Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

Articles Posted in Labor & Employment Law
by
The United States Court of Appeals for the Fifth Circuit affirmed the decision of the United States District Court for the Northern District of Texas, which dismissed a False Claims Act (FCA) retaliation lawsuit brought by former employee Dana Johnson against his former employer, Raytheon Co.Johnson alleged that Raytheon retaliated against him for reporting fraudulent misrepresentations that the company made to the US Navy. However, the Court of Appeals ruled that the District Court correctly held that it lacked jurisdiction to review Johnson’s claims implicating the merits of the decision to revoke his security clearance, based on the Supreme Court’s ruling in Department of the Navy v. Egan. The court also affirmed that Johnson failed to present a prima facie case of retaliation for the remaining claim, which involved Johnson being instructed not to report problems to the Navy. The court found that such instructions by Raytheon would not have dissuaded a reasonable worker from reporting to the Navy and therefore did not constitute retaliation.The case centered around Johnson's work for Raytheon, a government defense contractor, on a Navy project which required top-secret security clearance. Johnson claimed that after he reported concerns to managers and supervisors about Raytheon making fraudulent misrepresentation to the Navy, Raytheon began to monitor him, made false accusations about him to the Navy, and ultimately fired him. The Navy found that Johnson had committed security violations, and his security clearance was revoked. Raytheon subsequently terminated Johnson's employment. Johnson filed a lawsuit claiming retaliation, which the District Court dismissed and the Court of Appeals affirmed. View "Johnson v. Raytheon" on Justia Law

by
The United States Court of Appeals for the Fifth Circuit reviewed a case involving the Cenikor Foundation, a nonprofit drug rehabilitation center. The foundation had been sued by a group of its rehabilitation patients for alleged violations of the Fair Labor Standards Act (FLSA). The patients contended that they were effectively employees of the foundation, as they were required to work as part of their treatment program without receiving monetary compensation. The foundation contested the lawsuit and appealed a district court's decision to certify the case as a collective action under the FLSA.The Court of Appeals found that the district court had applied the incorrect legal standard in determining whether the patients were employees under the FLSA. Specifically, the court should have applied a test to determine who was the primary beneficiary of the work relationship, rather than a test typically used to distinguish employees from independent contractors.The appellate court remanded the case back to the district court to apply this primary beneficiary test and to consider the foundation's defense that any benefits provided to the patients offset any requirement to pay them a wage. The court emphasized that the question of whether the foundation's patients were employees under the FLSA was a threshold issue that needed to be resolved before the case could proceed as a collective action. View "Klick v. Cenikor Foundation" on Justia Law

by
In the case between Jennifer Harris and FedEx Corporate Services, Inc., Harris alleged race discrimination and retaliation under 42 U.S.C. § 1981 and Title VII of the Civil Rights Act of 1964. The United States Court of Appeals for the Fifth Circuit found that Harris's § 1981 claims were time-barred under her employment contract, making them fail as a matter of law. However, the court found sufficient evidence to support the jury’s verdict for Harris on her Title VII retaliation claim. In view of Title VII’s $300,000 cap on damages and the evidence presented at trial, the court remitted Harris’s compensatory damages to $248,619.57 and concluded she was not entitled to punitive damages. FedEx was not entitled to a new trial because of the court’s evidentiary ruling. View "Harris v. FedEx Corporate Services" on Justia Law

by
In this case, the United States Court of Appeals for the Fifth Circuit reviewed an appeal by Carolyn Johnson, an African-American female who worked at Louisiana State University Health Sciences Center (LSUHSC) as an Administrative Coordinator. Johnson alleged that she experienced sexual and racial harassment as well as retaliation from her former employer, LSUHSC. The harassment claims were based on a specific incident involving a colleague, Dr. Jeffrey Schumacher, slapping her on the buttocks, as well as several other instances of inappropriate behavior by Schumacher in the months preceding this incident. After reporting the conduct to her supervisor and Human Resources, Johnson was temporarily relocated to a different workspace while an investigation was conducted. Johnson claimed this relocation was in retaliation for her reporting the harassment.The court affirmed the district court's summary judgment in favor of LSUHSC on all counts. Regarding the harassment claims, the court found that while Johnson had sufficiently demonstrated that she was the victim of uninvited sexual and racial harassment, she failed to show that LSUHSC knew or should have known of the harassment and failed to take prompt remedial action. The court determined that LSUHSC took action to separate Johnson and Schumacher in response to Johnson's complaint and began an investigation into the matter, which was ultimately substantiated.In terms of the retaliation claim, the court found that Johnson failed to demonstrate that LSUHSC's decision to relocate her was a pretext for retaliation. The court noted that LSUHSC provided a legitimate, non-retaliatory reason for her relocation, which was to separate Johnson and Schumacher during the investigation. Johnson did not present evidence to suggest that this reason was pretextual. Therefore, the court affirmed summary judgment on Johnson’s retaliation claim. View "Johnson v. Board of Suprs of LSU" on Justia Law

by
Craig Price, a Black man, filed a lawsuit against his former employer, Valvoline LLC, alleging that his employment was terminated due to his race and he was subjected to a hostile work environment. Valvoline operated on an attendance policy, and Price had been repeatedly warned about his absenteeism, with his employment eventually terminated after he missed a shift due to food poisoning. Price also alleged that discriminatory comments had been made by his supervisors. The United States Court of Appeals for the Fifth Circuit affirmed the district court's summary judgment in favor of Valvoline. The Appeals Court found that Price's employment was terminated due to his repeated absenteeism, not because of his race. Furthermore, the court concluded that the allegedly race-motivated comments were not objectively severe or pervasive enough to create a hostile work environment. The court also noted that Price could not demonstrate that the alleged harassment he experienced was frequent or that it interfered with his work performance. Therefore, Price's claims of race discrimination and a hostile work environment were rejected. View "Price v. Valvoline" on Justia Law

by
A married couple who owned a small dental practice, D.L. Markham DDS, MSD, Inc., established an employee pension benefit plan for their business. They hired Variable Annuity Life Insurance Company (VALIC) to maintain the plan. Dissatisfied with VALIC's services, they decided to terminate their contract and were informed by VALIC that they would be charged a 5% surrender fee on all of the plan’s assets. The couple sued, alleging VALIC violated the Employee Retirement Income Security Act of 1974 (ERISA) by breaching its fiduciary duties and engaging in a prohibited transaction. The United States Court of Appeals for the Fifth Circuit affirmed the district court's dismissal of their claims. The court held that VALIC did not act as a fiduciary when it collected the surrender fee, as it simply adhered to the contract by collecting the previously agreed-upon compensation. The court also found that VALIC was not a "party in interest" when it entered the contract, as it had not yet begun providing services to the plan. Finally, the court held that VALIC's collection of the surrender fee did not constitute a separate transaction under ERISA, as it was a payment in accordance with an existing agreement. The court also affirmed the district court’s denial of the plaintiffs’ request to amend their complaint due to undue delay and insufficient detail of their new allegations. View "Markham v. Variable Annuity Life" on Justia Law

by
Tesla requires its employees to wear uniforms to minimize damage to vehicles throughout the production process. When employees wore union t-shirts instead, Tesla informed them they were violating the uniform policy and threatened to send them home. The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, AFL CIO (“Union” or “UAW”), filed an unfair labor practice charge, and a divided National Labor Relations Board (“Board” or “NLRB”) ruled that Tesla was infringing on its employees’ rights to unionize under the National Labor Relations Act (“NLRA” or “Act”). Tesla petitioned for review, claiming that the Board’s decision irrationally made all company uniforms presumptively unlawful. The NLRB cross-applied for enforcement.   The Fifth Circuit granted Tesla’s petition for review, denied the NLRB’s application for enforcement, and vacated the Board’s decision. The court agreed with Tesla that the NLRA does not give the NLRB the authority to make all company uniforms presumptively unlawful. The court explained that the Team Wear policy—or any hypothetical company’s uniform policy—advances a legitimate interest of the employer and neither discriminates against union communication nor affects nonworking time. And a prohibition is a greater infringement than is a restriction. Therefore, by treating any restriction as per se equivalent to a prohibition, the NLRB has failed to balance—or even strike a reasonable accommodation of—the employer’s and employees’ rights. View "Tesla v. NLRB" on Justia Law

by
The LSBA is a mandatory bar association. Attorneys are required to join and pay fees to the organization as a condition of practicing law in the state. Plaintiff has been a member in good standing of the LSBA since 1996. Upset that he was forced to associate with and contribute to certain causes, Plaintiff sued the LSBA, the Louisiana Supreme Court, and its justices (collectively, “the LSBA”) in 2019. He claimed that compulsory membership in the LSBA violated his rights to free speech and association. Defendants moved to dismiss, and the district court granted the motion. Plaintiff appealed.   The Fifth Circuit affirmed the judgment in part and reversed it in part. The court remanded to the district court for a determination of the proper remedy. The court explained that although it takes no position on the proper injunctive or declaratory relief. The court also rendered a preliminary injunction preventing the LSBA from requiring Plaintiff to join or pay dues to the LSBA pending completion of the remedies phase. The court wrote that because the LSBA engages in non-germane speech, its mandatory membership policy violates Plaintiff’s rights to free speech and free association. Additionally, Plaintiff is entitled to a limited preliminary injunction for the same reasons as the plaintiffs in McDonald. View "Boudreaux v. LA State Bar Assoc" on Justia Law

by
A writ of mandamus is reserved for extraordinary circumstances. TikTok, Incorporated, and various related entities contend that the district court’s denial of their motion to transfer to the Northern District of California was so patently erroneous that this rare form of relief is warranted. The district court denied Petitioners’ motion to transfer after finding that five of the eight factors were neutral, and three weighed against transferring to California.The Fifth Circuit granted the petition for writ of mandamus, finding that denying Petitioners’ motion to transfer was a clear abuse of discretion. The court explained that in the district court’s view, Petitioners’ large presence in the Western District of Texas raises an “extremely plausible and reasonable inference” that these employees possess some relevant documents. But the district court cannot rely on the mere fact that Petitioners have a general presence in the Western District of Texas because Volkswagen commands courts to assess its eight factors considering the circumstances of the specific case at issue. Further, the court explained that under Volkswagen’s 100-mile threshold, the Northern District of California is a clearly more convenient venue for most relevant witnesses in this case. The district court committed a clear abuse of discretion in concluding otherwise. View "In Re: TikTok, Inc." on Justia Law

by
Antero Resources, Corp., an oil and gas production company, sued a former employee (“Appellant”)  for breach of fiduciary duty, alleging that Appellant abused his position of operations supervisor to award service contracts to companies owned by his close friend Tommy Robertson. Antero also alleged that, after winning the contracts, Robertson’s companies deliberately delayed providing “drillout” operations, resulting in millions of dollars of overbilling. A jury found Appellant liable in the amount of $11,897,689.39, which consists of $11,112,140.00 in damages and $775,549.39 as recoupment for the value Appellant received as a result of the breach. The district court entered a final judgment in the same amount, along with post-judgment interest. The district court ordered Appellant to pay pre-judgment interest and to forfeit 130,170 shares of stock in Antero Midstream. Appellant challenged the judgment on two bases.   The Fifth Circuit concluded that sufficient evidence supported the jury’s finding on damages. The court further held that the district court’s decision to deny Appellant the opportunity to pursue post-trial discovery was an abuse of discretion. The court explained that discovery is procedural; federal law governs the question of whether a party is entitled to take post-trial discovery. Discovery after evidence has closed is typically reserved for situations where the trial reveals a new basis for seeking further information. Accordingly, the court vacated the order denying Appellant’s motion to amend the judgment. The court remanded to reconsider whether to allow Appellant to pursue discovery relating to Antero’s settlement with the Robertson companies and whether to offset the judgment in light of that settlement. View "Antero Resources v. Kawcak" on Justia Law