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Favorite Cases Remembered: Liar Liar (Almost Wins)

March 16, 2015

By Michael G. McClory

Favorite Cases Remembered: Liar Liar (Almost Wins)

With St. Patrick’s Day approaching, we are hearing Irish music (tune and tune and tune) and seeing images of leprechauns (this and this and this).  The popular idea is that a leprechaun is a diminutive Irish fairy who, because he must give you his pot of gold if caught, uses trickery to avoid capture.  A bit darker view of the leprechaun, though, is offered by Benjamin Radford, who writes: “Leprechauns offer a morality tale figure whose fables warn against the folly of trying to get rich quick, take what's not rightfully yours or interfere with ‘The Good Folk’ and other magical creatures.”
The darker view of the leprechaun is the perfect entry point to one of my favorite cases from the past.  This one, which I call Liar Liar (Almost Wins), dates back to 1996.  A senior partner at my firm in California “asked” me to provide pro bono representation to a nonprofit organization (he was on the board of directors).  I accepted.
The organization operated a small residential treatment home for persons with varying levels of mental or emotional needs (we’ll call it SecondChance Home).  The staff at SecondChance Home was responsible around the clock for the care of residents.  This care included providing various forms of therapy, administering medications, making sure the entrances were secure (residents were not free to leave), and maintaining order.
The matter I was asked to handle was a workers’ compensation retaliation claim brought by a former SecondChance Home employee (let’s call her LuLu Leeds).  Ms. Leeds had been a night staff person whose duties included administering medications, enforcing the lights out rules, and taking care of any issues that arose during the night.  She claimed that SecondChance Home terminated her employment shortly after she filed a claim for workers’ compensation benefits. The claim related to an incident that occurred several months before her termination.  Ms. Leeds had fallen on a small table in a hallway and smashed it; because it was night there were no witnesses.  At the time of the smashing, Ms. Leeds claimed no injury and the organization undertook no investigation into how the table came to be smashed.  However, she subsequently made a very delayed claim for workers’ compensation benefits, saying that she had indeed been injured during the fall and needed treatment.  The benefits claim was accepted; there was no time loss, but some medical treatment was covered.
SecondChance Home denied that the workers’ compensation benefits claim had anything to do with its termination of Ms. Leeds.  Rather, it claimed that it terminated her employment for theft of medications.  Specifically, the organization had noticed a steady pattern of small amounts of certain medications being missing.  Pills were disappearing two or three at a time.  After an investigation, including review of the logs kept by employees with access to the medications, SecondChance Home concluded that Ms. Leeds was likely responsible.  (It had counseled her once before related to a larger scale single-incident loss of medications.)  When she was confronted with the tentative conclusion that she had taken the missing medications and the facts supporting that conclusion, Ms. Leeds “acted guilty” by pointing the finger at specific other employees without any support other than theories about why such-and-such employee might have done it.  SecondChance Home terminated Ms. Leeds immediately.
Ms. Leeds filed a Labor Code 132a claim for workers’ compensation retaliation with the Workers’ Compensation Appeals Board (in California, the WCAB, not the courts, adjudicates claims of workers’ compensation retaliation).  In a nutshell, Ms. Leeds alleged that SecondChance Home had been upset with her benefits claim and was using the factually shaky medication theft explanation as a pretext to cover its retaliation. 
This is the point where I entered the case.  Naturally, I asked SecondChance Home for its full file on the matter.  The personnel file was thin; it included Ms. Leeds’ employment application, position description, and attendance record, but did not include any disciplinary documents (no warnings or memos regarding counseling).  Moreover, the medication theft investigation “report” did not include employee statements or notes of employee interviews.  From my own interviews of SecondChance Home management and a few employees I was convinced that the termination was a response to an honest conclusion of theft and not in retaliation for the benefits claim.  Because of the limited documentation, though, the challenge was going to be convincing a WCAB judge that there was no retaliation.
In preparation for the administrative trial, I knew that it was going to be a swearing contest.  It was going to be a battle of credibility.  I believed that the SecondChance Home witnesses would be solid– folks who could say what they did and why, even if they could not back up their words with contemporaneous documentation.  I also assumed that Ms. Leeds would take the stand and tell the tale that she wanted the judge to believe; she would also make the argument that SecondChance Home could not prove her wrong.
While checking Ms. Leeds’ background, I ran into a few discrepancies in her prior employment; it was minor stuff that she likely would be able to explain (dates and reasons for separation being off).  In search of other credibility wedges, I contacted the college listed on her application.  The registrar’s office told me that it had no record for a “LuLu Leeds.”  Since LuLu may have been a nickname, I asked about other names that seemed related: Lucille, Lucy, Lucinda, Lou, etc.  In each case the registrar told me that there was no record.  I told the registrar that I would be serving a subpoena for records using all of the names we had discussed and explained that if there were no records it would be fine to send a notarized statement to that effect.  The registrar sent an affidavit to me.
On the day of the administrative trial I met Ms. Leeds for the first time.  She appeared composed and told a tear-riddled story to the judge when questioned by her own attorney.  Among other things, she said that she cared deeply about the work she performed, that she was well-trained for it, that she was shocked when SecondChance Home retaliated against her, and that because of the alleged bad acts she might not work in that field again.
After she told her tale, I had a chance to cross-examine Ms. Leeds.  In addition to asking about the allegations in the case, I confirmed a few details in her testimony (dates of employment and her current unemployed status).  I then asked about the “well-trained” detail.  I asked what training she had and she told me she had a college degree and work experience.  Regarding the college degree, I asked her for the name of the college, the years of attendance, her degree, and her favorite teacher.  She answered all but the last of those questions.  I also asked her about the name – was she there as LuLu Leeds or had she been married at the time and used a different last name (I knew she had never been married); I also asked if she had used a different first name, perhaps a nickname, and she “recalled” that she might have used “Lucy”. 
When it came time to put on a defense, I entered into evidence the subpoena to the college and the affidavit responding to the subpoena.    
At the conclusion of the defense, the WCAB judge took the case under advisement.  He said that a decision would be issued soon, but that first he needed to review all of the evidence again.  About a week later we received the written opinion in the mail.  The judge ruled in favor of SecondChance Home and dismissed the retaliation claim.  In the written opinion, the judge explained that in the absence of documentary evidence proving either side’s case, his decision came down to credibility – SecondChance Home had it and Ms. Leeds did not.  I wish I still had a copy of the opinion handy so I could quote the judge’s comment related to the college attendance testimony.  The judge said something to the effect that he did not know whether Ms. Leeds had perjured herself, but he was fairly sure she was not telling the truth.
Practical Takeaways
Employers: Despite lawfully terminating Ms. Leeds, SecondChance Home had to go to trial and barely prevailed.  The absence of contemporaneous and clear documentation was the cause of this.  Thus, the case highlights the importance of creating and maintaining personnel records.  SecondChance Home counseled Ms. Leeds for performance on several occasions; those counselings should have been documented, particularly the counseling related to the first "missing meds" incident (the one for which she previously had been counseled).  While it may seem time consuming to take the time do this, the records serve at least two useful purposes.  First, outside of litigation, they can help with the development of employees.  Second, in litigation, they can be the difference between winning and losing.  In litigation, something is only a fact if you can prove it.
Lawyers: I got lucky with the content of the information from the college.  However, the only reason I got lucky is because I pursued the details.  This case highlights that all relevant details are worth pursuing. 
Until next time, best regards.
The Bullard Edge