Justia Corporate Compliance Opinion Summaries

Plaintiff Erika Rickman brought this suit against her former employer, Premera Blue Cross, for wrongful discharge in violation of public policy. Rickman alleged she was terminated in retaliation for raising concerns about potential violations of the federal Health Insurance Portability and Accountability Act of 1996, and its Washington counterpart, the Uniform Health Care Information Act (UHCIA). The trial court dismissed Rickman's suit on Premera's motion for summary judgment, concluding Rickman could not satisfy the jeopardy element of the tort because Premera's internal reporting system provided an adequate alternative means to promote the public policy. The Court of Appeals affirmed. The Washington Supreme Court granted review of this case and two others in order to resolve confusion with respect to the jeopardy element of the tort of wrongful discharge in violation of public policy. Consistent with its decisions in the other two cases, the Court held that nothing in Premera' s internal reporting system, nor in HIPAA or UHCIA, precluded Rickman's claim of wrongful discharge. The Court reversed the Court of Appeals but remanded for that court to address Premera's alternate argument for upholding the trial court's order of dismissal. View "Rickman v. Premera Blue Cross" on Justia Law

ManWeb, an Indianapolis engineering and installation company, entered into an asset purchase agreement with Tiernan, another Indianapolis electrical contractor. Unlike ManWeb, Tiernan was party to a collective bargaining agreement with a union, under which it contributed to a multiemployer pension fund. After the asset purchase, Tiernan ceased operations. Although ManWeb continued to do the same type of work in the jurisdiction, ManWeb did not make contributions. Counsel for the Plan sent a letter to Tiernan’s former address, stating that the company had effectuated a complete withdrawal from the Plan and, under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001–1461, the Plan had assessed withdrawal liability against Tiernan of $661,978.00. The letter was forwarded to ManWeb’s address and signed for by a ManWeb employee. No payments were made, nor was review or arbitration requested, despite the availability of both under the statute. The Plan filed a collection action, adding ManWeb as a defendant under a theory of successor liability. The district court granted the Plan partial summary judgment, finding that Tiernanr had waived its right to dispute the assessment of withdrawal liability, but rejected the claim of successor liability. The Seventh Circuit reversed to allow the district court to address the successor liability continuity requirement. View "Tsareff v. Manweb Services, Inc." on Justia Law

Plaintiff sued USBI, alleging retaliation in violation of the Sarbanes–Oxley Act, 18 U.S.C. 1514A. Plaintiff was disciplined and fired in retaliation for an email he sent alerting his superiors to unsuitable trades made by a co-worker, Harrigan, to the detriment of Plaintiff’s elderly client, Purcell. The trades occurred while Plaintiff was on disability leave. Plaintiff learned of the trades from his assistant shortly after they were made. He called his supervisor twice to express concern and wrote an email to his supervising principal, criticizing the trades for “destroy[ing]” Purcell’s estate plan. Upon returning, Plaintiff was reprimanded for his email. His superiors threatened his job, placed him on an aggressive “performance improvement plan,” and fired him when he ultimately failed to meet its goals. The jury awarded damages for economic loss and emotional damages, finding that Plaintiff proved by a preponderance of the evidence that he had an objectively reasonable belief that Harrigan committed unsuitability fraud and that his email was a contributing factor in his termination; and that USBI did not prove by clear and convincing evidence that it would have discharged Plaintiff even if he had not sent the email. The Sixth Circuit affirmed, holding that Plaintiff established that he engaged in protected activity. View "Rhinehimer v. U.S. Bancorp Inv.., Inc." on Justia Law

Miller, an African-American male, worked as a cook for Hospitality’s Sparx Restaurant. Miller became assistant kitchen manager and was a satisfactory employee. On October 1, 2010, Miler discovered racially offensive pictures at the kitchen cooler. Miller lodged a complaint. Two employees admitted responsibility. The manager agreed that the posting was a termination-worthy offense, but one offender was given a warning and the other was not disciplined. Soon after Miller’s complaint, supervisors began to criticize Miller’s work performance. Sparx fired Miller on October 23, 2010. The EEOC filed suit on Miller’s behalf under Title VII, 42 U.S.C. 2000e-2(a), 3(a). Before trial, Sparx had closed and Hospitality had dissolved. The court concluded that successor corporations could be liable. The jury awarded $15,000 in compensatory damages on the retaliation claim. The EEOC sought additional remedies. The district court denied the front-pay request but awarded Miller $43,300.50 in back pay (and interest) plus $6,495.00 to offset impending taxes on the award; enjoined the companies from discharging employees in retaliation for complaints against racially offensive postings; and required them to adopt policies, investigative processes, and annual training consistent with Title VII. The Seventh Circuit affirmed with respect to both successor liability and the equitable remedies. View "Equal Emp't Opportunity Comm'n v. N. Star Hospitality, Inc" on Justia Law

Petitioner filed a complaint with OSHA, asserting that Saybolt and Core Labs had violated Section 806 of the Corporate and Criminal Fraud Accountability Act of 2002, Title VIII of the Sarbanes-Oxley Act, 18 U.S.C. 1514A(a), by retaliating against him for blowing the whistle on an alleged scheme to violate Colombian tax law. OSHA, an ALJ, and the Board all rejected petitioner's complaint. The court concluded that petitioner did not demonstrate that he engaged in protected conduct because he did not complain, based on a reasonable belief, that one of six enumerated categories of U.S. law had been violated. Petitioner had not demonstrated that he engaged in any protected activity, and given this, the court could not say that Core Labs knew that petitioner engaged in a protected activity that was a contributing factor in the unfavorable actions of withholding petitioner's pay raise and ultimately terminating him. Accordingly, the court affirmed the Board's dismissal of petitioner's complaint because he had not demonstrated that his claim fell within the scope of section 806. View "Villanueva v. U.S. Dept. of Labor" on Justia Law

Plaintiffs Costantini, Jr. and Kahn sought indemnification for their fees and costs in underlying litigation involving Swiss Farm. The court concluded that Costantini was entitled to indemnification under Article 14 of the Operating Agreement because he was a manager of Swiss Farm and was sued by Swiss Farm in that capacity and prevailed. However, the court concluded that, although Kahn was sued for breach of fiduciary duty and prevailed, he was not a member of the Board of Managers, an officer, an employee or an agent of the company and, therefore, was not entitled to indemnification under the Operating Agreement. Accordingly, the court granted in part and denied in part plaintiffs' motion for judgment on the pleadings. View "Costantini, et al. v. Swiss Farm Stores Acquisition LLC" on Justia Law

In the 1960s, the founder’s sons (plaintiff and his brothers) joined the business, later incorporated as MBP. The business grew to have annual sales of $60 million. Plaintiff served as vice-president, secretary, and a member of the board of directors, and was a shareholder. Plaintiff had a “spiritual awakening” in 1995. He claims that the change resulted in antagonism toward him. Plaintiff delivered a eulogy at his father’s 2009 funeral, which upset family members. Days later, plaintiff received notice of termination of his employment and that various benefits would cease. The letter explained that “[y]our share of any draws from the corporation or other entities will continue to be distributed to you.” Plaintiff continued on the board of directors until August, 2009, when the shareholders did not re-elect him. Plaintiff filed charges of religious discrimination under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-2(a)(1) and of hostile work environment. The district court dismissed, finding that he was not an employee under Title VII and did not establish existence of a hostile work environment. The Third Circuit affirmed, stating that it was clear that plaintiff was entitled to participate in development and governance of the business. View "Mariotti. v. Mariotti Bldg. Prods., Inc." on Justia Law

Indiana Boxcar, a holding company that owns several railroads, petitioned for review of the Board's determination that Indiana Boxcar was an "employer" for purposes of the Railroad Retirement Act and the Railroad Unemployment Insurance Act, 45 U.S.C. 231, 351. To be an employer under those two Acts, a company such as Indiana Boxcar must be "under common control" with a railroad. Before this case, the Board repeatedly held that parent corporations like Indiana Boxcar were not under common control with their railroad subsidiaries. Under Board precedent, the term "common control" did not usually apply to two companies in a parent-subsidiary relationship. Here, however, the Board did not adhere to that precedent and did not reasonably explain and justify its deviation from its precedent. Therefore, the court held that the Board's decision was arbitrary and capricious under the Administrative Procedure Act, 5 U.S.C. 706(2)(A). Accordingly, the court vacated and remanded to the Board. View "Indiana Boxcar Corp. v. RRRB" on Justia Law

Plaintiff appealed the district court's dismissal of his complaint against the Guthrie Defendants. Plaintiff's principal issue on appeal required the court to consider whether the unauthorized disclosure of confidential medical information by a medical corporation's employee gives a plaintiff a right of action for breach of fiduciary duty under New York law that runs directly against the corporation, even when the corporation's employee acted outside the scope of her employment and is not plaintiff's treating physician. Plaintiff's appeal presented a question that has not been resolved by the New York Court of Appeals. Accordingly, the court deferred decision and certified the question to the New York Court of Appeals. The court disposed of plaintiff's remaining claims on appeal in a separate summary order filed simultaneously with this opinion. View "Doe v. Guthrie Clinic, Ltd." on Justia Law

Wiest worked in Tyco’s accounting department for 31 years, until his termination in 2010. Beginning in 2007, Wiest refused to process reimbursement claims that he believed were unlawful or constituted “parties” at resorts. Wiest sued Tyco and its officers and directors under the whistleblower protection provisions in Section 806 of the Sarbanes-Oxley Act, 18 U.S.C. 1514A, and under Pennsylvania law. The district court dismissed the federal whistleblower claims and declined to exercise supplemental jurisdiction. The Third Circuit reversed in part, holding that the court erred in requiring that Wiest allege that his communications to his supervisors “definitively and specifically relate to” an existing violation of a particular anti-fraud law, as opposed to expressing a reasonable belief that corporate managers are taking actions that could run afoul of a particular anti-fraud law. View "Wiest v. Lynch" on Justia Law