Oregon Court of Appeals supports broad protection of "mediation communications"

By Lori Irish Bauman
July 27, 2015

The Oregon Court of Appeals last week reinforced the broad scope of Oregon's law stating that "mediation communications" are inadmissible in subsequent proceedings.

In Yoshida's Inc. v. Dunn Carney Allen Higgins & Tongue, the issue was whether emails related to a mediation could be admitted into evidence in a separate legal malpractice case.  The client in the malpractice case contended that the defendant lawyer had failed to provide a timely notice to terminate an equipment and software lease, resulting in an automatic renewal of the lease.  The client hired a different lawyer to resolve the matter with the lessor, and in a mediation the client agreed to pay a sum of money to terminate the lease and purchase the equipment and software from the lessor.  In the trial of the subsequent malpractice case, the trial court admitted into evidence emails associated with the mediation.  Defendant lawyer contended that the emails showed that the client suffered no damages as a result of the alleged negligence.  A jury entered a verdict in favor of the defendant lawyer.

The Court of Appeals held that it was reversible error to admit the emails.  ORS 36.222 states that "mediation communications" -- meaning all communications make in the course of or in connection with a mediation -- are not admissible in any subsequent proceeding, and on that basis the trial court had erred.

Department of Labor issues guidance on classifying employees and independent contractors

By Leslie Bottomly
July 15, 2015

Today the U.S. Department of Labor issued an Administrator’s Interpretation of the Fair Labor Standards Act, offering guidance on whether a worker should be classified as an employee or an independent contractor. The Administrator’s Interpretation signals the DOL’s desire to expand the reach of the FLSA to protect the largest possible group of workers. It rejects the common law “control test,” which analyzes whether a worker is an employee based on the employer’s control over the worker.  Instead, it focuses on a broad “suffer or permit” standard.

According to the DOL, an entity ‘suffers or permits’ an individual to work if, as a matter of economic reality, the individual is dependent on the entity, as determined by a multi-factor “economic realities” test. The factors typically include: (A) the extent to which the work performed is an integral part of the employer’s business; (B) the worker’s opportunity for profit or loss depending on his or her managerial skill; (C) the extent of the relative investments of the employer and the worker; (D) whether the work performed requires special skills and initiative; (E) the permanency of the relationship; and (F) the degree of control exercised or retained by the employer.  While the Interpretation is not binding, the courts will generally defer to an agency's view of the law so long as it is not clearly erroneous.

Contact Ater Wynne's employment practice group for assistance in applying the DOL Interpretation to the circumstances of your business. 


 

Oregon Court of Appeals recognizes novel basis for wrongful discharge claim

By Lori Irish Bauman
July 14, 2015

While an at-will employee may generally be discharged for any reason, a discharge may be deemed wrongful -- and will form the basis of a common law wrongful discharge claim -- if it occurred because the employee fulfilled some important public duty.  Last month the Oregon Court of Appeals expanded the important-public-duty exception, holding that a domestic employee who is fired for reporting that the employer had committed a crime involving child abuse has a wrongful discharge claim.

In McManus v. Auchincloss, plaintiff was a domestic employee who reported to the police that defendant, his employer, possessed child pornography.  Defendant allegedly fired plaintiff in retaliation for the police report, and plaintiff sued for wrongful discharge.  The trial court dismissed, holding that the facts did not support a common law wrongful termination claim.  While a state statute prohibits an employer from terminating an employee in retaliation for making a good faith report of criminal activity, that statute expressly does not protect domestic employees.  Because the legislature omitted domestic employees from the statute, the trial court held that plaintiff had no common law claim based on performing an important public duty. 

On review, the Court of Appeals reversed.  The court noted that the legislature has expressed a general public policy in favor of protecting employees who report criminal activity.  That policy supports a common law claim by the plaintiff in this case, even though he was not protected by the express language of the legislation.