High Court Mulls Taking USERRA Appeal

November 12, 2009 (PLANSPONSOR.com) – U.S. Supreme Court justices are considering hearing an appeal in an employment discrimination case about whether an employer can be held liable for the actions of someone other than the manager who took the action alleged to have been discriminatory.

 

Vincent E. Staub, a fired technician for a Peoria, Illinois, hospital, has asked the high court to review a 7th U.S. Circuit Court of Appeals ruling, which overturned a $57,640 jury verdict in Staub’s favor after a trial of his lawsuit against his former employer, Proctor Hospital.

A Thompson analysis of Staub v. Proctor Hospital found a split in the case law among the nation’s federal appellate courts on the issue of whether the actions of someone other than the suing employee’s primary manager can still make the employer liable. Thompson said the 4th and 7th U.S. Circuit Courts of Appeals say an employer may be held liable only for the motives of the “formal decisionmaker” or another official who “so dominated the decisionmaking process as to be the functional decisionmaker.”

Meanwhile, the 6th, 9th, 10th and 11th U.S. Circuit Courts of Appeals have ruled that an official whose actions caused the ultimate decision could be the basis of a discrimination action.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Depending on the justices’ ultimate decision about whether to accept the case and their resolution of the legal issues, Thompson said the Supreme Court could affect the implementation of the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and the Uniformed Services Employment and Reemployment Rights Act (USERRA).

Justices have asked the U.S. Justice Department to file advisory briefs on the issues, which Thompson said is often an indicator of justices’ interest in a case.   

Staub’s suit alleges that his discharge as an angiography technologist violated USERRA as hospital officials discriminated against him because of his service as an U.S. Army reservist. The hospital claimed the firing was caused by Staub’s insubordination, shirking, and attitude problems.

For its part, the employer in the Staub case argued in its Supreme Court brief that the justices don’t have to resolve the global legal issues because its situation is different from others cited as precedent. Hospital officials insisted that the fact they conducted an independent investigation of Staub’s work history means the other cases no longer apply.

"The circuit courts are in agreement that where a final decisionmaker bases her decision on an independent investigation, the causal link between a non-decisionmaker's alleged bias and the employment decision is broken, and the non-decisionmaker's animus is insufficient to impute liability to the employer," Proctor Hospital said in the brief.

The 7th Circuit’s Staub decision is available here.

CEOs See Company Stock Ownership Levels Decline

November 12, 2009 (PLANSPONSOR.com) - Chief executive officers at the nation’s largest companies saw the value of their company stock ownership plunge last year as the U.S. equities market declined, according to an annual study by Watson Wyatt.

A Watson Wyatt press release said the study found that the total value of CEO stock ownership and outstanding equity awards and bonus payouts for CEOs decreased by 42% in 2008, more than the 34% decline experienced by a typical shareholder at those companies. In aggregate, the CEOs analyzed in the study lost a combined $53.7 billion – roughly $55 million for the average CEO – in 2008, compared with $3.2 trillion for shareholders of the same set of companies.

The value of broad-based employee stock option grants declined by 17% in 2008. Realized gains from employee stock option exercises declined by an average 55% last year, from $54 million per company to $24 million.The estimated in-the-money value of employee stock options outstanding declined by approximately $100 billion for the companies in the study.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

The Watson Wyatt survey also found that compensation committees continue to structure CEO pay programs so companies with better performance deliver higher realizable pay to their CEOs than low-performing companies. The median CEO at high-performing companies has a three-year aggregate realizable long-term incentive value that is 150% larger than at low-performing companies – $2.3 million versus $0.9 million in 2008.

Watson Wyatt’s “2009/2010 Report on Executive Pay: Moving Beyond the Financial Crisis” is based on public data from 982 companies in the S&P Super 1500 that filed proxies before July 2009.

To view the report, visit www.watsonwyatt.com/ExecPay.

«