Kentucky Court of Appeals
Employment - National Origin - Discrimination
Charalambakis v. Asbury College, 2014 WL 346068 (Ky.App. January 31, 2014), ordered depublished October 15, 2014 (2014-SC-215-D)

The plaintiff was employed by Asbury College for over twenty six years, and was a tenured professor of economics from 2003 to his termination in 2010. He was an American citizen originally from Greece. In 2007, plaintiff alleged that comments were made about his accent, and he asserted that his appointment kept him from being considered for department chair and student group advisor. In 2009, following complaints from former students, plaintiff was advised that he was being investigated for professional misconduct in the operation of his outside business, which employed the former students. Plaintiff offered explanations which his supervisor found to be insufficient, but plaintiff declined to add to his explanation. Instead, plaintiff sough review by the Faculty Personnel Committee (FPC) though the grievance procedure, which his supervisor took to be an attempt to circumvent his investigation. In a letter plaintiff accused his supervisor of treating him differently because he was not American born.

The supervisor issued his decision on November 24, 2009, finding three violations of the faculty manual and that his use of the FPC to challenge the process to be a lack of respect and insubordination. While the decision was that these constitute grounds for termination, the supervisor decided to instead probate plaintiff for two years. Four conditions were applied to the probation. One of these was that he cease to challenge the process through any other venue. In December, plaintiff filed an internal challenge of the decision with the FPC, and in January filed a charge with the Kentucky Commission of Human Rights (KCHR), claiming that his probation was the product of national origin discrimination. On February 15, 2010, the FPC recommended that the appeal be dismissed, which recommendation was accepted by the President. On March 1, 2010, plaintiff agreed to the terms of probation, and then added a retaliation charge to his KCHR complaint. He demanded a contract of employment and offered to drop his KCHR complaint if his demand was met. Of course he was then discharged. He subsequently filed a lawsuit alleging discrimination based on his national origin.

Direct Evidence

The plaintiff argued that comments made in 2007 about his accent constituted direct evidence that his probation and termination were motivated by national origin animus. While the Court agreed that the comments about his accent related to his national origin, it disagreed that they constituted direct evidence of discrimination. The comments were isolated and temporarily unrelated to the employment decisions made.

Burden Shifting - Pretext

The Court observed that the first two prongs of the burden shifting test had been met easily, leaving only the issue of whether the plaintiff had demonstrated the reason given to be a pretext. The Court held that there was no evidence to suggest the reasons given were pretextual. The allegations were thoroughly investigated and he had been allowed to respond to them. The fact that he disagreed with the employer's decision as to the merits of the allegations was not sufficient to show the reasons given were pretextual.

Kentucky Court of Appeals
Employment - Retaliation - Causation
Charalambakis v. Asbury College, 2014 WL 346068 (Ky.App. January 31, 2014), ordered depublished October 15, 2014

The plaintiff alleged that he was placed on probation and then terminated in retaliation for filing complaints with the Kentucky commission on Human Rights (KCHR). An investigation had led to his supervisor making findings that he had violated school policy but instead of termination the supervisor placed him on probation. One of the conditions of probation was that he would not further challenge the investigation in any venue. Prior to that his supervisor had been advised that plaintiff had filed a complaint, although a complaint was not actually filed until after the probation decision was made and an internal appeal was initiated with the Faculty Personnel Committee (FPC). Plaintiff advised the chair of the FPC that he was filing the KCHR complaint, who told him he thought bringing the charge would hurt the college and make his appeal weaker. After the appeal was denied, plaintiff agreed to the terms of probation, and then amended his KCHR charge adding a retaliation claim.

Direct Evidence

Plaintiff first contended that the comments by the FPC chair constituted direct evidence of a causal relationship between the KCHR complaint and his termination. The Court rejected this assertion because the comments were subject to a variety of interpretations and would require the drawing of an inference to show a retaliatory motive. For example, the comment could be viewed as referring to plaintiff's attempts to circumvent the investigation process as had been suggested by the supervisor, or a reference to his violation of the terms of his probation.

Circumstantial Evidence of Causation

This aspect of the opinion shows some real insight as to how many retaliation claims are actually abuses of the system, and the facts of this case has abuse written all over it. A causal relation may be shown where the decision maker was aware of the protected activity and there is a close temporal relationship between the protected activity and the adverse action. The Court declined to find the proof here sufficient because the supervisor had already contemplated termination as a possible result of the investigation and the investigation was well under way when the KCHR charge was filed. In fact, even at the end plaintiff tried to bargain away his KCHR charge for a contract of employment.

United States District Court
Limitations - Tolling by Obstruction
Shelburne v. Clemons, 2014 WL 345278 (W.D.Ky. January 30, 2014)

This was a § 1983 action which was brought more than a year after accrual. Plaintiff claimed that she was forced to engage in sexual relations with the sheriff and a deputy sheriff in Grayson County. She argued that the limitations should be tolled under KRS 413.190(2), which tolls the running of time where "he by absconding or concealing himself or by any other indirect means obstructs the prosecution of the action". She testified that she was threatened with incarceration, restriction of her visitation with her children, termination of parental rights and serious injury if she reported the conduct, and that these threats obstructed her prosecution of the action. The Court rejected this argument, holding that the statute required conduct which misleads or conceals the conduct from the plaintiff.

United States District Court
Employment - Public Policy - Concealed Carry
Holly v. UPS Supply Chain Solutions, Inc., 2014 WL 345275 (W.D.Ky. January 30, 2014)

Holly had experienced mechanical problems with his vehicle on the way to work, and his supervisor gave him permission to take his vehicle to the shop. As he went to his vehicle in the parking lot, he recalled that he had a firearm in his vehicle, and asked a co-worker to store it in his vehicle while his vehicle was in the shop. UPS claimed he was terminated because he had asked a co-worker for a personal favor during work hours, while Holly claimed the termination was in violation of KRS 527.020(4), which authorizes a person with a concealed carry permits to keep his weapon in his vehicle and KRS 237.106 which creates a cause of action against employers who take adverse actions against an employee because he kept a firearm in his car. In addition to the employer, Holly sued his supervisor, Fletcher. Holly dismissed the claims based on KRS 237.106 since the prohibition expressed therein applied only to employers.

The question before the Court was whether the Complaint stated a claim against Fletcher based on KRS 527.020(4). The Court held that if Fletcher was the one who terminated Holly, then he could be shown to be a "person" that prohibited the conduct. Fletcher further argued that Holly didn't just keep a concealed weapon in his vehicle, but asked a co-worker to store it and carried it out of the vehicle in order to make the transfer, conduct which was not protected by the statute. The Court held that at the pleading stage pretext was shown by allegations that the employer normally allowed co-workers to request personal favors and that Holly's photograph had been placed at security, an unusual practice. The Court did observe that this, if proven, would be a weak case.

United States District Court
Limitations - Fraudulent Concealment
Gloyna v. Toyota Motor Manufacturing North America, 2014 WL 318563 (E.D.Ky. January 29, 2014)

The decedent was in an automobile accident in April of 2007 while driving a Toyota which her estate claimed had a defect that caused sudden unintended acceleration. The opinion does not say when the complaint was filed, but it was more than a year following appointment of the personal representative. The noted that the discovery rule, if it would otherwise be applicable, does not apply to death claims. The issue therefore was whether the limitations was tolled due to fraudulent concealment under KRS 413.190(2).

The estate claimed that the cause of action was concealed because the model in question was not included in a recall, there were customer complaints concerning the model in question, and internal comments and comments from whistleblowers suggesting concealment. The Court rejected this contention on the ground that the estate had not used reasonable diligence to discovery the cause of action. They did virtually no investigation to discover the cause of the accident and did not have the vehicle inspected until well after the limitations expired.

United States District Court
Insurance - Misrepresentation in Application
Koch v. Owners Insurance Company, 2014 WL 299943 (W.D.Ky. January 28, 2014)

A homeowner suffered a loss by fire and was at the time insured by Owners. An examination under oath revealed that several statements made in the application were false. Apparently the application had falsely claimed that the applicant had not been refused or cancelled, had been insured by Allstate through a particular date, and that the applicant had no judgments, or past mortgage or tax payment within the last five years. The insurer offered the affidavit of a Branch Manager, which established pre-ordained underwriting guidelines that would have precluded the agent from binding coverage had the true facts been stated. Apparently, the insured argued that she was not aware of the facts misstated in the application.

In Kentucky rescission of an insurance contract for misrepresentation is governed by KRS 304.14-110, which declares a policy void if misrepresentations made were fraudulent, material to the risk or the hazard assumed by the insurer, or the insurer in good faith would not have issued the policy had the truth been known. Owners clearly met this standard given the affidavit concerning binding guidelines, so the question was whether the policy was void where the insured claimed to have been ignorant of the true facts. Recognizing that there was an exception where the agent makes the misrepresentation and the insured is not aware, the Court held that it did not extend to situations where the misrepresentation was made by the applicant, even if the applicant did not know the representation was false.

Kentucky Court of Appeals
Insurance - UM - Other Insurance Clauses
Countryway Insurance Company v. United Financial Casualty Company, ___ S.W.3d ___, 2014 WL 265508 (Ky.App. January 24, 2014), motion for discretionary review filed May 23, 2014 (2014-SC-000265-D)

In 2010, the Supreme Court held in Kentucky Farm Bureau Mutual Insurance Company v Shelter Mutual Insurance Company, 326 S.W.3d 803 (Ky. November 18, 2010) that the liability policy covering the vehicle was primary in cases where multiple policies applied. See prior discussion. This case considers that rule in the context of uninsured motorist coverage [UM]. Before reaching the holding on this case, we wish to note that the opinion was written by a new judge who was appointed in July of 2013, and the analysis is well developed and the opinion is well written (agreement with the conclusion may be another matter).

This opinion seeks to stay true to the rationale behind the Shelter case, while observing that UM coverage is different than liability coverage. The panel observed that UM coverage is not mandatory while liability coverage is mandatory, and a primary basis for the Shelter was the fact that the owner of a vehicle is required to provide insurance covering the vehicle. The panel then observed that the Court has traditionally treated UM coverage as personal to the insured. Based on these differences, the Court held that the driver's policy would be primary in the case of UM coverage.

One interesting side note is that the Court's opinion suggests that the Shelter holding only applies where the other insurance clauses are mutually repugnant, and seemed to intend its holding to be so limited as well. This is one more issue that the Supreme Court will have to clarify, although the language of the Shelter opinion reads as being applicable to all multiple coverage situations.

Kentucky Court of Appeals - Unpublished
Causation - Circumstantial Evidence
Barrett v. Elmo Greer & Sons, LLC, 2014 WL 272561 (Ky.App. January 24, 2014)

This is a one car accident brought against a highway contractor alleging negligence in the maintenance of the roadway and a failure to warn of same. Specifically, it was alleged that the roadway had potholes in the area where the decedent lost control of his vehicle. Noteworthy also is the fact that the decedent had been at a party drinking into the wee hours of the morning and was traveling at a high rate of speed. There are at least two reasons why the plaintiff failed to establish causation, although the opinion discusses only one of them.

The Court did a pretty good job of applying the rule against the pyramiding of inferences. The Court determined that three facts needed to be established to show causation. First, plaintiff had to show that potholes or other defects were present at the time of the accident. Second, plaintiff had to show the vehicle struck one or more of the potholes. Third, plaintiff had to show that the striking of the pothole caused the loss of control. The first was established by an expert that visited the sight a couple of weeks after the accident. The Court held that one could infer from the existence of the potholes that the decedent's vehicle struck one or more of them (a dubious proposition itself). However, the Court determined that that it was inappropriate to infer from the striking of the pothole that it was responsible for the loss of control. It is impermissible to draw an inference from another inference.

A secondary way to reach the same conclusion is to simply evaluate the proof in terms of probabilities. There are multiple possible explanations for the loss of control. The accident could have been caused by the potholes, or it could have been caused by excessive speed and intoxication. There is nothing to show that one was more likely the cause, and therefore any causal relationship is based on speculation, not evidence.

United States District Court
Product Liability - Alteration of Product - Superseding Cause
Wilson v. Engel Canada, Inc., 2014 WL 259472 (E.D.Ky. January 22, 2014)

The product in question was an injection molding machine, which is designed to reach temperatures of 400 degrees and apply up to 100 tons of pressure. The machine does not come with molds as those are provided by the user/employer. The plaintiff was using the machine with the safety override switch on, and her supervisor was making some adjustments. The buttons he pressed caused the ejector plate to retract, which trapped the plaintiff's hand in the machine and burning it to the tendon.

The employer's policies required that the safety override switch be turned on, which negated safety features in the machine. By the same token, the proof demonstrated that the employer's safety protocols were violated by the plaintiff having her hands in the machine while the adjustments were made. Likewise, the molding used by the employer altered the machine in an untypical fashion, which created the pinch point that caused the injury. This, the Court held was a superseding cause of the injury.

Kentucky Court of Appeals - Unpublished
Insurance - UCSPA - Coverage as Essential Element
Murphy v. Travelers Casualty and Surety Company, 2014 WL 199062 (Ky.App. January 17, 2014)

This action arose from a blasting claim against Hinkle Construction, which was insured by Travelers between March 31, 2007 and March 31, 2008. The plaintiff alleged that Travelers had failed to respond to her attorney's communications and pay her claim. In discovery the plaintiff admitted that the damage was sustained in November of 2008. The trial Court granted summary judgment on the ground that absent coverage there can be no "bad faith" claim, and this was affirmed by the Court of Appeals.

United States District Court
False Imprisonment - Shoplifting
Snyder v. Kohl's Department Stores, Inc., 2014 WL 186889 (E.D.Ky. January 15, 2014)

Plaintiff Snyder was suspected of shoplifting while in the Kohl's store, and after leaving the store was asked to return to the store to answer a few questions. She complied and answered all questions. She was asked to remove her clothing and did so, and she had no stolen merchandise on her person. She then left the store. The store relied on the merchant defense set out in KRS 433.236, which permits a merchant to detain a person as to whom the merchant has probable cause to believe a theft has occurred.

The Court determined that the store had probable cause as a matter of law. The Court held that it was not material whether she returned to ask questions voluntarily or felt compelled to return to the store because either way probable cause was the controlling issue. She was observed acting in a manner suggestive of shoplifting, and thereafter entered a fitting room with a number of clothing items. Store security heard popping sounds that were consistent with the removal of security tags. She left the fitting room with no merchandise in her hands, and walked quickly to the exit. The fitting room she had occupied had no merchandise in it. Snyder argued that the store security had failed to follow their policy, but this was deemed to be immaterial since the store personnel had probable cause.

Sixth Circuit Court of Appeals
Employment - Adverse Employment Action - Transfers
Deleon v. Kalamazoo County Road Commission, 739 F.3d 914, 2014 WL 114016 (6th Cir. January 14, 2014)

In this 2-1 opinion the Court held that a transfer that had been requested by the employee could be an adverse employment action. He had been an employee of the county road commission for 28 years, and since 1995 had worked as an Area Superintendent, supervising road maintenance activities. In 2008, he applied for a vacant position entitled Equipment and facilities Superintendent. The job description included work in the garage with exposure to loud noise and diesel fumes. He apparently testified that had he been given the position he would have demanded a $10,000.00 raise. He did not receive the position because his computer skills were insufficient. Another person was granted the position but left the employment shortly thereafter. Plaintiff complained about the position being offered to an outside person rather than him. A subsequent offeree declined the position. In 2009, the plaintiff was transferred to the position he had previously requested. The plaintiff claimed after the fact that he asked why he had been involuntarily moved from a position where he was doing well to one that was more hazardous. Perhaps a year or so later, plaintiff's supervisor asked him to write a memorandum about the redesign of a truck, and the plaintiff disagreed with his supervisor. Four days later plaintiff was hospitalized for five days, which was followed by eight months leave. In August of 2011, his psychiatrist cleared plaintiff to return to work, but he had been terminated because he had exhausted all available leave. He brought claims based on equal protection, race, national origin and age discrimination. The sole issue on appeal is whether he had suffered an adverse employment action.

The Court acknowledged the general rule that a transfer without changes in salary, benefits, title or work hours is not an adverse employment action. A transfer can constitute a demotion if evidenced by, among other things, "other indices that might be unique to a particular situation." As can be seen for this opinion, as standards go this one is worthless. The majority then discusses constructive discharge, which requires working conditions that are "objectively intolerable to a reasonable person." The Majority found that the evidence supported a finding that those conditions existed, even though the conditions they refer to apparently are within OSHA's standards. Usually, the conditions referred to relate to the conduct of the employer or co-workers, not the job itself.

While the majority opinion repeatedly refers to the transfer as involuntary, the fact remains that he had applied for the position. The majority determine that the alleged "demand" for more money tilts the balance in favor of being adverse. It is one thing to request a pay raise, but there was no evidence that he would have gotten one, or declined the position had he been granted the request for transfer in the first place. The dissent is correct when it points out that it was only after the fact that the plaintiff found the position to be adverse. Given this ruling, the employer could be liable if plaintiff was denied the position, or if he was awarded the position. This is quite disappointing, but the opinion may ultimately be limited to its facts or subject to en banc review.

Kentucky Court of Appeals
Immunity - Report of Dependency, Abuse, Neglect or Human Trafficking
Leamon v.Phillips, ___ S.W.3d ___, 2014 WL 92266 (Ky.App. January 10, 2014)

Heather Leaman [wife] accused her husband of physically abusing their three children. The next day, an anonymous report was made that the wife was endangering the children, apparently by Melinda Leaman [mother]. The caller alleged that wife had been sexually abused by her father, and was endangering the children by staying in dad's home. When Child Protective Services [CPS] investigated, wife denied having been sexually abused and stating at her father's house. Wife alleged that mother then made other false allegations. An emergency petition was filed and the children placed in foster care. Later, CPS issued a letter of unsubstantiation, and ultimately her children were returned. Wife and her father sued mother (and the CPS workers involved).

The trial Court dismissed the claims against mother on the ground that the immunity set out in KRS 620.050(1) applied and there was no evidence of bad faith on the part of mother. On the face of it, this would seem odd given that it certainly sounds like mother used the reporting process as a weapon to defend her son. The Court, in upholding the trial Court, simply says the record supports the conclusion. It's hard to see the point of writing an opinion if the opinion gives no clue as to its basis for its result since that is the purpose of appellate opinions. Accordingly, all that can really be said is that the mere fact that a report is made anonymously and apparently in an effort to defend ones son is not in and of itself sufficient to constitute bad faith.

Kentucky Court of Appeals
Immunity - Governmental - Enforcement of Dependency, Abuse, Neglect or Human Trafficking Statute
Leamon v.Phillips, ___ S.W.3d ___, 2014 WL 92266 (Ky.App. January 10, 2014)

This suit was brought against two employees of Child Protective Services in their individual capacity alleging that they should not have responded to a report made under KRS 620.030 in the way they did. The Court held that while the duty to investigate was ministerial, the decision of how to proceed as a result of the complaint was discretionary. Accordingly, the CPS employees were entitled to qualified immunity, and there was no evidence of bad faith on their part even if they could have acted more quickly once they determined the report was false.

Kentucky Court of Appeals
Surety Bond - Interpretation
The Ohio Casualty Insurance Company v. City of Providence, 2014 WL 92268 (Ky.App. January 10, 2014), motion for discretionary denied December 10, 2014 (2014-SC-000216-D)

The City of Providence purchased a surety bond from Ohio Casualty through an independent agent for the performance of the City Clerk, an appointed position without a specific term. The bond limits were, by the bond's terms, aggregate and non-cumulative, and the bind was written for an indefinite period of time. Each year premium invoices were sent and used the term renewal. After seven years of "service$quot;, it was detemriend tha the City Clerk had embezzled nearly a million dollars. The City argued, largely due to the use of the word renewal, that each year was a separate bond and they could therefore "stack" the limits for each year.

The opinion discusses at length the proof offered as to the intent of the parties to the bond, only to note that intent must be determined from the contract itself unless the terminology is determined to be ambiguous. However, the backdrop for the case is an older opinion in City of Middlesboro v. American Surety Company of New York, 211 S.W.2d 670 (Ky. 1948). In that case, the tax collector was elected to eight consecutive one year terms. The bond was for a term defined to from January 1, 1938 to the retirement of the principal. It also stipulated that "the liability of the surety for any one or more defaults of the principal during any one or more years of this suretyship exceed the amountherein specified". The Court read these provisions as providing for a term of one year, being the term of the tax collector, with a renewal each year creating a new contract. The Ohio Casualty Court distinguished this case by noting that the City Clerk did not have a term, but was appointed. The surety has prevailed in this case so far, but it would be a simple matter to make this issue clearer in the language of the bond, and the surety clearer has authority to limit its liability so long as it is clearly stated.

Kentucky Court of Appeals - Unpublished
Insurance - Duty to Defend - Reservation of Rights
Ohio Casualty Insurance Company v. Wellington Place Council of Co-Owners Homeowners Association, Inc., 2014 WL 97395 (Ky.App. January 10, 2014)

Ohio Casualty insured the builder of a condominium complex which had a history of construction defect problems. In 2006 a problem was noted with the foundation and lower level of one building, and Ohio Casualty paid $170,000.00 for repairs. In 2008 additional problems were noted and reported to Ohio Casualty, who hired a law firm to investigate. The investigation revealed construction problems and suggested that additional problems would arise in the future. The law firm notified the insured that the claim would be denied because the limitations/repose had run. Suit was filed in 2008, and the claims against the insured were settled in 2010, at which time it was agreed to continue the litigation as to coverage issues.

Apparently, Ohio Casualty did not issue a reservation of rights letter until seventeen months after suit was filed. The reservation of rights that was issued was apparently triggered by the Supreme Court decision in Cincinnati Insurance Company v. Motorist Mutual Insurance Company, 306 S.W.3d 69 (Ky. 2010), in which the Court determined that defective construction was not an occurrence. Both Ohio Casualty and the Court refer to this as a change in the law, but that is inaccurate. Prior to Cincinnati the issue was unresolved, but was often raised by insurers in these cases.

The Court correctly held that the failure to reserve rights was not excused because the Supreme Court subsequently clarified the law. However, Ohio Casualty is on stranger ground in arguing that there was no estoppel. The purpose of a reservation of rights is to prevent an insured from incorrectly from inferring from the provision of a defense that there is no issue as to coverage, and relying to its detriment on that inference (a non-waiver serves the same function pre-suit). The fact remains that an insured should be required to prove reliance and prejudice from that reliance for an estoppel to occur. Likewise, this estoppel can only apply to the insured. It may be too much to hope that the Court can properly apply the law in this area as many lawyers and judges seem to think that the reservation of rights is a hoop that must be jumped through as opposed to an application of an established equitable principle. But we can expect for review to be requested, and if accepted this could be an important precedent.

United States District Court
Employment - Adverse Employment Action
Harris v. Burger King Corporation, 2014 WL 68089 (W.D.Ky. January 8, 2014)

In this opinion, the Court addressed a racial discrimination claim and in the process was required to evaluate a number of claimed adverse employment actions other than termination.

Denial of Medical Attention

The employee alleged that she suffered a heat stroke at work but was not given a break and may have been told by her supervisor to get back to work. She then passed out and a co-worker had to take her to the hospital. The Court held that this did not constitute an adverse employment action.

Reduction of Hours

In general a reduction in work ours can be an adverse employment action. In this case, the employee alleged that her hours were reduced while a white employee was granted additional hours. The Court noted that the employee did not have a set number of hours to work each week. She did not object to the reduction in hours at the time, and her actual average hours remained the same over time, and thus did not materially affect the plaintiff. The Court then observed that even if this were an adverse employment action, the undisputed fact that the white employee asked for additional hours was a legitimate reason which could not be shown to be pretextual.

No Raise Following Critical Evaluation

The Court agreed that the denial of a proper pay raise following an unjustly critical evaluation can be an adverse employment action. However, in this case there was no evidence that the employee was owed a pay raise. In fact, she admitted that she did not receive a raise after previous critical evaluations rendered by other supervisors.

Transfer

A transfer does not ordinarily result in an adverse employment action if it does not result in a loss of prestige or pay, unless it amounts to a constructive discharge. In this case, there was no loss of pay when she was transferred to another store, and in fact she testified that she liked her new manager and that the alleged discriminatory conduct ceased at the new position.

Failure to Rehire

After being transferred to another store, plaintiff underwent surgery which necessitated time off from work. The employee claimed she kept management advised of her progress and had been told she could return to her position. After two or three months, the employee was listed as having abandoned her position. Around five months later the employee returned with a doctor's note saying she could return. She was told that there were no positions available and her position had been taken by a white male. The Court held that this claim failed because there was no proof that a position was available or that a white employee had been rehired under the same circumstances.

United States District Court
Employment - KCRA - Burden Shifting Analysis
Harris v. Burger King Corporation, 2014 WL 68089 (W.D.Ky. January 8, 2014)

In November we reported and were critical of a Court of Appeals opinion which purported to apply the burden shifting analysis to determine whether an inference of discriminatory conduct was shown. This opinion applies the Kentucky statute but properly applies that analysis, in contrast to the Court of Appeals decision.

The plaintiff underwent surgery and was accordingly off work, but did not return for 7-8 months, without submitting the appropriate paperwork. The employer determined that she had abandoned her position, and terminated her employment. The plaintiff made out her prima facie case by showing that she was replaced by a white male.

The employer argued that the legitimate non-discriminatory reason for termination was that she had abandoned her job. It was undisputed that she failed to file the appropriate paperwork and returned five months after she was supposed to. The Court held the reason offered sufficient, even though the employee claimed she did not know she needed to file paperwork.

The Court then turned to the issue of whether the employee had demonstrated the stated reason to be a pretext. It is at this point that the Weickgenannt Court departed from the appropriate application of the burden shifting analysis. The proof offered must support an inference that the stated reason was a pretext, and the proof the Weickgenannt found to be sufficient was equally consistent with pretext or no pretext. The law deems such a state of proof to be speculation. In this case, the employee argued that the real reason for termination was racial animus. The Court held that the mere fact that she was replaced by a white employee, while sufficient to make out a prima facie case, was insufficient to demonstrate pretext. Plaintiff also argued that her supervisors had promised that she could return, a mere broken promise would not indicate racial animus.

United States District Court
Employment - KCRA - Causation in Retaliation Cases
Harris v. Burger King Corporation, 2014 WL 68089 (W.D.Ky. January 8, 2014)

The employee in this case alleged that her termination was in retaliation for a complaint about racial discrimination and for attempting to file a workers' compensation claim. The Court discusses the role that temporal proximity of the protected action to the adverse employment action in establishing a prima facie case. However, the Court made is clear that temporal proximity will not by itself establish that the stated reason for the action was a pretext.

The other interesting aspect of the opinion is that the Court without comment applied the "but for" test to the causation aspect in both cases. It is not at all clear that the Kentucky Court will follow the recent United States Supreme Court pronouncements in this regard. See University of Texas Southwestern Medical Center v. Nassar, 570 U.S.___, 133 S.Ct. 2517, 2013 WL 3155234 (June 24, 2013).

Kentucky Court of Appeals
Insurance - Commercial Crime Coverage - Prior Theft Exclusion
Westfield Insurance Company v. Jackson Wholesale Company, 2014 WL 104081 (E.D.Ky. January 9, 2014)

In 2010, sales employee Dixon was caught stealing money from his employer by failing to remit payments made by customers. Due to his "friendship" with the owner, he was allowed to stay on make payments towards restitution. Shockingly, Dixon did it again two years later. This time the owner made claim for theft under the commercial crime coverage of his business policy. Since the policy specifically excluded from coverage theft by an employee that occurred and was known prior to the policy period, this loss was not covered.