Legal Report November 2005
U.S. JUDICIAL DECISIONS
NEGLIGENCE. A California appeals court has ruled that the client of a security guard firm cannot be held liable for injuries sustained by a contract security guard. In the case, the court ruled that a security guard attacked at a private party cannot collect damages from the homeowner’s association that hired the guards.
The case involved Coto de Caza, a private gated community, which hired BonaFide Security Services, a contract security guard company, through CZ Master Association, the homeowner’s association at Coto.
In August 1998, a teenaged resident of Coto hosted a party. Many more people arrived at the party than were invited and the party was soon out of control. Neighbors called the security officer provider and the Orange County Sheriff’s department to break up the gathering. Officers from both groups responded and dispersed the partygoers, some of whom were assaulting one another.
A short time later, the security officers received another call complaining that the party had reassembled. Donald Tilley, a 62-year-old security officer assigned to patrol the property, and another security officer went to the residence where approximately 30 people still remained. One of the remaining guests was Robbie Carreno, who had earlier been involved in one of the assaults. Tilley recognized Carreno, who was getting in his truck to leave.
Tilley approached Carreno and told him that he was under arrest. Tilley then asked for, and received, Carreno’s keys. As Tilley walked away from the vehicle, Carreno and his brother tackled Tilley and began beating him. Tilley was severely injured in the assault and suffered a fractured skull. Deputies from the sheriff’s office arrived on the scene after the assault was over.
Tilley sued CZ for negligence and premises liability. He claimed that CZ was negligent in prohibiting security officers from carrying firearms while simultaneously tolerating large, and often violent, parties thrown by residents. Similarly, Tilley sought to hold CZ liable under a premises liability claim, arguing that CZ failed to prevent or restrict the wild parties.
Tilley also claimed that CZ was negligent under the “peculiar risk doctrine,” under which someone who hires an independent contractor can be held liable when the contractor’s negligent performance causes harm to others. (The doctrine seeks to ensure that companies compensate workers for injuries caused by inherently dangerous work.)
CZ requested summary judgment—a hearing based on the facts of a case without a trial. The Superior Court of Orange County granted the summary judgment, ruling that there was no evidence to suggest that CZ controlled Tilley’s work with BonaFide. Because CZ did not control the work, it could not be held liable for Tilley’s injuries. Tilley appealed the decision.
The California Court of Appeal upheld the summary judgment. It ruled that BonaFide, not CZ, was in control of Tilley’s work. Also, the court ruled that CZ could not be held liable for merely allowing wild parties to occur. To be legally responsible, ruled the court, CZ would have had to host the parties or order them to be held. Finally, the court held that BonaFide ordered its guards to use their best judgment in responding to incidents but urged them to observe and report violations rather than get in harm’s way.
In it’s written report, the court noted that “CZ cannot have any liability for Tilley’s decision to step out of his ‘observe and report’ function to confront the Carrenos. There is simply no evidence that CZ expected, let alone required, that he do so.” (Tilley v. CZ Master Association, California Court of Appeal, No. G033470, 2005)
ADA. A federal appeals court has ruled that an insulation manufacturing plant did not discriminate against a potential employee when it declined to hire him. The applicant suffered from diabetes but had not taken steps to control his illness or care for himself. This lack of attention made the applicant a significant safety risk at the plant, and the company was within its rights to refuse him employment, ruled the court.
Employees at the Thermafiber plant in Wabash, Indiana, manufacture insulation. The process involves melting rock and blast furnace slag in a 2,600-degree furnace. The molten material then drops onto rotating wheels where it is cooled and spun into rock fibers. These fibers are molded into boards and cured in ovens that reach 600 degrees.
After cooling, the boards are passed through a series of saws and high-speed blades. Operators at the plant retrieve the pieces from the conveyor belt and move them to another belt to be shrink-wrapped and sent out.
In August 2001, Brent Darnell applied for a job at Thermafiber. The company offered Darnell a job contingent on a medical exam. During the exam, doctors learned that Darnell had Type I Diabetes and was dependent on insulin. The doctor also determined that Darnell’s diabetes was uncontrolled, meaning that he could suffer from unconsciousness, confusion, and impaired judgment due to the fluctuation of his blood glucose. The doctor recommended that Darnell not be hired. The company rescinded its offer.
Darnell sued Thermafiber under the Americans with Disabilities Act, claiming that the company had discriminated against him because of his diabetes. The company requested summary judgment, contending that Darnell’s uncontrolled diabetes would pose a serious safety risk. The U.S. District Court for the Northern District of Indiana granted the summary judgment. Darnell appealed.
The U.S. Court of Appeals for the Seventh Circuit upheld the lower court’s ruling. The court rejected Darnell’s argument that there was no evidence that his uncontrolled diabetes was likely to cause injury to others. The court ruled that it was precisely because Darnell did not monitor his diabetes or take adequate care of himself that an accident was likely to happen. (Darnell v. Thermafiber, U.S. Court of Appeals for the Seventh Circuit, No. 04-2170, 2005)
U.S REGULATORY ISSUES
EEOC GUIDANCE. The Equal Employment Opportunity Commission (EEOC) has issued guidelines for employers on dealing with cancer as a disability. As with other illnesses, cancer is considered a disability under the Americans with Disabilities Act (ADA) when the disease limits a person’s major life activities. As an example, the guidelines note that an employee undergoing radiation treatment who becomes nauseated and too tired to cook, shop, or do household chores is covered under the ADA because the cancer substantially limits the employee’s ability to care for himself.
The guidelines point out that an employer may not ask a prospective employee whether he or she has had cancer or is under treatment for cancer. However, the employer can ask specific questions about the person’s ability to perform the job in question. For example, an employer may ask an applicant if she can lift up to 50 pounds, travel out of town, or work rotating shifts.
If an applicant voluntarily reveals that he or she has cancer, the employer is still prohibited from asking questions about the cancer or treatment. However, the employer may ask questions about necessary accommodations.
The agency gives this example: An applicant for a bank teller position arrives for an interview wearing a scarf and tells the prospective employer that she has lost her hair due to radiation treatments. Because the bank has a policy that tellers cannot wear hats or caps at work, the employer may ask whether the applicant would need a modification of the policy so that she could continue to wear her scarf until her treatment was complete.
The guidelines, which offer numerous other examples to illustrate EEOC rules, is available at Security Management Online.
U.S. CONGRESSIONAL LEGISLATION
OSHA. Several bills that would give employers more latitude in disputes with the Occupational Safety and Health Administration (OSHA) have been merged into one measure (H.R. 739). This bill has been passed by the House of Representatives and is currently pending in the Senate Health, Education, Labor, and Pensions Committee.
The legislation would allow employees more time to contest safety violations. Currently, employers have 15 days to contest safety violations. The bill would allow employees to exceed that 15-day time limit if the failure to contest results is from “mistake, inadvertence, surprise, or excusable neglect.”
H.R. 739 would also allow employers with 100 or fewer employees and a net worth of $7 million or less to collect attorney’s fees if they prevail in a dispute with OSHA.
INFRASTRUCTURE. A bill (H.R. 2864) that would fund water infrastructure and safety issues has been approved by the House and has been accepted for consideration in the Senate. The bill would authorize and fund critical infrastructure projects and made it possible to upgrade outdated water facilities.
IDENTITY THEFT. A bill (S. 1408) that would set national standards requiring businesses to report data security breaches to its customers has been approved by the Senate Commerce, Science, and Transportation Committee. It must now be taken up by the full Senate to proceed.
The bill would apply to businesses and organizations—such as schools—that collect personal information. (Personal information might include Social Security numbers, banking information, and driver’s license data.) These groups will be required to secure such information with physical and technological safeguards set out by the Federal Trade Commission (FTC) through regulations.
Under the measure, if personal information is stolen or lost and affects more than 1,000 individuals, the company holding that information must report the incident to the FTC. Failure to report the breach could result in fines of up to $11,000 per individual affected.
S. 1408 would allow consumers to put a freeze on their credit report to prevent identity theft from occurring. Individuals could temporarily lift the freeze for their own purposes and then reinstate the freeze. Consumers could request a freeze on their account for any reason.
The bill would preempt existing state laws to create a uniform system.
STATE LEGISLATION
California
INFORMATION BROKERS. The California Assembly’s Insurance Committee has voted down a bill (S.B. 550) that would have required any companies, before selling personal information to investigators, to certify the legitimacy of those clients and provide the subject of the inquiry with a copy of the information being given out.
The bill, which would have established the California Data Brokers Access and Accuracy Act of 2005, would have allowed anyone injured by the act of giving out information to an inappropriate person to file a civil lawsuit against the party or parties responsible.
This column should not be construed as legal or legislative advice.
