Briefly, the plaintiff in Staub, a U.S. Army reservist, was discharged for a violation of hospital policy. Two of his supervisors had clearly expressed displeasure with the employee’s absences necessitated by his military obligations and this was reflected in adverse notations in the plaintiff’s personnel file. Another incident led to a review by one of the employer’s more senior decision makers – who bore no discriminatory animus but was apparently unaware of the predilections of the supervisors – and resulted in plaintiff’s discharge. The U.S. Supreme Court ultimately determined that the more senior official’s lack of discriminatory animus did not insulate the employer from liability for wrongful termination because she relied on information provided by two individuals with improper motivations.

Courts generally focus on the actions of decision makers to determine whether or not a discrimination lawsuit has merit. Plaintiffs generally cannot rely exclusively on the words and deeds on a non-decision maker alone to sustain a claim for wrongful discharge . However, the firm’s advertisement appears to imply that the Supreme Court introduced a new “cat’s paw” theory of employer liability wherein an improper discriminatory motive anywhere within the employer’s ranks somehow subjects it to liability. In actuality, what the Supreme Court holds is that one individual within an organization who lacks improper animus but bases her decision on a personnel file containing information provided by those motivated by discrimination does not insulate the employer from liability. If anything, the Court closed a loophole which was probably never opened and furthered the intent underlying the employment legislation.

It is also interesting to note that the opinion was written by the conservative Justice Scalia, hardly a champion of expanding anti-discrimination statutes, and had only one dissenter. Justice Kagan took no part in the opinion.

The Biglaw advertisement concludes by exhorting businesses to call the firm at any one of its many nationwide offices for information and strategies to address what it infers to be some sort of revolutionary change to American employment jurisprudence. While that would undoubtedly help the firm’s bottom line, and notwithstanding the would-be memo’s histrionics, the Staub case simply stands for the proposition that employment discrimination – in this case against a member of the military but in reality against any protected class – is illegal and unacceptable. Frankly, it shouldn’t cost $500.00 to $1,000.00 an hour for a lawyer to tell you that.

Economy.  The theme for 2011 seems to be “slow progress”.  The economy will improve – albeit gradually – with consumer spending rising and unemployment falling.  Higher gas prices are emerging as a potential issue for the year ahead, and an overall and sadly deserved lack of faith in government and its institutions (like the Federal Reserve) will keep the recovery modest.  But by comparison, the economic outlook for 2011 is better than what we saw in 2010 and a big step forward from 2009.  Modest, sustained growth is generally preferable to the boom-bust cycles of the past decade.

Legal.  Businesses will continue to look for new and  innovative ways to control legal costs.  While in the past they have paid lip service to the notion of reducing expenditures on attorneys while still shelling out too much for top dollar firms that provide too little, corporate law departments, directors, managers, and officers are under increasing pressure to trim wherever possible.  This is an ideal time for innovative providers like In House Legal to offer high caliber services while reducing costs and adding value.  The days of Biglaw dominating the big business and corporate legal markets are over.

In House Legal.  For 2011, IHL is focusing on broadening its presence in Nashville and the Mid-South, further developing a client base in the Washington, D.C. and Baltimore areas, and entering the New York City metropolitan legal services market.  The agenda for next year is very ambitious because of the realities of today’s economy.  IHL represents an innovative, cost-effective alternative for the provision of legal services.  In other words, we have something good to offer the business and corporate communities, and we intend to let them know we’re here.

To our many clients, colleagues, and friends, we wish you all a happy, healthy, and prosperous New Year.

In 2010, American political candidates ran successfully on the mantra of reducing both a bloated federal government and the massive budget deficit.  Republicans, who under President George W. Bush spent virtually without care while expanding executive power to include such morally nebulous authority as approving torture and rendition, found success by bemoaning Washington’s overreach and intrusion on state and individual rights.  Initiatives that were “patriotic” during the Bush administration became “socialist” under President Obama.  Democrats exhibited their usual pluck by touting their own conservative credentials instead of descrying the vapidity of Republican agenda. The result is leaders consumed with trimming federal spending even if the results prove deleterious.

Take, for example, the push to end earmarks, or “pork barrel spending”.  Representatives and senators often try to direct federal dollars to projects in their home districts and states.  Some of these efforts, such as the infamous Alaskan bridge to nowhere, provoke outrage.  But most are important regional economic stimuli or long term growth initiatives.  Nashville, for example, needs federal funds to build a new courthouse and further develop its commuter rail system.  Boston’s Big Dig, while an allegory of Massachusetts governmental chaos, corruption, and incompetence, has provided huge short and long term benefits for that city.  Years ago, the new Denver International Airport was the poster child of government waste; it has also proved a necessary and important building block for that metropolitan area.

Moreover, in an economy where the unemployment rate is close to 10%, interest rates are virtually zero, and deflation is the more immediate concern than inflation, government spending becomes a key tool toward restoring financial order.  Road construction, infrastructure repair, research grants and the like provide much needed jobs and development opportunities.  Because many state constitutions mandate a balanced annual budget, only federal funding makes capitalizing on these opportunities possible.  If ever there was a time for pork, now is it.

However, the United States and its European counterparts seem inclined to take a different, and potentially catastrophic, tack.  After spending billions bailing out large financial institutions, Washington, London, and others have decided to close their wallets.  Instead of replacing lost consumer spending with government funds, they intend to cut back, leaving already choking regional economies with even less money for investment in job creation and other economic opportunity initiatives.  Ireland, England, France, and Greece have all instituted severe budget cuts; Dublin has increased taxes, London plans to lay off thousands of government workers, and Paris is cutting back on benefits.  Portugal and Italy both seemed poised to follow as they sit on the precipice of financial collapse.

There is something morally repugnant about a government spending hundreds of billions to save financial institutions from their reckless behavior and then imposing austere measures on the citizens whose dollars and euros funded the bailout.  It is particularly galling in light of the discovery that American banks were taking these monies while ignoring federal and state foreclosure laws to more quickly seize the homes of the taxpayers who saved their necks; at what point in time will someone in authority insist that these institutions play by the rules or suffer real consequences?

Moral arguments aside, prudent economics dictates that governments keep their coffers open to fund a more efficient recovery.  Deficits cannot be sustained forever and measures to decrease government debt will have to be adopted eventually.  But can we at least wait for a real recovery, first?

The economic crisis that began when the housing bubble burst in 2008 has called into question just how solid America’s institutions really are.  The banking industry needed massive government intervention (though only half of what was originally anticipated) to save itself from a morass of poor investments and ill-conceived strategies to make something out of nothing.  What’s worse, even after taxpayers funded the effort to pull financial institutions back from the abyss, it appears that many banks are making the same mistakes that necessitated the bailout in the first place.

Moreover, financial institutions, always able to afford the most expensive law firms to represent their interests in court, now appear to be dancing around the very contracts they spend so much on attorneys to enforce against bank customers.  Much like the late-night, back-room shredding of Enron fame, banks have bypassed their contractual and statutory foreclosure obligations by creating document production lines where reams of paperwork are drafted, signed, and notarized.  Signing a document signals to courts and the public at large that the signatory has read it and agrees with the contents.  Notarization turns it into sworn testimony to be presented to a court of law.  These are not intended as antiquated niceties to make a file look pretty.  They are the fundamental tools by which property is transferred from one owner to the next.

If financial institutions are allowed to escape unscathed from their failures to adhere to the fundamentals of both economics and jurisprudence then they become inherently untrustworthy.  A potential depositor who deems his money at risk in the United States will take those funds elsewhere.  If Boards of Directors and entrepreneurs cannot rely on the legal system to demand adherence to and enforce as necessary contractual obligations, they will be less likely to do business here.  Should these perceptions become sufficiently widespread the entire foundation on which American power is based will be so undermined as to call its longevity into question.

Then some other country will have to help us rebuild.

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