About the Firm

The law firm of Sharpless & Stavola, P.A. provides top quality, aggressive legal representation to individuals and businesses throughout North Carolina. A core practice area of the firm is employment litigation, where our attorneys regularly represent parties in disputes arising from all aspects of the employer-employee relationship. Employment issues frequently litigated by the firm include claims of discriminatory hiring and employment practices, sexual harassment, retaliation and wrongful discharge, wage and hour violations, breach of contract and no-compete covenants, and employee benefits litigation. In addition to confronting claims of traditional employment discrimination, the firm represents parties with respect to statutory rights and obligations imposed by the Americans with Disabilities Act and the Family Medical Leave Act.

On behalf of our clients, we regularly appear in all North Carolina state and federal courts and administrative agencies, including the Equal Employment Opportunity Commission (EEOC), the North Carolina Department of Labor, and the Office of Federal Contractor Compliance Programs (OFCCP).

Sharpless & Stavola, P.A. is a Martindale-Hubbell “AV” rated law firm. Please review the firm’s webpage for additional information, including individual attorney profiles. The firm's telephone number is 336-333-6400.

Friday, July 11, 2014

Fourth Circuit Affirms Jury Verdict in Racial Harassment and Retaliation Action Despite Erroneous Causation Instruction

In E.E.O.C. v. A.C. Widenhouse, Inc. (06/24/2014), the Fourth Circuit Court of Appeals affirmed a substantial plaintiffs’ jury verdict in a case featuring claims of a racially hostile work environment, racially discriminatory discharge, and retaliatory discharge.  The lawsuit was brought first by the United States Equal Employment Commission (“EEOC”) on behalf of two black employees, and also included additional claims brought by Contonious Gill, one of the affected employees, after he intervened in the action.

Gill had worked for A.C. Widenhouse as a truck driver from May of 2007 until his termination in June of 2008.  During his employment, Gill was subjected to racial epithets, which included use of the “N” word and the term “porch monkey.”  He also heard racially charged jokes and witnessed displays of objects such as nooses and confederate flags.  Gill testified that he repeatedly reported these incidents to superiors, who did nothing to remedy the problem.  Gill was terminated in June of 2008 when he was unable to complete a delivery due to illness.  Gill alleged that the termination was due to racial discrimination as well as retaliation for his reporting the harassment.

The jury found Widenhouse liable on each claim and awarded Gill $105,000.00 in damages.  The judge, in turn, awarded Gill an additional $88,509 in back pay and prejudgment interest. The judge also ordered Widenhouse to pay $139,000 in attorneys’ fees and costs.

In its appeal to the Fourth Circuit Court of Appeals, Widenhouse contended that the trial court erred by instructing the jury on the law applicable to the claim of retaliation.  On this point, the trial judge instructed the jury that it should find Widenhouse liable for violating Title VII's retaliation prohibition if the jury found that retaliation for Gill's protected activity of reporting racial discrimination was a motivating factor in his termination.  This instruction was contrary to recent United States Supreme Court precedent holding that a retaliation plaintiff must prove that the plaintiff’s protected conduct (here, Gill’s complaints of harassment) must have been the “but-for” cause of the retaliatory action.  

While acknowledging the erroneous instruction, the Court of Appeals nevertheless affirmed the verdict because Widenhouse failed to show that the erroneous instruction affected the outcome of the retaliation claim.  In its analysis on this point, the Court found significant the jury’s verdict sheet, which noted the jury’s finding that the termination was “because of” his opposition to unlawful harassment.  The Court also found that the jury’s finding of liability for the same conduct under a companion Section 1981 federal law theory to demonstrate further a lack of prejudice from the erroneous instruction.

In affirming the jury verdict despite the erroneous jury instruction, the opinion also demonstrates that the Supreme Court’s recent pronouncement of a “but-for” causation requirement really is not the significant change in the law that employers initially believed.  Other recent cases decided by other courts have previously noted that there can be more than one “but-for” cause, and the opinion here seems to confirm the point.  Other commentators have discussed how the traditional analytical framework for retaliation claims appears to have been altered little by the distinction between “motivating factor” and “but-for” causation. We tend to agree that the but-for causation requirement is unlikely to dramatically alter the danger presented by retaliation claims when termination decisions closely follow an employee’s complaints of work place discrimination or harassment.

Friday, May 9, 2014

EEOC Files Age Discrimination Lawsuit Against Wal-Mart Stores of Texas

As we have previously noted on this blog, age discrimination claims continue to be asserted in large numbers, both in North Carolina and across the nation.  Employment discrimination on the basis of age is expressly prohibited by the Age Discrimination in Employment Act (“ADEA”).  Furthermore, in North Carolina, age discrimination is prohibited by the North Carolina Equal Employment Practices Act. 

Recently, the United States Equal Employment Opportunity Commission (“EEOC”) filed a civil lawsuit against Wal-Mart Stores of Texas, LLC due to alleged age discrimination.  In the lawsuit, the EEOC contends that David Moorman, a 54 year old manager of a Wal-Mart store located in Keller, Texas, was the victim of unlawful age discrimination in multiple respects.  The lawsuit is instructive in demonstrating the various types of discriminatory conduct and actions that can constitute actionable discrimination.

In the complaint that initiated the lawsuit, the EEOC contends that Mr. Moorman was subjected to frequent age-based taunts from his direct supervisor, including repeated references to “old man.”  According to the EEOC’s press release on the case, the supervisor also referred to Mr. Moorman as “old food guy,” and derided him with comments such as, “You can’t teach an old dog new tricks.”  It is further alleged that Wal-Mart took no corrective action, even after Mr. Moorman reported the conduct, that the misconduct increased, and that the store ultimately fired Mr. Moorman because of his age.

In addition, the lawsuit alleges that Wal-Mart unlawfully refused a request for accommodation of a diabetes related disability.  According to the lawsuit, Mr. Moorman requested reassignment to a store co-manager or assistant manager position after being diagnosed with the condition.  It is alleged that Wal-Mart refused to consider the request and simply rejected it without discussion.

On the basis of the above, the EEOC sued Wal-Mart for violations of the ADEA as well as the Americans with Disabilities Act (“ADA”).  The ADEA claims are multifaceted inasmuch as the complaint refers both to a hostile work environment and a discriminatory discharge. 

The lawsuit is a good example of how multiple federal causes of action can arise as a result of an employer’s treatment, or mistreatment, of older workers.  The alleged misconduct in this case occurred during a relatively brief time period, between February of 2011 and July 11, 2011, the date of termination.  Within this relatively brief time period, it is alleged that Wal-Mart created a hostile work environment, failed to correct it upon notification of the problem, and terminated a complaining victim.  It is not clear whether the EEOC contends that Wal-Mart terminated Mr. Moorman in retaliation for his reports of harassment, but a claim for retaliatory discharge is yet another risk for employers under this scenario.  Finally, the ADA claim represents still another statutory violation that the company is alleged to have committed within a relatively brief time frame.

While surprising to read, it is not uncommon to see allegations of this nature.  The “can’t teach an old dog new tricks,” is a particularly common statement that appears to be used with some frequency in the American work place. 

As explained, the EEOC has filed this particular lawsuit on behalf of the affected worker.  Notably, just two weeks after filing the lawsuit described above, the EEOC also reported a settlement with Wal-Mart Stores East, LP, in which the company was required to pay $363,419 to resolve an action for sexual harassment and retaliation.  These recent developments show that even the nation's largest companies continue to face substantial liabilities as a result of equal employment opportunity violations.

The majority of age discrimination lawsuits are brought by private law firms after the EEOC concludes an administrative review of a Charge of Discrimination.  The cases are quite complex, both in terms of procedural and proof requirements.  If you are confronting issues or allegations of work place discrimination or harassment, it is important to seek counsel from qualified attorneys in this area.

Saturday, February 8, 2014

Middle District of North Carolina Magistrate Recommends Dismissal of Complaint for Race and National Origin Discrimination Due to Arbitration Agreement

A recent federal opinion from the Middle District of North Carolina  confirms the enforceability of agreements to arbitrate in the employment context.  In Peraza v. Rent-A-Center, a Hispanic plaintiff filed a pro se suit for alleged employment discrimination on the basis of race and national origin, as well as for retaliation.  The complaint alleged that the plaintiff complained of his supervisors’ disparate treatment of Hispanic customers only to have no corrective action taken in response.  Additionally, the plaintiff alleged that his supervisors began to retaliate against him for making the complaint by writing him up for small attendance-related infractions for which non-Hispanics were not disciplined.  Finally, after the plaintiff reported the supervisors’ conduct to HR, his employment was terminated.  The plaintiff filed suit under Title VII of the Civil Rights Act of 1964.

The defendant employer promptly filed a motion to dismiss the complaint and order the case to arbitration on the basis of an arbitration agreement that the plaintiff signed during his employment.  That agreement stated that the parties “mutually consent to the resolution by arbitration of all claims or controversies, past, present or future, including without limitation, claims arising out of or related to [Plaintiff's] application for employment, assignment/employment, and/or the termination of [Plaintiff's] assignment/employment.”  The agreement specifically covered claims of employment discrimination and harassment. 

Furthermore, the agreement provided that an arbitrator must also decide “gateway issues of arbitrability.” On this point, the agreement stated that “[t]he Arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to any claim that all or any part of this Agreement is void or voidable.”  

The Magistrate Judge made short work in concluding that the arbitration agreement controls under the “liberal federal policy favoring arbitration agreements.”  The Magistrate also recognized that the parties’ agreement to arbitrate even gateway issues of arbitrability is likewise enforceable.  In fact, that very issue, the Magistrate noted, has been recently decided by the United States Supreme Court in another Rent-A-Center case, Rent-A-Center, West, Inc.  v. Jackson, 130 S. Ct. 2772 (2010).

For these reasons, the Magistrate issued a recommendation that the defendant’s motion be granted.
As explained, the plaintiff was pro se, or representing himself, in the matter.   

In opposing the motion, the plaintiff argued that the case should remain in court, in part because of language concerns.  Indeed, the response itself reflected both that the plaintiff was unrepresented and limited in his command of the English language.  Here too, the Magistrate quickly determined that such challenges must be taken to the arbitrator for resolution.

The case is a reminder of the strict harshness with which courts enforce signed arbitration agreements.  Under current case law, employers are free to require employees to enter such agreements – despite the EEOC’s express condemnation of this practice – and even threshold issues of arbitrability can be reserved for determination by the arbitrator. 

Sunday, December 8, 2013

North Carolina District Court Refuses to Enforce Overreaching Employee Non-competition Agreement

A lawsuit between two nurse staffing companies reminds us that not all non-competition agreements are enforceable under North Carolina law.  In Clinical Staffing, Inc. v.Worldwide Travel Staffing, Ltd., the U.S. District Court for the Eastern District of North Carolina found a non-competition provision contained within nurse employee contracts to be unenforceable because the restrictive language was over broad.  The court’s order provides a thorough overview of North Carolina law on this frequently confronted subject.

The underlying dispute began after Worldwide Travel Staffing (“Worldwide”) won a contract to provide nursing services to various facilities operated by the North Carolina Department of Health & Human Services.  In order to staff positions at the facilities, Worldwide hired a number of nurses who had previously worked with its competitor, Clinical Staffing, Inc. d/b/a Dzeel Clinical (“Dzeel”).  The complaint also alleged that a number of nurses resigned from Dzeel and signed on with Worldwide in violation of a non-competition provision contained within the Dzeel employee contract.  Dzeel additionally complained that Worldwide induced the nurses to join Worldwide, in part by advising the nurses that the non-competition agreement was unenforceable.  Worldwide then allegedly placed many of the nurses in the same state facilities where the nurses had previously worked as Dzeel employees.

Dzeel asserted two claims against Worldwide: (1) that Worldwide tortiously interfered with its nurse contracts, and (2) that Worldwide violated North Carolina’s Unfair and Deceptive Trade Practices Act.  Both claims were based on the non-competition provision contained within Dzeel’s nurse employee contracts.  That provision stated, in part, the following: “I will not provide service to any Dzeel client or individual who has received services under the direction of Dzeel Clinical for a period of (6) six months from my termination date.”  

After determining that the case hinged upon the enforceability of the non-competition agreement, the court noted that covenants not to compete between employers and employees are not viewed favorably by courts.  Consequently, a party attempting to enforce such an agreement has the burden to prove the covenant reasonable.  In North Carolina, such agreements are enforceable only if they are: (1) in writing; (2) reasonable as to [the] terms, time, and territory; (3) made a part of the employment contract; (4) based on valuable consideration; and (5) not against public policy.  Courts examine the reasonableness of a no-compete agreement’s time and geographic restrictions by balancing the substantial right of the employee to work with that of the employer to protect its legitimate business interests.  The time and geographic restrictions are weighed in tandem, such that a greater scope of one will require a smaller scope of the other.  The restrictions must be no wider in scope than is necessary to protect the business of the employer.  

Worldwide moved for summary judgment on grounds that the non-competition provision was unenforceable under the above principles.  In response to the argument that the language was overly broad in prohibiting a former employee from providing any “service,” Dzeel argued that the term should be interpreted to mean nursing services.  Noting that the contract must be strictly construed against the party who drafted it, the court rejected this argument and instead applied the plain language of the agreement.  

As written, the restrictive language was over broad.  The court noted that the language prevented a former employee from performing any service of any kind to any Dzeel client or individual worldwide.  The agreement was therefore unenforceable.  It necessarily followed that both of the claims asserted in the plaintiff’s complaint failed as a matter of law.  First, the court concluded that Dzeel could not establish a claim of tortious interference with contract because no valid contract existed.  In addition, there could be no valid claim for unfair and deceptive trade practices since the agreement was unenforceable and Worldwide had been correct in so advising Dzeel’s former employees.

The case is a reminder to employers of the need to craft non-competition agreements with care so as not to run afoul of the exacting reasonableness requirements imposed by North Carolina law.  As the court’s ruling underscores, non-competition agreements are not favorably, and overreaching agreements can be avoided.

Sunday, September 29, 2013

North Carolina District Court Denies Discrimination Plaintiff’s Attempt to Compel Production of Defendant’s Net Worth Evidence

A ruling from the United States District Court for the Eastern District of North Carolina has denied an employment discrimination plaintiff’s motion to compel production of an individual defendant’s net worth information.  In so doing, the court aligned itself with other federal court rulings that have held that a plaintiff may obtain discovery of net worth information only after first establishing an actual prima facie entitlement to a punitive damages award.

The case, Jackson-Heard v. Elizabeth City State University, is an employment discrimination action brought by Mary Jackson-Heard, a former professor of accounting with the defendant school.  Claiming she was unlawfully terminated, the plaintiff asserted claims of race discrimination, age discrimination, and gender discrimination.  In addition to suing the University, the plaintiff also sued the Dean of the School of Business under 42 U.S.C. Section 1981. Among other relief, the plaintiff sought an award of punitive damages.

The plaintiff served discovery requests seeking detailed information and financial documents relating to the individual defendant’s personal net worth.  The plaintiff claimed that such information was discoverable in order to explore and develop her claim for punitive damages.  The defendant, however, objected to the requests on grounds that they were overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of admissible evidence.  The plaintiff filed a motion to compel production of the requested information.

In its ruling, the court acknowledged the intended broad scope of discovery.  The court also quoted the language of Rule 26 stating that relevant information, for discovery purposes, need not be admissible at trial so long as it is reasonably calculated to lead to the discovery of admissible information.  At the same time, the court noted the trial court’s broad discretion in determining relevance for discovery purposes.

Turning then to the specific issue at hand, the court acknowledged that a defendant’s financial position is relevant to the issue of punitive damages.  At the same time, however, the court pointed to several federal court decisions that have held that a plaintiff must establish a prima facie case of actual entitlement to punitive damages before requiring production of sensitive financial information.  The court determined that the plaintiff had not yet shown an entitlement to punitive damages and, also, found that the information the defendant had provided was sufficient in any event.  For the reasons, the motion to compel was denied.

The ruling provides defendants with some hope for limiting harassing discovery requests.  Under this ruling and the precedents cited, a plaintiff cannot pry into a defendant’s sensitive financial status by merely asserting a claim for punitive damages.  Instead, the plaintiff must establish that the punitive damages claim has actual merit.

The ruling represents a notable difference in philosophy between federal and state courts in North Carolina.  Frequently, North Carolina’s state court judges take much more liberal views on the permissible scope of discovery in civil lawsuits.  Many times, plaintiffs in North Carolina actions pursue punitive damages claims and promptly serve discovery requests seeking similar documents and information.  Although the scope of discovery standard is theoretically the same under both federal and state rules of civil procedure, state court judges are traditionally far more accommodating to requests for net worth information.