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O'Flaherty Heim Birnbaum Kirchner & Curtis Ltd. > Business & Real Estate Law > Long Saga Of Wrongfully Terminated Attorney Continues

Long Saga Of Wrongfully Terminated Attorney Continues

Even Attorneys can be unlawfully terminated. In this case, an arbitration panel found that Menards had wrongfully terminated Dawn Sands, their executive general counsel, as retaliation for her assertion for equal pay to her male counterparts under Title VII of the Civil Rights Act of 1964. In 2007, an arbitration panel awarded Ms. Sands over 1.4 million in back pay, liquidated damages, compensatory damages and punitive damages as well as $129,120.25 in attorney fees. In a surprise twist, they also ordered her reinstatement. Menards appealed and the Court of Appeals affirmed, Menards appealed again and the Supreme Court overturned the reinstatement but remanded for an award of front pay in order to make Ms. Sands “whole.”

For the second time, the parties have again appealed to the Court of Appeals. The Circuit Court awarded Ms. Sands a front pay award of $603,333 and $576,469 in attorney fees. On remand, the Circuit Court refused to hear any evidence on the issue of front pay. The Circuit Court also refused to hear Menard’s two §806.07(1)(h) motions. Menards motions were based on after-acquired evidence of misconduct and evidence that Ms. Sands had paid her sister for false testimony during the arbitration proceedings. Menards also appealed the attorney fees award. The Court of Appeals ultimately found that dismissal of the first motion was proper given that Sand’s back pay award ended long before Menard’s found her misconduct, therefore Menards would not have been entitled to disgorgement as a matter of law. The Court of Appeals did remand Menard’s second motion back to the Circuit Court on whether Sands paid her sister for testimony at the arbitration proceeding, saying that such issue goes to the integrity of the arbitration proceedings themselves. In the interest of judicial efficiency, the Court then considered if the circuit court denied that motion, whether an evidentiary hearing should be held on the issue of front pay.

Both parties sought to introduce evidence on front pay, Ms. Sands sought to introduce evidence that she intended to remain with Menards for her entire career and Menards that Sands requested only two years of front pay at her arbitration hearing thereby judicially estopping her from receiving more and that Ms. Sands had failed to mitigate her damages. The Court of Appeals ultimately found that nothing barred Ms. Sands from her ability to introduce evidence of her intention to remain employed with Menards until retirement. Further, they found that she was not judicially estopped from receiving only 2 years of front pay as a result of her testimony at the arbitration proceeding. As rationale the court noted that because Ms. Sands failed to convince the arbitration panel of her position, the third element of estoppel was missing and more importantly at the time she requested it, she would not have foreseen the arbitration panel awarding reinstatement and that Menards would put up a lengthy and very public refusal to comply, which ultimately may have damaged Ms. Sands career possibilities.

Menards also argues Ms. Sands is barred from receiving front pay for failure to mitigate her damages. The Court of Appeals again disagreed, stating that while she did decline a job offer in October 2006, the arbitrators still elected to reinstate her. From the time the arbitration award was given until the Supreme Court overturned the reinstatement, Ms. Sands would not have had a duty to mitigate her damages. However, the Supreme Court case ended over two years ago, and the Court of Appeals did find that Menards should be able to present evidence of her failure to mitigate damages since the Supreme Court ruling. The Court of Appeals also found that Menards should have been allowed to present its after-acquired evidence with respect to the determination of front pay, but also found that such evidence would not have barred her from recovering. The Court of Appeals found that an award of front pay would have begun in 2007 had reinstatement not been ordered, and that the after-acquired evidence was not discovered until late 2010. Therefore, at best, Ms. Sands front pay award could be limited by the after-acquired evidence to the time period between 2007 and late 2010.

The last issue before the Court of Appeals was whether the Circuit Courts award of $576,469 in attorney fees was appropriate. Sands had petitioned the court for $671,062.38 in attorney fees, which she claimed represented her fees since the day of the arbitration decision. Menards opposed the fees saying she could not recover because she was not a prevailing party and that her fee petition was insufficient. The Court of Appeals found that even though Menards had appealed to the Supreme Court, Ms. Sands had prevailed in that the Supreme Court had awarded her front pay in lieu of reinstatement in order to make her whole, making her a prevailing party for purposes of the attorney fees award. The Court of Appeals did find however that her fee petition was insufficient. The Circuit Court with little rationale had rejected Ms. Sands fee request, saying it was borderline shocking to the conscience but then awarded her the amount Menards had spent on attorney fees. In doing so it did not determine the reasonableness of her attorney fees petition, including whether the hourly billing rate was reasonable and if it was true that Ms. Sands’ attorneys had included numerous entries for legal work for Ms. Sand’s sister as Menards purported.

There are many significant issues standing between Ms. Sands and her award for front pay, including Menard’s motion on the issue of whether Ms. Sand’s paid her sister for testimony at the original 2007 arbitration proceeding, failure to mitigate her damages and the after acquired evidence of her misconduct if considered. Given the numerous issues again remanded to the circuit court, whether this is the last trip to the Court of Appeals for Menards and Ms. Sands remains to be unseen.

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