Client Alert

Bacardi Corporation v. Torres Arroyo

By: Gabriel Quintero O'Neill, Esq.



August 6, 2019

JUST BECAUSE IT WAS FILED UNDER SUMMARY PROCEDURE DOESN'T MEAN EMPLOYERS CAN'T STRIKE BACK

 
Puerto Rico's Act No. 2 of October 17, 1961, also known as the Labor Claims Summary Procedure Act ("Act 2"), provides an expedite procedure ("summary procedure") for employees seeking to enforce their labor and employment rights. Act 2 specifically prohibits employers from filing counterclaims in cases filed under said summary procedure. While some employment advocates argue that Act 2 absolutely bars employers from countersuing, on July 26, 2019, the Puerto Rico Supreme Court (the "Supreme Court"), in Bacardi Corporation v. Torres Arroyo, 2019 TSPR 133, 202 DPR __ (2019), held that the prohibition against counterclaims in Act 2, does not bar employers from filing independent lawsuits against employees.

In Bacardi, the employer performed a workforce reduction whereby plaintiff's employment was terminated. As part of the reduction, plaintiff signed a separation agreement in which he admitted: (i) the employer had just cause for the dismissal; (ii) that the cause was not discriminatory; and (iii) that he had no claims against his employer. In addition to waiving potential claims, plaintiff agreed to indemnify the employer for costs, expenses and attorney fees if he were to file a future lawsuit. 
 
A year later, plaintiff filed a lawsuit for unlawful termination and age discrimination under the summary procedure. The employer answered the complaint and invoked the terms of the separation agreement as an affirmative defense.  At the same time, the employer filed a separate civil lawsuit for breach of contract seeking reimbursement for the amounts paid as per the separation agreement.
 
Eventually the Supreme Court held that Act 2 establishes a judicial summary procedure for certain cases but does not grant or abrogate causes of action. As per the Supreme Court's opinion, any other interpretation runs counter to the public interest of promoting  dispute resolution and settlement agreements. The Supreme Court concluded that Act 2 does not prohibit lawsuits brought by employers against employees when such suits are separate and independent from suits filed under Act 2.

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Employers now have a better understanding of available legal actions and remedies in response to lawsuits by employees. Goldman Antonetti & Córdova, LLC stands ready to assist you and your business in assessing your rights as an employer.


Luis Antonetti
lantonetti@gaclaw.com
787.759-4111
Vicente Antonetti
vantonetti@gaclaw.com
787.759.4112
Angel Berberena aberberena@gaclaw.com
787.759.4143
Romel Meléndez
rmelendez@gaclaw.com
787.759.4115
Luis Ortiz Abreu
lortiz@gaclaw.com
787.759.4110
Howard Pravda
hpravda@gaclaw.com
787.759.4101
Gabriel Quintero
gquintero@gaclaw.com
787.759.4130
Jorge Rodíguez Micheo
jrodriguez-micheo@gaclaw.com
787.759.4102
Javier Vazquez
jvazquez@gaclaw.com
787.759.4113

                  


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