April 5, 2011

Seagate’s liability to duped recruit jumps to $2.4 million

Posted in Application Process, Attorney's Fees, Fraud and Misrepresentation, Hiring and Recruiting, Job Descriptions, Minnesota Statute 181.64, Minnesota Statute 181.65 tagged , , , , at 7:42 pm by Tom Jacobson

Last December, I posted an article about how Minnesota’s Seagate Technologies was socked with a $1.9 million jury verdict for misrepresenting a job to a recruit the company hired (see Bloomington-based Seagate hit with $1.9M verdict for misrepresenting job to recruit).  Not surprisingly, lawyers for both sides filed post-trial motions after the verdict was delivered.  Seagate recently lost both motions, and one of them added over a half million dollars to the recruit’s judgment.

In the first post-trial motion, Seagate challenged the outcome of the trial.  Seagate argued that the evidence was not sufficient to support the jury’s verdict and that the company should get a new trial.  In the alternative, Seagate argued that the verdict was excessive and should be reduced.  The federal district court judge who presided over the case, the Hon. Donovan Frank, rejected all of Seagate’s arguments and allowed the verdict to stand (Vaidyanathan v. Seagate US, LLC, http://bit.ly/hMptiM).

At the same time, Vaidyanathan asked the court to award him the attorney’s fees he incurred while litigating against Seagate.  Vaidyanathan’s argument was based on a seldom-used Minnesota statute, Section 181.65 (http://bit.ly/foPuhF), which allows the recovery of fees in cases such as his.  After considering the issues in the case, the amount of time spent by Vaidyanathan’s attorneys on the case (nearly 2050 hours), and the rates charged by his attorneys (ranging from $50.00 per hour for a law clerk to $495.00 per hour for the lead attorney), Judge Frank awarded Vaidyanathan an additional $517,352.50 for his attorney’s fees (see Vaidyanathan v. Seagate US, LLC, http://bit.ly/dS6K9t).  This brings Seagate’s liability to Vaidyanathan to more than $2.4 million.  If Seagate’s own attorney’s fees were roughly the same as Vaidyanathan’s, the company’s overall cost in this case could be approaching $3.0 million.

The case emphasizes the high cost of employment-related litigation, for there are many laws which allow successful employee-plaintiffs to recover their attorney’s fees in addition to their other damages.  Depending on the legal basis for an employee’s claims, those damages can include lost past and future wages and a myriad of other items.  And, employers are rarely awarded their attorney’s fees when they win.  To minimize the risk of getting involved in such high-stakes litigation, employers should regularly consult with legal counsel regarding their employment practices.

For more information about this article, please contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2011 Swenson Lervick Syverson Trosvig Jacobson, PA

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March 4, 2011

Liar liar, time to fire?

Posted in Dishonesty, Misconduct, Unemployment Benefits tagged , , , , , , , , at 8:50 am by Tom Jacobson

“You can’t handle the truth!”  (Jack Nicholson, as Col. Nathan R. Jessep, in  A Few Good Men, 1992 http://www.youtube.com/watch?v=8hGvQtumNAY).  It must be that some job applicants believe their potential employers can’t handle it, either.

The Huffington Post recently ran a story about Ruth Lyons’ struggle to find a job (Big Retail Companies Require Job Applicants to Disclose Their Age, http://huff.to/gczZGx).  The story describes how several large companies require applicants to disclose their age on job applications.  As noted in the story, although the practice is technically lawful, it would likely raise a red flag in any age discrimination case.

But a more interesting aspect of the story is how Lyons handled her job search:  she lied.  According to the story, after she was rejected for several jobs where she had listed her true birth date (April 28, 1951), Lyons started listing her birthday as April 28, 1969.  One company, which had never responded to her application when she used her correct birthdate, hired her after she re-applied using her fake age.

Though Lyons’ approach may have landed her a job, it raises another question: What are the employer’s rights when an employee lies on a job application or during an interview?  Resume’ puffing is nothing new, but what about outright lies during the application process?

The Minnesota Court of Appeals recently grappled with this in the case of Santillana v. Central Minnesota Council on Aging (http://bit.ly/gIZt3o).  In that case, Krista Santillana was fired by one employer for theft, but when she later applied for a job with Central Minnesota Council on Aging, she told them she had left the previous job because she was interested in part time work.  When CMCA found out about her history, they fired her.  Santillana applied for unemployment, and the Court of Appeals eventually ruled that by lying during the application process, she failed to disclose a fact that was material to her job.  Therefore, the court held that Santillana committed misconduct that disqualified her from unemployment benefits. 

The Santillana case should not, however, be interpreted to mean that an applicant’s dishonesty gives an employer a free pass for discipline or discharge.  The case was about a lie that was material to the applicant’s job, and the legal issue was the impact of that lie on the employee’s claim for unemployment benefits.  Furthermore, in other cases courts have ruled that an employee’s lie during the application process does not provide an employer with an automatic defense to certain discrimination claims. 

Nevertheless, a lie by an applicant should certainly give any employer a good reason to question that person’s future as an employee.  Providing notices about the importance of honesty and full disclosure during the application process would certainly help the employer if a lie is discovered post-hire.  And, diligent follow-through with reference and background checking will help ferret out the applicants who lack the integrity expected of any employee.

If you have any questions about this post, please contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2011 Swenson Lervick Syverson Trosvig Jacobson, PA

December 22, 2010

Bloomington-based Seagate hit with $1.9M verdict for misrepresenting job to recruit

Posted in Fraud and Misrepresentation, Hiring and Recruiting, Interviewing, Job Descriptions, Minnesota Statute 181.64 tagged , , , , at 10:45 am by Tom Jacobson

 

 

When Chandramouli Vaidyanathan accepted a job with Bloomington, MN-based Seagate Technologies, he thought he would be leading the company’s yield engineering team. The job was not what Vaidyanathan expected, so after he was transferred to a different position within the company and later dismissed along with 100 other employees during a lay-off, he sued Seagate. On November 18, 2010 a jury awarded Vaidyanathan $1.9 million.

One of Vaidyanathan’s legal theories was that Seagate had violated section 181.64 of the Minnesota Statutes (http://bit.ly/gzdFuI). This law makes it unlawful for a Minnesota employer to knowingly make false representations to induce a job recruit to relocate to accept a job offer. Employers who violate this law can be ordered to pay the employee’s damages and attorneys’ fees.

A violation of this law is also a misdemeanor, so an employer who breaks this law could be punished with a fine of up to $1,000.00 and/or ninety days in jail.

In Vaidyanathan’s case, the evidence established that Seagate made a clear and definite promise to Vaidyanathan that his job would be to lead the company’s yield engineering team. According to the Court, Seagate’s promise was, however, “made, in part, out of ignorance and a lack of sufficient information,” and Vaidyanathan testified that he never did any yield engineering work for Seagate.

After a seven-day trial, the jury concluded that Seagate knowingly made false representations to Vaidyanathan about the kind and character of his work and that Seagate’s misrepresentation induced him to take the job and move to Minnesota from Texas. The jury then awarded Vaidyanathan, whose starting salary had been $126,048.00, $1.9 million in damages. The jury’s Special Verdict can be read at http://bit.ly/grjREY.

Claims under Section 181.64 are rarely litigated, and when they are, they are often dismissed. Nevertheless, Vaidyanathan’s case stands as a vivid reminder of the importance of accurately describing a job to recruits.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

 

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