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The U.S. Supreme Court has been busy this week, passing down two major employment law decisions. A brief summary of each case is below, along with its compliance training impact:

Admissibility of “Me Too” Evidence, is a Case-by-Case Analysis

A closely watched Supreme Court case, Sprint/United Management Co. v. Mendelsohn was decided yesterday. Mendelsohn was a laid-off older worker who sued her employer for age bias. At trial Mendelsohn attempted to rely on the testimony of other older workers who also were fired from the same company. The district court refused to allow the testimony indicating that the facts of these co-workers were not relevant, because they had been fired by other supervisors, not the supervisor who laid off Mendelsohn.

When Sarbanes-Oxley passed in 2002, all of us understood that it represented a complete overhaul of financial controls and reporting in this country. What some of us didn’t understand, however, was that SOX created a whole new theory of employment discrimination – not discrimination related to membership in a protected category defined by Title VII of the Civil Rights Act (like race, gender or religion), but discrimination related to whistleblowing activities – like raising a concern about the books being cooked.

The key provisions of the whistleblower protection under Article 8 of SOX are as follows:

• Employees who provide information about acts they reasonably believe to be a violation of securities laws, rules of the SEC, or laws relating to fraud against shareholders, are protected from retaliation by their employer.
• Protected employees cannot be discharged, demoted, suspended, harassed, or otherwise discriminated against.

SOX retaliation claims have been steadily on the rise since 2002. What’s even more interesting is that the average recovery in a SOX whistleblower discrimination claim ($270,000) significantly exceeds the average recovery in a classic Title VII retaliation claim ($187,583). (Employment Practice Liability: Jury Awards Trends ’ Statistics, 2005, Jury Verdict Research, Horsham, PA.)

So we know these types of claims are prevalent – which is why a robust ethics and compliance training program will include appropriate coverage of whistleblower protections and the rule against retaliation. What some of us may not realize, however, is that SOX whistleblower protections could apply outside the U.S. At least that’s what a recent case out of the Southern District of New York is suggesting.

When it comes to ethics and compliance training, I constantly find myself talking with in-house counsel about how to allocate the corporate legal budget. Where should the money be spent, and how can those decisions be justified? Sobering up to the current economic conditions (which are only going to get worse) makes the pressure around those budget allocation decisions even more extreme.

Plenty of organizations get bogged down in the smoke and mirrors of intricate compliance risk assessments and the infamous “training needs analysis” (usually run by a vendor who conveniently, also sells training). But when it comes to the baseline training that should drive the foundation of spend decisions, it’s really not that complicated. The core curriculum should be comprised of those areas where: (1) training is legally mandated, and (2) there is the greatest exposure based on actual litigation trends.

The first driver is pretty simple – frankly, because there aren’t that many true mandatory training laws. Most are concentrated in the areas of harassment and discrimination. (For a detailed overview, check out ELT’s mandatory compliance training summary.)

The second is a bit more complicated, and of course more fluid. You have to look at the actual litigation data from recent years. Luckily, we lawyers love to research this stuff, and write about the data at length – so the information is easy to come by. Take the recently released fourth Annual Workplace Class Action Litigation Report from Seyfarth Shaw LLP. It analyzes rulings and decisions in 507 leading class-action and collective-action cases against employers in all 50 states, along with key settlements. The report’s chief conclusions are that the rapid pace of wage-and-hour litigation is likely to continue this year, and that workplace litigation, especially class action and multi-plaintiff lawsuits – “continues as the chief exposure driving corporate legal budget expenditures.”