Wadler v. Bio-Rad: In-House Counsel as Whistleblower

Last month, a jury in the U.S. District Court for the Northern District of California entered a verdict awarding $8 million in damages to the former general counsel (Sanford Wadler) of Bio-Rad Laboratories, a life-sciences company headquartered in the San Francisco area.  Wadler claimed that he was wrongfully terminated and retaliated against for reporting his suspicion to an audit committee that Bio-Rad had violated the Foreign Corrupt Practices Act (FCPA).  One topic at issue was whether Wadler could use documents and information protected by attorney-client privilege to put on his case against his former employer.

The Court found that Bio-Rad waived its claim to attorney-client privilege, and therefore, the Court admitted the evidence, overruling Bio-Rad’s objection.  In its ruling, the Court noted that other items provided by Bio-Rad during the case’s discovery phase contained a presentation, a complaint, and other communications that should have been protected by the attorney-client privilege.  And, in providing these during discovery, Bio-Rad expressly waived its claim to privilege.  By doing so, this opened the door for Wadler to use otherwise privileged information that bolstered his claim at trial.

Additionally, the court noted another important takeaway.  One of the reasons Bio-Rad gave for Wadler’s employment termination was that he failed to perform his job adequately.  The Court stated that this reason created an implied waiver to the privilege.  So, even if the Court had ruled that Bio-Rad had not expressly waived privilege by offering the above discovery, the fact that Wadler was fired for failing to perform his job adequately would have been enough to overrule the objection.

If you are company management, this case should serve as a warning that in-house company counsel shouldn’t be treated differently from other potential whistleblowers.  This creates yet another reason for companies to rely more heavily on outside counsel, as their rights and position as non-employees of the company are much different.

The Danger of Social Media as Outlet for Political Thought

You can’t log onto social media without being exposed to someone’s opinion on politics.  And, normally, I would say that’s fine.  The ability to talk about what you believe and why you believe it can be extremely productive.  Often, these discussions can spark progress and understanding.  That being said, “freedom of speech” does not protect you from being fired for it.

In Missouri, most employment is “at-will”, which means that you can be fired for any reason or no reason whatsoever, as long as that reason is not unlawful.  There is no requirement the termination of your employment be “just” or for  “just cause”.  There are various state and federal laws that prohibit employers from terminating employment.  For example, termination of employment cannot be motivated by race, religion, sex, certain ages, disability (with certain restrictions), work-related injury, or participation in certain investigations, to name a few.  Are there some glaring omissions?  Definitely.  Currently, a few particularly hot topics are sexual orientation and political ideology.

So what does this mean?  The best advice I can offer is be aware of your social media footprint.  Limit those who have access to your tweets, status, and the like by making your profile private.  Not only could these things affect your current job, but they can also dissuade future employers from hiring you.  The bottom line is that everybody has a right to voice his or her opinion, but that right is not one that provides us with legal protection from discrimination.

Supreme Court to Determine Enforceability of Class Action Waivers

A few weeks ago, the U.S. Supreme Court consolidated and granted review of the following cases:

National Labor Relations Board v. Murphy Oil USA, Inc.;

Epic Systems Corp. v. Lewis;

Ernst & Young LLP v. Morris.

All three of these cases address whether class action waivers contained in arbitration agreements are enforceable.  Currently, the law is split, as the three cases above contain rulings that are inconsistent with each other.

There are a few interesting practical notes on this matter:

  • The NLRB consists of five board members, two of which are currently vacant. The two remaining vacancies will be filled by Presidential appointment. But, we are unsure about when President Trump will do so. In addition, President Trump will have the opportunity to appoint a new NLRB General Counsel in November 2017 when Richard Griffin’s term expires. Therefore, the tone of the NLRB rulings, which have consistently invalidated such waivers since 2012, may soon change. Therefore, the need for a clear ruling on this matter by the U.S. Supreme Court cannot come soon enough.
  • However, many experts are predicting that this issue, if heard by the current justices of the Supreme Court, would result in a 4-4 tie. Therefore, the timing of appointment and confirmation of a ninth justice may be very instrumental for this issue. The date for this matter’s oral argument has not yet been set. Ideally, the matter isn’t heard until a ninth justice has been confirmed, eliminating the potential for further confusion.

What does all of this mean? It means that the employers and employees encumbered by employment contracts need to consult with counsel more than ever. What is enforceable today may no longer be enforceable in the very near future. Failure to pay attention to these developments could result in an unnecessary need for re-drafting of applicable agreements, or missing out on an opportunity to collectively bring suit to enforce legal rights.

At Schaeffer Law, we keep up with changes in legal nuances and updates to the law.  We encourage everyone to have us look at his or her employment contract before it is signed.  This includes anything from confidentiality agreements and employment releases to non-competes and severance agreements.  We know what to look for and can review these quickly and reasonably, potentially saving clients from making a very expensive mistake.  Contact us if you need counsel.

EEOC publishes new resource on Mental Health Conditions

Last month (12/16), the EEOC published a new document on mental health conditions in the workplace. It is entitled “Depression, PTSD, & Other Mental Health Conditions in the Workplace: Your Legal Rights”.  It is rather short, and it is helpful for both employers and employees to read.  If you don’t read it, at least check out the 3 points I outlined below.  Most of what the publication contains is old news. That being said, there is nothing more invigorating than a refresher in labor and employment law. So, here are the main takeaways for those of you who manage or supervise employees:

  1. You cannot fire somebody because he or she has a metal condition.

….unless that person cannot perform the essential functions of the job with or without a reasonable accommodation. The law goes on to state an exception, which is that employers do not have to employ people who, even with an accommodation, pose an objectively direct threat to safety.

  1. You may require an employee with a mental health condition to submit medical documentation offering proof of the condition if a reasonable accommodation is requested.

However, it is generally accepted practice for employers to not force employees to    disclose a precise condition or present sensitive medical records as long as whatever you receive sufficiently describes the limitations and identifies particular accommodations that would allow the employee to perform the essential functions of the job.

  1. If a reasonable accommodation would help an employee do his or her job, you must give that accommodation unless it involves significant difficulty or expense.

This rule may seem like a way around providing accommodation, but it is not a good idea to make this decision on your own. Most employers are surprised at how significant the difficulty or expense must actually be in order to be exempted from this rule, and the courts will not hesitate to make an inquiry into the position of the company when determining if denial on these grounds is proper.

These are just a few notes from the EEOC’s latest release on these matters. If you have any questions, check out our page on the ADA (Americans with Disabilities Act) or contact us directly.