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Ohio Employment Law Blog

Employee termination spurs litigation against Amazon and Netflix

Many employees in Franklin, Ohio, go through multiple challenges at work every day. One challenge that can result in resignation is a hostile workplace. Unfortunately, resigning can be complicated and can result in an employer retaliating against a valued employee.

A former executive filed a wrongful termination case against Netflix and Amazon after the digital streaming services company allegedly used its connections to have him fired after he left Netflix to take a position with Amazon. The man previously had worked as a director of content acquisition at Netflix and was entrusted with a lot of responsibilities. However, because of the hostile, cold and competitive work environment, he decided to leave the company and pursue a career at Amazon's Digital Video Team, a direct competitor of Netflix.

Former employee accuses Dollar General of wrongful termination

Health is an important concern for many workers in Franklin, Ohio. Workers are entitled to take some days off from work because of their or their family's medical condition under the Family Medical Leave Act (FMLA). Unfortunately, some employees deny their employees this right, which can spur retaliation and costly employment disputes.

A woman filed a lawsuit against the Dollar General Store after allegedly firing her after she filed for a medical leave under FMLA. The lawsuit was originally filed in the store's place of business, but is being moved to a federal court after the defendants' request.

Employers fail to provider key ERISA requirements, survey says

Benefits, pension plans and compensation are some of the issues that many workers in Franklin, Ohio, consider when deciding whether to look for employment or stay with their current company. However, mismanagement of pension plans and other compensation plans can result in hardship to any employer.

According to a survey by HR360, 71% of brokers stated that employers fail to meet a key requirement of the Employee Retirement Income Security Act of 1974. They are not maintaining plan documents or providing summary plan documents to their employees. According to the brokers, there are several reasons why employers fail to do so. First, employees think that the brokers are responsible for distributing benefit booklets and summaries. Second, employers are not aware of the ERISA requirements. Finally, developing the documents can be expensive, time-consuming and difficult to produce.

Oral Argument in the US Supreme Court's Fifth Third Bank Case - "Coach Class Trustees" and Insider Trading Dominate the Debate Oral Argument in the US Supreme Court's Fifth Third Bank Case - "Coach Class Trustees" and Insider Trading Dominate the Debate

On April 2, the US Supreme Court heard oral argument in the Fifth Third Bank v. Dudenhoeffer case, which started with a bang - the very first question (from Justice Kennedy) described the presumption of prudence as like having a "coach class trustee" for ESOPs. Which was a theme throughout the argument by Fifth Third Bank in favor of a strong presumption in favor of holding employer stock - that the Justices were struggling with how to differentiate between the duty of prudence for all ERISA fiduciaries and a workable presumption of prudence for ESOP trustees. Justice Scalia, for example, wondered why we need a "special rule" for ESOP trustees when ESOPs have the same "buy/sell" dilemmas that ordinary 401(k) plans face (page 17).

The argument advanced by the plaintiffs, and the US as amicus in support - that no presumption should apply - was met with a different practical question: how can an allegedly conflicted ESOP trustee act upon inside information? What exactly is an ESOP trustee to do? The response of counsel for the plaintiffs focused on the fact that the dilemma is entirely caused by the trustees' insider status; the fact that they may not be able to take action "is not something that ERISA can tolerate" (p.43). The response of the US was that these insiders are required to investigate the circumstances and the proper course of action. But the Justices appeared to struggle applying both answers. 

Fifth Third Bank's Reply Brief Frames the Issues Before the US Supreme Court as Oral Argument Approaches

With oral argument in the US Supreme Court this week - April 2 - my last comment before the oral argument focuses on the last brief filed - the Reply brief filed by Fifth Third Bank, the Petitioner. The brief starts oddly - arguing that no one has supported the Sixth Circuit's standard; which is only true because the plaintiffs and their amici assert that the standard should be more permissive than permitted by the Sixth Circuit. Fifth Third criticizes this position, pointing out that no Circuit that has addressed the issue has agreed with a more permissive standard than the Sixth Circuit's position.

The core of the Reply, however, is a return to the argument that the duty of prudence should be situational; that it depends on facts and circumstances that apply in the context of the plan at issue and the aims of that plan. Because an ESOP is, by definition, undiversified and primarily concerned with employee ownership, Fifth Third argues that the focus should be upon those unique characteristics, and not a duty of prudence that is inflexible.

Amicus Briefs in Support of Plaintiffs in the Fifth Third Case Filed by the AARP, AFL-CIO, Law School Professors, and the US Solicitor General

The amicus briefs filed in support of the plaintiffs (Dudenhoeffer, and the other Respondents) focus the changed circumstances of the pension plan landscape since ERISA was enacted in 1974, and practical examples of the impact a presumption would have on litigation going forward.

The brief of the AARP starts by noting what the US Supreme Court already noted in 2008 in LaRue - that an employee's primary pension benefit is now provided through a defined contribution plan, not a DB plan. Those DC plans have concentrations of employer stock that the AARP criticizes, citing social science research and investment research studies (as well as the Enron case) that reflect poorly on the financial literacy of 401(k) plan participants. The AARP therefore asserts that applying a presumption that only excepts "extraordinary circumstances" shields fiduciaries until it is too late to save an employee's investment in employer stock. "By the time the employee could overcome the Moench presumption, the company has collapsed causing real damage to employees' lives" (p.15).

Nonteaching workers call off strike on contract dispute in Ohio

Many workers in Franklin, Ohio, depend on their jobs to support their families. Although securing work depends on several factors, an employment contract can help ensure that employers do their part to guarantee that employees receive fair wages, compensation and benefits.

Recently, 30 nonteaching employees in an Ohio school district called off their strike. The employees, which include maintenance employees, cafeteria workers and school bus drivers, were represented by the Ohio Association of Public Employees (OAPE) Local 611. The union issued the strike notice after rejecting a contract that a school board superintendent deemed the last, best and final offer. The three-year employment contract offered no wage increase in the first two years and 0.5% in the third year. Additionally, the Board wants to have the union member's monthly health care contributions increased from 5% to 10%. Although wages are not the deciding factor, the local school district demands a 2% increase each year. The OAPE representative did not disclose any acceptable amount for health care premium payments. He emphasized the plight of short-hour employees and their ability to fill in for other employees.

Forced resignation spurs employment litigation in Ohio

Having a job is one of the most cherished accomplishments of many people with disabilities in Franklin, Ohio. Unfortunately, although these individuals have the right to equal access to employment opportunities, they can be exposed to mistreatment from other employees.

A former female employee of Goodwill Industries filed a lawsuit against the company after it allegedly forced her to resign. According to the employee's claim, she was forced to resign after she reported an incident where a manager verbally abused other employees with disabilities. According to the lawsuit, the former clerk witnessed a manager making offensive remarks against employees with developmental disabilities.

Labor dept. data finds ERISA mismanagement increased in 2013

Many employees in Franklin, Ohio, depend on their jobs to secure a happy retirement. Experts say that retirement benefits are a reason people accept an employment opportunity, and these benefits also motivate employee productivity.

Unfortunately, results of a Department of Labor (DOL) audit conducted last year found that not all 401(k) sponsors satisfactorily comply with the Employee Income Retirement Security Act. The DOL has added 1,000 more enforcement officials since 2008 to ensure 401(k) compliance and this, apparently, has not helped. Seventy-five percent of the plans audited by the agency in 2013, resulted in sponsors paying penalties, fines and forced reimbursements because of errors.

The Dudenhoeffer Plaintiffs Focus on ERISA's Duty of Loyalty in their Brief to the Supreme Court

The brief of the Respondents - the plaintiffs in the case, John Dudenhoeffer and other participants in the Fifth Third 401(k) plan - takes aim not only at the prudence argument asserted by the Petitioner and its amici discussed in my earlier posts, but also ERISA's duty of loyalty to plan participants that was allegedly breached.  

 The brief starts by citing ERISA's title to "demonstrate the centrality of employee retirement income" to the statutory framework and its protection of employees, not fiduciaries.  The Respondent's brief criticizes the statutory arguments of Fifth Third, with a focus on the plain text of Section 404.  For example, the brief criticizes the bank's prudence argument - that the "like character and with like aims" aspect of Section 404(a)(1)(B) cited by the bank ignores Section 404(a)(2), which only exempts diversification from the duty of prudence when the plan holds employer stock. 

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