in a retail store located in the mall. To establish a cause of action for negligence, there must be 1) a legal duty to conform to a standard of conduct for the protection of others, 2) a breach of that duty, and 3) a causal relationship between the breach and the injury for which damages are sought. Speculation that security in the common area would have deterred the rapist was not sufficient to create a question of fact for the jury. See Stephens v. Clairmont Center, Inc., 230 Ga. App. 793, 498 S.E.2d 307 (1998); Post Properties v. Doe, 230 Ga. App. 34, 495 S.E.2d 573 (1997); Collins v. Shepherd, 212 Ga. App. 54, 56, 441 S.E.2d 458 (1994); and Godwin v. Olshan, 161 Ga. App. 35, 37, 288 S.E.2d 850 (1982).

Murray v. Fitzgerald Convenience Centers, Inc., 239 Ga. App. 799 (1999). Summary judgment was denied to a convenience store owner where a business customer stepped on a small manhole cover that was loose and her foot dropped into a hole. Although the plaintiff admitted that she had not been looking down as she walked across the parking lot, the fact that customers were expected to cross the parking lot to enter the store, coupled with the lack of any evidence that the hole was open and obvious, raised a jury question concerning whether or not the plaintiff had exercised ordinary care for her own safety. The hole provided access to an underground storage tank for gasoline deliveries, inventory measurements, and other service items. The hole, which was approximately 16" across, was normally covered with a small, metal manhole-type cover. The issue was not just whether or not the plaintiff could have seen the hazard had she been looking down, but rather whether, taking into account all circumstances, the plaintiff exercised ordinary care for her own safety. Since Robinson v. Kroger Co., this has typically been a jury question.

Moore - Sapp Investors v. Richards, ____ Ga. App. ____, Case No. A99A0918 (9/24/99). Summary judgment was affirmed in favor of a landowner where the plaintiff, who had stepped in an open water meter hole while crossing the landowner's property, admitted that he was cutting across the property for his own convenience to get to a nearby grocery store. As such, the plaintiff was a licensee and not an invitee. With a licensee, a landowner is only liable for injury sustained by the plaintiff if the plaintiff shows plaintiff if the plaintiff shows that his injuries were sustained as a result of the willful or wanton conduct of the landowner. "A landowner is under no duty to keep premises in a safe condition for the benefit of trespassers or bare licensees . . . To the licensee, as to the trespasser, no duty arises of keeping the usual condition of the premises up to any given standard of safety, except that they must not contain pitfalls, man-traps, and things of that character." The principle that it is willful or wanton not to exercise ordinary care to protect others (even licensees) is only applicable when the injured person "[I]s actually known to be or may reasonably be expected to be within range of a dangerous act being done or a hidden peril on another's premises." In this particular case, the landowner had no knowledge that the plaintiff was on his property. A further distinction exists between cases in which the negligence is active and those cases involving a static condition or passive negligence. The principle underlying the distinction is the same as where a man-trap exists. A landowner may have a static condition on his land if it is not so close to a well-traveled path that it presents a danger to those who might accidentally step off the path onto his property. In this particular case, the injured plaintiff was well onto the defendant's property, and was there without the defendant's knowledge.

Mechanical Equip. Co. v. Hoose, ____ Ga. App. ____, Case No. A99A1452 (10/7/99). Summary judgment was granted to Mechanical Equipment Co. based on the equal knowledge rule. This was despite a statement by the Court of Appeals that it was "mindful" that issues of negligence, comparative negligence, etc., are typically to be resolved by the jury. Robinson v. Kroger Co., 268 Ga. 735, 748 (1998). In this case, the plaintiff filed suit for injuries she received when she fell on a set of cross tie steps located on the premises of Mechanical Equipment. Evidence showed that the plaintiff had used the cross tie steps 10 - 12 times during the past year. In fact, the plaintiff had used the steps earlier on the day on which she fell, and testified that she had not noticed anything wrong with the steps. The plaintiff's case was based on an affidavit from an engineer that the steps violated the Standard Building Code. Mechanical Equipment presented evidence that the steps had been on its premises for at least 8 years, and that its employees used the steps each day without noticing any sort of defect. Although plaintiff's theory was that she fell because the steps were either loose or because wood was rotten, she testified that she had not noticed anything wrong with the stepseither before or after she fell. Because of this testimony, and because the plaintiff had used the steps many times before she fell, her knowledge was deemed to be equal to that of the defendant so that summary judgment was appropriate. This was a static defect case in which the fact that the plaintiff had previously traversed the alleged defective area was determinative.

Hutchins v. J. H. Harvey Co., ____ Ga. App. ____, Case No. A99A1135 (8/1/99). The plaintiff in this case was shopping in a supermarket operated by defendant, and was pushing a shopping buggy through the store when she slipped and fell. After falling, the plaintiff saw a 9" puddle of clear liquid on the floor and noted that her dress was soiled. Subsequently, in a deposition, the plaintiff testified that 1) she had not been looking at the floor prior to falling; 2) that she had been looking at her shopping cart; 3) that she did not expect anything to be on the floor; and 4) that had she been looking at the floor, she could have probably seen the 9" puddle. A store employee testified that after the plaintiff's fall he inspected the area and had not seen the 9" puddle or anything else to cause the fall. Other testimony indicated that the floor had been cleaned with a machine sometime prior to the fall, and that it typically took 20 - 30 minutes for the floor to dry. The court concluded that J. H. Harvey had not had actual knowledge of the puddle and that since an employee was not in the immediate area of the fall, constructive knowledge would have to be established by evidence that J. H. Harvey had not had a reasonable inspection procedure in place. J. H. Harvey's evidence was that it had cleaned the floors at 7:47 a.m. The plaintiff fell between 9:00 a.m. and 9:10 a.m. Under these circumstances, the Court of Appeals found a question of fact concerning the reasonableness of J. H. Harvey's cleaning and inspection procedure. A defense based on the plaintiff's failure to exercise ordinary care for her own safety was rejected based on the decision in Robinson.

GENERAL ISSUES

Boyer v. Brown, ____ Ga. App. _____, Case No. A99A1173 (9/20/99). A driver's violation of the Open Container Law is admissible as negligence "per se" since the statute's purpose is to protect the general public from drivers with immediate access to alcohol. A passenger or the driver of another car, who is involved in an accident with the operator violating the Open Container Law, is a member of the general public, and is intended to be protected by the statute. This case is distinguishable from a situation where an open container is found at an accident scene outside either of the vehicles involved in the accident, and where neither driver is shown to have been drinking at the time of the accident. In the latter situation, testimony concerning the Open Container Law is not admissible. Even where a driver is not intoxicated, violation of the Open Container Law is admissible to the extent that holding a glass of wine, etc., may distract the driver and hinder him from properly operating his motor vehicle.

Davis v. Kaiser Found. Health Plan of Georgia, Inc., 271 Ga. 508 (1999). In this case, the Georgia Supreme Court ruled that the public policy of Georgia, which favors complete compensation, prevents enforcement of an insurance policy provision to the contrary. The underlying facts were that Davis had been injured in an automobile accident and then settled her claim against the other driver for his policy limits of $15,000 before collecting $85,000 from her uninsured motorist carrier. After the settlements, Kaiser Foundation Health Plan, which had paid Davis $40,361.42 for medical expenses, sought reimburse-ment. The contract of insurance between Kaiser and Davis had been entered prior to the Court of Appeals decision in Duncan v. Integon Gen. Ins. Corp. on July 1, 1997. In addition, the contract contained specific language requiring the insured to reimburse the insurer for benefits received as a result of injury or illness caused by a third-party or sustained in a motor vehicle accident. After both the trial court and the Georgia Court of Appeals issued decisions, which favored Kaiser, the Georgia Supreme Court reversed and stated "[I]t is now clear that the public policy of this State will not permit insurers to require an insured to agree to a provision that permits the insurer, at the expense of the insured, to avoid the risk for which insurer has paid by requiring the insured to reimburse the insurer whether or not the insured was completely compensated for the covered loss." In reaching its decision, the Georgia Supreme Court adopted language from an Alabama decision, which stated "[T]he very heart of the bargain when the insured purchases insurance is that if there is a loss he or she will be made whole. The cases that originally applied subrogation to insurance contracts did so on behalf of the insurer only after the insured had been fully compensated. These cases never envisioned the use of subrogation as a device to fully reimburse the insurer at the expense of leaving the insured less than fully compensated." Powell v. Blue Cross and Blue Shield, 581 S2d 772 (Ala. 1990).

*** CAUTION ***

The above case summaries are provided as a service by this firm but in no way should be used as a substitute for case by case analysis. We have tried, where appropriate, to indicate "cert. granted" or "cert. pending". It should be understood, however, that this newsletter is published once each quarter and is based on decisions by the Georgia Supreme Court and Georgia Court of Appeals which have been published in time to be included. The newsletter does not reflect opinions which may have been decided but not published as of our cut-off date for mailing the newsletter. For that reason, you should not rely on a case note published in the newsletter without first verifying that the pertinent decision has not been reversed, modified, etc.

USELESS FACTOIDS AND HUMOR

LAS VEGAS FACTOIDS

_ There are over 15,000 miles of lighted neon tubing in the many signs on the Strip and downtown Las Vegas.

_ The MGM Grand's 170,000 sq. ft. casino is larger than the playing field at Yankee Stadium. It contains more than 3,000 gaming machines.

_ You have to break a lot of eggs to serve breakfast in Las Vegas. At Caesars Palace alone, an average of 7,700 are prepared each day, with 2.8 million eggs delivered each year to that one resort. Caesars serves over 427 pounds of coffee each day and pours more than 3,000 ounces of orange juice every 24 hours.

_ The Luxor Hotel (shaped like an Egyptian Pyramid) is 36 stories tall, required more than 150,000 cubic yards of concrete, six thousand construction workers and 18 months to build. It takes a specially designed window washing device 64 hours to clean the sides of the pyramid, which is covered by 13 acres of glass. The Luxor atrium is the world's largest and could comfortably hold nine Boeing 747 airplanes.

SUPER BOWL FACTOIDS

_ In the USA, more toilets flush at half time than any other time of the year.

_ Super Bowl Sunday is the most popular party day of the year C surpassing New Year's Eve. It is also the slowest weekend for weddings.

_ Super Bowl Monday sales of antacids increase by more than 20% over other Mondays.

_ Dominos Pizza sales typically double on Super Bowl Sunday. Last year Americans ate more than 8.5 million pounds of tortilla chips on this day.

ACTUAL TRAFFIC ACCIDENT REPORTS ON INSURANCE CLAIMS:

• I had been driving for 40 years when I fell asleep at the wheel and had an accident.'
• The pedestrian had no idea which way to run so I ran over him.'
• I told the police that I was not injured, but on removing my hat found that I had a fractured skull.'
• I was thrown from my car as it left the road. I was later found in a ditch by some stray cows.'
• I saw a slow moving, sad-faced old gentleman as he bounced off the roof of my car.'
• The indirect cause of the accident was a little guy in a small car with a big mouth.'

MCLAIN & MERRITT NEWS

New Associates

McLain & Merritt, P.C. is pleased to announce the addition of four new associates:

AILEEN R. PAGE, born New York, New York, May 17, 1969; admitted to bar, 1996, Georgia. Education: University of Toronto (B.A. 1992); Georgia State University (J.D. 1996). Member: Moot Court Board (Best Oralist, 1996); Georgia Association for Women Lawyers; Canadian Women's Club; State Bar of Georgia, Young Lawyers' Section (Coach, High School Mock Trial Competition, 1996-99). Assistant District Attorney, Coweta Judicial Circuit (1996-98). Assistant District Attorney, Dekalb County, Special Prosecutions: Crimes Against Children Unit (1998-99).
Areas of Practice: Insurance Defense Litigation; Premises Liability Litigation; Personal Injury Litigation, Employment Discrimination Litigation.

JOHN D. ROGERS, JR., born Savannah, Georgia, July 28, 1967. Admitted to bar, 1994, Georgia. Education: University of North Carolina, Chapel Hill (B.A. 1989); Emory University (J.D. 1993). Member: State Bar of Georgia.
Areas of Practice: Insurance Defense Litigation; Premises Liability Litigation; Personal Injury Litigation; Employment Discrimination Litigation.

CAROLINE K. HART, born Montezuma, Georgia, February 25, 1974. Admitted to bar, 1999, Georgia. Education: Vanderbilt University, (B.A. 1996); Southern Methodist University (J.D. 1999). Member: State Bar of Georgia.
Areas of Practice: Civil Litigation, including Property and Casualty Insurance Defense Litigation; Premises Liability Litigation; and Employment Law Litigation.

WILLIAM P. JONES, born Rapid City, South Dakota, May 19, 1973. Admitted to bar, 1999, Georgia. Education: South Dakota School of Mines & Technology (B.S., summa cum laude, 1996); University of Georgia (J.D. 1999). Member: State Bar of Georgia.
Areas of Practice: Workers' Compensation; Insurance Defense Litigation.

Fruit Basket Turnover Seminar

Our first Fruit Basket Turnover seminar on October 10, 1999, was a huge success with approximately 90 people attending. We plan on making this an annual event with different topics each year. Many of the seminar participants gave us written feedback, some of which are shown below:

"The Seminar was excellent. Would love to see more from this firm. Although not interested in WC, your seminar even made that interesting."

"Thanks for a great seminar! As I told Mr. Merritt, I believe each of your speakers were knowledgeable, presented their material in an interesting way C Keep up the good work!"

"Good variety of information. Good question and answer. Providing a medical expert to combine with WC kept it interesting for non WC. Good presentation by all. In particular, "Good subjects. Knowledgeable speakers of the subjects. Interesting speakers. No boredom here. One of the best panels heard. Should continue with seminars. Comfortable facility. More visual aides needed. Will return to next seminar. Well done. Thanks."

"Al DeCusati had specific pointers I will be able to use for premises liability C kept my interest."

"The seminar as presented was well done by knowledgeable people. The substance was of a broad nature and well presented. The material prepared and handed out was well done and easy to follow. This was one of the better seminars I have had the opportunity to attend. I would like to hear additional topics such as Violence in the Workplace, ADA vs. WC complications. Good job by the McLain & Merritt firm."

"I enjoyed your seminar very much. A lot of the information I heard was useful in my work as a claims adjuster. This was the first time I have been to one of your seminars. I look forward to attending again in the future. I will also recommend your seminar to the other adjusters in our office. Thanks."

"This was a well-prepared seminar! One would never know this was a first for your firm. However, would enjoy extended presentations regarding slip and fall cases."

"The early sessions were very informative and well done. The lighting was somewhat low. The visuals were good, but somewhat difficult to see C perhaps overheads next time? The varied subjects were interesting. Dr. Wood was interesting and informative also. Good well-rounded seminar."

"Enjoyed slip and fall segment. More time could have been spent in that area. Wish he would have spoken on static defects. Very informative seminar!!"

More on Seminars

McLain & Merritt offers free continuing education seminars that have been approved by the Georgia Insurance Commission. Areas covered are Unemployment Law, Workers' Comp issues and Property and Casualty issues. If you are interested in having a seminar held at your place of business or at our's, please call, write, or e-mail Bill Sutton, 3445 Peachtree Rd., Suite 500, Atlanta, GA 30326, 404-365-4511, bsutton@mclain-merritt.com.

Newsletter Comments

Although we mentioned in the previous newsletter that this would be a quarterly publication, due to factors beyond our control, we were unable to keep our word. However, we have every hope of making this newsletter a quarterly publication from now on. We are interested in hearing what you think and would appreciate feedback. Please write us at: bsutton@mclain-merritt.com or cconnor@mclain-merritt.com.

Strange Laws

In California, it is illegal to peel an onion in a hotel room.

In Michigan it is illegal for a woman to get her hair cut with-out her husband's permission.

In Texas it used to be illegal to buy games on Sunday.

In Pennsylvania it is against the law to sing while taking a bath.

It is against the law to whale hunt in Oklahoma.

In Hartford Connecticut, it is illegal for a husband to kiss his wife on Sundays.

MORE HUMOR:

The following were actual answers on a 6th grade history test:

Ancient Egypt was inhabited by mummies and they all wrote in hydraulics. They lived in the Sarah Dessert. The climate of the Sarah is such that the inhabitants have to live elsewhere.

Moses led the Hebrew slaves to the Red Sea where they made unleavened bread, which is bread made without ingredients. Moses went up on Mount Cyanide to get the Ten Commandments. He died before he ever reached Canada.

Solomon had three hundred wives and seven hundred porcupines.

The Greeks were a highly sculptured people, and without them we wouldn't have history. The Greeks also had myths. A myth is a female moth.

In the Olympic Games, Greeks ran races, jumped, hurled biscuits, and threw the Java.

Joan of Arc was burnt to a steak and was canonized by Bernard Shaw.

Writing at the same time as Shakespeare was Miguel Cervantes. He wrote Donkey Hote. The next great author was John Milton. Milton wrote Paradise Lost. Then his wife died and he wrote Paradise Regained.

Abraham Lincoln became America's greatest Precedent. Lincoln's mother died in infancy, and he was born in a log cabin which he built with his own hands. Abraham Lincoln freed the slaves by signing the Emasculation Proclamation. On the night of April 14, 1865, Lincoln went to the theater and got shot in his seat by one of the actors in a moving picture show. They believe the assinator was John Wilkes Booth, a supposingly insane actor. This ruined Booth's career.