text: April, 2013 - Mavrick Law Firm
  Mavrick Law > Practice Updates > 2013 > April
  Posted by Peter Mavrick on April 26, 2013
  Posted by Peter Mavrick on April 14, 2013
  RECENT CASE HOLDS PREGNANCY IS NOT A "DISABILITY" UNDER THE AMERICANS WITH DISABILITIES ACT
  Posted by Peter Mavrick on April 6, 2013
  The United States Court of Appeals for the Fourth Circuit, interpreting the Americans With Disabilities Act ("ADA") before its 2008 amendments, recently ruled in Young v. United Parcel Service, Inc., 707 F.3d 437 (4th Cir. 2013), that an employee's pregnancy does not justify a disability discrimination lawsuit. The ADA is a federal law that prohibits discrimination against persons who are disabled, have a record of being disabled, or are regarded as disabled. An employee has three avenues to establish the existence of a disability under the ADA:
  (1) a physical or mental impairment that substantially limits one or more major life activities of the employee;
  (3) the employee is regarded as having such an impairment.
  The appellate court initially explained that pregnancy is not a "disability" under the ADA, and cited the fact that this interpretation of the statute is nearly uniform under federal case law.
  The the appellate court next addressed the employee's contention that her situation implicated the third prong under the ADA, i.e., being regarded as having an impairment. The employee argued that UPS "regarded her pregnancy-related work limitations" as a disability. A "regarded as" disabled claim includes the circumstance when the employer mistakenly believes that an actual, non-limiting impairment substantially limits one or more life activities. For an employee's lawsuit to succeed, the employer must believe that an individual has a substantially limiting impairment when, in fact, the impairment is not so limiting. Major life activities under the ADA are "those activities that are of central importance to daily life," such as walking, seeing, and hearing. Where an employee contends he or she was discriminated against by being regarded as disabled, the courts focus on the reactions and perceptions of the employer's decision-makers. The appellate court explained that the employee's claim did not establish a violation of the ADA "[b]ecause UPS possessed objective facts suggesting that Young might have lost the ability to perform central job functions, [and therefore] it had a legitimate reason to seek some verification that Young had recovered her ability to perform those duties. The appellate court relied in part on analogous precedent in Porter v. U.S. Alumoweld Co., 125 F.3d 247 (4th Cir. 1997), holding that an employer's medical inquiry was job-related and consistent with business necessity when the employee returned to the job involving lifting after back surgery.
  The appellate court also disagreed with the employee's second contention, that UPS had a duty to seek additional information from her healthcare providers and independently evaluate her ability to return to work. The employee argued on appeal that UPS "should have engaged in an interactive process to determine whether Young was capable of performing her job." Although the ADA does advise employers to initiate "an informal, interactive process" when determining whether an individual with a disability needs an accommodation, no such counsel applies to the determination of whether an employee is disabled in the first instance. The appellate court explained that the employee presented no valid reason to conclude that an employer acts inappropriately in relying on the employee's own objective evidence. The appellate court found persuasive the case of Breitkreutz v. Cambrex Charles City, Inc., 450 F.3d 780 (8th Cir. 2006), which held that "[i]f a restriction is based on the recommendation of physicians, then it is not based upon myths or stereotypes about the disabled and does not establish a perception of disability." Because the employee pointed to no more than the objective fact of her pregnancy, and offered no evidence tending to show that UPS management subjectively believed the employee was disabled, the employee did not present sufficient evidence to raise a factual issue of her "regarded as" claim.
  Peter T. Mavrick and the Mavrick Law Firm represent businesses and management in Fort Lauderdale, Miami, and Palm Beach, Florida. The Mavrick Law Firm practices law in South Florida in labor/employment disputes, and in business and real estate litigation. The Mavrick Law Firm has successfully represented many businesses in negotiations, in response to threatened legal action, and in court. This article is intended for information purposes only and is not legal advice. This article is not a substitute for legal advice tailored to a particular client's situation. Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.
  PERSONAL LIABILITY FOR A CORPORATION'S OBLIGATIONS UNDER FLORIDA LAW: "PIERCING THE CORPORATE VEIL"
  Posted by Peter Mavrick on April 3, 2013
  In business litigation cases, it is important to evaluate the possibility of "piercing the corporate veil," whether from the perspective of plaintiff/creditor or defendant/debtor. While a corporate debtor might be uncollectable due to its lack of financial resources, the story does not always end with the corporation's own balance sheet. When a plaintiff/creditor can prove the requirements to pierce the corporate veil, a prudent corporate defendant/debtor and its principals might be more amenable to making substantial efforts to resolve the case rather than taking their chances on an adverse judgment.
  As a general principle, corporations are legal entities that function with limited liability. Corporations are regarded as such because the corporate obligations remain those of the corporate entity, meaning that the corporation's owners, officers, and shareholders are not held personally liable for corporate debt. However, in certain situations courts allow a creditor to "pierce the corporate veil" and hold corporate owners personally liable for corporate debts.
  In Florida, "piercing the corporate veil" is governed by Florida Supreme Court case Dania Jai-Alai Palace, Inc. v. Sykes, 450 So. 2d 1114 (Fla. 1984), which holds "the corporate veil may not be pierced absent a showing of improper conduct." This is not the most detailed description, especially in the legal realm where attorneys are accustomed to applying a particular set of facts to specific multi-factor tests. In a more recent case, Florida's Third District Court of Appeal formulated a three factor test in Gasparini v. Pordomingo, 972 So.2d 1053 (Fla. 3d DCA 2008). Under the Gasparini case, to pierce the corporate veil and hold a shareholder liable for a corporate liability, a creditor must prove the following:
  The corporate form can also be pierced under certain circumstances when a creditor seeks to hold a parent corporation liable for the obligation of a subsidiary. For example, Ocala Breeders' Sales Co. v. Hialeah, Inc., 735 So. 2d 542 (Fla. 3d DCA 1999), identified the following factors to help determine when the subsidiary is merely an instrumentality of the parent corporation, including whether: (1) the same person controlled both the parent and subsidiary; (2) they operated out of the same facilities as the parent; (3) the subsidiary's contracts were performed by employees of the parent; (4) the subsidiary was never capitalized; and (5) the subsidiary shared bank accounts and financial obligations with the parent. All of these factors were established, and the court found that the subsidiary was merely an instrumentality of the parent corporation. Ocala Breeders' also clarified what is meant by the term "improper conduct": "[T]o pierce the corporate veil under Florida law, it must be shown not only that the wholly-owned subsidiary is a mere instrumentality of the parent corporation but also that the subsidiary was organized or used by the parent to mislead creditors or to perpetrate a fraud upon them." The court held that a parent corporation defrauded the plaintiff when its subsidiary entered into a contract requiring it to make certain capital improvements. The subsidiary did not have the ability to fulfill the contract since it was never capitalized. In that scenario, the court found it appropriate to bypass the personal liability protection afforded to the corporate officers based on an organized effort to perpetrate a fraud on corporate creditors.
  Whether representing the plaintiff/creditor or the defendant/debtor, in business litigation it is often prudent to evaluate the possibility of piercing the corporate veil.
  Peter T. Mavrick represents business owners in business litigation. Mr. Mavrick has successfully represented many businesses in negotiations, in response to threatened legal action, and in court. This article is intended for information purposes only and is not legal advice. This article is not a substitute for legal advice tailored to a particular client's situation. Peter T. Mavrick can be reached at: Website: www.mavricklaw.com; Telephone: 954-564-2246; Address: 1620 West Oakland Park Boulevard, Suite 300, Fort Lauderdale, Florida 33311; Email: peter@mavricklaw.com.