Butler Williams & Skilling Blog

Overtime Cases Certified for Notice in Timeshare Sales and Cable Installer Cases

Wal-Mart Settles Wage and Hour Lawsuit

Supreme Court Reaffirms Retaliation Protection

Lilly Ledbetter Fair Pay Act Passes Senate!

WellPoint Age Discrimination Collective Action (Class) Moves Forward

Defamatory Job Evaluation Statements: Virginia Supreme Court Clarifies Actionable Defamation Cases

We all know that employers can ruin reputations by creating false impressions of poor job performance.  However, when employers mix partially true statements and opinion with false statements, some courts have been reluctant to enforce the rule that requires the statements to be viewed as a whole to discern the underlying defamatory message or content conveyed.  Now, the Virginia Supreme Court has delivered a clear message that an alleged defamatory statement must be viewed as a whole to determine the truth or falsity of the statement – and this includes the falsity created by accompanying inference and innuendo.

On January 16, 2009, the Virginia Supreme Court reiterated that damaging defamation can occur in the workplace when untrue statements are combined with partially true statements and opinion.  The Supreme Court again reviewed the case of defamatory statements made in a performance review which, when read together with all the circumstances, inferences and innuendo, were alleged to have a defamatory meaning.  The case, decided Friday, January 16, 2009 is Hyland v. Raytheon Technical Services Company, et al, Record No. 080157.  The case may be read in its entirety at http://www.courts.state.va.us/opinions/opnscvwp/1080157.pdf

In Cynthia Hyland v. Raytheon Technical Services Company, et al, the Virginia Supreme Court held that a claim for defamation is stated when one makes a false factual statement that concerns and harms a person’s reputation.  Ms. Hyland’s case arises out of defamation that occurred in the workplace.  Cynthia Hyland worked for Raytheon for about 21 years and was a senior VP and general manager of a Raytheon division when the statements which she contends were defamatory were made.  Ms. Hyland oversaw a division that bid for government contracts.  While her division lost government contract bids in 2000 and 2002, Ms. Hyland continued to receive positive performance evaluations - and was even appointed senior VP and general manager for her division and two additional units.  However, after Ms. Hyland made critical statements about the leadership style of the president, Bryan Even, in a supposedly confidential internal job assessment, she saw a dramatic change.  Apparently, Mr. Even learned of the critical comments.  Ms. Hyland’s next performance appraisal was negative and her employment was later terminated.  She filed suit for defamation.  A jury returned a verdict for $1,850,000 (including $350,000 punitive damages), based on five allegedly defamatory statements, and a judgment was entered for Ms. Hyland.  Raytheon appealed.

That judgment was reversed by the Virginia Supreme Court in a 2007 Virginia Supreme Court case, Raytheon Tech. Servs. Co. v. Hyland, 273 Va. 292 (2007) and the Supreme Court sent the case back to the trial court because 3 of the 5 statements relied on by Ms. Hyland at trial were determined to not be actionable defamation (the Supreme Court determined that 3 statements were opinion).  Because the jury considered all 5 statements in its verdict, the Supreme Court could not determine which statements the jury had relied upon: the 2 statements of defamation or the 3 statements of opinion. 

The second trip to the Supreme Court involves the trial court’s dismissal of the case.  On remand to the trial court, the Fairfax Circuit Court (the trial court) granted judgment to Raytheon, this time holding that the 2 defamatory statements contained true elements of fact and opinion and, therefore, were true - and that Ms. Hyland admitted as much.  Ms. Hyland took the position that she had not conceded this, relying on the full inferences and defamatory implications of the entire statements as a whole, and she appealed. 

Last week, handing down an opinion in its second review of this case, the Virginia Supreme Court reversed and again returned the case for trial on the 2 statements Hyland relied on as defamatory.  The Supreme Court stated that the trial court was wrong when it parsed the defamatory statements to separate factual portions and when it failed to consider the statements as a whole.  Defamation may be stated by inference, implication or insinuation.  While opinion is not considered actionable defamation, factual statements made in support of an opinion can form the basis for a defamation action.  A court may not isolate one portion of the statement from another portion of the statement to sanitize it or insulate it from a defamation claim.  A court must consider the statement as a whole.  Factual portions of an allegedly defamatory statement must not be viewed in isolation, but must be considered in view of accompanying opinion and other stated facts.  The key is what message is conveyed and whether the facts used to support the message may be proved false.  Once a court determines that an allegedly defamatory statement is capable of being proved false it is the jury’s function to evaluate the evidence presented and determine whether the plaintiff has proven that the statement is false.     

            The Virginia Supreme Court recognized the following performance evaluation statements as stating a claim for actionable defamation:

Cynthia lead [sic] [Raytheon] in the protest of the FAA’s evaluation selection process for the TSSC contract and through a difficult procurement for the TSA, both of which demanded her constant attention.  These visible losses created significant gaps in our strategic plans and in her business unit financial performance.

Cynthia and her team met their cash goals, but were significantly off plan on all other financial targets including Bookings by 25%, Sales by 11.5%, and profit by 24%.

The employer’s use of the word “significantly” did not make the statements non-actionable opinion because the factual statements used addressed Hyland’s responsibility for the losses and purportedly missing goals.  Raytheon convinced the trial judge that the case should be dismissed because, it alleged, Ms. Hyland admitted the truth of aspects of the two allegedly defamatory statements.  By improperly limiting its consideration to the separate factual portions of statements (and excluding consideration of the statements as a whole) the trial court denied Ms. Hyland the opportunity to demonstrate that the messages conveyed, “including any implications, inferences or insinuations that could reasonably be drawn from each statement,” were defamatory.  Ms. Hyland returns to Fairfax Circuit Court to have a jury determine whether her employer defamed her – under the rule of law that allegedly defamatory statements must be viewed in their entirety, as a whole, for defamatory content.

The Bottom Line:

• Virginia law protects employees from defamatory employer statements in the workplace, even in performance appraisals;

• Defamatory statements must be viewed as a whole, with all defamatory inferences and innuendo;

• Employees’ reputations are not legally subject to an employer’s whim when it mischaracterizes facts to convey that the employee has failed to perform, has cost the employer money or to otherwise falsely paint an employee as a poor performer;

• Situations where employers dramatically change position on performance to retaliate against employees for some reason are often the starting point for such false statements – this may occur when, for example, an employee has taken legally protected actions such as reporting illegal or unethical conduct by the employer, has responded honestly to an internal request for information (as it appears was the case with Ms. Hyland) or has reported sexual harassment, gender discrimination or racially based discrimination or harassment;

• Virginia trial courts should be expected to follow this clarification of defamation law where someone makes false statements to harm one’s reputation.  Under our legal system, employers should not escape the harmful result of their actions by arguing to judges that portions of their statements were true or were opinion.  Under the clear rule in Virginia, juries should be permitted to determine the falsity and reputational damage done to employees in workplace situations and in other situations involving reputational damage.

• With this case and other helpful case law, Virginia employment lawyers and civil rights lawyers can better protect employees whose reputations have been damaged by malicious defamatory statements in the workplace. 

Fixing a Systemic Problem - Discriminatory Race and Gender Pay Claims May Become Easier to Prove

On Friday, January 9, 2009, the U.S. House of Representatives passed legislation which could make proving race or gender based pay practices a little easier.  The Ledbetter Fair Pay Act and the Paycheck Fairness Act were passed by the House of Representatives as combined H.R. 11. 

This legislation, if enacted and signed into law, will overrule a hurdle to proving race or gender pay practices erected by the U.S. Supreme Court in Lilly Ledbetter v. Goodyear Tire & Rubber Co., Inc.  That 2007 U.S. Supreme Court decision erected a wall to proving such cases that meant many people receiving lesser pay than their white or male peers, would effectively, be out of court.  The Ledbetter rule states that if an employee fails to challenge the discriminatory pay practice or plan within a short time after the first notice or indication of the discriminatory pay practices, the case is untimely – and a discriminating employer is not legally responsible. 

But when was the last time an employer who was shorting women or minorities sent a memo around to bring attention to the fact that it is paying women or African American employees less, or providing lesser promotional or advancement opportunities to such workers?  Let’s face it - many, many employers do pay women and minority employees less than they pay comparably situated male or white employees.  Often, this fact does not come to light until the pay structure is examined more carefully, such as when a termination is questioned, or some other, more apparent differential treatment is observed – say the failure to promote or advance minorities or women.  But, under the Ledbetter rule, if that challenge is too late, then too bad – you cannot enforce the laws that prohibit pay discrimination based on gender or race.

Prior to the Ledbetter decision, most courts accepted a ‘paycheck accrual’ rule that held that every paycheck under a discriminatory pay plan was a separate actionable event, allowing an employee to go back in time to capture the underpayment once the discrimination becomes apparent.  Under such a rule, all discriminatory payments would be due under a theory which recognizes that an employer must be responsible for past, as well as present, violations under a ‘continuing violation’ theory. 

The Ledbetter decision rejects such a ‘paycheck accrual’ rule and makes it much more difficult for a women, African American, Hispanic, Asian American or other racial or religious minority to challenge the discriminatory pay practice.  H.B. 11, the legislation currently identified as the Ledbetter Fair Pay Act and the Paycheck Fairness Act, will reaffirm the prior ‘paycheck accrual’ rule and will allow underpaid women and minorities the ability to enforce the laws which prohibit such discriminatory pay practices.  It will eliminate artificial time barriers to challenge these illegal pay practices and will remove the employer defense that a person did not challenge the discrimination soon enough!  Please contact your U.S. Senator to encourage them to vote in favor of this legislation.  There is no legal excuse for paying women or minorities lesser wages for performing the same work – and there should be no legal incentive to avoid the law (or for keeping illegal pay systems in place) because some woman or racial minority failed to ‘beat the clock’ to challenge the practice.  Our laws should encourage following the law – not avoiding it!

President-Elect Obama and Congress Working to Overturn Supreme Court Ruling on Equal Pay

Congressional Democrats are working to legislatively overrule the Supreme Court's controversial decision in Ledbetter v. Goodyear Tire & Rubber Co., Inc., which severely limits a woman's right to bring a claim for unequal pay under federal law.  In its ruling the Court held that the statute of limitations on a claim made by a female employee for unequal pay begins when the employer decides that it will pay her less than male employees, and requires that a female employee bring a claim for unequal pay within 180 days of the employer's decision regardless of whether the female employee had any knowledge of the pay disparity during that time.  In other words, a female employee who does not discover that her employer is paying her less than male employees performing the same work is forever barred from being able to protect her rights to equal pay under Title VII. This is precisely what happened to Lily Ledbetter, who filed her discrimination claim within 180 days of learning of the pay disparity.  The Court's ruling is out of touch with the American working world, where most people are not aware of the salary or wages that their employer is paying other workers.

Under the Lily Ledbetter Fair Pay Act, a female employee who is a victim of wage discrimination would have 180 days from the date of each paycheck to file a claim.  The Act has already passed the House of Representatives, and the Senate is preparing for a vote. 

Congress Amends ADA to Broaden Protections for More Disabled Workers

On September 25, 2008 President Bush signed the ADA Amendments Act of 2008 ("ADA-AA"), which will broaden the protections of the Americans with Disabilities Act for more workers with disabilities.  The ADA-AA was the result of bipartisan efforts and was supported by advocacy groups for both employers and employees. The legislation overrules several rulings of the Supreme Court of the United States that had diminished both the protections of the ADA, and the scope of workers with disabilities whom the ADA protected. For instance, the ADA-AA overrules the Supreme Court's decision in Sutton v. United Airlines, Inc., which allowed a court to consider mitigating measures, such as medications or prosthetic devices, in determining whether a person has a disability. The ADA-AA also overrules the Supreme Court's decision in Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, under which the Court set forth an exacting standard that further limited the scope of persons protected under the ADA. These cases left many capable and qualified workers who had been discriminated against because of their disability without jobs and without recourse.  In addition, these cases resulted in significant litigation in the federal courts regarding whether a person had a disability so as to be protected under the ADA, and not whether the person had been the victim of unlawful discriminatory practices. In enacting the ADA-AA, Congress intended to move the focus of these cases back to the behavior at issue, and whether it was discriminatory, and away from whether a person was "disabled enough" to have federal protection.