Appellate Case Roundup

By Joe Murray

It’s our semi-regular roundup of appellate decisions:

Dawson-Murdock v. National Counseling Group, Inc., No. 18-1989 (4th Cir. July 24, 2019) (ERISA): National Counseling Group (NCG) made a nifty argument to get this case dismissed at the district court level: Despite the summary plan document stating NCG was the plan administrator and a named fiduciary of the group life insurance plan, NCG argued it was not a fiduciary for the purposes of plaintiff’s ERISA claims. The 4th Circuit found this argument unpersuasive and, while not quite a bench slap,[i] used terms like “logic” and “common-sensical understanding” to find that a plaintiff is “not required to allege that the plan administrator and named fiduciary also satisfies the functional fiduciary test in order to state a plausible fiduciary breach.” Once the 4th Circuit found that NCG was a plan administrator and fiduciary, it had no problem finding that plaintiff’s two claims against NCG could proceed.

Matias v. Elon University, No. 18-2507 (4th Cir. July 22, 2019) (unpublished) (§ 1981, Title VII): Matias filed suit alleging discrimination because of his Mexican heritage based on his discharge and a failure to promote. The 4th Circuit found that two objectionable comments nine years apart were not sufficient to support a direct evidence claim. The court also found Matias couldn’t satisfy the McDonnell Douglas prima facie case since he could not show his qualifications were demonstrably superior to the selected individual (promotion) and could not identify a similarly situated comparator (termination).[ii]

Crosmun v. Trustees of Fayetteville Technical Cmty. Coll., No. COA18-1054 (N.C. App. Aug. 6, 2019) (e-discovery): Sean Herrmann summarized this case in a well-written, detailed post.

Sterling Title Co. v. Martin, No. COA18-1189 (N.C. App. Aug. 6, 2019) (non-compete, Trade Secrets): The court of appeals reminds us yet again that non-compete agreements must be narrowly tailored as to time and territory/customers. Unfortunately for Sterling Title, its non-compete covered the entire time Martin worked for it plus one year (11 years total) and all customers Martin had contact with, regardless of the client’s location, the amount of contact Martin had with the client, and the amount of time that had passed since the client ceased doing business with Sterling Title. Taken together, these provisions were too broad to be enforced.

Passaro v. Commonwealth of Virginia, No. COA18-1189 (4th Cir. Aug. 16, 2019) (ADA, Title VII): This opinion focused on Virginia law addresses Virginia’s waiver of sovereign immunity against ADA claims and if claim preclusion is applicable when an administrative proceeding does not allow for recovery of monetary damages.

Evans v. International Paper Company, No. 18-1448 (4th Cir. Aug. 27, 2019) (Title VII, EPA): Employee attorneys be warned: If you allow your client’s claims of hostile work environment and constructive discharge to be combined, you will face the dreaded “hostile-environment constructive discharge” claim. To prove hostile-environment constructive discharge claim, a plaintiff must prove the requirements of both a hostile work environment and a constructive discharge claim. Unfortunately for Evans, the district court found she did not meet the objective standard of a hostile work environment claim, and so the 4th Circuit decided to affirm on the independent reason that she could not prove “her working conditions were so intolerable that a reasonable employee would have been compelled to resign.”

Perkins v. International Paper Company, No. 18-1507 (4th Cir. Aug. 27, 2019) (Title VII): Zack Anstett wrote a great summary of this case last week.

Welton v. Durham County, No. 18-2340 (4th Cir. Aug. 28, 2019) (unpublished) (1A, Title VII): Welton lost out on becoming Durham County manager to another employee and alleged she then experienced discrimination in retaliation for seeking the manager position and complaining about her treatment. Welton filed a lawsuit alleging retaliation based on violations of the First Amendment (applying for the manager’s position) and Title VII retaliation (demotion after she complained). The 4th Circuit upheld the lower court’s dismissal and summary judgment of the claims because applying for the position was a general course of conduct unprotected by the First Amendment and that the decision to demote Welton occurred before her protected activity.

Burroughs v. Green Apple, LLC, No. COA18-248 (N.C. App. Sept. 3, 2019) (unemployment): At the close of an HR investigation, Burroughs agreed to sign portions of an agreement that required him to “move forward and align with the organization’s guiding principles,” but refused to sign the portion that stated the employer had completed the investigation and taken “corrective actions as needed.” Because of this impasse, Burroughs and the employer agreed to separate. The employer then argued Burroughs wasn’t entitled to unemployment benefits because he was insubordinate. The court of appeals upheld the award of benefits to Burroughs, finding that Burroughs’s actions were not a violation of the employer’s interests or policies. Rather Burroughs’s actions were “a reasonable response” to the disagreement at hand.

Woodard v. NC Dep’t of Com., No. COA19-135 (N.C. App. Sept. 3, 2019) (unpublished) (unemployment): If almost $500 disappears from the employee’s cash drawer, the employee tells the employer and the police she doesn’t know how the money went missing, and then the employee refuses to communicate with the employer, the employee is not going to get unemployment benefits.

Warren v. N.C. Dep’t of Crime Control & Pub. Safety, No. COA18-532 (N.C. App. Sept. 17, 2019) (State Personnel Act): The North Carolina State Highway Patrol terminated Warren 12(!) years ago and we may finally have finality to this case. Warren had alcohol in his system when he drove his service vehicle off-duty to a party, which violated the unbecoming conduct policy. The question was if his conduct and violation were just cause for termination. The court found they were not since violations of the unbecoming conduct policy usually resulted in discipline of suspension, pay reduction, or demotion. Since termination was inconsistent with the Highway Patrol’s treatment of similar conduct, there was no just cause for termination.