A Federal Nuclear Research Facility, A Greedy Corporation & Mass Layoffs: A Wrongful Termination Lawsuit in California - $37.25 M Dollar Settlement
"Bechtel/LLNS is a controversial company as to how powerful they are—and it is not a company that is beholden to stockholders—no responsibility to anybody. What is going on with our government contracts—privatizing labs, nukes for profit, private companies running our nuclear facilities—how do they do that? Well, they cut back on their staff and go with inexperienced, cheaper labor; is that what we need for our nuclear arsenal? They promised to save the government a lot of money, and they did so on the backs of loyal hardworking people. Their strategy was just to get rid of their best workers, and keep their cheapest labor--this also was a theme of the case. But, [most importantly] this was a case about perseverance and having the courage to move forward under very complicated, difficult circumstances. It was a very expensive case to pursue but our firm was not afraid to do anything we had to do to fight for justice for our clients. And so it was about the courage of our firm, the courage of our clients—all of us, to take on people like this and never give up.”
– Gary Gwilliam
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It might seem a bit trite to compare this case to a modern-day version of David and Goliath--drawing a comparison between Gary Gwilliam, Esq. and his small law firm in Oakland, California, and the giant corporation Lawrence Livermore National Security, LLC—but it simply is too apropos to overlook.
This case, which began in May of 2008, stretched out until September 30, 2015, when a $37 million dollar settlement was finally reached for the 130 wrongfully terminated employees of LLNS. The comparisons are almost too numerous to mention, but let’s give it a try.
1. The Giant Defense Law Firm: Gary and his firm of 6 on one side, and the large, expensive, defense law firm of 1200 on the other--backed up by the clout, power and financial resources of Lawrence Livermore National Security, LLC.
2. The Giant of Time: Seven years and over 25,000 billable hours devoted to this case by Gary & his firm.
3. The Giant Financial Commitment of Gary & his firm to this case: Approximately $1.5 million dollars in out of pocket expenses.
4. The Giant of Documentation: Close to 300,000 pages of documentation were produced.
5. The Giant Number of Clients for this one case: There were 130 plaintiffs represented by Gary and his firm. This case was not a “Class Action,” but rather a “Consolidated Action” lawsuit. In Consolidated Action lawsuits, each plaintiff, even though they are part of a large group, is treated as an individual with separate claims and individual circumstances.
This case illuminates the critical importance of choosing the precise lawyer for your lawsuit; someone with keen insight and legal expertise, without doubt, but also the courage, compassion, confidence, perseverance, fearlessness, integrity and the financial resources, to see a case like this through to the end. It takes every single one of these attributes to take on large corrupt corporations and win.
“…..This was a very, very sad situation because of what this ruthless company [Lawrence Livermore National Security, LLC] did to their employees. I was the only lawyer in the Bay area that had ever taken on Livermore lab and taken them on successfully. My name was well known out there--nobody else would touch them; we were the only law firm ready and willing to take them on even though we knew we were up against a big giant. The defense firm had two hundred [times] as many lawyers as us-- 1200 versus 6. They had two hundred lawyers for every one of ours, but that was good—we had them right where we wanted them. But the truth of the matter is that I had as much experience, and was as ready to go to trial, as anyone in that firm.
….. We estimated that our firm put in 25,000 hours, and that is a tremendous amount of hours. Livermore could have settled the case a long, long time ago and saved everybody a lot of time and money, but they wanted to fight it. And the people who really got rich is that defense firm—not us; we got a nice settlement, but I tell you …all those hours and all the time and money we put into it. This was not a case, given how much it was, that was a "get rich" case. We ended up getting out of it pretty much what we put into it. But seven years of risk—there are very few plaintiffs lawyers that would have taken on a case that was this risky—that would go on this long and put this much money into it—they just wouldn’t do it. This is what good plaintiffs lawyers do however—you just have to have the courage to move forward and say, ‘Hey, I’m going to do it.’ I would have fought this case forever even if it had driven me to bankruptcy; I would never have given up on this case—never. You have to decide that there is something more important than money; it is about doing what is right, doing it right and getting justice for your clients."
In May of 2008—just seven months after it won the contract from the Department of Energy to manage their national nuclear laboratory in Livermore, California--Lawrence Livermore National Security, LLC (LLNS), engaged in a massive layoff of more than 430 of its employees. They said at the time that the employees were laid off because the Lab was dealing with a national recession, a budget “shortfall,” and a change of focus away from nuclear weapons development. This was the first layoff at the Lab in almost forty years.
In May of 2009, 130 of these former employees sued LLNS, claiming that they had been selectively terminated under the guise of a lay-off because they were older, more senior, and thus higher-paid employees. The plaintiffs, all of whom worked in the laboratory's business unit in support of its science and research units, said the organization breached contracts when it ignored a long-standing policy of cutting temporary, contract and junior workers before terminating employees with seniority. All of the plaintiffs had claims for age discrimination and breach of contract, along with other individual claims such as retaliation and disability. Under California law, employees over the age of 40 are protected against age discrimination. The average age of the plaintiffs in this case was 54, and they had all worked for the Lab an average of 20 years. All of them were terminated during this mass layoff in May of 2008. They were represented by the law firm of Gwilliam, Ivary, Chiosso, Cavalli & Brewer in Oakland, California.
An Alameda County court judge decided to divide the case into two distinct phases based on two separate legal theories or "Causes of Action"; one being breach of contract-- and the other-- age discrimination. The case would initially proceed with five lead plaintiffs representing each group.
About four years later, in May, 2013, the first case went to trial and the jury found that LLNS had breached or violated its own employment agreements, which stated that it would terminate employees only for “reasonable cause." Subsequently, the jury awarded a total of more than $2.7 million to the five lead plaintiffs, in amounts ranging from $242,000 to $853,000 each, as compensation for lost pay and benefits. In December 2013, the second jury found that the Lab did not engage in age discrimination when it terminated their employees--meaning, it was not proven that there had been a pattern of discrimination because they were older.
The Result: There was a verdict for, and against, the employees in the same case. This was possible because there were two separate phases to the same case. And while the jury for Phase I determined that the Lab had breached its employment contracts and acted unfairly in terminating the lead plaintiffs, the second jury—for Phase II—found that lab did not terminate these same employees because of their age. So basically, both juries considered the case on two distinctly different theories, and came to two different conclusions.
The case was heavily litigated for more than seven years; close to 300,000 pages of documents were produced. More than one hundred plaintiffs were deposed. There were two separate 60-day jury trials—again, referring to Phase I and Phase II--and both sides filed appeals. Attorneys’ fees and costs were estimated at $10-15 million for each side.
With the encouragement of Alameda County Superior Court Judge Robert Freedman, the parties engaged in months-long mediation that resulted in the settlement on September 30, 2015, for $37.25 million dollars. One plaintiff in the original 130 employees didn’t settle their case. LLNS continued to deny any wrongdoing in connection with the circumstances underlying the layoffs. On the contrary, in the words of Gary Gwilliam, “ They never admitted anything—we had to fight them at every stage of the game …… they never, never conceded anything. They said, ‘We followed the rules; this was a reasonable layoff and we did everything we could—we treated these people fairly….we just had to lay them off.’”
Elaine Andrews, the lead plaintiff, said of the settlement, “It is not what we wanted, and we haven’t been made whole for our losses, but it’s been seven years and people need to move on.”
On May 22, 2008, when 430 career employees were told they no longer had jobs, they were told to clear out their offices, collect their belongings and leave the premises. This was all done under the cold supervision of management personnel, and then they were escorted off the grounds by armed guards. This was basically an outrageous, "slap in the face" to the hundreds of loyal employees who had devoted their time, talents and lives, to the Lawrence Livermore National Lab (LLNL) and its stated mission. Many of these employees lost their homes, savings, livelihood, financial security—with many being forced into bankruptcy.
Elaine Andrews was an employee of LLNL who was fired in this mass layoff which followed the privatization of the Lab and its transition from public to private control. On October 1, 2007, Lawrence Livermore National Security, LLC—a private company—was awarded this contract to manage the lab for the Department of Energy or DOE. At that time, everybody signed a new employment agreement, which stated, “Any termination action must be reasonable under the circumstances and cannot be made for an arbitrary or discriminatory reason.”
Gary explains what happened, “Elaine Andrews was the most senior person in the entire HR department—she had been there 29 years. They laid off one person in that entire department. Who was it? It was her; and they left all those younger workers there. It was a consistent violation of letting older workers go, but keeping younger workers.”
Therefore, Elaine Andrews was one of 130 former workers of the LLNL who claimed that this widespread layoff specifically targeted the highest salaried senior staff members, and those who were closest to retirement. She was one of the five test plaintiffs of Phase I and Phase II of the trial.
Elaine shed more light on what happened, saying that all of the workers who were laid off were older than 50, and everyone believed the lab let them go so they could get rid of older employees and hire younger people at lower wages. She also said that the layoffs came at a difficult time because most of the affected employees were too young to retire but too old to find another job since the U.S. had just gone into an economic downturn at the time. In her words, “Many have lost their homes and suffered physical and mental issues from the stress of losing their livelihood.” The former employees also were unhappy about the manner in which they were fired. Elaine continued, “Supervisors walked into our offices, told us we were being laid off but didn’t give us a reason and said we had 30 minutes to pack up our personal belongings. The laid-off employees were then escorted by armed guards to the exit center, where their security badges were confiscated. These weren’t "loser" employees; these were outstanding employees ……I had a great career there, beginning as an employee in accounts payable, then becoming a group leader in procurement, a manager in the contract labor office and working in a position in the human resources department.”
“The telephone rang and it was Tammy Jernigen the Associate Director for Human Resources. I had never met her and she was very nervous on the phone. She told me that I had been selected—that I was going to be affected by the layoff. When I asked why she said, ‘I’m not at liberty to tell you.’
Never to this day have I been told. Prior to the layoff I had even been asked to be on the committee to calculate seniority—so here I was calculating seniority for half of the lab employees, not knowing that I was the only one who was going to get laid off that Thursday. I was there [nearly]30 years in 2008, and I was senior to everyone on the job. I haven’t been able to find another job. This has been so traumatic because of the shame and embarrassment, and I feel so worthless; that’s what this has done to me.”
LLNL, as it is commonly referred to, or simply “The Lab,” is a federal nuclear research facility that was founded in 1952 by the University of California. At that time it was known as the “University of California (UC) Radiation Laboratory at Livermore.” It was essentially an extension, or branch, of the UC Radiation Laboratory at Berkeley and created as a “Sister Lab” to the nuclear weapon design laboratory at Los Alamos in New Mexico--home of the Manhattan Project and the first atomic weapons. In similar fashion, many of the country's top nuclear research facilities or "labs" around the country, are run by non-profit universities.
Edward Teller and Ernest Lawrence are considered co-founders of Livermore, and Lawrence was the Director of the Lab. When Lawrence died in 1958, the University of California at Berkeley Board of Regents, renamed the Laboratory, “Lawrence Radiation Laboratory.” In 1971, the Lab was renamed, “Lawrence Livermore Laboratory,” which eventually became “Lawrence Livermore National Laboratory.”
From the time of its establishment in 1952, to October 1, 2007, LLNL was managed essentially as a public service by the University of California. But in 2007, President George W. Bush’s administration made the decision to turn over key government functions to private industry—and in so doing, fully privatizing the nation’s nuclear warhead complex. They awarded the contract to Lawrence Livermore National Security, LLC—a private entity headed by Bechtel and the University of California Board of Regents, which now runs Lawrence Livermore National Laboratory under a contract with the federal government.
Gary clarifies what happened:
“Before October 2007, the Lab was run entirely by the University of California, but in 2005 or 2006 when the Bush administration was in, they were convinced that the universities weren’t running them very well, and that a private company could do a lot better and save us all a lot of money—and there would be more efficiency because private companies do better than public agencies. So, they put the contract up for bid. Well there were a number of bids, but the main bid was by Lawrence Livermore National Security, LLC, (LLNS) and it was made up primarily of Bechtel and the University of California. This is who the government awarded the contract to. There were a few smaller companies that were part of LLNS, but primarily it was Bechtel and UC. Of these two, Bechtel was really the one that was running everything. In order to get the contract, LLNS had told the government that they would be able to save them about 50 million dollars a year. However, there was about 40 million dollars more in the cost of the contract. At the time of transition, from LLNL to LLNS, employees signed a new employment agreement, which stated, "Any termination action must be reasonable under the circumstances and cannot be made for an arbitrary of discriminatory reason." However, approximately 30 Bechtel employees were placed in top management positions, and they were the ones who immediately came in and began all the layoffs. Apparently, part of the plan to save money involved letting go of all their older--and higher paid employees--and bringing in a bunch of younger ones."
Bechtel is a controversial company as to how powerful they are and it is not a company that is beholden to stockholders—no responsibility to anybody. What [in the world] is going on with our government contracts—privatizing labs, nukes for profit, private company running our nuclear facilities—how do they do THAT? Well, they cut back on their staff and go with inexperienced, cheaper labor; is that what we need for our nuclear arsenal? All they did was promise to save a lot of money—and they did so, on the backs of loyal hardworking people. Their strategy was just to get rid of their best workers, and keep their cheapest labor. This also, was all part of the theme of this case.”
As soon as the layoffs started happening in May 2008, Gary started getting calls. There were a number of reasons for this. Firstly, Gary had "history" with Lawrence Livermore--he had taken them on in the past and had had several cases against them. One was a very high profile case which had received a lot of publicity; it was tried twice--meaning it was tried, appealed and then remanded back to the lower court for a new trial. Therefore, he became known as the only lawyer in the Bay area who had ever taken on Livermore Lab--and taken them on successfully--his name was well known "out there." Secondly, due to this exposure as well as his reputation for taking on difficult cases, the Union "knew" who he was. Thirdly, Elaine Andrews who ultimately became the lead plaintiff in this case, had been a former client of Gary's. She turned to him again when she found herself out of a job. In Gary's words, "Not one other lawyer had ever done one of these employment cases against Livermore--nobody else would touch them, so we were the only law firm ready and willing to take Livermore on--even though we knew we were up against a big giant."
Gary says that right from the beginning, he and his firm were very quality conscious as to the cases they accepted, and they declined about 50 for various reasons--they just didn't take every case that came to them. Some people were not the right age, some didn't want to proceed to trial, there were a number of reasons. Every single case was thoroughly vetted meaning Gary or one of the attorneys at his firm met with every single person, sat down and talked with them, and heard their entire story. It was extremely time consuming and methodical work--but it simply had to be done.
It was quite apparent from the very beginning, that virtually everyone had basically the same story which was, "I had worked there for years, they got rid of me, and left others there who had worked for me and were much younger." Furthermore, the average age of those laid off was 54, and the average time at the Lab was 20 years. It was all too obvious what the Lab had done--they had gone out of their way to lay off older workers and keep younger ones--and they tried to justify it in different ways. Therefore, there were no surprises with respect to Gary and his firm's theory that it was age discrimination and unfair and arbitrary and discriminatory--this was always known to be the crux of the case, right from the beginning.
The case did not settle until September 30, 2015, so Gary was in litigation and actively involved in it for over seven years. He says, “I did have a few other cases that I worked on here and there, as the case didn’t go to trial until 2013. I hired an attorney full time—Rob Schwartz—and it was 100% of his time. He did a really great job on it. There were three at our firm who worked on it; my partner Randy Strauss, Rob Schwartz and me. We estimated that our firm put in 25,000 hours, and that is a tremendous amount of hours. We went into the case with the idea that Livermore was going to settle early on. They talked about that because it was obvious they had made some serious errors. We had some early mediation, but it turned out it went the other way and we ended up spending more time and energy and money than we ever thought we would, but I don't have any regrets about that at all. We had great clients who needed our help, they were very deserving of it, and they were extremely appreciative of every single thing we did for them. We always kept everybody very closely advised as to what was going on, we had meetings with them, we sent emails--they were very grateful—even after all of these years when they were getting worn out and tired. A couple of them had to go through bankruptcy; some of them lost their homes, they couldn't get another job, they were struggling, they had health problems, but still they hung in there. It was our clients who were the real heroes in this case—not me. Think about somebody in their 50's, who has worked for the same company for twenty years, and they are dumped into the job market to see if they can get a job in May 2008—right at the beginning of this horrible recession—these people didn't have any chance of getting another job at that time. They were just out cold and it was a very, very sad situation because of what this ruthless company did to them. They were also extremely hard-nosed at Livermore and wouldn't give anyone any extra benefits for retiring early. They wouldn't even say, 'If you retire early we'll give you extra pay.' They simply wouldn't do anything for anybody. They passed it off onto the government and said it was their fault, but that wasn't true—Livermore just didn't care ...... about loyalty or fairness or for anybody but themselves"
When the 130 former Lawrence Livermore National Laboratory (LLNL) employees filed suit against LLNS, it was a consolidated action—not a class action lawsuit—which is an important distinction. Furthermore, to have a consolidated action lawsuit that includes 130 plaintiffs is a highly unusual occurrence; most consolidated actions might normally fall within the range of 2-10 plaintiffs. The fact that this lawsuit consisted of such a large number of plaintiffs, significantly added to the complexity and difficulty of this case.
Both Class Action and Consolidated Actions share the following similarities:
• A Large group of plaintiffs have suffered injury or been harmed by the defendant(s).
• The same defendant(s) is alleged to have caused that harm or injury
• The lawsuit is consolidated into one action, and not into separate individual lawsuits.
The key difference between these two actions has to do with how this large group of plaintiffs is treated with regard to procedure.
In a typical class action, a plaintiff sues a defendant or a number of defendants on behalf of a group or a class. The allegations involve a large number of people who have been injured by the same defendant(s), and in the same way. The class action allows all of the claims of all class members—to be resolved in a single proceeding—instead of each injured person bringing their own individual lawsuit. Once a class action is formed, it expands to include everyone who has allegedly been harmed in the same way and by the same defendant. The class action then proceeds as a single case with one single outcome. In a class action, this “group” referred to as “The Class,” are represented by a class representative who “stands” in for the rest of the class. Therefore, all members of the class are treated as one plaintiff, not separately or as individuals with individual claims.
In consolidated actions, each plaintiff, even though they are part of one large group, is treated as an individual. This means therefore, that certain facts need to be established for each individual including anything that is unique to them, such as how he/she has personally been harmed by the actions of the defendant. Often a consolidated action is used when each plaintiff within the group, has so many differing individual circumstances, that they outweigh the existing common issues of fact and questions of law that would make it mandatory and necessary for a case to be considered a class action. For example with Livermore, age of the plaintiff, the length of time with Livermore, job position, salary, employment contract, etc., were all varying factors and all unique to each individual employee. However, they were all damaged in the same layoff and all had common issues of law and fact regarding liability.
“Here is what happened…… we filed a lawsuit for one hundred and thirty people—that is very rare. It was a very unusual case. People kept thinking this was a class action but it wasn’t a class action, it was a consolidated action. We could have filed one hundred and thirty separate lawsuits if we had wanted to, but that would have really been a nightmare; so, we filed one hundred and thirty cases in one complaint because they were all a part of the same lay-off and they were all held together by that. The defense frequently wanted to separate them all out and make us try them separately in the hopes that that would make us drain our resources, but the judge kept the cases together, so the question became, ‘How are we going to try them?’”
Gary continues, “So the judge came up with an idea that we should have what we call some “test cases;” so five cases were chosen as test cases relatively early on in the litigation and these were the five plaintiffs that ended up going to trial. So, we had two theories or what we call “Causes of Action” in our complaint. One was Age Discrimination and one was Breach of Contract. The Breach of Contract was based on the fact that the plaintiffs could only be fired for what is called “Reasonable Cause,” per their [newly signed] employment agreements with LLNS. The vast majority of employees in this country are what is referred to as, “At Will,” and can be fired for any reason—most people know that, but that is not true of public employees. Because our plaintiffs had been public employees at the University of California for many, many years, they were able to work something out and negotiate a deal with the government, that when Bechtel and the LLC took over the Lab on October 1, 2007, everybody signed that new employment agreement or letter, and in that letter it was agreed that these employees could only be fired for reasonable cause and not arbitrary or discriminatory—that is the standard for what we call our “Breach of Contract case.
Now those two cases should have been tried together, but the defense was making a big deal about the Age Discrimination case and how we needed all this statistical evidence and there was a motion for Summary Judgment on it. [Summary Judgment is a pre-trial motion claiming that there are no important facts in dispute, and therefore no need or reason to proceed to trial. Either plaintiff or defendant can file for summary judgment.] So, when we wanted to get the case set for trial, it was already the end of 2012; the layoffs had been in 2008, the lawsuit was filed in 2009, and there had been depositions and discovery ongoing since that time—consequently, three years had gone by. The difficulty in this case had been the complication of trying to get so many cases to trial with so many delaying tactics from the Lab and their lawyers--that was the big problem; the defense team had just done everything they possibly could to avoid the trial including, among many other things, having it moved to the Federal Court twice, which was a delay tactic. “
A case can be [re]moved to Federal Court most typically when there is what is called a diversity issue—meaning, one of the opposing parties is a resident of a different state. The other most common reason is where there is some type of constitutional issue. In this case, removal to a Federal Court was a delaying tactic designed to increase the costs of litigation and wear down the opposition—the plaintiff attorneys and the plaintiffs. When a case is removed to Federal Court, the state court no longer has any jurisdiction and cannot hear the case. The Federal Court then has jurisdiction unless it remands the case back to the state court, claiming that the basis for removal to Federal was frivolous. This is what happened here. Gary explains, “The second time was totally in bad faith—they moved it because they couldn’t get a continuance for the case—which they wanted. We ended up getting $40,000 + in attorney’s fees for a Bad Faith Removal which kind of tells you how they did things."
Gary explains that the defense firm were able to convince the judge that it was going to take them another year or two to prepare for the Age Discrimination case, and so out of frustration he said to them, "Look, at least let's move forward with the Breach of Contract case." He figured they couldn’t complain about that, and if that were to happen, the case would probably settle. So the judge agreed with Gary on this and he bifurcated (split)the two causes of action; meaning he said that the Breach of Contract case and the Reasonable Cause action would be tried first; and then the Age Discrimination second. In Gary's words, "And that’s why there were two phases to the case, and that’s why it was tried twice in front of two separate juries in 2013. I think that was all totally unnecessary and would have preferred to have it all tried at once, but that is the way it came down.”
March 11, 2013—Phase I trial began: Breach of Contract & Reasonable Cause
September 9, 2013 — Phase II trial began: Age Discrimination; Lab management deliberately let go of its older, long-term and career employees, and replaced them with younger employees with less seniority and requiring less pay.
The Defense Firm:
At first glance, it might appear that Gary and his firm were at quite a disadvantage. They were up against a large, high-powered, local defense firm. Gary however, didn't see it that way. He explains, "The defense firm had 200 times as many lawyers as us; 1200 versus 6. They had 200 lawyers for every one of ours, but that was good—we had them right where we wanted them—for the truth of the matter is, I had as much experience, and was as ready to go to trial, as anyone in that [defense] firm. There was nobody in that firm that had any more experience than me."
The defense strategy basically consisted of an inordinate number of delays and denials. This amounted to: Don’t concede to anything, completely deny everything and wear everybody down to the point that they don’t have the time, energy, resources, emotional strength or will, to fight any longer; basically everything that you would expect from a large high-priced, legal defense firm. This was done with a series of highly calculated legal maneuvers.
Demurrers: “Assertions by the defendant that although the facts alleged by the plaintiff may be true, they do not entitle the plaintiff to prevail in the lawsuit.”
Motions in limine: “In Limine” literally means “in the beginning.” Motions in limine are those filed before discovery even begins. They are often are filed in order to prevent the introduction of improper or prejudicial evidence at trial. When used as a delay tactic however, this generally refers to frivolous motions being filed in such large numbers, as to run up the legal costs against the opposing party.
Motions to continue trial: If you are a defendant or defense attorney, you often want to slow everything to a crawl and make it as painful as possible for the plaintiff(s) to continue to fight, so the more desperate the plaintiffs inevitably will become. The more you can tap into, or spend, everyone’s financial resources, the more likely you are to force everyone to the table to settle, in order to stop the “pain.”
Livermore never admitted to any wrongdoing whatsoever in the laying off of their employees. They said it was an entirely reasonable and proper lay-off and that they had followed their own rules—they never conceded anything. On the contrary, they said that they had had an unexpected "sudden financial stress" and just couldn't afford to keep everyone. They repeatedly and defiantly insisted that they had done everything they possibly could do for these employees and had treated them fairly, but they "regretfully" had to lay them off. In Gary's words, "They contended that in 2008 they didn't have enough money to run the Lab because there had been a budget shortfall--and they maintained that position to the end--even after it became obvious that the government had given them all the money that they wanted. So at every point in the game they argued that everything they had done was reasonable and they were fair, and that people had been treated right. That was a lot of BS in my opinion. The judge wouldn't let all those things in. Basically, they just made up a story and I think I can prove that they did not have a financial problem--they didn't--and although the recession came along, there was plenty of money in the government contracts and they got the same amount of money they always wanted. Furthermore, the defense made numerous motions for summary judgment and got parts of the case thrown out, and did everything they could to argue the lawsuit was wrong; and of course, once the verdict came down they appealed it. It was just a constant, never ending battle."
1. The employees of the Lab were laid off as the Lab dealt with a national recession and a change of focus away from nuclear weapons development.
2. The layoffs were done to position the organization for the future and retain employees with the skills needed.
3. There was never a guarantee that employees would be laid off in reverse order of seniority; those who were laid off lost their jobs because their skills were no longer needed.
4. Former Lab Director George Miller, a witness for the defense, testified that the “reasonable cause” clause didn't apply to layoffs.
5. Lawrence Livermore's Barbara Quivey testified that when three maintenance supervisors were laid off, it was because it would have taken five to ten years to retrain them for other positions. But her testimony was disputed by another witness from the lab, who claimed it would have taken one to two years.
6. Management had received notification via “email” from the DOE, that restructuring was needed at the Lab. They were simply following “orders.”
7. The Lab began by cutting roughly 240 temporary and contract workers, but “that was not enough to address the issues facing the lab,” defense attorney Patricia Gillette told the jury. She also stated that Lawrence Livermore then offered generous severance packages to anyone who took a voluntary layoff, but the government refused to add further incentives and only 215 people volunteered. She offered this to the jury, "No one took any pleasure in laying off people; it was a terrible day for everyone. In order to insure the future of the lab, they had to have the right mix of people going forward."
The primary issues Livermore faced came down to two main considerations.
1. LLNS violated their own employment policies--which was evident by the highly credible, individual employee experiences/stories.
2. There was a shocking lack of documentation pertaining to management layoff decisions.
As the trial proceeded, it became quite evident that the jury was growing increasingly disturbed to hear how the Lab had treated their employees. According to their own policies, Livermore employees were supposed to be laid off in inverse order of seniority. What this meant was that the most senior people were supposed to “go” last, and newest and temporary people were supposed to “go” first. That is the way the government laid everything out, and that was exactly what was supposed to happen, if it needed to happen. Gary explains, “LLNS violated that rule time and time again—the worst violation was Marian Barraza. Marian had worked there for thirty-eight years. She was in her 50’s. She started as a 17-year-old kid working there, she married her husband, she had a family with him and he died there on the job. Her daughter worked there—everybody loved Marian; she was great. And when the lab came she said, 'I wasn’t going to worry about the lab—I was probably the oldest, most senior person there; there were other people working there that were temporary people, and a guy who had worked there for about a year and a half….. and they walked in and just said well, 'You’re out.' " Gary continues, "They gave this woman one hour to clean out all of her stuff in her room and then they marched her out of there and sent her crying into the parking lot. She had to call her daughter who had to leave work and drive her home. It was a very touching and a very terrible story….what they did to this woman and many others. And she testified, as did others, that she had been treated like a criminal. This is a woman who had had security clearance—who had never done anything wrong—they just got rid of her and kept temporary workers in her place. Well, the jury didn’t like that. And then, there is the story of Elaine Andrews..... there was just simply a consistent violation of letting older workers go but keeping younger workers. It was bad, and it was wrong, and we proved it over and over again. We should have proved this statistically, but when we got into statistics it got very complicated and difficult, but we told the individual stories and that is why we won that case—the individual stories were just shocking—how Livermore had treated everyone. The jury during the first trial [Phase I] did not like the Lab at all--what they had done nor how they had gone about laying everyone off. Regardless, the Lab kept saying, ‘Oh, we had a right to do this….’ They came up with some lame reason for every layoff. However, we were able to show that Livermore had conducted themselves despicably, but more critically, had consistently violated their own rules.
Gary said one of the most shocking things which came to light during the trial, was the Lab’s deliberate and intentional total lack of documentation, and its complete disregard for—or any type of adherence to—normal business policies and procedures. It seemed obvious that they were completely averse to leaving any type of “paper trail” as to how they arrived at important decisions regarding the layoffs—no emails, memos, and meeting minutes anywhere—so it was all very calculating and insidious--particularly as they were operating under a government contract.
As this was a government contract, you would have expected that they would have covered themselves with memos, and emails and all kind of stuff—part of this obviously was that they hid this stuff from us; they were just doing things in the hallway. I’ll give you an example: one of our biggest contentions was that they arbitrarily left out a very big part of the lab called the Nuclear Ignition Facility, out of the layoffs—they call it NIF. There are about 1200 people working there and it has been a very controversial part of the Lab; they are trying to develop nuclear fission for commercial purposes so that someday we can have a safe energy throughout the world. It is a big, big deal. There was a piece about it on the cover of Time magazine. NIF has been around for awhile and nuclear fission research is happening around the world; but at the Lab, it has gone way over budget and it’s been very controversial. Diane Feinstein and others have been consistently critical of it. Now having said that, we contended that there were a lot of younger people that they kept on at NIF, and we needed to know that for our comparison purposes. [For our Age Discrimination case] As it turns out, they decided to exempt everyone at NIF, and they had people there who were gardeners, people who were maintenance people--lower level people as well as higher level scientists; they had young people and temporary people but they excluded them all and they did not have one memo about that. It was basically a handshake deal where the head of NIF and the head of the whole facility said, ‘Nah, we’ll exclude them.’
Furthermore, there was a committee made up of the HR personnel, who were supposed to oversee the entire layoff. We called it "LIRC" which was short for the "Layoff Implementation Review Committee." They were supposed to, and they did have, meetings throughout the entire time of the layoff-- starting in early 2008. You know what—there was not one minute, not one note, not anything for that entire committee "entrusted" with making those important decisions. They would say things like, ‘Well, we just went there…. nobody took notes, we just talked.’ They supposedly didn’t even “know” who even met on the committee—that kind of shocked people. Our HR expert was really all over them about that—about how wrong that was—their intentional lack of documentation. It is as if they were saying, 'You know, if we don’t have a paper trail, so you can’t catch us….ha ha… you know we don’t have anything in writing so what can you say?’ People didn’t like that—particularly for a government agency dealing with important issues like this, so I think this was the most important theme during trial, and the strongest argument we had—that they just failed and refused to document their activities. There have been a lot of problems with the Lab’s lack of documentation before, and it really came to light during this case. It was truly shocking to our HR expert—a guy named Jay Finkleman who was one of our main experts—and he did a great job. He is a highly respected, well known expert witness, and he said to them, 'You just can’t do this….a government should never do this.’ Anybody who had ever worked for big companies or the government were just shaking their heads. This really hurt them a lot. And I’m glad they didn’t document anything because it helped us win the case and made them look like idiots.”
Dr. Robert L. Civiak was a physicist and a former national security analyst at the Office of Management and Budget. In his opinion, Lawrence Livermore National Security had manufactured their budgeting crisis in order to justify the layoffs in 2008, and that they had had sufficient funds to avoid any involuntary layoffs.
In a sworn declaration filed with the Court, Dr. Civiak stated that: “…the parameters of the 2008 budget were known well before LLNS assumed management of LLNL, in October 2007. Any suggestion that a surprise budget shortfall led LLNS to invoke involuntary layoffs of career employees is false.” He added: “In my ten years of experience working on budget requests from the Department of Energy, [DOE] and its contractors, those organizations routinely exaggerate their funding needs and threaten dire consequences if their needs are not met. At OMB we called this tactic "Washington Monumenting" their budget problems, in analogy to the Interior Department's threats to close the Washington Monument when their budget is tight. Therefore, “In my opinion, LLNS Washington Monumented its budget problem. LLNS’ claim of a $280 M budget shortfall was likely made in an attempt to get increased funding from the Administration and the Congress. Only, LLNS took it another step. They used this phony budget shortfall as an excuse to lay off hundreds of workers for reasons not related to the budget.”
Gary says the Judge made several rulings which he vehemently disagreed with, and which were quite detrimental to the case when it was all said and done. One of these such rulings had to do with Dr. Civiak, whom Gary had hoped to call as an expert witness. However, the Judge ruled this budgetary issue completely out of the case--he was never allowed to testify.
In 2013, the claims of five so-called “test plaintiffs,” out of 130 former employees who filed suit, were litigated in two separate jury trials – Phase I and Phase II.
The first trial, [March 11, 2013] which alleged breach of the plaintiffs’ employment contracts, resulted in a victory for the five test plaintiffs and an award of $2.73 million in damages for their economic loss, with amounts ranging from $242,000 to $853,000 each, to compensate for lost pay and benefits. These awards represented compensation for past and future economic damages only.
1. Jurors were suspicious that the lab lacked documentation for many of its layoff decisions;
2. The Jury was swayed by evidence that management didn’t implement its layoff policies the same across the board.
3. In seeing a list with the ages of those laid off, it was apparent that they were all older employees.
The Lab prevailed in the second trial which alleged that the Laboratory had discriminated against older employees in making layoff decisions. This second jury found that the layoff did not have a disproportionate impact on employees age 40 and over, and that there wasn’t a pattern of discrimination because they were older.
This result—verdicts both for and against employees in the same case—was possible because, while the first jury determined that the Lab breached its employment contracts and acted unfairly in terminating the lead plaintiffs, the second jury found that the Lab did not terminate them because of their age. So basically both juries considered the case on two different theories and came to two different conclusions.
“So, we won the breach of contract case, but the Breach of Contract case only gave us the right to economic damages—wage loss past and future. The Age Discrimination case would have given them the right to emotional distress damages, possibly punitive damages and attorney's fees. [Age Discrimination is what is considered, “tortious,” meaning, constituting a tort or wrongful conduct. It is the intentional infliction of emotional distress and is therefore “actionable” and “injurious.”] But we were limited to a disparate impact case since the judge threw out intentional claims. Unfortunately that case ended up being a sort of battle of the statistical experts, it became very difficult to get any steam behind that case; jurors don’t trust statisticians very much and when you have a case just based on statistics as this had to be because of the way the judge had framed it, it was a very difficult case to win. The judge had made several rulings initially that I felt were wrong, and we were appealing them. The short of it was that we ended up losing that part of the case at the end of 2013."
It is important to note here that the defense appealed the Phase I verdict and Gary and his firm appealed the Phase II verdict. Gary continues, "Through-out 2014 the defense kept saying, ‘Well now, we are all on appeal so why don’t we just stay [suspend] the action and don’t do anything until the appeal is over—that sounds kind of reasonable doesn’t it?’"
Gary understood that this was just another typical delay tactic on the part of the defense—the entire case had been riddled with them--so Gary said, “Well, no not really—that is going to take over five years—five years for older plaintiffs to get that appeal done.” Gary explains, “I knew they knew that; and furthermore, there was no guarantee whatsoever as to what the appellate court decisions would be—whatever they were—that would resolve anything and we’d have to try the cases all again, so they were very cynical and calculating in their efforts. The judge denied their request and then they took it to the Appellate Court and then they took it all the way to the California Supreme Court in order to try to get this Stay of Action. In the meantime the case was on appeal, and then finally at the beginning of 2015, they agreed to mediate the case. They did that not because they gave a damn for the plaintiffs, or because of any type of loyalty to them, they didn’t care about that. They didn’t even care about whether they were going to win it; they had spent over 15 million dollars on attorney’s fees for this big defense law firm and they were willing to spend more. I think it was just political pressure that finally brought them to the table.”
After seven long grueling years, and with both jury verdicts for Phase I and Phase II on appeal, the case finally settled. Immediately preceding this settlement, there had been four months of lengthy mediations and negotiations, which had been highly encouraged by the Alameda County Superior Court Judge, Robert Freedman. LLNS finally agreed to pay $37.25 million to settle the claims of the 129 plaintiffs from Phase 1. [One plaintiff had decided not to settle.] The money was to be distributed according to the workers' pay rates and years of service with the lab. To this day, the Lab continues to deny any wrongdoing in connection with the circumstances surrounding or underlying the layoff.
It is important to understand that prior to this settlement, no money had been paid out in this case whatsoever. The May 2013 verdict in favor of the five test plaintiffs in Phase I of the trial—for 2.7 million dollars—was never paid out because the verdict was appealed by the defense. Phase II of the trial was a defense verdict.
“There were separate verdicts for each of the five test plaintiffs in Phase I and one of them was much higher than the others. So, there were 5 separate individual verdicts only for the wage loss—Ok, so that was only a verdict and that was appealed—but there was never a payout—they weren’t paying off anybody anything. So when we settled the case, we settled the case in its entirety including the issues on appeal and everything else for the 37 million dollars.
The 5 test plaintiffs got their money from this $37 M settlement—they didn’t get any interest on that—they essentially got their verdicts and nothing more. [This is called “prejudgment interest” and it refers to the interest that accrues on the dollar amount of a legal award, from the time of the injury or damage to the time the judgment is entered by the court.] We did get an agreement from all of our clients as to how that money would be split, so everybody sort of agreed as to what was fair. Ultimately, we got individual settlement agreements for all of those except for one and that one wouldn’t settle so we withdrew from her case and that case is still pending. So essentially there were 129 separate settlements which added up to over 37 million dollars."
There is an old saying that ‘Justice delayed is justice denied’ and it is seen far too often in these type of cases. It is always standard operating procedure for the defendants to delay and to drag everything out as long as possible, and run everybody down. And frequently, they are successful at this. People eventually have to settle the case and take what they can get because they have waited so long and have kind of given up—they’re under financial stress or emotional stress; so this whole idea of defendants deliberately doing everything they can to delay the justice of those cases is just part of what happens. But, these are big corporations and they will do everything they can to avoid paying money at all, or as long as possible.
“LLNS always knew they were going to have to pay some money out—no doubt about it, but I’m also sure they thought, ‘who cares’ –they saved far more money than what they paid out in the settlement—by “dumping” all those people and continuing to be able to run the lab and continue to make the money they were making. It is the same old story—profits over people. But, guess what? They didn’t pay out any money anyway--they didn’t pay a damn dime out of their own money…it was all government money and it didn’t cost them anything. They had to take some money out of their contract—but they buried it among upcoming "necessary" expenses no doubt. LLNS/Bechtel just didn’t take a hit on this at all. Furthermore the government pays attorney's fees and we tried every way we could to find out how much they paid this defense firm--but they would not cough it up. My estimate, and it is conservative, is that they spent over 15 million dollars on attorney's fees in this case. As this was all taxpayer money it should have been disclosed, but it never was, even after a formal request under the Freedom of Information Act.
There were some rules that changed during the course of this litigation; namely, that private contractors should have to pay for attorney’s fees, if they were found to be at fault. I don’t know if that is ever going to happen on this case and I think the way they settled it and the way it came down—probably not, but Congressman Marke, who was a congressman at the time, (now he is a Senator from Massachusetts) has been interested in this issue for years. He passed a law a couple of years before this settlement, that talked about requiring private contractors to pay attorney’s fees in these circumstances, but how successful that has been I don’t know.
This case took considerable time, energy and money to pursue, but Gary says, "You know, I’m a trial lawyer. I’ve tried a lot of cases—if I wasn’t working on this case, I’d be working on something else. From my perspective, I loved working on this case. This case was interesting and challenging, and our clients were very deserving. Sure it was stressful, but I've been doing practicing law for so long, that by the time I got into the case, I could kind of roll with that…. it is stressful to go to trial and the rest of it, and you worry about all the money and all the things going on, but when it is all said and done, you can’t just be thinking about the money—you have to do what is right. Nobody else was going to give these people any justice—nobody else was going to get them anything. I was fighting for one hundred and thirty deserving people and I just had to kind of keep my focus—not on any distress or the finances of the case, but focused on where it belonged and that was on my clients—it was my client’s case, not my case. Lawyers sometime lose sight of that on contingency fee cases because we are partners in a way with sharing that—but this was always about my clients.”
Secret Settlements versus Consumer Advocacy & Public Justice:
“It’s Just Not About the Money!”
This lawsuit had a far reaching impact—more so even than in obtaining justice for those who had suffered injury due to the actions and policies of Lawrence Livermore National Security, LLC. Gary and his firm insisted on no confidentiality and it was important to shine the light on the LLNS wrongdoing.
Gary and his firm took on a huge corporation when they took on LLNS. They also put up a considerable amount of their own money in order to pursue this case for their clients. In Gary’s words, “We took a big risk with this case…our firm taking on a big corporation like this and putting up 1.5 million dollars of our own money—that’s a lot of money; my partners standing behind me with concerns which are understandable, and the case going on and on—but we continued to fight until the very end. And then, at the very end of it, and this is a very important point, we would never give in on confidentiality. Livermore wanted to have a confidential, “secret” settlement and initially it was in the first draft of our settlement agreement. When I saw that, I went back and said to them, ‘Wait a minute, you cannot do that and we will not take it—this is government money and it is against public policy’. Attorneys, however, do this all the time—they still cop out and they have secret settlements and confidential settlements when they shouldn’t—and so I said, ‘No, we won’t do this; we can say anything we want about the cases and our clients can say anything they want about the cases, and there will be no confidentiality whatsoever in the settlement.’”
Gary says that unfortunately a lot of plaintiff lawyers will make those deals nonetheless. Sometimes it is because the clients want the attorney to do it; but oftentimes, it just because many lawyers have just given up on fighting for public settlements. This is dangerous for society as a whole, because how do people really know what the wrong is that has been done; how do they know when a product is bad or a drug? How do they know that the tires on the car aren’t safe or that the car is dangerous? In Gary’s words, “All types of crazy things out there are happening—bad things that are being swept under the rug; and these confidential settlements are something we should do everything we can to avoid. But, that bus has left the station for most lawyers. This is an important distinction. Sometimes it might be ok to say, ‘My client might not want the amount of the settlement’, but the facts of the settlement, and what has been done in some cases—that needs to be made known.”
Gary considers himself first and foremost, a Consumer Advocate. He says, “I’ve been active in a group called, Public Justice. It used to be called Trial Lawyers for Public Justice—I’m a former president of that. They have done a lot of work on corporate secrecy, but what a lot of times these defendants have done is to not only keep the settlement secret—but manage to have the documents sealed.These are the very documents that show all their wrongdoing, whether it be financial wrongdoing or some drug that somehow causes people cancer or whatever, they take all of those documents that prove that, and have an order so that they are sealed and nobody can find them. Our organization goes out and opens those up and fights on that issue. What we do is not just important for our clients but for everybody, and makes the world safer whether that be with safer drugs or safer cars, or finances that people aren’t getting cheated on—well, that is just the kind of work that we do. I’m a public interest lawyer and a consumer advocate--I’m not just a plaintiff’s lawyer……and the public interest part of me—that lies at the heart of everything I do.”