Wanting to bolster attendance for his newly acquired and struggling Marfa baseball team, the Giants, Bick Benedict sent his scout team looking for someone who was extremely short. Bick settled on Jett Rink. Anticipating that Major League Baseball would reject Rink, Bick got the contract approved late on a Friday. When Jett stepped up to the plate to lead off in the second game with the St. Louis Browns the following Sunday, the umpire refused to allow Jett to bat until Bick showed the umpire Jett’s signed contract and the official team roster. Despite strict orders to crouch low and not swing, Rink stood up, but the strike zone was still considerably smaller. He was an easy walk. Two days later, the AL President voided Jett’s contract and officially banned those under a certain height from being able to play in the AL. Can Major League Baseball discriminate against short people? Can anyone?

Discriminate Against SHRIMPs?

Yes. In fact the story above is real. Although there are some who passionately contend that SHRIMPs (Severely Height-Restricted Individuals of the Male Persuasion) are an oppressed social group entitled to special protections or compensatory benefits, refusing to hire vertically challenged job applicants is generally not illegal in Texas. Not surprisingly, it is in San Francisco and Santa Cruz California, Michigan and, possibly the District of Columbia. I say generally because there is an argument that some kinds of shortness are protected by the ADA.

Vertically Challenged?

While the Americans with Disability Act apparently does recognize dwarfism as a disease I found no readily available, developed case law in this area. Perhaps the big question is who gets recognized as suffering discrimination, and who is just unfortunate. America’s Equal Employment Opportunity Commission, which oversees the anti-discrimination laws, now boasts a man who has given the subject some thought – Paul Steven Miller, who is 4’5″ tall. He is an achondroplastic dwarf. While his dwarfism is regarded as a disability and is legally protected against discrimination, Mr. Miller opposes extending such protections to the “normally” short– men like America’s labor secretary, Robert Reich, who is 4’10” and hears no end of it. Why protect Mr. Miller but not Mr. Reich? Because, Mr. Miller says, one cannot protect everybody. “It would be totally unwieldy to let everybody in.”

Unlike discrimination on grounds of gender, age and race, heightism is not acknowledged as a problem. And yet when academics do the numbers, short people always come up … short. One study suggests that discrimination against the short is worse than sex and race discrimination. Yet, Randy Newman who once sang, “Short People” and suggested they “got no reason to live” would undoubtedly be in the minority today.

Tilting the Scales in Your Favor

As the saying goes, “you can sue someone for just about anything.” While there is supportable logic for Major League Baseball to have a height limitation on its players, there may not be such easily identifiable logic in other jobs. Moreover, the breadth of the Americans with Disabilities Act that might include “dwarfism” and its related diseases coupled with the imagination of trial lawyers might make a viable claim. There would appear to be a discernible difference between “being born that way” and choosing a behavior that creates a health risk like last month’s blog. If you have any doubts, I am sure that our Looper Reed employment experts Ruth Ann Daniels and Michael Kelsheimer will have sound advice. In the meantime, there does not have to be an explanation given to any job applicant who is not selected. A simple, no thank you will suffice.

Be aware, that like organizations that weigh in on obese people, there are organizations that support those who come up short like the National Organization of Short Statured Adults, Inc. whose non-profit 501(c)(4) combats “Heightism” – a prejudiced attitude about human height that often results in discrimination. It is based on the belief that short stature is an inferior trait and therefore undesirable.

Aaron Elvis is a world-renowned chemist.  His latest paper explaining the chemical origins of life has received unprecedented acclaim in the scientific community.  However, there is a small problem.  Elvis manipulated some of his test results upon which the paper was based, and now one of his graduate students is about to expose Elvis as a fraud.  Rather than suffer through this career-ending humiliation, Elvis plots to fake his own death while on an Alaskan fishing trip.  Later that summer, Elvis “disappears”, and all that is found is a fishing boat floating adrift in the Prince William Sound along with a short suicide note describing his self-inflicted drowning.  Elvis then slips off to parts unknown and is never heard from again.  Has Elvis committed a crime?

What is Illegal About Faking Your Own Death?

While it is likely not a crime for Elvis to commit pseudocide (fake his own death), it would be difficult for him to eventually not run afoul of some law.  Obviously, Elvis’s pseudocide would be unlawful if it were done to collect insurance proceeds, evade a debt (e.g. taxes or a mortgage) or escape criminal prosecution.  Likewise, it would be unlawful for Elvis to process a new fake identity with a governmental agency.  However, so long as he breaks no other law, Elvis is within his rights to vanish without a trace.

Do Insurance Companies Look Out for This?

The Coalition Against Insurance Fraud states that “life insurance companies are on high alert for fake deaths” and that fake deaths happen often enough that insurance companies maintain investigative portfolios to “track down the scammers.”  According to the CAIF, “the effort to screen out potential fraud begins soon after a person seeks a life insurance quote.”

What’s the Worst That Could Happen?

Individuals who fake their own death and later reappear can often be saddled with law enforcement’s search and rescue costs.  Listverse provides an interesting look at the Top 10 cases of faked deaths and conspiracy theorists like to point out that the Lloyd’s of London life insurance policy on Elvis Presley was never cashed.  Those planning a disappearance might consider Doug Richmond’s How to Disappear Completely and Never be Found which describes “planning a disappearance, arranging for new identification, finding work, establishing credit, pseudocide, and more.”

Justin Thyme is a member of the U.S. Olympic swim team and is returning from London with a gold medal in the 400 meter individual medley.  After 10 years of dedicated training, Thyme secured first place when he edged out the next closest finisher by a mere .0007 seconds.  After the medal ceremony, Thyme is excited to learn that U.S. gold medalists are given a cash prize by the U.S. Olympic Committee of $25,000.  Thyme, however, is disappointed when told that he might have to pay $9,000 in taxes on his medal and prize.  Is that the law?

Taxes on Gold Medals

Yes.  Although a gold medal is not worth much in actual terms (about $655, as it is only 1% gold), The USOC awards a nice honorarium for those fortunate enough to win a medal.  In the United States, gold medal winners are awarded $25,000, $15,000 for silver, and $10,000 for bronze.  (While this may seem like a lot of money, it pales in comparison to the prizes awarded by other countries.  An Italian who wins gold would be awarded nearly $182,000.  A Russian would be awarded nearly $135,000.)  While Olympic medalists do have to pay taxes on their winnings, it is unlikely that Thyme will be hit with a tax bill for $9,000.  The $9,000 figure is based on the earnings of someone in the top tax bracket of 35%.  This is usually not the case for Olympic athletes (forget the Kobe Bryants and Michael Phelps of the world).  Also most athletes would be able to write off their prize winnings against their significant training costs expenses.

Supporting Case Law

There is legal precedent for the taxation of the medal itself.  In 1963, Maury Wills (shortstop for the Dodgers) received the S. Rae Hickok Award for being named the outstanding professional athlete of the year.  The award was an alligator skin belt with a gold buckle and diamonds.  A lawsuit was initiated to determine whether Wills was required to report the value of the belt as income.  Finding that the belt could be taxed, the court noted, “The law as it presently exists requires the foregoing conclusion.  We dislike it, for we are convinced it is an inequitable result.  The next step would be for the IRS to tax the gold and silver in medals awarded to Olympic Games’ winners.”  Commissoner v. Wills, 411 F.2d 537 (9th Cir. 1969).

Proposed Solution

Republican Florida Senator Marco Rubio has recently proposed a bill entitled Tax Exemption for American Medalists or “TEAM” to amend the Tax Code to make the medals and cash awards tax-free.  President Obama announced his support of the legislation.  The legislation would apply to awards received after December 31, 2011.

Kev Orkian the CEO of Muleshoe Medical Center decided all hospital employees’ physique “should fit within a representational image or specific mental projection of the job of a healthcare professional.” Kev decreed that any job applicant with a body mass index over 35 (245 pounds for someone 5-foot-10) was obese and need not apply. Beyond just appearance, Muleshoe feared that medical claims of overweight employees would accelerate its already spiraling employee healthcare costs. Can Kev discriminate against overweight people? Is there a known relationship between obesity and healthcare costs?

Can You Discriminate Against Overweight People?

Yes. Refusing to hire job applicants because of their weight is not illegal in Texas or almost any other place in the nation except Michigan and six U.S. cities (Santa Cruz, CA, San Francisco, CA, Urbana, IL, Madison, WI, Binghamton, NY and Washington, D.C.).  Where it is illegal, you cannot fire someone because they are fat or in some cases, there is a broader list of non-fireable “physical appearance” prohibitions. For more, check out the Hooter’s employee weight discrimination case.

Is there a Relationship Between Obesity and Healthcare Costs?

Yes. Those who weigh over 20% greater than their maximum healthy weight (“obese”) are at greater risk for diagnosed diabetes, for high blood pressure, for high cholesterol levels, for asthma, for arthritis, and for fair or poor health. That translates to a higher risk of healthcare costs associated with those health issues, cardiovascular disease and stroke, cancer, gallbladder disease and gallstones, gout and breathing problems such as sleep apnea (short episodes of interrupted breathing during sleep). More than a cosmetic problem, obesity is the second leading cause of preventable death (over 300,000 deaths each year). Obesity affects 58 million people across the nation and its prevalence is increasing. Approximately one-third of adults are estimated to be obese. Those 40% overweight are twice as likely to die prematurely as normal-weight people.

Tilting the Scales in Your Favor

The uncertainty of the costs and regulatory implications of Obamacare undoubtedly encourages every company, including Muleshoe Medical, to promote the health and well being of its employees. Whether the rationale is as fickle, arguably, as the physical appearance of Muleshoe’s employees or the company’s bottom line. A non-smoking, fit employee has fewer unplanned, missed work days and is likely to be less burdensome upon the company’s healthcare program. The result? A better, cheaper insurance plan for all of Muleshoe’s employees. Our Looper Reed employment experts Ruth Ann Daniels and Michael Kelsheimer advise that companies are becoming more mindful of excluding job applicants who smoke and are obese. Some companies are even modifying their Employee Handbooks to motivate the reduction and even elimination bad health habits and to promote healthier habits, including health club memberships and the like.

Be aware, however, that there are organizations like the California-based National Association for the Advancement of Fat Acceptance (NAAFA) (fighting to end size discrimination since 1969) and New York-based Council on Weight and Size Discrimination (CWSD) which argue that bias against weight is no different than prejudice based on color, gender, religion, disability, or sexual orientation, and in language reminiscent of the civil rights movement, speak of “weight diversity.” CWSD claims to be fighting what it calls “sizism” and “weight bigotry,” denouncing the media’s portrayal of “fat people.”

Sean D’Leer and Patty O’Door are the proud owners of STD Contractors, a heavy construction business in Texas. They are starting to see more large commercial development activity and are considering hiring more laborers to staff up for what they hope to be a sustained economic recovery. However, all of the recent news about immigration and United State Supreme Court decisions is making them nervous. They are wondering if immigration law changes will affect them and, if so, how?

Recent Immigration Law Changes

The much publicized and long awaited United States Supreme Court decision in Arizona v. United States was released earlier this month. The Supremes rejected three parts of the Arizona law and upheld what was regarded by many as the “heart” of that law – a provision that allows police to check a person’s immigration status while enforcing other laws if “reasonable suspicion” exists that the person is in the United States illegally. For Texans this case is of interest only to the extent that it indicates the direction of the prevailing national wind on immigration laws and enforcement.

Perhaps a little closer to home is the Administration’s decision earlier this summer to offer immigration protection to younger undocumented immigrants through the “Deferred Action Process for Young People” program. In summary, beneficiaries of the new program must satisfy all the following requirements: (1) be 15-30 years old and have entered the U.S. before age 16; (2) have been present in the U.S. for 5 years as of June 15, 2012; (3) have maintained continuous residence; (4) have not been convicted of one serious crime or multiple minor crimes; and (5) be currently enrolled in high school, graduated or have a GED, or are honorably discharged veterans of the Coast Guard or Armed Forces.

While the “Deferred Action Process for Young People” program opens up previously unavailable immigration benefits, Sean D’Leer and Patty O’Door need not do anything about implementing it as yet.

Tilting the Scales in Your Favor

Federal law requires that employers only employ individuals who are authorized to work in the United States. Employers should be proactive in reminding their employees of the following: (1) the company complies with all immigration laws; (2) nothing in the law has changed related to the employment of individuals who can establish current legal work authorization; and (3) any material difference in the information he or she initially provided the company as it relates to their legal work authorization (immigration status) could lead to his or her termination. The Immigration Reform and Control Act of 12986 (IRCA) requires employers to verify the identity and employment eligibility of all employees hired after November 6, 1986, by completing the Employment Eligibility Verification (I-9) Form and reviewing documents showing the employee’s identity and employment authorization. But NOTE: Employers should not ask whether or not a job applicant is a United States citizen before making an offer of employment. Perhaps we’ll talk more about that next month.

Conner “Big Hit” Carter retired from professional football 10 years ago after a highly acclaimed career. Big Hit’s punishing tackles earned him numerous pro bowl appearances as well as a hefty pay check and several head injuries. Recently, Big Hit has experienced Alzheimer’s-like symptoms including memory loss, depression and severe mood swings causing him to join the lawsuit recently filed by over 2,000 NFL players alleging that the NFL promoted the violence of the game and deliberately concealed evidence that there were no long-term effects from concussions and no link between football related head injuries and long-term brain damage. How will the NFL likely respond to these allegations?

The Likely Litigation Strategy. Big Hit and his fellow plaintiff players will almost certainly employ many tactics successfully used by tobacco litigation plaintiffs, which resulted in a landmark $206 billion settlement. Players will argue that, like the tobacco companies that hid the connection between smoking and long-term congenital issues, the NFL hid important evidence downplaying the risks of multiple concussions and failed to disclose that head injuries could have been avoided if the league provided players with accurate and truthful information. It is likely that the NFL’s will move to dismiss the lawsuit arguing that that federal employment law preempts the player’s ability to file a lawsuit that is fundamentally a dispute under their collective bargaining agreement. Like a workers’ compensation claim, the labor agreement provides exclusive remedies for issues relating to player safety, treating injuries and compensating for head injuries. The NFL successfully employed this strategy in the past when the Minnesota Supreme Court refused to allow a claim brought by the widow of Vikings tackle, Korey Stringer when he died of heatstroke following a 2001 team practice. The NFL will also argue that it is impossible to prove with any certainty when the injuries took place. Was Big Hit injured while playing pee wee football, high school football or college football? Were the injuries the result of diet or simply hereditary? Another likely strategy employed by the NFL will be to avoid class certification and force players to file individual lawsuits (which will be both time consuming and expensive), by arguing that each state has different tort laws and remedies, that a class action is inappropriate because the injuries to each plaintiff are so unique and therefore separate lawsuits are required.

Tilting the Scales In Your Favor.

Workers’ compensation insurance is a powerful and often necessary tool for employers. As discussed in prior Tilting the Scales posts, workers’ compensation is a state-regulated insurance system that provides covered employees with income and medical benefits. Workers’ compensation coverage limits liability by preventing an employee from filing a claim in a civil suit, except in cases of gross negligence.

Dan Driver’s rapidly growing computer IT business Byte Back is busier than ever and needs help. Not forgetting his cash flow crunches of 2007, Dan is watching labor costs steadily rise. Healthcare insurance is his #2 greatest expense behind wages. All of this talk about employee healthcare insurance has left Byte Back paralyzed as an old cow looking at a new gate. What does the Supreme Court’s decision today on The Patient Protection and Affordable Care Act, more commonly known as “Obamacare,” mean to Byte Back? If Dan hires now, can he know what it will cost Byte Back?

U.S. Supreme Court Rules ObamaCare Constitutional

The Affordable Care Act, including its individual mandate that virtually all Americans buy health insurance, was upheld today by five justices who agreed that the penalty that someone must pay if he refuses to buy insurance is a kind of tax that Congress can impose using its taxing power. Although, there were not five votes to uphold it on the ground that Congress could use its power to regulate commerce between the states to require everyone to buy health insurance, the individual mandate being a tax is all that matters. Because the mandate survives, the Court did not need to decide what other parts of the statute were constitutional, except for a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding. On that question, the Court held that the provision is constitutional as long as states would only lose new funds if they didn’t comply with the new requirements, rather than all of their funding.

Possible Business Implications.

In a Summer 2010 Vanderbilt Law School Health Law Society article written by Eric Yetter entitled “Obamacare: Functions and Implications,” Mr. Yetter drew certain conclusions about the practical implications of Obamacare upon businesses. According to Mr. Yetter, employers with more than fifty employees will face fines unless they either increase wages above 400% of the Federal Poverty Level (FPL) or provide their employees with health coverage. Employers whose employees are eligible for subsidies on an exchange and who are not provided with health insurance will face a fine. Assuming that an employee is the single earner in a family of four, she would need to be paid at least $88,200 to not qualify for a subsidy on the exchange. Assuming this person works forty hours per week for fifty weeks per year, her hourly wage would be $44.10/hour. Obviously, it would be cheaper for an employer to pay the fine than raise its lowest wage employees to this compensation level. But if even a single employee qualifies for a subsidy on the exchange, the employer must pay a fine of $2,000 per employee for all employees except the first thirty employees. Thus, Obamacare will have one of three ultimate effects on employers: 1) employers will provide coverage for all of their employees; or 2) employers will raise their lowest-paid worker’s salary to $88,200; or 3) employers will pay the federal government $2,000 per employee for all employees except the first thirty. For a large company with 100,000 employees, that fine would be approximately $200 million per year. Companies that cannot afford to provide health coverage for every employee will likely eliminate health benefits for all of their employees and pay the fine instead. However, there are no assurances that those employees losing coverage would receive an additional wage increase in lieu of employer provided coverage, which they could instead use to purchase insurance on the exchange.

Tilting the Scales in Your Favor

Even though the Supremes have spoken, the jury is still out on the reactions of businesses, both overtly and indirectly in their hiring practices as they respond to the Court’s finding that Congress does in fact have the power to tax through the imposition of an individual insurance mandate. What Dan and Byte Back will do in response to this new tax remains to be seen.

Chuck Ponzi is subpoenaed to testify in a fraud case concerning a complex pyramid scheme.  Ponzi’s deposition testimony is critical to the Plaintiff’s claims that investors were promised a 100% profit within 90 days of their investment.  Having read about Roger Clemens recently avoiding perjury charges because his deposition testimony was not presented in court at a trial, Ponzi chooses to “alter” his testimony about the critical facts upon which the Plaintiff relies.  Can Ponzi’s deposition testimony result in charges of perjury?

The Law in Texas  

Yes.  In Texas, there are two levels of perjury.  If Ponzi makes a false statement, under oath, at a deposition with the intent to deceive, he could be guilty of a Class A misdemeanor, which is punishable by a fine of up to $400 and/or one year in prison.  Ponzi would be guilty of “aggravated” perjury if, in connection with an official proceeding (like a trial), he makes a material false statement with the intent to deceive.  Under this scenario, Ponzi would be facing a third degree felony charge with a fine up to $10,000 and two to ten years in prison.  To find Ponzi guilty of “aggravated” perjury, there is an additional requirement of “materiality.”  In other words, did the statement affect the course or outcome of the official proceeding?  Whether or not a statement is material is for the court, not a jury, to decide.  However, it is not a defense that the person thought that the false statement was not material.  Interestingly, it is a defense to the prosecution of an aggravated perjury charge if a person retracts his false statement before the completion of the testimony at the proceeding and before it becomes evident that the falsity of the statement would be exposed.

Tilting the Scales in Your Favor

Bottom line, unless you are willing to risk fines or jail, don’t lie under oath.  Although Clemens was acquitted of the government’s perjury charges, perjury charges and convictions do occur in Texas.  In May 2011, a man from Tennessee Colony, Texas was sentenced to eight years in prison for aggravated perjury. Authorities claimed that the man had lied during a child custody hearing about his military background stating that he had served in Iraq and Afghanistan and had been awarded the Service Medal, a Bronze Star and three Purple Hearts, all of which were later determined to be lies.

Ray Kroc, a resident of a rural town in Texas, awoke one morning to find several head of cattle grazing in his backyard.  Kroc does not have any idea who the owner might be and the cattle are untagged, unbranded and have no other identifying marks.  Kroc is hopeful that Texas has some type of “finders keepers” statute and fences the cattle in so that he may “use” them for a business that he recently started.  If they remain unclaimed, can Kroc keep the cattle and use them to supersize his business?

No, there is no “finders keepers” when it comes to another Texan’s livestock.  The notion of wandering cattle, horses or other livestock (known as “estray” in the law) is unfamiliar to most city folk but not uncommon to those inhabiting more rural areas.  Unfortunately for Kroc, he is going to have to turn the cattle over.  If he fails to do so, the Texas  and Southwestern Cattle Raisers Association notes that he can be charged with “Theft of Livestock” (a cattle rustler, I suppose). In Texas, Kroc is obligated to report the ”stray” to the county sheriff as soon as reasonably possible.  The sheriff will then notify the owner or, if the owner is unknown, impound the cattle.  If the owner still cannot be located after certain efforts have been undertaken, the cattle may be sold (with funds going to the county), donated to a nonprofit organization or retained for county purposes.  While Kroc cannot keep the cattle, Texas law does provide that he shall be reimbursed, a reasonable amount, for any “maintenance and damages.” Check out the list of animals (including a red Beefmaster bull, 4 Longhorns, a sorrel and white paint gelding and a Jack Donkey) impounded by the Travis County Sheriff’s Office. Wichita County Sheriff Lt. Cecil Yoder said his department spends several hours every week chasing down loose livestock that have escaped through broken fences. In an attempt to be neighborly, officers used to lead the lost animals back onto the owner’s property. But now, Yoder says the cows will be impounded.

Tilting the Scales in Your Favor. Do you know someone who owns “exotic livestock” or “exotic fowl”? These are any mammals or animals, respectively, which are not indigenous to the State of Texas, including animals from the deer and antelope families and game birds not indigenous to Texas. Unlike loose livestock, a Texan can only claim to be the owner of exotic livestock or exotic fowl if the animal is “tagged, branded, banded, or marked in another conspicuous manner that can be read or identified from a long distance and that identifies the animal as being the property of the claimant.” Otherwise, it appears that exotic livestock or exotic fowl that are loose are “fair game!”

The last couple of years have been good to Ray Sea the owner of Barely a Wake Marine Dealership in Palacios, Texas. Sales of the boats he manufactures are trending up. However, so are Ray’s accounts receivable. Hull Sizer, a purchaser of Ray’s superior Barely a Wake beauties, was over 180 days past due. Ray went to his lawyers for advice.

The right question is, “can Barely a Wake collect from Hull Sizer if it does get a judgment?” Predictably Ray’s lawyers told him that anyone can file a lawsuit.

Tilting the Scales in Your Favor. The best question for Ray Sea and Barely a Wake Marine Dealership to consider is not just whether the lawsuit can be filed or is any good, but whether Hull Sizer has sufficient non-exempt assets to pay a Barely a Wake judgment.

Collecting a Texas Judgment. A judgment creditor may only collect in Texas against property that is not exempt. Assuming that Barely a Wake does get a judgment against Hull Sizer and believes that Hull has non-exempt property, it may follow these steps to try to collect its judgment.

When? First allow the appeal time on the trial court judgment to run out, which is ten days in Justice and Small Claims Court and thirty days in County Court at Law or District Court. Before the appeal time runs, Barely a Wake can file an Abstract of Judgment in the deed records of any county where it believes Hull Sizer owns real property. Doing so creates a judgment lien on the debtor’s real estate in that county and should be picked up by credit reporting agencies and noted on the debtor’s credit report.

What is considered not exempt property? Any non-exempt property is subject to a Writ of Execution issued by the Clerk of the Court where the judgment was obtained. Generally speaking (and there are exceptions and clarifications for each), Barely a Wake may not seek to satisfy its judgment against Hull’s homestead, the cash surrender value of certain life insurance policies, his retirement plan and his current wages (held by his employer except court ordered child support). Also exempt from execution is the first $60,000 of Hull’s family personal property (30,000 for Hull personally) that fits into one or more of the following categories: home furnishings, family heirlooms, wearing apparel, tools and equipment used for trade, athletic and sporting equipment, two firearms, farming or ranching implements and vehicles, 60 head of livestock other than cattle, 12 head of cattle and a two-, three- or four-wheeled vehicle, household pets, and more.

How long? If not paid, the Barely a Wake judgment can stay on Sizer’s credit report for 10 years. If the judgment is not paid within 10 years, then it can be renewed by Barely a Wake for another 10 years and so on.