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By E. A. Torriero, Chicago Tribune (5/14/02) - HOUSTON -- More than a year before energy conglomerate Enron Corp. tumbled into bankruptcy, Andersen employees were so involved in the intricacies of Enron's finances that the accounting firm lobbied regulators for broader powers to act both as auditor and adviser, the ex-lead Andersen partner on the Enron account testified Monday.

David Duncan, the government's key witness in the Andersen federal obstruction of justice trial, said Andersen accountants and Enron financial managers were so tightly linked that they shared office space, hired auditors away from one another, socialized, and huddled to find ways to push the limits on Enron's accounting practices.

Prosecutors hope that Duncan's testimony will show a conspiracy on Andersen's part to conceal evidence.

"I obstructed justice," Duncan said, in a preview of explicit testimony expected Tuesday and Wednesday on his role destroying thousands of Enron-related documents. "I instructed people on the (Enron audit) team to follow the document retention policy, which I knew would result in the destruction of Enron-related documents."

In September 2000, Duncan co-authored a letter with then-Enron chief executive Kenneth Lay to the Securities and Exchange Commission asking for wider latitude to act in the seemingly conflicting roles of financial confidant and watchdog.

Speaking in a measured Southern drawl and sometimes shifting nervously, Duncan, 43, also told the jury what he admitted to in April in federal court: that he broke the law by shredding paperwork relating to Enron's troubled finances as a federal probe loomed.

Duncan, who is awaiting sentencing on his obstruction of justice guilty plea and turned government informant in hopes of leniency, is expected to testify for the next two days. He took the stand late Monday afternoon and testified for more than an hour. Andersen's defense attorney Rusty Hardin has yet to cross-examine him but one of his aims will be to show that Duncan acted alone, a member of Hardin's legal team said.

Duncan, a 20-year Andersen veteran, was the "global managing partner" on the firm's prestigious and lucrative Enron account that stretched from Houston to far-flung offices in London, South America, and India.

Under questioning from Assistant U.S. Attorney Sam Buell, Duncan admitted that he was proud of how the Enron account generated enormous and increasing fees for Andersen. It also made Duncan a rich man. Duncan earned more than $700,000 a year including performance bonuses, he said.

From fiscal year 1999 to 2000, Andersen revenues jumped from $47.8 billion to $58 billion, Duncan said. The biggest gains come from consulting work that escalated from $4 million in 1999 to $10 million in 2000, Duncan said.

The technique, known in the accounting business as integrated auditing, became widely popular and hugely lucrative in recent years in the accounting world. Andersen's Enron account, its fifth largest worldwide, was held up as the model within Andersen for the use of integrated accounting, Duncan said.

By the fall 2001, Enron's finances unraveled as Andersen auditors struggled to find ways to properly correct more than $1 billion in Enron losses that had gone unrecorded in the previous three quarters.

Earlier Monday, two senior Andersen partners from Chicago testified that in numerous phone calls in October and November, more than a dozen Andersen accountants from Chicago and Houston debated how to properly record Enron's plummeting numbers.

By late October, Andersen auditors at the highest levels of the firm realized the potential for Enron's ruin, according to an in-house e-mail distributed to the Andersen hierarchy and introduced into evidence by the government on Monday.

"The problems are just beginning," said the e-mail written by Andersen partner C. E. Andrews, who is not scheduled as a witness in the case. "We will be in the crosshairs."

Defense attorney Hardin objected to the introduction of the e-mails into the case saying that its authors needed to be called to testify to assure the accuracy of the information.

"I have never seen a prosecution over the top," Hardin told U.S. District Judge Melinda Harmon outside of the jury's presence. "This stuff is not admissible. It is ludicrous."

By the time the e-mail was written, Andersen auditors in Houston had begun a wholesale shredding of crucial Enron documents on October 23rd, prosecutors allege. Duncan admitted in court on Monday that he directed Andersen's Enron force of more than 100 people to destroy the paperwork.

Nearly 1,000 miles away in Chicago, at least two partners struggled last fall over what to do with e-mails and documents that were working memos and supplements to Enron's official statements, according to Monday's testimony.

James Green, an auditor on an oversight team advising Andersen accountants in Houston, said he decided to delete more than a hundred Enron-related e-mails because they were drafts and memos and not part of the firm's formal presentation of Enron's financial picture.

In January, after Andersen attorneys ordered a halt to the destruction of any Enron-related materials in the face of government subpoenas, Green went to his supervisors and wondered if he had done anything illegal, he said.

In the end, Green said, "I didn't feel I had done anything wrong."

(5/10/02) - Perdue Farms will pay $10 million in back wages in a settlement the U.S. Labor Department hopes will set the standard in one of North Carolina's largest agricultural industries.

The agency also said it sued Tyson Foods on Thursday after talks to end the same practice at that company broke down.

At issue is whether workers for the two companies should be paid for the time they spend putting on and taking off work clothing and protective gear needed on their jobs.

Under a consent agreement, Perdue agreed to change its pay practices and to compensate 25,000 current and former employees for time spent "donning and doffing" gear and sanitizing their work areas. The Labor Department estimated the settlement would result in $10 million in payments to workers.

"This is a very important and, I believe, historic development," said Labor Secretary Elaine Chao, who has focused the agency's enforcement work on industries with highest concentrations of low-paid, immigrant labor. "This is a major victory for the workers, who will now get paid what they are entitled to and be compensated for health and safety precautions at their plants."

Chao said she hopes to get the entire poultry industry to follow Perdue's lead. Tyson and Perdue are the largest poultry producers in North Carolina. Tyson employs about 4,000 at processing plants in Monroe and Wilkesboro. Perdue Farms Inc. has a plant in Concord. Union County is the state's second-largest producer of poultry.

Perdue Farms Chairman Jim Perdue said he was pleased to get the matter settled.

"For many years, various lawsuits have left this issue unresolved, thus creating confusion in the workplace," Perdue said. "It is always our goal to adhere to the law."

Eugene Scalia, solicitor for the Labor Department, declined to elaborate on why settlement talks with Tyson broke down. Tyson is defending itself from a separate 36-count federal indictment alleging it conspired to smuggle illegal aliens into its plants for profit. The company pleaded not guilty in that case.

In a news release posted on its Web page Thursday, Tyson said the Department of Labor's position is tantamount to asking banks to pay employees for the time they take to put on suits in the morning. The Arkansas company said only 25 percent of its workers are Hispanic. It has no idea how many are immigrants.

Scalia said many poultry processors require workers to be dressed in protective gear when the production line starts running and stop paying them for time spent changing clothes or cleaning up at the end of their shifts.

He estimated the time involved in donning and doffing amounts is eight minutes per worker per day, or about $500 per year. The Labor Department estimates the average poultry worker earns $7 per hour.

"A number of companies have this practice, and we will be contacting them shortly," said Scalia. "I hope the agreement we have reached will serve as a model."

In a ruling that's sure to send a chill wind down Madison Avenue, the California Supreme Court ruled Thursday that companies can be sued for false advertising over policy statements made in public relations campaigns.

Voting 4-3 in a case involving Nike Inc., the justices, relying on U.S. Supreme Court case law, said statements by the Oregon-based shoemaker denying allegations that some overseas factories are sweatshops were a form of commercial speech not protected by the First Amendment.

"Because in the statements at issue here Nike was acting as a commercial speaker, because its intended audience was primarily the buyers of its products and because the statements consisted of factual representations about its own business operations," Justice Joyce Kennard wrote, "we conclude that the statements were commercial speech for purposes of applying state laws designed to prevent false advertising and other forms of commercial deception."

The court's ruling did not decide whether Nike's ads were false or misleading, instead leaving that for the trial court, which had sided with Nike at the demurrer stage.

Chief Justice Ronald George and Justices Kathryn Mickle Werdegar and Carlos Moreno concurred with Kennard.

Justices Ming Chin, Marvin Baxter and Janice Rogers Brown sharply dissented, accusing the majority of trammeling on constitutional freedoms by effectively silencing one party to the debate.

"Handicapping one side in this important worldwide debate is both ill considered and unconstitutional," Chin wrote. "Full free speech protection for one side and strict liability for the other will hardly promote vigorous and meaningful debate."

Ann Brick of the American Civil Liberties Union, which filed an amicus brief in the case on Nike's behalf, said the majority's analysis was "very disappointing."

"It essentially shuts business speakers out of the public debate on any issue that directly affects them. That kind of analysis is absolutely antithetical to the basic First Amendment principle that we let the people, not the government, decide who's right and who's wrong on an issue of public dispute."

Kasky v. Nike Inc., 02 C.D.O.S. 3790, began when Marc Kasky filed a private attorney general action claiming that Nike violated California laws prohibiting unlawful business practices and false advertising by issuing press statements refuting claims that workers in Nike's Southeast Asian factories toiled in slavelike conditions. Kasky said those statements were deliberately deceptive.

Two years ago, San Francisco's 1st District Court of Appeal agreed with the trial court and tossed the case, saying that Nike's public relations campaign was protected because it was noncommercial speech that dealt with a topic of great public interest.

Several groups filed amicus curiae briefs with the court, and the dispute resulted in some odd bedfellows: the conservative Pacific Legal Foundation, for example, stood alongside the ACLU in backing Nike.

In reversing the appeal court, the California Supreme Court fashioned a "limited-purpose test" aimed at helping trial court judges determine whether allegedly false advertising is commercial, as opposed to noncommercial, speech. The speaker must be someone engaged in commerce, the majority held, the intended audience should be actual or potential customers, and the content of the message must be commercial in character.

Even under the new test, Chin wrote in his dissent, Nike should pass.

"Nike's speech, in an attempt to influence public opinion on economic globalization and international labor rights and working conditions, gave the public insight and perspective into the debate," he wrote. "This speech should be fully protected as 'essential to free government.'"

The majority saw otherwise, saying Nike had stepped across a fine line.

"To the extent Nike's speech represents expression of opinion or points of view on general policy questions such as the value of economic 'globalization,' it is non-commercial speech subject to full First Amendment protection," Kennard wrote. "Nike's speech loses that full measure of protection only when it concerns facts material to commercial transactions -- here, factual statements about how Nike makes its products."

The difference in treatment is justified, she held, because commercial speech -- which is more readily verifiable by its speaker and more "hardy" than noneconomic speech -- "can be effectively regulated to suppress false and actually or inherently misleading messages without undue risk of chilling debate."

In her separate, 30-page dissent, Justice Brown -- making references to Harry Potter, Lord of the Rings, and King Arthur's Court -- said Nike's statements should have been protected because the commercial and noncommercial aspects were "inextricably intertwined."

"Nike's commercial statements about its labor practices," she wrote, "cannot be separated from its non-commercial statements about a public issue, because its labor practices are the public issue."

Brown also called on the U.S. Supreme Court to re-examine its 60-year-old position on commercial speech, saying the court's current doctrine "fails to account for the realities of the modern world -- a world in which personal, political and commercial arenas no longer have sharply defined boundaries."

Coming up with any such new doctrine, she commented, might require "some wizardry."

"Unfortunately," she added, "Merlin and Gandalf are busy, so the United States Supreme Court will have to fill the gap."

Nike's attorney, David Brown of San Francisco-based Brobeck, Phleger & Harrison, said it was likely his client would seek review at the U.S. Supreme Court. As for the grounds, he said: "They're well expressed in the two dissents."

Deborah La Fetra of the Pacific Legal Foundation said the majority ruling could set "a very bad policy of dampening debate on really important public issues."

"What this decision means," she added, "is that one side of the debate gets full free speech protection, but a corporation trying to defend itself is subject to strict liability."

Alan Caplan, one of the plaintiff's lead attorneys, saw a different message in Thursday's ruling. "Every company is going to have to meet the standard now," the San Francisco-based Bushnell, Caplan & Fielding partner said. "If you're going to put statements out about [corporate policies], you're going to have to tell the truth."

(4/26/02) - MIAMI (AP) -- A federal judge has approved a settlement between Leon County and civil rights groups that sued over widespread voting problems in the 2000 presidential election in Florida.

The state and six other counties remain in the case brought by the NAACP and four other groups who sued in a dispute that grew out of the long-uncertain results of Florida's vote for president.

"There was nothing they were seeking that was impossible to achieve," Ion Sancho, Leon County supervisor of elections, said Friday. "I've been a proponent of settlement from the moment the lawsuit was filed."

Thomasina Williams, one of the attorneys for voters, said settlement talks are under way with other counties, and she was optimistic that some will follow Leon's move. Trial is set for Aug. 26.

State lawmakers changed election laws in response to complaints after the 2000 election, but critics said the changes didn't go far enough.

In the biggest departure from current procedures, Leon agreed to give a written explanation to voters whose ballots are rejected. The idea to make that a state standard was discarded by the Legislature.

The groups that sued agreed that the settlement "achieves some if not all of the relief" they could have obtained at trial, according to the court order dropping Leon from the lawsuit last week.

The county agreed to address disputes over voting, voter registration and voting lists and will meet with community groups to boost registration, with special efforts targeting minorities and college students. Sancho said he was doing all of that before.

Many voters said their votes didn't count or they were turned away from polls due to mistakes on voter lists, busy telephone lines at election headquarters, punch-card voting machine foul-ups and other problems.

Statewide, the largest numbers of voting problems were found in precincts with high proportions of black and elderly voters.

Under the settlement, both sides will work to restore voters who were wrongly removed from voters lists in the 2000 election. Many law-abiding voters across the state said their names were dropped because they were mistakenly pegged as ex-cons, who generally aren't allowed to vote in Florida.

The county also agreed to improve communication and training for staffers who work on election day.

Leon County includes the state capital of Tallahassee.

For a 2000 story that was swept under the rug fast, click the link below:

Election Hearing Too Hot To Handle?

(4/29/02) - WASHINGTON, April 29 — The Supreme Court ruled in an important disability rights case today that an employer is not ordinarily required to distort a valid seniority system in order to accommodate the need of a disabled worker for a transfer to another job.

The 5-to-4 decision was a tentative victory for US Airways, which had invoked its seniority system to deny an injured baggage handler the right to stay in a less physically taxing job in the mailroom, where he had been temporarily assigned but for which he did not have sufficient seniority to remain. The court's opinion today is not likely to be the last word, either in this dispute or in the legal question it addressed.

A federal appeals court ruled the worker, Robert Barnett, was entitled to a trial on his claim that the airline had violated his rights under the Americans With Disabilities Act. The court, the United States Court of Appeals for the Ninth Circuit, in San Francisco, said that the existence of a seniority system was merely "a factor" to consider in a case-by-case assessment of whether a proposed accommodation was reasonable.

In a decision vacating that ruling, Justice Stephen G. Breyer said for the majority today that seniority systems were entitled to much greater weight than that. When disabled employees request new assignments to positions for which seniority would not otherwise entitle them, "it will ordinarily be unreasonable for the assignment to prevail" unless the employee can show some "special circumstance," he said.

But by leaving the door open for employees to show why their needs should prevail in a particular case, the Supreme Court stopped short of adopting the airline's proposed rule, under which a seniority system would always trump a disabled employee's requested accommodation.

In contrast to the Ninth Circuit, all the other federal appeals courts to have considered the question had ruled that a seniority system always wins. One court, the United States Court of Appeals for the Fourth Circuit, in Richmond, Va., had gone further, holding that not only seniority but all other workplace rules trump a disabled worker's claim to accommodation. The court rejected that approach today. "The act does not create any such automatic exemption," Justice Breyer said.

To that extent, the court today set a standard more favorable to the interests of disabled employees under the 12-year-old disability law than had prevailed in much of the country. Justice Breyer and the four other justices who signed his opinion — Chief Justice William H. Rehnquist and Justices John Paul Stevens, Sandra Day O'Connor, and Anthony M. Kennedy — navigated between two competing poles.

On the one hand, Justices Antonin Scalia and Clarence Thomas said in dissent that the court was tilting too far toward disabled employees and had left the law "in a state of uncertainty that can be resolved only by constant litigation."

On the other hand, the two other dissenters, Justices David H. Souter and Ruth Bader Ginsburg, said that a proper understanding of the disabilities law showed that Congress put little weight on seniority systems and had not intended them to be more than "a factor" in the analysis.

The decision, US Airways v. Barnett, No. 00-1250, was one of the first Supreme Court decisions to interpret the concept of "reasonable accommodation" that is central to the way the Americans With Disabilities Act works.

The law prohibits an employer from discriminating against a "qualified individual with a disability," defined as someone who, with "reasonable accommodation," can perform the essential functions of the job in question. But an employer is not required to offer an accommodation that would impose an "undue hardship" on the operation of its business. In this case, US Airways argued that to have to depart from its ordinary seniority system would work such a hardship, and that consequently Mr. Barnett's requested accommodation of a permanent position in the mailroom was not "reasonable."

To balance the competing concepts of accommodation and seniority, the court today established a process for decision that stopped short of imposing a categorical rule but that at the same time was more determinate than the case-by-case approach adopted by the Ninth Circuit.

First, Justice Breyer said, the employee's proposed accommodation must be one that is reasonable on its face. If the employer believes that the accommodation would be an undue hardship, making the accommodation in fact unreasonable, the employer bears the burden of demonstrating that fact.

If the hardship involves a conflict with a seniority system, the employer would ordinarily win at that point and would be entitled to summary judgment in its favor. "In our view, the seniority system will prevail in the run of cases," Justice Breyer said.

However, while the court established a presumption in favor of seniority systems, it did not make that presumption conclusive. The employee "nonetheless remains free" to show that "special circumstances" make the requested accommodation a reasonable one, Justice Breyer said. His opinion gave two examples: a seniority system in which the employer makes frequent, unilateral changes, leaving employees with reduced expectations that the system will be followed; and a system that already contains so many exceptions that "one further exception is unlikely to matter."

The US Airways seniority system was devised by management, and was not part of a union's collective bargaining agreement. The court drew no direct distinction between the two situations, although the analysis made it somewhat more likely that a collectively bargained seniority system might be less open to challenge because employees can expect that it cannot be changed at the whim of management.

Walter E. Dellinger, who argued the case for US Airways, said the decision was "very satisfactory" in that it would protect "consistently applied" seniority systems from challenge in disability act cases. He said the airline would now seek to end the case by requesting summary judgment in Federal District Court in San Francisco.

Claudia Center, a lawyer with the Legal Aid Society's Employee Law Center in San Francisco, who argued for Mr. Barnett, said she was relieved that the court had limited its analysis to seniority systems. Reassignment was typically a last resort in disability cases, she said, with employees first seeking changes in equipment or in their work schedule. "The court has set a hurdle, but one that many plaintiffs will be able to meet," she said.

(4/17/02) - In a year when the U.S. Supreme Court will decide an unusually high number of employment law cases, the most significant decision may turn out to be one of the least publicized.

On March 27, in Hoffman Plastic Compounds Inc. v. National Labor Relations Board, the Court rejected an award of backpay to an employee fired for participating in a union organizing campaign because, unbeknownst to the employer, the worker was an illegal alien. While the decision may seem innocuous, the Court went out of its way to ignore or reject its own precedent, and in the process embraced an immigration policy that is not only harsh, but also wrongheaded.

Hoffman Plastic hired Jose Castro in 1988 to operate chemical blending machines. Later that year, he participated in a union organizing campaign and was quickly laid off, along with other union agitators. The National Labor Relations Board (NLRB) found that the workers were fired because of their union activity. However, when the case came before an administrative law judge to determine damages, Castro admitted that he was in the country illegally and had used fraudulent documents to obtain employment. The judge denied any award of backpay, but the NLRB reversed, holding that backpay was authorized up until the date that Hoffman Plastic learned Castro was an unauthorized worker.

Chief Justice William Rehnquist, writing for the 5-4 majority that reversed the NLRB's decision, authored a stinging rebuke. Rehnquist concluded that granting backpay to an illegal alien would violate the public policy underlying the Immigration Reform and Control Act of 1986 (IRCA), which prohibits the employment of undocumented aliens.

Although the Court set out to enforce the policy behind the IRCA, it has not done so effectively. The only effective deterrent to hiring illegal aliens is to make hiring them a less attractive option for employers. However, the Hoffman Plastic decision does just the opposite. By stripping these workers of meaningful civil rights protections, the Court makes such workers more attractive to unscrupulous employers willing to victimize workers who will not seek redress in a hostile court system.

Judging by the Court's own precedents -- which are inconsistent with this result -- its decision in Hoffman Plastics appears to be supported by little more than anti-immigrant sentiment. The question of "after-acquired evidence" is not new. Federal courts long debated what should happen in employment cases when, during litigation, the employer learns of employee misconduct -- such as résumé fraud or illegal activities on the job -- that would have led to termination had the employer first known about it.

BEFORE 'HOFFMAN PLASTIC'

Seven years ago, in Nashville Banner Pub. Co. v. McKinnon, a unanimous Supreme Court held that the best way to enforce the public policies embodied in federal employment laws while still deterring employee misconduct was to cut off backpay as of the date the misconduct was discovered, and deny reinstatement or front pay. That way, the employee did not receive an outrageous windfall, nor did the employer avoid serious sanction for wrongdoing. It would have been a simple matter -- and a logical result -- for the Hoffman Plastic Court to extend Nashville Banner to a case where the misconduct is that the employee was in the country illegally.

The Court, though, turned to a line of Supreme Court cases denying backpay awards where the employee was terminated in part because of serious illegal conduct, such as assaults on other workers. However, this is exactly the analysis rejected by the Court in Nashville Banner.

Until now, it has been generally recognized that unauthorized workers can bring claims for violations of minimum wage and overtime laws. What remains of those protections after Hoffman Plastic is uncertain.

Anti-immigrant sentiment is enjoying considerable currency right now and could result in impulsive, and harmful, immigration policies. We would be better served by a Court that follows its own precedent in protecting civil rights, rather than shaping immigration policy.

R. S. Ghio is head of the employment law section of Dallas' Arter & Hadden. Ghio also handles immigration issues within the section.

The New York Law Journal carried the story of an attorney that sued e-mail marketer Etracks.com Inc. for sending his firm thousands of e-mail ads.

After the suit was filed, the attorney received more e-mail. This time it was from the public – thanking him for filing the suit. The public is wishing for the spam generator to be sent to the cleaners.

Internet service providers have also be filing lawsuits against spam senders.

In more simple times the problem used to be door-to-door salesmen. Then telemarketers and fax-marketers took over. The door-to-door salesmen seem to have subsided and strict laws stopped the fax blasters. Telemarketing is still going full speed ahead.

The solution to spam is simple: If everyone deleted it, without opening it, the companies would stop sending it – they would make no money from it. If everyone were to hang up on telemarketers, that annoying business would fade away.

Much of the fraud committed today is through spam and telemarketing. That should be reason enough to simply say “no.”

(4/9/02) - HOUSTON -- The Arthur Andersen auditor who oversaw Enron's books pleaded guilty today to ordering the shredding of Enron documents and agreed to cooperate with prosecutors in a deal that could break the scandal wide open.

Former partner David B. Duncan pleaded guilty to obstruction of justice, admitting he tried to thwart an Enron investigation by the Securities and Exchange Commission.

He is believed to be the first person in the Enron case to strike a deal with federal prosecutors.

"Documents were in fact destroyed so that they would not be available to the SEC," he told U.S. District Judge Melinda Harmon, reading from a statement.

The charge carries up to 10 years in prison and hundreds of thousands of dollars in fines. Attorneys did not release details of any agreement on the sentence. Duncan remains free until his sentencing on April 26.

He had no comment as he left the courthouse. His attorney, Sam Seymour, said: "He's continuing his cooperation, as we've said all along."

Duncan was fired by Andersen after the accounting firm acknowledged the large-scale destruction of documents and deletion of computer files related to the collapse of the energy giant, whose bankruptcy cost thousands of employees their jobs and, in many cases, their life savings.

Duncan could prove crucial in enabling prosecutors to build a case against Enron. As the senior auditor in charge of the Enron account, he would presumably have knowledge of the complex web of partnerships used by the company to keep millions of dollars in debt off its books.

Under the plea bargain, Duncan is immune to any further prosecution related to the Enron case as long as he fully cooperates with federal authorities-- which could include testimony at future trials-- and agrees not to sell his story or otherwise profit from the debacle.

In court, Duncan described how he ordered Andersen employees on Oct. 21 to destroy certain documents two days after he learned that the SEC was investigating Enron.

"I also personally destroyed such documents," Duncan told the judge. "I accept that my conduct violated federal law."

Prosecutors said the shredding occurred between Oct. 23 and Nov. 9. The SEC notified Andersen on Nov. 8 that it would subpoena documents related the firm's work on Enron.

A grand jury indicted Andersen on March 7 on a charge of obstructing justice, accusing the firm of destroying "tons of paper" at offices worldwide and deleting enormous numbers of computer files on its Enron audits. At times, the government said, the destruction was so frenetic that employees worked overtime and shredding machines could not keep up.

The indictment was unsealed March 14. Andersen has pleaded innocent, and a trial is set for May 6. In the meantime, large numbers of Andersen clients are dropping the firm, and the company is struggling to save itself.

Duncan initially was thought of as somewhat of a rogue auditor when Andersen fired him and demoted several others on the Enron team after acknowledging the shredding in January.

Robert Mintz, a former federal prosecutor and an expert on white-collar crime, said Duncan's plea significantly weakens Andersen's hand in trying to work out a settlement of the criminal case.

"His defection represents the first thread in the unraveling of the defense," Mintz said. "Andersen's best defense was the presentation of a unified front, categorically denying any intentional wrongdoing by any employees."

(4/9/02) - A San Diego jury awarded $30 million in punitive damages Friday to six female supermarket workers who accused their employer of sexual harassment.

The award is believed to be among the largest ever for a harassment case in the United States, and is the latest development in a six-year case involving the Compton, Calif.-based supermarket chain Ralph's Grocery Co.

It's also the latest big-ticket victory for San Francisco plaintiffs' attorney Philip Kay. In 1994 Kay gained national prominence when he won a $7.2 million verdict (later reduced to $3.7 million) in a sexual harassment suit against law firm Baker & McKenzie and one of its partners.

Kay described Friday's verdict as a victory for working-class women. "I hope that places like Ralph's, that have women like this working to support their families, that they'll afford them the same type of dignity and respect that anybody should have at a workplace," Kay said.

Each of the six plaintiffs was awarded $5 million in punitive damages, in addition to $550,000 for emotional distress to be split among the six.

Several employment attorneys said the award was among the highest for a sexual harassment case that they were aware of, though they couldn't confirm that it was the highest ever.

"Regardless of whether it's the largest ever," said Fenwick & West employment attorney Victor Schachter, "it's certainly a sobering message to all employers that a failure to provide an environment free of sexual harassment can be extremely costly."

The case involved the conduct of a Ralph's store director who routinely harassed female employees over the course of a decade. According to the suit, Roger Misiolek physically and verbally abused six female Ralph's employees by calling them vulgar names, manhandling them, and throwing items like telephones, clipboards and, in one instance, a 30- to 40-pound mailbag, at them.

Despite numerous complaints by the harassed employees, Ralph's neglected to investigate, document or remedy the situation, the women alleged.

"They knew it was happening but chose not to take any effective action," said Kay. "All they would do was transfer the victims away" to different stores.

Attorneys from Los Angeles-based Ballard, Rosenberg, Golper & Savitt, which represented Ralph's, did not return calls for comment. According to Kay, the defense counsel has already indicated that it will appeal the decision.

Friday's verdict was the second in the case. In 1998, a jury found Ralph's liable for gender harassment, failure to prevent gender harassment and malice or oppression based on its conscious disregard of the rights or safety of others. The jury awarded the six plaintiffs $550,000 in compensatory damages and $3.325 million in punitive damages.

But because one of the jurors turned out to be a shareholder of Ralph's parent company and disputed an expert witness's assessment of Ralph's net worth, the judge ordered a new trial on grounds of juror misconduct. The new trial was to determine punitive damages only.

According to Kay, the defense subsequently offered to settle the entire case for $2.2 million. "I'm glad we didn't accept," said Kay. "We beat their offer."

"When a jury has a multimillion-dollar verdict like this it is trying to send a strong message that whatever happened is unacceptable and needs to be changed immediately," said Oakland, Calif., employment attorney Thomas Klein.

Indeed, one juror believed that the monetary award wasn't high enough in Gober v. Ralph's Grocery, N72142. Ralph's should have been penalized at least 1 percent of their $3.7 billion net worth, said jury foreman John Adair. "We barely came over one-tenth of 1 percent."

Kay would not say how much of the $30.6 million verdict would flow in his direction. But he noted that under the California Fair Employment and Housing Act, the prevailing party is entitled to pursue all attorney fees in a post-trial motion. He estimated that these fees are probably in excess of $5 million.

Pete Bradley, a former N.C. Division of Motor Vehicles officer who has talked to state investigators probing possible corruption in the agency, told police his phone lines were cut and windows broken at his home Tuesday.

Bradley has been the focus of news articles about the investigation in the Asheville Citizen-Times and in Saturday's Observer.

Among other things, he said he told state investigators that his superiors at DMV coerced him into making political contributions.

Bradley told police in Biltmore Forest that vandals cut two phone lines and three cable lines leading into his home, and broke two windows in a basement office.

"It's an obvious attempt to intimidate me which will not work," Bradley said Wednesday. "I'm not going to be intimidated. I'm going to pursue this fully and people will be held accountable ... I don't care who they are."

Bradley worked as an enforcement officer for DMV from 1996 to '99. In February he was fired from his job as police chief of the small town of Woodfin, just north of Asheville, after embarrassing personal revelations were leaked to the media. The revelations turned out to be part of an SBI report into corruption at DMV.

The probe began more than two years ago and is now in the hands of the Special Prosecutions section of the state Department of Justice.

Bradley's attorney, Leon Patricios of Miami, said Bradley plans to file a suit against his former agency and others next week in federal court.

NC DMV Corruption Probe

N.C. DMV Corruption Investigation

WASHINGTON (AP) - The Supreme Court reversed course Monday and said it would not decide whether older employees have similar rights as minorities in discrimination claims.

Justices heard arguments last month in an appeal filed by fired utility workers in Florida, who claim that company reorganizations targeted aging employees.

Instead of ruling on the merits of the case, justices said that its decision to hear the case in the first place was "improvidently granted." The court did not explain the action.

The case asked whether a 1967 law that bars on-the-job age bias allowed lawsuits on grounds that an employer's action had a disproportionate impact on older workers. Justices have already settled that impact suits are allowed under the 1964 Civil Rights Act, which bans discrimination based on a worker's gender, religion or race.

The court agreed to consider that question last December, when the country was still in a recession and companies were cutting an average of 146,000 jobs a month.

A ruling could have had a broad impact. The 1967 Age Discrimination in Employment Act covers about 70 million workers age 40 or older, nearly half the work force. The law bans different treatment for older workers just because of their age.

The case's dismissal is a defeat for about 120 former Florida Power Corp. employees, who claim they were fired as part of a company effort to change its image and reduce salary and pension costs. More than 70 percent of those laid off during company reorganizations in the 1990s were age 40 or older.

The 11th U.S. Circuit Court of Appeals said the workers could not pursue their lawsuit under the age discrimination act.

Age bias was cited in more than 20 percent of 80,840 discrimination complaints filed last year against private employers with the Equal Employment Opportunity Commission. Race and sex discrimination allegations accounted for about 67 percent.

The case is Adams v. Florida Power Corp., 01-584.

Vietnam veterans suffering from diabetes and prostate cancer after being exposed to Agent Orange won a round Monday in their court battle against the federal government.

The 9th U.S. Circuit Court of Appeals ruled that the Department of Veterans Affairs must pay retroactive disability payments to thousands of Vietnam vets.

The payments must date to when veterans initially applied for benefits under a law that allowed them to do so beginning Sept. 25, 1985.

Because of a complicated rule-making procedure, the government said the cancer victims could not receive benefits until Nov. 7, 1996, if they filed a claim after Jan. 4, 1994.

The appeals court nullified that government interpretation, which affects an estimated 1,200 veterans, said Barton F. Stichman, executive director of the National Veterans Legal Services Program.

Also undermined by the ruling was the government's position that veterans suffering from adult onset diabetes could not get benefits until July 9, 2001, if they filed a claim between Jan. 4, 1994, and July 9, 2001, Stichman said.

"All I can tell you is for the last 20 years the VA has dragged its feet on the Agent Orange issue. They try every way they can to come up with theories to why they shouldn't give benefits," said Stichman, who filed suit in 1986.

Phil Budahn, a Veterans Affairs spokesman, said the government had not seen the decision and could not immediately comment.

Between 1962 and 1971, the United States sprayed 19 million gallons of herbicides over southern Vietnam to destroy jungle cover for communist troops. About 55 percent of that was Agent Orange.

Over the years, the government has added a host of diseases associated with Agent Orange entitling veterans to disability benefits. Those include several cancers, including cancer to the lung, larynx and trachea. Last year, the government recognized adult onset diabetes.

The ruling puts prostate cancer and adult onset diabetes in line with the other diseases acknowledged by the government to have links to Agent Orange, meaning disability benefits would be paid from when a claim was first filed.

For many veterans, the government has paid retroactive benefits while litigation continued. The government reserved the right to take back the benefits if it won the lawsuit.

Clifford Nash, a Vietnam veteran with prostate cancer, said the court decision will allow him to keep about $11,000 in benefits that he may have had to return had the court ruled the other way.

"I've heard some veterans say we fought there and now we got to fight for what's right and ours," said the 71-year-old Nash, of West Enfield, Maine. "Everything seems to be taking a turn for the better."

The case is Nehmer v. Department of Veterans Affairs, 01-15325.

Veterans Awarded Lifetime Medical Care

A federal judge yesterday ordered the government to pay attorney fees and other expenses to Indian plaintiffs as sanctions for government legal tactics used in combating a six-year lawsuit over the management of an Indian trust fund.

U.S. District Judge Royce C. Lamberth ordered the Interior Department to pay 75 percent of the costs incurred by the Native American Rights Fund (NARF) and other plaintiffs for having to file court motions relating to two small parts of the sprawling lawsuit.

One part of the sanctions relates to a government request for a protective order that the court later held to be baseless. The second was for government requests for clarifications about what e-mails it was to produce to the court. The court held that those requests were intentional delays.

The total cost of the sanctions was not clear yesterday, as the Indian plaintiffs have 30 days to file their expenses and fees. But a lawyer for the plaintiffs said it would be less than the $600,000 in sanctions the judge imposed earlier in the case, after finding in February 1999 that the secretaries of the interior and the Treasury were in contempt of court.

"This order is another demonstration that the court sees a pattern and practice of government obfuscation and problematic litigation tactics," said Keith Harper, an attorney with the NARF. "It's more evidence of why we can't trust government to tell the truth or follow court orders in this case."

Lamberth's orders were released late yesterday. John Wright, a spokesman for the Interior Department, said the department had not had a chance to review the papers.

"It would be premature for us to comment on orders we haven't seen," Wright said.

In another order issued yesterday, Lamberth absolved Interior Department officials from charges that they retaliated against a whistle-blower who had given depositions that an expensive new computer system that was designed to overhaul the troubled trust fund was failing. That employee, Mona Infield, was working at the Albuquerque branch of the Bureau of Indian Affairs. In 2000, she was ordered to stay home on paid administrative leave, after refusing to move to a new records branch being opened in Reston.

Lamberth ruled that the agency had adequately compensated Infield, but he cautioned that "the defendants should consider the prospect of future contempt proceedings before engaging in the type of behavior" that led to the charges.

The plaintiffs are suing the Interior Department for mismanaging a 115-year-old trust fund for as many as 500,000 Native Americans. The trust fund distributes to shareholders as much as $500 million in annual revenue from the leasing of grazing, oil, mineral or timber rights on millions of acres of Indian-owned land.

More than a century of shoddy bookkeeping, lost files and complicated rules of ownership have left an unknown amount of money missing. The Indian plaintiffs estimate the amount to be as much as $10 billion; the government estimates it to be far less.

Interior Secretary Gale A. Norton and a top deputy in the department are facing contempt charges on allegations that they covered up or lied to the court about the failures of the new computer system.

A Scramble for Cover in Indian Case