Virginia Business Law Update : Virginia Business Lawyers & Attorneys : PCT Law Group : Litigation Defenses, Contract Disputes, Business Formation : Northern Virginia, Arlington, Fairfax, Alexandria

We have all been there. Walking through the aisle of a store and some store personnel who was stocking a shelf has left a ladder or some supplies right in the middle of the aisle, obstructing the path. Well, the Plaintiff in this case did what most of us would do. She attempted to walk around the ladder, but when she did -- bam! – she hit her head on a metal shelf that was on the other side of ladder, and she (sadly) suffered significant, and likely permanent, brain injury.

In this diversity jurisdiction personal injury case, Zankow v. Sears Holding Corp., et al., Plaintiff claimed that Sears was negligent because the placement of the ladder combined with the shelves in the narrow aisle created an unreasonably dangerous condition that caused her serious and permanent injuries. The shelves were 1 to 1.5 inches thick and were connected to the back of a shelving unit with no side walls. While trying to get around the ladder, Plaintiff apparently did not notice the shelves as she was focused on the ladder – the original obstruction.

For its part, Defendant claimed that it should not be held liable as the ladder and the shelves were in plain sight; and, in any event, because Plaintiff failed to use ordinary and reasonable care in walking around the ladder, she was contributorily negligent and barred from recovery.

On summary judgment, the Court dismissed Plaintiff’s claims. The Court ruled that from the pictures submitted by the Plaintiff of the scene (which were attached to the Opinion) and the description provided, the shelf and the ladder were “open and obvious” conditions from which Plaintiff had a duty to use reasonable care to avoid. The court rejected Plaintiff’s argument that the shelf she hit her head on was protruding, because the evidence showed that no one shelf stuck out further than the others. Further, the Court did not find that the combination of the ladder and the shelves rendered either of the hazards “latent” such that Plaintiff would not have been expected to notice and avoid the open and obvious hazards. Citing Virginia Supreme Court precedent, the Court ruled that once a hazard is deemed to be open and obvious, an injured plaintiff’s claim must fail as a matter of law since she will be deemed to have failed to exercise reasonable care, and will thus be found contributorily negligent.
 

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An Alexandria federal court judge has awarded a plaintiff employee more than $1.5 Million in damages against her former employer stemming from allegations, which included sexual harassment, breach of contract, and constructive discharge. In the case of Wynne v. Birach, the employee, Elizabeth Wynne, sued her former boss and his company, Twin Star Holdings, alleging the owner of the company, Sima Birach, Jr., sexually harassed her, cheated her out of money owed under her employment agreement, and forced her to submit fraudulent financial documents.

You might ask, what was Mr. Birach’s response to these serious allegations? The answer: Nothing!

Mr. Birach and his company never put in a response to the allegations and basically ignored the proceedings. This resulted in Ms. Wynne obtaining a victory by default. In and of itself, it is somewhat remarkable that a company would fail to defend itself against such allegations. However, more significant than that, the court’s opinion sets forth at least two very important findings for employment law cases.

First, the court took judicial notice of the fact that Mr. Birach was the sole director of Twin Star Holdings, and based upon the uncontested allegations in the Complaint, Mr. Birach regularly used corporate funds to pay for his personal expenses. This finding allowed the court to pierce the corporate veil and hold Mr. Birach personally liable for the damages in the case. It is rare that a company’s owner is personally tagged for damages in a wrongful termination case. The Wynne case emphasizes, once again, the need for companies to observe corporate formalities to avoid the possibility of personal liability against corporate owners.

Second, Ms. Wynne was not terminated, but actually resigned from her position. Nevertheless, the court found that she was “constructively discharged” from her job because her boss subjected her to “repeated and blatant” sexual harassment, and she was repeatedly asked to violate Virginia law by submitting fraudulent financial documents. This is significant because courts in Virginia rarely find that an employee has been subjected to working conditions so intolerable that they have no other choice but to resign.

These two important findings from the Wynne case should not be diminished just because the employer did not show up to fight. The court ruled against Ms. Wynne on several of her other claims made under the Virginia Human Rights Act and against her on her assault claim; so she did not automatically win her constructive discharge and piercing the corporate veil claims because the employer defaulted. Rather, the court looked at the facts asserted and found they were sufficient to establish these claims.

Based upon prior rulings from the federal and state courts in Virginia, some employment law practitioners thought that obtaining a constructive discharge finding was virtually impossible in Virginia. The Wynne case assures us that is not the case.

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