In the Fourth Circuit (the federal court with appellate jurisdiction over the district courts in Virginia, Maryland, West Virginia, South Carolina and North Carolina), six-figure compensatory damage awards are frequently viewed as excessive. This Court has repeatedly emphasized that while a plaintiff’s testimony can theoretically support a large emotional damage award, such evidence alone usually does not pass muster. The recent Virginia Federal Court decision of Huang v. The Rector and Visitors of the University of Virginia, et al., which involved a False Claims Act retaliation claim, followed the same line of reasoning and reduced the jury’s award by hundreds of thousands of dollars.
After a four-day trial, a jury found in favor of Plaintiff Huang on his False Claims Act retaliation claim and awarded $159,915 in lost wages and $500,000 in compensatory damages. The only evidence introduced by Plaintiff in support of compensatory damages was his own testimony of the effects of the retaliation by Defendants. Plaintiff testified that the retaliation ended his academic career at the University, caused the loss of his research grant, limited his ability to obtain subsequent employment, caused a significant fifty pound weight loss and sleep issues, and put a strain on his marriage. But, he did not present any evidence of medical treatment, counseling, medications, physical injuries, etc.
In reducing the jury award in Huang, the Fourth Circuit considered the succession of case decisions involving emotional damage awards. The Court rejected the implication that there is a bright-line rule in the Fourth Circuit that six-figure awards are excessive in the absence of medical evidence. But, the case awards examined all had been significantly reduced by the Court. Three cases ultimately resulted in awards no greater than $15,000 and another jury award was reduced to $50,000. In another case, the Fourth Circuit found that the plaintiff had presented “considerable objective verification of her emotional distress,” but the award was still reduced from $245,000 to $150,000.
The Fourth Circuit noted that certain factors were helpful in determining what evidence of emotional distress had been offered, such as whether the plaintiff had received medical attention or psychological treatment, or had physical injuries or loss of income. In addition, the Court noted that corroborating testimony of plaintiff’s distress was a factor to consider when deciding whether to reduce an award. Given the specific description of the emotional distress offered by the Plaintiff in Huang, the Court determined he had provided a solid basis for a significant award of compensatory damages. But given the lack of objective verification evidence, the award was reduced from $500,000 to $100,000.
In assessing the potential damages in a case, the above decision provides further assistance in placing a dollar value on emotional injuries. For injuries that defy a fixed rule of quantification, this legal authority is a helpful guide for the assessment of the degree of harm allegedly suffered.
© Copyright, PCT Law Group 2013, all rights reserved.
In the world of government contracts, companies frequently team together to put forward the most persuasive bid in response to a Request for Proposal (“RFP”). Such teaming arrangements often result in a teaming agreement between government contractors. A teaming agreement typically sets forth the relationship of the companies, the purposes for which they are teaming together, the rights of the companies and general terms, as well as a provision which sets forth that for a specific project a second document (i.e., a subcontract or work order) will be executed by the parties. Well, what happens if the prime contractor is awarded the contract, but ultimately refuses to sign a subcontract with its teaming partner, the sub? Can the sub successfully sue the prime contractor by relying on the teaming agreement?
In the case of Cyberlock Consulting, Inc. v. Information Experts, Inc. (2013), the United States District Court for the Eastern District of Virginia said “No” to Plaintiff subcontractor’s breach of contract claim and held that the Teaming Agreement in that case was an agreement to agree and thus unenforceable under Virginia law. Cyberlock Consulting, Inc. (“Cyberlock” or “Plaintiff”) entered into two Teaming Agreements with Information Experts, Inc. (“IE” or “Defendant”) for the purpose of assisting IE with work it hoped to get in response to RFPs from the U.S. Office of Personnel Management (“OPM”). The first Teaming Agreement had attached to it a Statement of Work setting forth in detail the work that Cyberlock would perform for IE, the period of performance, place of performance, and project management requirements for the work. The first Teaming Agreement also had attached to it as an exhibit the actual subcontract that the parties agreed they would enter into upon award of the prime contract to IE. IE was in fact awarded the prime contract by OPM and obligations under the first Teaming Agreement were satisfied.
Subsequently, OPM revealed that it would seek bids for a new project and the parties negotiated and entered into a second Teaming Agreement. While the second Teaming Agreement set forth general provisions of the parties’ responsibilities if IE was awarded the prime contract, and even included a Scope of Work document as an exhibit which stated that Cyberlock would perform 49% of the work awarded to IE under a prime contract, [according to the Court] the second Agreement did not specifically set out in detail what work Cyberlock would perform. In addition, unlike the first Teaming Agreement, there was no subcontract attached to the second Teaming Agreement that the parties agreed to sign in the event that IE was awarded the prime contract. As it turns out, IE was awarded the second prime contract. However, after a month of negotiations and several drafts of a proposed subcontract exchanged between the parties, IE terminated the negotiations. Cyberlock sued to enforce the second Teaming Agreement and claimed that it was entitled to 49% of the work awarded to IE in the prime contract.
The Court disagreed, and stated that although there was language in the second Teaming Agreement which indicated the parties’ intent to enter into a subcontract if IE was awarded the work by OPM, there was no specific subcontract that had been negotiated and to whose terms the parties’ had agreed. The Court held that the post-award obligations in the second Teaming Agreement were, at most, an agreement to agree to enter into a yet agreed upon (future) subcontract agreement, and therefore the second Teaming Agreement was unenforceable as a matter of law since agreement to agree contracts are unenforceable under Virginia law.
© Copyright, PCT Law Group 2013, all rights reserved.
A former business partner’s “naked licensing” defense was foreclosed by entering into a trademark licensing agreement with the trademark owner, ruled the Eleventh Circuit (the federal court with appellate jurisdiction over the district courts in Florida, Georgia and Alabama). This defense to a trademark violation claim is made when the owner/licensor fails to properly supervise the licensee’s use of the mark, which can constitute abandonment of any rights to the trademark by the licensor.
In Nguyen v. Biondo, the plaintiffs own and operate an upscale hair and nail salon that serves specialty cocktails and wine to customers. The plaintiff created a mark with the word “tipsy” in it to advertise this unique service, and registered the trademark with the United States Patent and Trademark Office. While the application for the mark was pending, the plaintiffs agreed to sell part of the spa business to defendant. However, after acquiring the mark, the business relationship between the plaintiffs and defendant fell out and the plaintiffs sold all ownership rights in the spa to defendant.
The sales agreement was central to this case decision. As part of the sales agreement, defendant was allowed to continue operating the spa business using the name “tipsy” until a certain date. The agreement specifically provided that defendant was not acquiring the rights to the mark “tipsy.” Despite the agreement provisions, defendant continued to use “tipsy” as part of the spa’s name after the date had passed and violated his payment obligations to plaintiffs.
Plaintiffs sued defendant for, among other things, breach of contract and trademark infringement under the Lanham Act. Defendant responded by asserting that plaintiffs’ conduct preceding the sales agreement demonstrated a lack of supervision and control over the mark “tipsy,” and thus defended that the mark had been abandoned. The Eleventh Circuit refused to consider the defendant’s “naked licensing” defense because the facts underlying it occurred before the sale and licensing agreement was signed by the parties. By signing the agreement, the Court held that defendant “expressly recognized that [plaintiff] owned the mark.”
Although the “naked licensing” defense was unsuccessful in this action, companies should ensure that written agreements to license marks contain robust quality control provisions to prevent consumer confusion as to the source of the goods and services sold under the mark. Moreover, businesses must monitor quality through inspections and other activities to avoid this harsh litigation trap.
On March 8, 2013, the U.S. Citizenship and Immigration Services published a new I-9 Employment Eligibility Verification form. The form is used to comply with the Immigration Reform and Control Act of 1986, which requires employers verify newly-hired employee’s identify and legal authorization to work in the United States. Businesses and its newly-hired employees must complete the form within three days of the start of work, and employers must ensure it is done timely and properly. After May 7, 2013, all businesses must use the new, revised I-9 form.
Changes to the form have made the I-9 more user-friendly and easier to read. Employees must complete the first page with their personal information, and the revised form now gives room for employees to provide their email address and phone number (however, it is optional). Businesses must retain an I-9 for all employees for three years after the date of hire or one year after the date employment ends, whichever is later.
Employers need to be attentive when completing these forms. Recent developments under the Obama Administration show that both the U.S. Department of Labor and Homeland Security have increased their budgets for worksite enforcement – indicating the Federal Government is stepping up their efforts in audits of I-9s. Businesses face an array of punishments (from fines to significant civil and criminal penalties) for any violations.
An employee who alleged she was subjected to a sexually harassing work environment, gender discrimination, and retaliation under Title VII of the Civil Rights Act of 1964 (“Title VII”) filed a Charge with the Equal Employment Opportunity Commission (“EEOC”). However, almost all of the facts supporting the employee’s Charge were put in the EEOC intake questionnaire and letters to the EEOC, rather than in the EEOC Charge Form. As such, only the claims and facts set forth in the Charge were considered by the Court and they were insufficient to state the discrimination and retaliation claims raised by the employee.
In the case of Balas v. Huntington Ingalls Industries, Inc. (2013), the United States Fourth Circuit Court of Appeals affirmed a ruling from the Eastern District of Virginia that the Plaintiff, Karen Balas, could not maintain claims which were solely asserted in her EEOC questionnaire and in letters to the EEOC. The Court ruled that an administrative charge serves a vital function in the process of [potentially] remedying unlawful employment practices because it serves to alert the employer of the alleged wrongs committed; allows for an investigation into the alleged wrongful activity by the employer and the EEOC; and allows for the EEOC to seek conciliation between the parties if it finds merit to the charges. The Court reasoned that since a plaintiff’s employer is not put on notice as to the claims and facts alleged in the EEOC questionnaire or in letters privately written by a plaintiff to the EEOC, only those claims formally made part of the EEOC Charge were allowed to move forward in a lawsuit against an employer.
The Fourth Circuit concluded that the district court was correct in its refusal to consider any of Ms. Balas’ Title VII claims that were not included in her EEOC Charge; and that the Court had no jurisdiction to hear such claims because the Plaintiff had failed to administratively exhaust her remedies before filing such claims in federal court.
© Copyright, PCT Law Group 2013, all rights reserved.
When interviewing employees for a job promotion, it is probably best for the employer to have selection criteria that go beyond an employee’s performance during the job interview.
In the case of Hill v. Commonwealth of Virginia Department of Transportation (“VDOT”) (2013), a Virginia Federal District Court held that the employer’s stated reason for passing over the Plaintiff was not enough to grant summary judgment in favor of the employer. Plaintiff, Pamela Hill, applied for the position of assistant district administrator for construction and preliminary engineering. She, along with eight other candidates, interviewed for the position. Ultimately, a male colleague, Christopher Blevins, was chosen for the promotion. Hill alleged gender discrimination under Title VII of the Civil Rights Act of 1964 for being passed over for the position. Hill alleged that she was more qualified than Blevins and cited to her seventeen years of experience working for VDOT, prior promotions, supervisory experience, and her Bachelor’s Degree in Mining Engineering (Blevins did not have a college degree). At summary judgment, VDOT apparently did not argue that Blevins was more qualified than Hill. Instead, VDOT relied solely on its assertion that Blevins provided better answers to the interview questions than Hill.
In denying VDOT’s summary judgment motion, the Court held that Defendant’s nondiscriminatory reason for denying Hill the job promotion – a few lines of interview notes from the candidate interviews – was “entirely subjective and meagerly explained.” While the Court readily acknowledged that prior cases within the Fourth Circuit have upheld subjective employment decisions based (at least in part) upon interviews, it noted that those cases also included some objective criteria upon which the employer based its employment decision. Ultimately, the court held that VDOT’s reliance solely upon a few lines of interview notes was not enough to meet its burden at the summary judgment stage, and the case was allowed to proceed to a jury trial on the merits.
While it is fine to make a promotion based upon performance during an interview, this court decision is a reminder to employers that additional and objective promotion criteria should be utilized and documented in order to provide a clear non-discriminatory reason for the promotion decision.
© Copyright, PCT Law Group 2013, all rights reserved.
If an employee misappropriates their current or former employer’s proprietary information, and discloses such information to its new employer and/or any other unauthorized person(s), that is enough to establish a violation under the Virginia Uniform Trade Secrets Act (“VUTSA”) so says the Virginia Supreme Court. There is no requirement under the Act that the employee or new employer actually use the misappropriated information to compete with the former employer.
In the case of Geographic Services, Inc. v. Collelo, et al. (2012), the Virginia Supreme Court held that once an employer establishes the existence of a trade secret, all that they are then required to show is that the trade secret was misappropriated as that term is defined under the Trade Secrets Act. The entity from which the trade secret was misappropriated does not have to show that defendants used the trade secret in order to establish a claim under the VUTSA and recover damages. Disclosure of the trade secret is sufficient where it can be shown that the new employer and/or person to whom the trade secret was disclosed knew, or had reason to know, that the trade secret was acquired by improper means. In such cases, where the plaintiff cannot readily prove measurable damages, then the VUTSA provides that the court can impose a reasonable royalty upon the wrongdoers for the unauthorized disclosure of the trade secret.
This decision by Virginia’s highest court provides a cautionary note for Virginia employers: if you know, or should have known, that an employee has obtained proprietary information from its prior employer without its knowledge, you could be on the hook for damages if the employee discloses the information to your company – even if your company never uses the information. The disclosure, in and of itself, will be enough to expose companies to monetary damages. Conversely, companies in which an employee has taken proprietary information can seek legal redress and possibly obtain damages even if the employee and its new company did not use the information.
© Copyright, PCT Law Group 2013, all rights reserved.
Although not contractually required to do so, many employers offer their management-level employees a severance package in the event of a reduction-in-force or some other non-disciplinary event which requires an employer to terminate a relationship with a managerial employee. The terms and compensation contained in severance packages usually depend upon salary, years of service, and work performance and/or value of the employee to the employer. However, if an employee can show that the terms of a severance package offered to them are less favorable than those offered to other, similarly situated employees, the employee may be able to state a claim for discrimination.
In the case of Gerner v. City of Chesterfield, Virginia (2012), the United States Court of Appeals for the Fourth Circuit reversed a lower court ruling from the Eastern District of Virginia and found that although a severance agreement is offered upon employment termination and is not a contractual right, it is nevertheless an employment benefit upon which a discrimination claim may lie. Finding that the district court judge (Hudson, J.) erred in his analysis of the legal standard, the appellate court held Title VII protects current and former employees from discrimination, as well as those who have not been hired and have been discriminated against in the hiring process. Further, the Court found that Ms. Gerner's allegations that she was offered a less favorable severance package than her male counter-parts under the City’s reduction-in-force plan, were sufficient to allege an adverse employment action for a gender discrimination claim. In making its ruling, the Court relied upon U.S. Supreme Court precedent and decisions from other Circuit Courts.
This decision by the Fourth Circuit, which is the highest federal appellate court for Virginia, Maryland, West Virginia, and the Carolinas, is a reminder to employers that they must be vigilant in making sure that employment benefits (even severance packages which are often viewed as “voluntary” or “discretionary”) are provided on an equitable basis. Alternatively, employers must make sure that they have a strong, non-discriminatory, reason for any difference in the provision of such benefits among similarly situated employees.
© Copyright, PCT Law Group 2012, all rights reserved.
It is clear that the economic downturn has lessened the appetite for companies to spend money on anything not perceived as a “necessary business expense.” The importance of intellectual property (IP) rights in a 21st century, knowledge economy, however, dictates that individual inventors and small- and medium-sized businesses (“SMBs”) find capital to file for patents and trademarks relating to their truly innovative products and services.
The above then begs the question: How can SMBs save money in hiring and engaging IP legal counsel? Well, the answer to this question contains many variables related to the specific IP attorney being hired. Such variables include the region where the IP attorney works, the size of law firm in which they practice, their level of experience, the complexity of the IP involved, etc.
The above variables aside, there is one constant in the price equation that I consistently advise SMBs to pay attention to – the preparation of their disclosure materials BEFORE meeting with any newly-engaged IP counsel. That is, SMBs (and individual entrepreneurs) can directly and significantly control their IP legal cost through careful preparation of their disclosure materials. I have seen $5000 legal bills turned into $15000 legal bills through the needless “back and forth” between an IP attorney who is “on the clock” and a client who has prematurely engaged such IP attorney. So, what do I mean by disclosure materials and how should an SMB prepare them? Well, I answer in two parts:
With respect to an invention needing a patent application, disclosure materials means an SMB gathering and organizing all relevant papers, sketches, drawings, notes, software code, formulations, etc. that provide the IP attorney with the following information:
- Title of the invention
- The full legal names, addresses and citizenship of all inventors
- The full name, address and state of incorporation of the company who will own the patent (if any)
- A description of the problem solved by the invention
- A description of how long the problem has been around and how have others tried to solve the problem
- A description of how the invention solves the problem differently than past solutions or attempted solutions
- System diagrams showing all hardware/software components of the invention
- Flowcharts illustrating the steps of the invention
- A list any known websites, publications, patents, products, services, etc. that are relevant to the subject matter of the invention
- A description of how the invention relates to the launch of a new product or service
- Dates the invention was (or will be): first conceived; implemented as a pilot or otherwise used in the public domain; reduced to actual practice; the subject of a publication or public disclosure; sold or offered for sale; and/or internally exploited
With respect to a mark or logo needing a trademark application, disclosure materials means an SMB gathering and organizing the following information to provide to the IP attorney:
- A description of the mark
- The full name, address and state of incorporation of the entity who will own the trademark
- A description of all the types of products and/or services with which the mark is actually used or will be used
- Date of any first sale of goods bearing the mark in interstate commerce
- Copies of any specimens showing the mark as it is currently (or will be) used on or in connection with the goods or services
- A description of how the mark is actually used or intended to be used
A prepared and organized client is one who receives efficient IP legal services and a reasonable legal bill from their IP attorney, and is consequently glad to pay that reasonable bill!
For several years now, many practitioners that advise and/or draft non-competes for their business clients have stopped including language in non-compete provisions which prohibit a former employee from being an “owner” or “shareholder” in a competing business. Virginia Courts have routinely held that including language which prohibits a former employee from essentially owning stock in a competing business was overbroad and not necessary to protect an employer’s legitimate business interest. Therefore, such non-competes have regularly been invalidated.
Consistent with prior court opinions, a Virginia Beach Circuit Court recently invalidated a non-compete provision which prohibited a former employee from, inter alia, being an owner or shareholder in a competing business. The case, Patient First Richmond Medical Group, LLC v. Ameanthea Rica Blanco (Virginia Beach Circuit Court, Feb. 15, 2011), involved Defendant Blanco, a family nurse practitioner who was employed by Plaintiff Patient First. According to the allegations in the case, Blanco, while still working at Patient First, began formation of a competing healthcare practice which was to provide primary and urgent care treatment at reasonable or fixed fees during extended weekday and weekend hours without the need for an appointment.
Blanco also solicited two doctors from Patient First to come work with her at the new medical practice. After she resigned her position with Patient First, Blanco opened up the competing business within seven miles of her former place of employment. Patient First brought suit alleging that Blanco violated her employment agreement which contained non-competition and non-solicitation provisions.
The covenant not to compete prohibited Blanco from performing medical services of the type performed for Patient First (though the term “medical services” was not defined) for two years after her employment and within a seven-mile radius as an “agent, officer, director, member, partner, shareholder, independent contractor, owner, or employee” of the competing business. The Court found that the non-compete provision was overbroad because its provisions went beyond occupations and businesses that were in competition with Patient First. The Court reasoned that by barring Blanco from being a shareholder in a competing business, she would be barred from merely owning stock in a publically traded company, even if she were not providing medical services for the company and thus not competing with Patient First.
The Court also held that a number of the terms in the provision were not defined and left too much uncertainty as to which activities of the former employee would, or would not, be in violation of the covenant. Therefore, an employee would essentially have to guess at which conduct was prohibited. The Court held that in such cases, the non-compete was unenforceable as offending sound public policy, and sustained Blanco’s demurrer without leave for Patient First to amend.
After a less-than-satisfactory boiler improvement job done by a subcontractor, a Henrico County Circuit Court judge allowed the prime contractor to pierce the corporate veil and reach the personal assets of the subcontractor’s owner for damages related to this job. In this case, the Court found evidence that the sole shareholder of the subcontractor failed to uphold corporate formalities such as annual meetings and the maintenance of separate financial books for the company. Moreover, the subcontractor arranged for the corporation to enter into a contract while grossly undercapitalized. The finding resulted in a judgment worth $137,454 against the shareholder personally.
In Virginia, courts regard veil-piercing as an extraordinary remedy. Generally, each corporation is a separate legal entity with its own debts/liabilities and assets. However, under Virginia law, a court may pierce the corporate veil to find that an individual owner is the alter ego of a corporation where it finds (1) a unity of interest and ownership between the individual and the corporation, and (2) that the individual used the corporation to evade a personal obligation, to perpetrate fraud or a crime, to commit an injustice, or to gain an unfair advantage.
When deciding whether to pierce the corporate veil, courts consider a variety of factors, including the intermingling of assets of the corporation and of the shareholder; the absence or inaccuracy of company records; and significant undercapitalization of the business entity. Virginia businesses must be cognizant of such corporate formalities and protocols in order to protect the personal assets of owners from potential liability.
Fairfax County Circuit Court Awards Damages To IT Government Contractor In Non-Compete Case Against Subcontractor
A Fairfax County Circuit Court judge awarded a Virginia information technology government contractor $172,395 in damages in a non-compete case against a former subcontractor. The court determined that the defendant subcontractor breached the covenant not-to-compete provision in its consulting agreement with the plaintiff government contractor.
A Virginia court will enforce a non-compete clause between an employer and an employee if it is: sufficiently narrowly drawn to protect the employer’s legitimate business interest; not unduly burdensome on the employee’s ability to earn a living; and, not against public policy. As restrictive covenants are generally disfavored in Virginia (as they restrain free trade), the employer bears the burden of proof and any ambiguities in the contract are construed in favor of the employee.
In this case, the court concluded that the covenant not-to-compete at issue was enforceable because it only prevented the subcontractor from working for two companies; it proscribed competition for only a year; and, it was specific as to the type of work that was prohibited under the agreement between the parties.
The damages awarded by the court to the plaintiff government contractor were based on the lost profits that the non-compete clause was supposed to prevent. As the court noted, “[a]warding damages on the breach of the agreement protects plaintiff’s legitimate business interest by compensating it for the breach.”
Preferred Systems Solutions, Inc. v. GP Consulting LLC, Circuit Court for Fairfax County, Virginia (July 28, 2011)
An Eastern District of Virginia Court has permanently enjoined Verizon from infringing upon patents of a California-based Company, ActiveVideo Networks, Inc. (“ActiveVideo”), including two patents which will have a direct impact upon Verizon’s ability to offer its popular Video on Demand (“VOD”) services. In the case, ActiveVideo Networks, Inc. v. Verizon Communications, Inc., et al., ActiveVideo sued Verizon for allegedly infringing upon several of its patents. After a three-week jury trial, the jury found in favor of ActiveVideo and awarded it $115,000,000 in damages for Verizon’s infringement. ActiveVideo then sought a permanent injunction from the Court enjoining Verizon from continuing to infringe upon the patents.
In analyzing the injunction standard under the Patent Act, Judge Raymond A. Jackson of the Eastern District of Virginia relied heavily upon the four-part test set forth by the United States Supreme Court in the case of ebay, Inc. v. MercExchange, L.L.C. The District Court found in favor of ActiveVideo regarding all four prongs finding that: 1) ActiveVideo had been, and would continue to be, irreparably harmed by Verizon’s unauthorized use of its technology; 2) ActiveVideo did not have an adequate monetary remedy at law because the continuing harm associated with loss of market share and brand recognition of the VOD service were difficult to quantify; 3) the balance of hardships favored ActiveVideo because, as a small company, it relied heavily upon the patents infringed upon by Verizon, while Verizon offered numerous services and would be less affected by having to cease use and/or find alternatives to offering the VOD service; and 4) public interests and public policy were served by protecting patent rights. Regarding this last prong, the Court specifically noted that, “[t]hough Verizon does add other components to be able to offer the completed product, Verizon’s FiOS system, and more specifically the VOD aspect of the FiOS system, could not function without the use of ActiveVideo’s technology.” Mem. Op. at 17.
Nevertheless, have no fear Verizon VOD users. The Court granted Verizon a six-month “sunset” window of time to come up with a non-infringing alternative to its current VOD system, and Verizon claims it has already been diligently working to come up with an alternative system. Therefore, before the time is up, it is likely Verizon will have embarked upon an alternative method to provide the popular VOD service to its customers – thus, enabling it to keep sending out those monthly Verizon bills to its subscribers at a brisk and healthy pace.
© Copyright, PCT Law Group 2011. All rights reserved.
The Fourth Circuit Court of Appeals allowed a former city employee’s sexual harassment and retaliation claims to proceed to trial by reversing a lower court ruling which granted summary judgment in favor of the employer. Plaintiff Katrina Okoli, formerly an executive assistant for John P. Stewart, the director of Baltimore’s Commission on Aging and Retirement, filed a lawsuit alleging sexual harassment hostile work environment, quid pro quo sexual harassment, and retaliation. In the case of Okoli v. City of Baltimore, et al., Plaintiff Okoli alleged that over a four month span, Defendant Stewart repeatedly sexually propositioned her; told her of his alleged sexual exploits; asked her about her underwear; fondled her leg underneath a table on several occasions; and forcibly tried to kiss her when they were alone in a conference room. Okoli alleged that she rejected such advances by Stewart and also twice complained about the harassment to officials within the City government, as well as wrote a letter to Baltimore’s then-mayor Martin O’Malley concerning the harassment. Okoli was fired by Stewart just hours after her letter was received by the mayor’s office.
For its part, the City contended (and apparently the lower court agreed) that Stewart’s conduct was sporadic and infrequent and did not rise to the level of a hostile work environment. Further, the City argued that Okoli’s work had deficiencies, and that she was going to be fired even before she wrote the letter complaining of Stewart’s behavior. Additionally, the City argued, Okoli’s letter was non-specific and did not state that she was being “sexually” harassed by Stewart, only “harassed.” Therefore, they argued, Okoli did not engage in protected activity under Title VII to warrant a retaliation claim against the City.
The Appellate Court disagreed and held that the statements attributed to Stewart were both severe and pervasive. In addition, the Court held that a plaintiff need not mention the “magic words” of “sex” or “sexual” to effectively advance a sexual harassment complaint. Citing decisions from other circuit courts, the Court held that the complainant only need put the employer on notice that unlawful behavior is afoot. Okoli’s use of the words “unethical,” “degrading and dehumanizing” in her letter complaining about Stewart’s behavior were enough to raise a sexual harassment complaint. Finally, the Court determined that the district court erred in concluding that simply because Stewart had a document on his computer that pre-dated Okoli’s letter, such document was a termination letter. Stewart modified the computer document three times before delivering it to Okoli as a termination letter just hours after her sexual harassment complaint reached the mayor’s office. Under those facts, the Court concluded that there was sufficient evidence to infer that Stewart did not intend to fire Okoli prior to receiving word that she complained about his behavior to the mayor and his staff.
The Fourth Circuit Court of Appeals hears appeals involving Virginia employment cases.
© Copyright, PCT Law Group 2011. All rights reserved.
U.S. District Court (Alexandria): No Personal Jurisdiction Over Defendant In Website Defamation Case
The U.S. District Court in Alexandria, Virginia (often referred to as the "rocket docket") recently held that a Canadian businessman who does business in Loudoun County, Virginia cannot sue an out-of-state resident who purportedly defamed the businessman on her website. The court concluded that it could not exercise personal jurisdiction over the defendant because there was no evidence that the defendant intended to target a Virginia audience with its website.
Under Virginia law, in order for a court to exercise personal jurisdiction over a defendant, a plaintiff must demonstrate that its lawsuit arises from activities that occurred in Virginia (“specific jurisdiction”). Alternatively, a plaintiff can establish a basis for personal jurisdiction over a defendant by showing that the defendant has such “continuous and systematic contacts” with Virginia that the defendant, for all intents and purposes, is domiciled in Virginia (“general jurisdiction”).
In this action, as the website did not target Virginia and the plaintiff could not put forth any evidence to show that the out-of-state defendant had a “continuous and systematic” presence in Virginia, the court held that it could not subject the defendant to jurisdiction in a Virginia court.
Knight v. Grayson and John Doe # 1, United States District Court for the Eastern District of Virginia (Alexandria Division)