Category Archives: Employment

Employee fired for claiming copyright in website can get unemployment benefits

Update: This decision was reversed by the North Carolina Supreme Court at Binney v. Banner Therapy Products, Inc., — S.E.2d —-, 2008 WL 2370887 (N.C., June 12, 2008).

Christina Binney was one of the founders of Banner Therapy Products, and worked as the company’s treasurer. She was also responsible for Banner’s computers, and designed its catalog and website. In April 2003, she was fired for taking her computer’s hard drive home over the weekend, and because she had named herself in copyright notices appearing in the company’s catalogs and on its website.

She sought unemployment benefits, and the North Carolina Employment Security Commission (“ESC”), denied her claim. The ESC determined that the denial of benefits was proper because Binney had been terminated for employment-related misconduct.

Binney appealed the ESC’s determination to a North Carolina trial court, but that court affirmed the denial of benefits. She tried again with the state’s appellate court, which reversed the denial of benefits. The appellate court held that given Binney’s position and responsibilities in the company, and the reasonableness of her conclusions as to ownership of copyright, her actions did not rise to the level of misconduct that warranted a denial of benefits.

In determining that it was okay for Binney to have taken her hard drive home for the weekend, the court emphasized the she was the one primarily responsible for the company’s computer equipment. There was no formal policy to prohibit her from removing the hard drive, and there was no evidence that her use of the drive over the weekend to prepare for a meeting on Monday morning was improper. Moreover, there was no evidence that the removal of the hard drive inconvenienced Banner in any way.

As for whether it was misconduct for Binney to have claimed ownership in the company’s catalog and website which she created, the court observed that there was no evidence that Binney acted in bad faith. She had created the original version of the catalog before the company was incorporated, and, relying on legal research she had conducted herself, she believed she owned rights in subsequent versions as derivative works. Without any evidence that Binney’s belief about her copyright ownership was not genuine, and without any evidence that Banner incurred any detriment, the court held that Banner failed to meet its burden of demonstrating misconduct sufficient to warrant a denial of benefits.

Binney v. Banner Therapy Products, — S.E.2d —, 2006 WL 2022223 (N.C.App., July 18, 2006).

Secretary fired for accessing boss’s private e-mail gets unemployment benefits

Plaintiff Picou worked as a secretary for Trussco, Inc. for two years in a trailer where she and her supervisor, a Mr. Hebert, shared a computer located in Hebert’s office. One day, Picou logged into Hebert’s e-mail account and browsed through the sent messages folder. She found some messages Hebert had written to Trussco’s President and CFO in which Hebert complained about Picou’s poor attendance at work. Picou printed out two of the messages, annotated them with her comments, and faxed them to Trussco’s Safety and Risk Manager. Trussco terminated Picou after it found out how she had obtained the messages.

The day after she was fired, Picou filed for unemployment benefits with the Louisiana Department of Labor. Trussco objected, arguing that Picou was terminated for misconduct, and that such misconduct disqualified her from receiving unemployment benefits. The department denied her claim for benefits several times.

Undaunted, Picou appealed to a Louisiana state court, which reversed the Labor Department’s denial of benefits. When Trussco sought review, the Louisiana Court of Appeal upheld the award, holding that the unauthorized access of Hebert’s e-mail account did not rise to the level of “misconduct” defined by Louisiana statute.

Louisiana law provides that an employee may be denied benefits if he or she is terminated because of, among other things, “dishonesty, wrongdoing, . . . or violation of a policy or rule adopted to insure [sic.] orderly work. . . .” La.R.S. 23:1601(2)(a). According to the court, an employer must also show “willful and wanton” conduct on the part of the employee to justify a denial of benefits.

In this case, the court emphasized that Picou “was expected to use and communicate with other employees by the e-mail system.” Further, Picou and Hebert shared the computer and the e-mail system. For the Louisiana Court of Appeals, these facts were enough to justify Picou’s conduct, concluding that the browsing of her employer’s sent e-mail was not an “intentional and substantial disregard for the employer’s interest.”

Sounds like the judge may still have been a bit distracted from Mardi Gras when he wrote this opinion.

Picou v. Trussco, Inc., — So.2d —, 2006 WL 473842 (La.App., March 1, 2006).

Tennessee Supreme Court rules on “after-acquired evidence” of Internet misuse by employee

Here’s an interesting employment law question arising from the misuse of Internet access by an employee during work hours:

Employee won’t agree to the terms in a new proposed employment contract offered to him as part of a corporate restructuring. As a result, he is terminated. Under the terms of the original employment agreement, Employer begins paying severance to (the now former) Employee. Sometime after the termination, upon a forensic examination of the Employee’s computer, Employer discovers that Employee had been visiting adult websites while at work. The employment agreement had provided that severance would be paid unless Employee was terminated for “gross misconduct.” Can Employer get out of paying severance to Employee based on this after-acquired evidence of gross misconduct?

The answer, at least in Tennessee, is yes. That state’s supreme court has held that after-acquired evidence of this sort can be a defense to breach of contract so long as the employer can show by a preponderance of the evidence that it would have terminated the employee had it known of the misconduct.

Teter v. Republic Parking System, Inc., —S.W.3d —, 2005 WL 316518 (Tenn., November 29, 2005)

FMLA policy on company intranet sufficient notice to employee

In the retaliatory discharge case of Dube v. J.P. Morgan Investor Services, plaintiff Dube alleged, among other things, that he had not been given proper notice of his rights under the Family and Medical Leave Act of 1993, 29 USCA § 2601 et seq. (“FMLA”). The employer moved for summary judgment. In granting the employer’s motion, the court found that prior to Dube’s period of absence, the company’s human resource policies (including information about the FMLA) had been provided to all employees via the company’s intranet website. The court concluded that the posting on the intranet adequately gave notice to Dube of both his and his employer’s obligations under the FMLA.

Dube v. J.P. Morgan Investor Services, 2005 WL 1140766 (D.Mass., May 13, 2005).

Employer had legitimate reason to fire employees for violating company e-mail policy; court found no age-based discrimination

In the case of Rizzo v. PPL Service Corp., the U.S. District Court for the Eastern District of Pennsylvania has awarded summary judgment in favor of the employer in an age discrimination lawsuit filed by former employees who were fired after sending and receiving personal e-mail at work.

PPL Service Corporation had a zero-tolerance policy against employees using their e-mail accounts to send and receive non-work related messages. After an internal investigation revealed they were in violation of this strict policy, plaintiffs were fired. Believing that the alleged violation of the e-mail policy was merely a pretext for illegal age discrimination, the plaintiffs filed suit against PPL under the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq.

PPL moved for summary judgment, and the court granted the motion. Because there was no direct evidence of age discrimination, the court applied the burden shifting analysis set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817 (1973). Under this analysis, a terminated employee has the initial burden of presenting a prima facie case of discrimination. The burden then shifts to the employer to show a legitimate, nondiscriminatory reason for the alleged adverse employment action at issue. If the employer makes this showing, the burden shifts to the plaintiff to show the stated reasons are pretextual.

In this case, the court found that the plaintiffs presented a prima facie case of age-based discrimination. The record revealed that there was a disproportionate number of employees in the protected group (above 40 years old) who were investigated for improper e-mail use. Furthermore, the only people terminated as a result of the investigation were above 40.

There was no dispute, however, that the employer had presented a legitimate, non-discriminatory reason for terminating the plaintiffs. The plaintiffs admitted they were aware of the company’s e-mail usage policy, and admitted they had sent and received prohibited messages.

Notwithstanding the legitimacy of the employer’s reason for termination, the plaintiffs argued that the offered reason was merely a pretext. The court found otherwise, and noted that the plaintiffs presented no evidence that age played any role whatsoever in the decision to terminate them.

Rizzo v. PPL Service Corp., 2005 WL 913091 (E.D.Pa., April 19, 2005).