Legal Briefings

PUBLIC SECTOR EMPLOYERS AND AGE DISCRIMINATION
When Mount Lemmon (Arizona) Fire District faced a budget crisis, it laid off its two oldest (and highest paid) full-time firefighters. They sued under the Age Discrimination in Employment Act. The district argued that it did not violate any laws because it is too small to be considered an “employer” under the ADEA. Section 630(b) of the ADEA defines the term “employer” to mean any individual or company who has 20 or more employees. It states the term employer “also means a State or political subdivision of a State.” The district argued that the two sentences should be read together to excuse any state or local government employer with fewer than 20 employees from complying with the ADEA. The district urged the court to adopt this interpretation because it is consistent with court decisions applying the minimum employee requirement to public employers under Title VII of the Civil Rights Act of 1964. The court disagreed with each of the district’s arguments. It held that by using the terms “also means,” Congress intended to add a second definition of the term “employer,” not clarify the prior definition. The court also noted that the ADEA is sometimes broader than Title VII due to the different language used in each statute. Mount Lemmon Fire Dist. v. John Guido, No. 17-587 (Nov. 6, 2018).

IMPACT: Public sector employers are subject to the ADEA and prohibited from discriminating against employees over age 40 based on age.

BUSTING THE HOME-STATE ADVANTAGE
Three Rivers Provider Network Inc. is a medical billing company headquartered in Nevada. It employed three high-ranking individuals, gave them access to its intellectual property and had them sign confidentiality agreements. All three employees did not live in Nevada. The employees allegedly left Three Rivers and started a competing business in California, Medical Cost Containment Professionals LLC, using Three Rivers’ confidential information and business models and breaching their confidentiality agreements with Three Rivers. Three Rivers filed a complaint for breach of contract in Nevada against Medical Cost. The employees filed a motion to dismiss the complaint for lack of personal jurisdiction, alleging that they did not have sufficient minimum contacts with Nevada to be sued there. The court agreed. None of the former employees resided in Nevada, and the competing company, Medical Cost, was not incorporated in Nevada. The court rejected Three Rivers’ argument that the former employees knew they were hurting a Nevada employer. Such an argument, according to the court, was not enough to allow the non-Nevada employees to be sued there. Three Rivers Provider Network Inc. v. Medical Cost Containment Professionals LLC, No. 2:18-CV-135-JCM (GWF), 2018 WL 3620491 (D. Nev. July 30, 2018).

IMPACT: Following the U.S. Supreme Court’s 2014 decision in Walden v. Fiore, courts around the country are dismissing cases where the employer attempts to sue a former employee for wrongful acts committed outside of the employer’s home state. These cases depend on their unique facts; courts look at the various contacts that the employee (and any potential new employer) have with the state where a lawsuit is filed.

Rachel L. Schaller and Daniel Saeedi are attorneys at Taft Stettinius & Hollister LLP. To comment, email editors@workforce.com.