Employment Law Case Notes

• Jurisdiction: United States,Federal,California
• Author: By Anthony J. Oncidi*
• Publication year: 2014
• Citation: Vol. 28 No. 4

Employment Law Case Notes

By Anthony J. Oncidi*

Anthony J. Oncidi is a partner in and the Chair of the Labor and Employment Department of Proskauer Rose LLP in Los Angeles, where he exclusively represents employers and management in all areas of employment and labor law. His telephone number is (310) 284-5690 and his email address is aoncidi@proskauer.com. (Tony has authored this column without interruption for every issue of this publication since 1990.)

Employees of Contractors of Public Companies May Sue for Retaliation Under Sarbanes-Oxley Act

Lawson v. FMR LLC, 134 S. Ct. 1158 (2014)

Plaintiffs in this case are former employees of private companies that contract to advise or manage mutual funds (collectively, FMR). Both plaintiffs allege that they "blew the whistle" on putative fraud relating to the mutual funds and as a result suffered retaliation from FMR. Plaintiffs filed suit in federal court, alleging violations of the whistleblower protection provisions of the Sarbanes-Oxley Act of 2002. FMR moved to dismiss the actions on the ground that plaintiffs were not employees of a public company, but were instead employees of private companies that contract with public companies. The United States Supreme Court reversed the dismissal of plaintiffs' claims, holding that the statute's whistleblower protection extends to employees of contractors and subcontractors of public companies.

Severance Payments Are Taxable Wages Under FICA

United States v. Quality Stores, Inc., 134 S. Ct. 1377 (2014)

Before and following the filing of an involuntary Chapter 11 bankruptcy, Quality Stores and its affiliated companies terminated thousands of employees. The employees received severance payments, and Quality Stores reported those payments as wages on W-2 tax forms, paid the employer's required share of FICA taxes, and withheld the employees' share of FICA taxes. Quality Stores then asked 3,100 former employees to allow it to file FICA tax refund claims for them, of which approximately 1,850 employees agreed. After the IRS neither allowed nor denied the claim for refund, Quality Stores initiated a proceeding in the bankruptcy court seeking a refund of the disputed amount. In this opinion, the United States Supreme Court held that the severance payments constituted taxable wages under FICA.

Male Employee's Sexual Harassment Claims Should Not Have Been Dismissed

Lewis v. City of Benecia, 224 Cal. App. 4th 1519 (2014)

Brian Lewis, a heterosexual man, sued his former employer (the City of Benecia) and two former male supervisors for sexual harassment and the City for retaliation. The trial court granted summary judgment in favor of the supervisors (Steve Hickman and Rick Lantrip) and judgment on the pleadings for the City. A jury found in favor of the City on the retaliation claim. The court of appeal reversed all of the lower court's rulings except the summary judgment that was granted in...