Jury rules against Isiah Thomas

The jury in the Isiah Thomas sexual harassment trial has returned a verdict of $11.6 million dollars against Madison Square Garden and its chairman, James Dolan. The jury spared Isiah Thomas any personal liability, although it is certainly hard to calculate the damage this trial has done to his reputation. The verdict breaks down as follows: MSG owes $6 million for condoning a hostile work environment and $2.6 million for retaliation. Dolan owes $3 million. ESPN.com quotes U.S. District Judge Gerard E. Lynch calling the verdict "eminently reasonable." It is therefore doubtful he will do anything to reverse the verdict or lessen the amount. MSG, meanwhile, is quoted as saying: "We believe that the jury's decision was incorrect. We look forward to presenting our arguments to an appeals court, and believe they will agree that no sexual harassment took place and MSG acted properly."

And we thought Danny Ferry was a bad GM

I can't do any more justice to recapping the madness that is the Isiah Thomas sex harassment trial than Bill Simmons has done on espn.com's Page 2, here. Anyone care to predict the verdict? Putting all of the salacious allegations aside, if any one fact is going to doom the Knicks, it's the post-termination memo that came from the desk of the VP for Human Resources (which he denied writing) detailing the plaintiff's performance deficiencies in an attempt to justify her termination after the fact. Ouch.

Ohio Supreme Court rejects common law wrongful discharge age discrimination claim

In a 6-1 decision published today, the Ohio Supreme Court, in Leininger v. Pioneer National Latex, held: "A common-law tort claim for wrongful discharge based on Ohio's public policy against age discrimination does not exist, because the remedies in R.C. Chapter 4112 provide complete relief for a statutory claim of age discrimination. The Court concluded "that is is unnecessary to recognize a common-law tort claim when remedy provisions are an essential part of the statutes upon which the plaintiff depends for the public policy claim and when those remedies adequately protect society's interest by discouraging the wrongful conduct." Because R.C. 4112.02(N) and 4112.99 have broad remedial language allowing for the full panoply of legally recognized relief (i.e., back pay, front pay, compensatory damages, and punitive damages), the age discrimination statute adequately protects Ohio's strong policy against age discrimination and therefore a parallel common law claim is not needed.

This case is significant for two reasons. First, it continues the Ohio Supreme Court's trend towards the reinvigoration of employment at-will, which started in Wiles v. Medina Auto Parts (as an interesting side note, the same lawyer was on the losing side of both Wiles and Leininger). Given the decision in Wiles, though, Leininger's result is not a surprise.

Perhaps more significant is the underlying effect of this decision on the statute of limitations for age discrimination claims. Common law wrongful discharge claims have a four-year statute of limitations. Because state age discrimination claims are now limited to the statute, such claims will be controlled by the statute's 180-day statute of limitations for age claims (unless the employee elects to pursue the lesser remedies of reinstatement/back pay and attorneys' fees available under R.C. 4112.14 and its six-year statute of limitations). It is safe to assume that this case will also do away with public policy claims for all other forms of discrimination, although that effect will most likely not be felt, since R.C. 4112.99 has a six-year statute of limitations for all types of discrimination other than age. As a result of Leininger, and at least as far as state age claims are concerned, employers will have a greater degree of certainty regarding adverse employment decisions after six months (as opposed to four years) have elapsed.

Wage and hour litigation hits the big time

The Wall Street Journal Law Blog has also picked up this week's BusinessWeek cover story on the proliferation of wage and hour litigation and collective actions. The Journal quotes Rochester, New York, employee-side attorney J. Nelson Thomas, "This is the biggest problem for companies out there in the employment area by far. I can hit a company with a hundred sexual harassment lawsuits, and it will not inflict anywhere near the damage that [a wage and hour suit] will." Indeed, Mr. Nelson's law firm's website lists nine separate wage and hour class action lawsuits it is currently handling, against businesses such as Dick's Sporting Goods and NVR, Inc. (aka Ryan Homes), and as a reference for potential clients links to news articles on a half-dozen other successful multi-million dollar lawsuits for back overtime. I cannot stress enough, do not assume that your salaried employees are not entitled to overtime, and do not wait for Mr. Thomas to knock on your door before you figure out whether all of your employees are properly classified and are being paid all to which they are legally entitled. An internal wage and hour audit may cost a few extra dollars up front in legal expenses, but will be immeasurably less expensive in time, aggravation, and actual dollars than defending a wage and hour lawsuit.

Document, document, document!

As the record reflects, there was a myriad of problems with Plaintiff's job performance and treatment of his subordinates that justified Defendants' decision to fire Plaintiff. This, however, is not what Defendants told Plaintiff during their final meeting. Defendants did not tell Plaintiff he was being fired for poor performance, but rather because of an unspecified "personality conflict." While the law does not specifically require an employer to list every reason or incident that motivates its decision to terminate an employee, we are skeptical of undocumented accounts of employee conduct that may have been created post-termination. Under the facts of this case, however, ample evidence exists that indicates that Plaintiff's performance was inadequate to meet his job requirements. In sum, Plaintiff has not put forth sufficient evidence for a jury reasonably to conclude that Defendants did not have an honest belief that Plaintiff performed his job duties poorly.

So said the Sixth Circuit last week in Abdulnour v. Campbell Soup Supply Company, a national origin discrimination case brought by an Iraqi national fired by Campbell Soup for job performance that was less than "M'm M'm Good". The Sixth Circuit upheld the trial court's dismissal of the lawsuit on summary judgment because Abdulnour could not come forward with any evidence, other than his own subjective disagreement, that Campbell Soup did not honestly believe in the reasons proffered for his termination. Clearly, however, as the quote above demonstrates, the appellate court was troubled by the lack of documentation in Abdulnour's personnel file for the alleged performance deficiencies. It is safe to assume that if Abdulnour could have come forward with any evidence at all to support his allegation of pretext, the court would not have hesitated to ding the company for its poor documentation.

The lesson to be learned is basic, but one that cannot be repeated enough. Any employer's greatest defense against a claim of discrimination is a well-documented history of performance problems to support the termination, coupled with comparable treatment of similarly situated employees. When in doubt, document all performance problems with all employees. If the discipline or counseling is oral only, document that fact also. Have all employees sign off on all such records, and if the employee refuses to signify the receipt of the discipline, document that failure as well. The Sixth Circuit in the Abdulnour case cannot be any clearer that when an employer relies on undocumented accounts of misconduct to support a termination, it is fair for the court and a jury to draw the inference that those accounts were created post-termination. The Abdulnour decision is the anomaly, and almost universally cases with poorly documented personnel files will not end well for the employer. Campbell Soup dodged a bullet; do not put your company in similar risk.

Use a wage and hour audit to proactively head off claims

"Wage Wars: Workers are Winning Huge Overtime Lawsuits," graces the cover of this week's BusinessWeek magazine. It should serve as a harsh wake up call for all companies. The article cites recent huge wage and hour settlements and verdicts, including an $18 million settlement paid by Starbuck's and eight and nine figure jury verdicts against Wal-Mart. In fact, the article estimates that American companies have collectively paid over $1 billion to settle these types of claims over the past few years.

The sweatshops of the 1920s and 1930s that led to the passage of the Fair Labor Standards Act and its 40-hour workweek are virtually non-existent. Nonetheless, claims for unpaid overtime continue to rise, more than doubling in the federal courts from 2001 to 2006. Almost always, these cases are not the result of the intentional withholding of overtime premiums. Instead, they fall into two classes: off-the-clock pay claims and the misclassification of employees. The former concerns pay for working through lunch breaks, donning and doffing gear, and required travel time. Regarding the latter, employees fall into two basic classes for coverage by the FLSA, exempt and non-exempt. Companies and the employees themselves often mistakenly assume that white collar employees are exempt, and blue collar employees are not. Paying an employee a salary (as opposed to an hourly wage), however, is not enough to qualify an employee as exempt. The FLSA only provides an exemption if an employee meets the specific qualifications for the executive, administrative, professional, outside sales, or computer employee exemptions. These exemptions are highly fact specific, and wholly depend of the nature of the actual work performed, and not a job title. For example, merely labeling an employee as a manager or supervisor is not enough to qualify an employee for the executive exemption, unless that salaried employee customarily and regularly directs the work of two or more other employees, and has the authority to hire or fire. The other exemptions have similarly stringent requirements (click here for a copy of the federal regulations on these exemptions).

The question is not whether companies need to audit their workforces for wage and hour compliance, but whether they properly prioritize doing so before someone calls them on it. According to the BusinessWeek article: "While violations appear widespread, employees themselves rarely think to make wage and hour claims. Instead, they usually have it suggested to them by lawyers." It is immeasurably less expensive to get out in front of a potential problem and audit on the front-end instead of settling a claim on the back-end. The time for companies to get their hands around these confusing issues is now, and not when employees or their representatives start asking the difficult questions about how employees are classified and who is paid what.

How long is too long for retaliation

Does an employee who complains that she is being discriminated against and is fired three months later have a case for retaliation? According to the Cuyahoga County Court of Appeals in Mendlovic v. Life Line Screening of Am., Ltd., the answer is no. In that case, Mendlovic claimed that she told the owner of the company that her supervisor was not "giv[ing] her a chance" because she is a woman. Two to three months later, she was fired. The court found that the gap between the complaint and her termination did not, as a matter of law, show a sufficient causal connection.

Often, employees feel emboldened after complaining about discrimination, as if granted some sort of immunity from termination. After all, no employer wants to buy a retaliation lawsuit, even if otherwise legitimate grounds exist for the termination. Now, at least in Cuyahoga County, that immunity has a duration. The taint of retaliation will wear off after two or three months, absent any other evidence of retaliation. Notwithstanding, any termination of an employee who has complained about retaliation should always be viewed as high risk, and should never be undertaken without serious deliberation, and in most cases the involvement of your employment lawyer.

The Blog is in trial

Posts will be sparse for the next week or two, as the Blog is in the middle of trial. I'll be keeping a look out for interesting items to post when I can grab a free moment or two.

Court confirms that independent contractors can be discriminated against

In a case affirming the longstanding rule that independent contractors are not covered by Ohio's employment discrimination laws, the Lucas County Court of Appeals highlights the pitfalls employers face in treating workers as independent contractors instead of employees.

Bill Perron served Atlas Roofings as a sales agent. Atlas set forth the terms of his relationship in a Sales Agent Agreement. Under the Agreement, Atlas provided Perron with a specific sales territory, which Atlas could adjust at its own discretion. Perron worked out of an office in his home, and was to use his best efforts to procure customers. Atlas, however, retained control over the products Perron could sell, as well as their pricing and other terms and conditions of sale. Also, Perron was prohibited from selling any competing products. Atlas paid him solely on commission, with no benefits of any kind, because, according to the Agreement, he was "engaged in [his] own independent business." Perron was to maintain his own insurance policies, and pay his own taxes, none of which would be withheld. Finally, to make sure that the terms of the relationship were perfectly clear, the Agreement specifically provided that Perron was an independent contractor.

When Perron turned 65, Atlas began to transition Perron's sales territory to another, presumably younger, representative. In fact, Perron's manager admitted as much in an intra-company e-mail:

As Bill approaches his 65th birthday (late June 2004) we thought of using 2004 as a "transition year" for Bill by starting to develop Bill's eventual replacement group.... Atlas's game plan for Bill Perron had always been for Bill to handle the commercial line for a couple of years, to get him past his 65th birthday.... Thus, the 2004 transition plan would ... keep Bill Perron compensated through November 1, 2004, keeping his Social Security in tack [sic] without fear of penalty for early retirement.

Unsatisfied with a forced retirement, Perron sued Atlas for age discrimination. Despite the smoking gun e-mail, the trial court dismissed the age discrimination claim because Perron was an independent contractor, and not an employee. In Perron v. Hood Indus., Inc. d/b/a Atlas Roofing Corp., the Lucas County Court of Appeals upheld the dismissal of the lawsuit and Perron's treatment as lawful.

While the civil rights laws clearly only cover employees, and not independent contractors, what is not always clear is what qualifies one as an employee as compared to an independent contractor. The Court cited to the well-worn "right of control" test to make its determination:

If the employer reserves the right to control the manner or means of doing the work, the relation created is that of master and servant, while if the manner or means of doing the work or job is left to one who is responsible to the employer only for the result, an independent contractor relationship is thereby created.... Factors to be considered in determining who has the right to control includes indicia such as who controls the details and quality of the work; who controls the hours worked; who selects the materials, tools, and personnel used; who selects the routes traveled; the length of employment; the type of business; the method of payment; any any pertinent agreements or contracts.

The Court agreed that Perron was an independent contractor, and not an employee. In reaching that conclusion, it relied heavily on the language of the Agreement, the fact that he worked out of his home, set his own hours, was paid solely in commissions, received no benefits, and paid his own taxes. The Court was not persuaded by Atlas's discretion and control over its products, pricing, and orders.

Companies might be tempted to use this case as a template for designating workers as contractors. This case, however, could have just as easily been decided in Perron's favor, and on another day it very well might have been. It points out the very real dangers companies face in trying to classify workers as independent contractors. Separate and apart from the serious tax implications of misclassifying an employee as a contractor, I would not want to be in front of a jury trying to justify Atlas's e-mail on a legal distinction between independent contractor and employee. Employers should consider all of the risks associated with classifying someone as an independent contractors, and should not make such a decision without first consulting with employment counsel.

Federal Judge blocks No-Match Rules

The San Francisco Chronicle is reporting that a U.S. District Court Judge Maxine Chesney has issued a nationwide Temporary Restraining Order blocking, at least until October 1, the Department of Homeland Security's recently enacted rules that require employers to terminate undocumented workers. I've previously detailed the new regulations, which specify the steps employers should take upon receipt of a no-match letter from the Social Security Administration. The judge has indicated that to save the regulations the government will have to present evidence showing a connection between a no-match letter and "a reasonable inference that the person is here illegally." The AFL-CIO, which brought the lawsuit, has argued that past experience with no-match letters shows that they are often sent mistakenly because of clerical errors and legal name changes. This issue is one in which employers might be served aligning themselves with labor unions. If the regulations are ultimately struck down, employers will receive a reprieve from the onerous task of re-verifying the employment status of innumerable employees.

Requiring a return-to-work medical certification of full duty or no restrictions violates the FMLA

Rather than reporting on Clark v. Gospel Light Publications, I'll merely direct everyone over to The FMLA Blog. The Clark case holds that a policy requiring that a return-to-work medical certification specify that the employee can work full duty or without restriction violates the FMLA. When you couple this opinion with Bryson v. Regis, in which an FMLA claim was allowed to continue even though the employee could not perform the essential functions of her job at the end of her leave, the FMLA is becoming more and more difficult for employers to administer. Companies face an awful Hobson's choice. You violate the FMLA if you require a doctor's note attesting to the employee's ability to return without restrictions, and also violate the FMLA if you refuse to accept a doctor's note requesting light duty. The FMLA was never intended to create job rights beyond 12 weeks, and yet these two recent decisions seem to do exactly that, much to the likely chagrin of HR departments everywhere.

Happy Labor Day

It might be a little late into the holiday, but I'd be remiss as an employment law blogger if I did not wish everyone a happy Labor Day. No fresh content today (check back tomorrow), but in honor of the holiday of the working person I'm linking to my favorite post from the first three months of the blog -- Lessons from Childrens' Lit.

Is the 40-hour work week relevant?

Yesterday's Cleveland Plain Dealer had an interesting article (available here) on the state of the American work week. Surprisingly, the average person worked 1.7 hours less per week in 2006 as compared to 1956 (39.2 hours versus 40.9 hours). It notes, however, that these statistics can be misleading, since they lump blue collar and white collar workers together. In reality, the white collar workforce is expected to work longer and harder, often putting in 50 and 60 hour weeks. Blue collar workers, on the other hand, only average 34 hours per week. Moreover, despite the shorter average work week, we still work more hours per year in this country than any other Western industrialized country except South Korea. In light of these statistics, is the 40 hour work week as relevant as it was in 1938 when the Fair Labor Standards Act was enacted to curb exploitation, boost job creation, bring the country out of the Great Depression? An argument can be made that regulated overtime is no longer needed, as companies would voluntarily pay overtime to non-exempt employees as a recruiting and retention tool to get and keep the best workers. Regardless, out of the fear of exploitation and a perception of entitlement, the FLSA and its overtime provisions are not going anywhere anytime soon.

Religious discrimination claims rise

This morning's Pittsburgh Post-Gazette reports on the increasing number of religious discrimination cases. Title VII (and Ohio's counterpart, R.C. 4112), prohibits employers from discriminating against individuals because of their religion in hiring, firing, and other terms and conditions of employment. For example, religious harassment is just as illegal as sexual harassment, and an employer has the same duty to investigate a claim by a Muslim employee that he is being harassed on account of his religion as it would have to investigate a claim of sexual harassment by a female employee. In our post-9/11 world, such claims have become more and more prevalent.

The law also requires employers to reasonably accommodate the sincerely held religious practices of an employee or prospective employee, unless doing so would create an undue hardship. Some common examples of reasonable accommodation are flexible scheduling, voluntary substitutions or swaps, job reassignments, and lateral transfers. These situation most often arise when an employee requests a day off for a religious holiday (such as Good Friday or Yom Kippur), or seeks not to be scheduled to work on the Sabbath. An employer can claim undue hardship if accommodating an employee's religious practices requires more than ordinary administrative costs. For example, hiring a new employee or rescheduling other employees would probably present an undue hardship, while other employees volunteering to cover a shift most likely would not. Moreover, a religion does not have to be traditional to qualify for protection. The Post-Gazette article cites a California case in which a vegan bus driver won a judgment against a county transit agency for firing him after he refused to hand out "free hamburger" fliers for a fast food restaurant.

As workplaces are becoming more culturally, ethnically, and religiously diverse, religious discrimination will continue to be a hot button issue. Employers should not ignore requests for accommodations, no matter how strange they might seem. One person's Mind Body Energy is another person's Christianity. The accommodation may have a small price associated with it, but I can assure you such a price will almost always be less than the price of defending a discrimination lawsuit.

Ohio Supreme Court may be asked to clarify Coolidge

In addition to providing a good summary of the history of the public policy wrongful discharge tort in Ohio, Klopfenstein v. NK Parts Industries, Inc. also sets the stage for a potential battle in the Ohio Supreme Court over the proper statute of limitations for a claim under Coolidge v. Riverdale Local School Dist. Coolidge held that an employer cannot discharge an employee who is receiving temporary total disability workers' compensation benefits solely on the basis of absenteeism or inability to work, when the absence or inability to work is directly related to an allowed condition. The Cuyahoga County Court of Appeals, in Brooks v. Qualchoice, held that Coolidge does not create a new public policy exception to the employment at-will doctrine, but instead illustrates conduct that is retaliatory under R.C. 4123.90 (the workers' comp anti-retaliation provision). In Klopfenstein, the Third District Court of Appeals disagreed, holding, "Coolidge creates an independent public policy exception to the employment at-will doctrine." These divergent holding have significant implications, because the two claims have vastly different statutes of limitations. An aggrieved employee has 4 years to file a public policy wrongful discharge claim, as compared to 180 days for a retaliation claim pursuant to R.C. 4123.90. The workers' comp retaliation statute also has strict notice requirements that a claimant must meet as a prerequisite to bringing suit, in addition to more restrictive damages.

Klopfenstein will not be the last word on this issue. Whether in an appeal from that case, or some future case, the Ohio Supreme Court will be called upon to clarify its Coolidge holding and definitively state the proper statute of limitations. In anticipation of that future battle, let me suggest that Klopfenstein was wrongly decided. R.C. 4123.90 states: "No employer shall discharge ... any employee because the employee filed a claim ... under the workers’ compensation act for an injury ... which occurred in the course of and arising out of his employment with that employer." If an employee is terminated because of workers' comp-related absences, that employee is being terminated because of the claim. Thus, the termination falls squarely within the coverage of R.C. 4123.90. It is the job of the legislature, and not the courts, to expand the statute of limitations for Coolidge claims if it sees fit to do so.

Big changes in the political winds?

I've written a lot since starting this blog about the various bills introduced in the House and Senate to amend Title VII and other employment law statutes. Indeed, one of my very first posts asked whether federal legislation would bring us new protected classes. Following my lead, the National Law Journal has nicely summarized the assorted employment law reforms Congress has introduced this session:

• Ledbetter Fair Pay Act: reverses the Ledbetter decision by setting forth that each discriminatory paycheck is a discrete act of discrimination for purposes of triggering Title VII's statue of limitations.
• American with Disabilities Restoration Act: amends the definition of "disability" to undo a decade of Supreme Court precedent.
• Employment Non-Discrimination Act: adds protections for sexual orientation and gender identity to Title VII.
• Genetic Information Non-Discrimination Act: prohibits employment decisions based on genetic information.
• Civil Rights Tax Relief Act: eliminates taxation of non-economic damages received by employment plaintiffs.
• Equal Remedies Act: removes Title VII's caps on compensatory and punitive damages.
• Arbitration Fairness Act: invalidates pre-dispute arbitration agreements requiring arbitration of employment disputes.

Some of these reforms, namely ending the loophole that allows companies to invidiously discriminate on the basis of sexual orientation, are long overdue. Others, such as the ADA Restoration Act, the Equal Remedies Act, and Ledbetter Fair Pay Act, will have far greater and more onerous consequences for employers. Because the Democrats don't have enough votes to overturn a Presidential veto, most of these bills currently are nothing more than political rhetoric. If, however, a Democrat wins the White House, 2009 will be a very interesting year, as companies should expect sweeping changes to federal employment laws, the likes of which have not been seen for more than a decade.

I can't make this stuff up

Ollis v. HearthStone Homes presents a textbook example of how not to make personnel decisions, and is also just plain funny.

The owner and president of HearthStone, John Smith, practices a fringe religion that focuses on Mind Body Energy (MBE) sessions to cleanse one's negative energy. He required his employees attendance at such MBE sessions to enhance their work performance. The case recounts Smith's interesting MBE practices:

According to Smith, an employee’s negative energy could be discovered either through a machine that tests a person’s electromagnetic energy field or through a manual process called “muscle testing.” Muscle testing may require a person to extend his or her arms while answering “yes” or “no” questions. If the person’s extended arms remain strong while questioned as someone pushes down on the arms, the answer is “yes,” whereas, weak arms indicate an answer of “no.” Another example of muscle testing is to place two fingers together and to answer “yes” or “no” questions. If the fingers remain together, the answer is “yes”; whereas, if they separate, the answer is “no.” Smith used muscle testing to make business decisions. Smith equates muscle testing “to someone who may pray before they make decisions.”

On one occasion, Smith determined by muscle testing an employee that drainage problems in a HearthStone subdivision were caused by that employee's ancestors perishing on the land during the Ice Age. Smith determined that the employee was unknowingly defending the land on behalf of her ancestors, and required her to attend MBE sessions to cleanse her negative energy.

Smith also used muscle testing in conducting a sexual harassment investigation against the plaintiff, Doyle Ollis, a devout Christian. After the investigation, Smith terminated him for “poor leadership and lack of judgment," which the jury found to be pretext for Ollis's opposition to Smith's MBE practices and religious discrimination. For the termination, the jury awarded Ollis a whole whopping dollar in damages (plus attorneys fees). Perhaps the jury's low award was influenced by Ollis's admission that he had asked the complaining female subordinate several inappropriate questions, including asking her about her “freakiest” sexual encounter, how long she had known her spouse before she had sex with him, how many sexual partners she had, and if she wore thong underwear. As an aside, HearthStone later terminated the complaining employee for reportedly “removed her clothing at a golf outing and ... doing cart-wheels naked on a golf course.”

Like I said, I can't make this stuff up.

Suspended Bengal claims disability discrimination

The following is from the Cincinnati Bengal's website:

The attorney for Bengals linebacker Odell Thurman has filed a claim of disability discrimination against the NFL. John Michels said Thursday that he has notified the U.S. Equal Employment Opportunity Commission that he feels his client is being discriminated against because he is perceived as an alcoholic.

Michels said it doesn't matter that Thurman acknowledged in court that he is an alcoholic when he appeared for a DUI stemming from a Sept. 25, 2006 traffic stop. He indicated that Thurman has passed all required programs stipulated by the league.

"He has not had an alcoholic problem since the incident last fall," Michels said.

The NFLPA has not yet responded to Thurman's request to appeal to NFL commissioner Roger Goodell's July 26 decision to extend Thurman's year-long suspension for another year. Michels said if the EEOC finds for Thurman, the commission can offer such remedies as reinstatement and back pay.

Michels cited a recent precedent. The EEOC ruled in favor of Roy Tarpley, the former Dalllas Mavericks forward banned in 1995 for violating the league's substance abuse policy. The commission said the NBA violated the Americans with Disabilities Act when it didn't reinstate Tarpley even though he had passed all drug tests taken in the last four years.

Michels said the Bengals are named in the claim only because they are Thurman's direct employers. He said the claim was not a Bengals decision and that the commission is aware that the suspension came from the NFL and not the club.

I'm not sure what to make of this claim. On the one hand, you have a new NFL commissioner try to put his stamp on the league as a no-nonsense disciplinarian. Then again, if Thurman has truly been clean and sober for the past year, and has complied with the terms of his suspension, it could appear that the NFL is punishing him for his addiction, and not past violations of league rules. My best guess is that the EEOC will dodge these tough issues and never reach the merits of the charge, because the entity imposing the discipline, the league itself, is not Thurman's "employer," and his employer, the Bengals organization, had nothing to do with the discipline.

6th Circuit expands FMLA job restroration rights

Yesterday the 6th Circuit decided Bryson v. Regis, a significant FMLA decision that could have far-reaching implications for employers' administration of FMLA leave programs and employees' job restoration rights.

Karen Bryson worked in a Lexington, Kentucky, Supercuts for 15 years, starting as a stylist and working her way to store manager. As store manager, Bryson reported to area manager Kim Sawyer. In December 2003, after injuring her knee more than year hence, Bryson took an FMLA leave of absence for corrective surgery. Deposition testimony revealed that Sawyer was very upset with Bryson's leave, referred to her in management meetings as a "crippled ass," and told co-workers that she would make sure Bryson did not have a job to return to after her leave.

Bryson was scheduled to return on March 10, 2004, at the end of her 12 week entitlement. On March 8, Bryson left Sawyer a voice mail message to let her know that she could not return to full status on March 10. When Sawyer never returned the call, Bryson next contacted one of Sawyer's contemporaries, Julie Wilson. Bryson told Wilson that she would not be able to stand for 10 hours a day, but that she could work a full day albeit with some standing and some sitting. Also on March 8, Bryson's doctor completed Supercut's "Release/Intent to Return to Work" form. On that form, Bryson checked the box that indicated that she could not at that time perform all of the essential functions of her position and was requesting assistance with her temporary restriction of seated work only. Bryson mailed the form to Supercuts on March 8, but Supercuts did not receive it until March 15.

Meanwhile, on March 10, when Bryson was no call/no show, Supercuts terminated her employment via a letter authored by Supercut's corporate FMLA Administrator, which stated: "It has been brought to my attention that as of today your health care provider has not released you to return to work with or without restrictions. Because you have exhausted your 12 workweek entitlement to job protected leave under the FMLA, we are unable to continue to hold your position."

Bryson sued Supercuts and its parent corporation, Regis Corp., for FMLA retaliation and disability discrimination. The district court granted summary judgment to the employer and dismissed Bryson's lawsuit. The Sixth Circuit, however, in a decision that has potentially far-reaching implications in how employers administer their FMLA leave programs, reversed the dismissal of the FMLA retaliation claim and remanded the case for trial.

The resurrection of Bryson's FMLA claim is troubling. The Court focused on the gap between Supercut's letter of termination and its receipt of Bryson's "Release/Intent to Return to Work" form, coupled with Sawyer's anger over the leave. It found those two factors to be sufficient evidence of pretext to get this case to a jury. It appears that the 6th Circuit was bothered by Sawyer's comments, and saved Bryson's claim even though she could not have been legally entitled to her job on March 10. Indeed, the Court's analysis ignores one crucial undisputed fact -- regardless of anyone's intent, Bryson was simply not able to return to her job on March 10. She was instead requesting reinstatement to a temporary light duty position, but as the 7th Circuit confirmed earlier this month, the FMLA does not provide for light duty. Nevertheless, Bryson v. Regis implies, if not explicitly holds, that employers cannot terminate an AWOL employee at the end of FMLA leave if the employer knows that the employee can return to work in some limited fashion.

This case seems to create new rights under the FMLA that heretofore did not exist. Even though Bryson was not disabled under the ADA, the 6th Circuit seems to require Supercuts to have accommodated her injury either by providing her light duty, otherwise modifying her job functions, or extending her leave beyond the FMLA's 12 weeks. Bryson presents a significant expansion of FMLA rights, and places all similar terminations at risk unless the employee is entirely unable to return in any capacity at the end of the FMLA leave.

The Bryson case is also a good reminder for companies to build examples such as Sawyer's retaliatory comments into management harassment training. While the 6th Circuit seems to have expanded employee job restoration rights under the FMLA, one has to wonder if this case would have come out differently without Sawyer's statements about Bryson's injury and continued employment.

Does individual liability have unintended consequences?

Law.com reports today on the increasing number of executives and managers being personally sued for their work-related decisions. Under Ohio's employment discrimination statute, managers and supervisors have been personally liable for their own acts of discrimination since the Ohio Supreme Court decided Genaro v. Central Transport in 1999. The federal wage and hour laws (the FLSA, the FMLA, and the Equal Pay Act) also provide for personal liability, but the same does not hold true for Title VII, the ADEA, and the ADA. Many Ohio discrimination suits name an individual in addition to the company because suing a local manager or supervisor of a non-local company will block removal to federal court. Does that strategy, however, have an intended consequence? According to the law.com article, some attorneys believe that naming an individual unnecessarily ups the ante in employment discrimination cases, causing the defense to dig in their collective heels, making cases more difficult to settle because more people are involved who want their personal reputations cleared. In fact, employers often take these cases just as personally as do employees, because they involve hurtful allegations of racism, sexism, or other forms of bigotry. Whether suing a manager or supervisor will render a case more difficult to resolve should be considered before any individual is added as a defendant to a discrimination suit.

UPDATED - New rules require termination of illegal immigrants

The Department of Homeland Security has announced new rules on the safe-harbor procedures for employers who receive SSA No-Match Letters. These rules require employers to terminate any employee who uses a fake social security number or otherwise cannot be documented as legal. The DHS has also published an interactive Safe Harbor Information Center for employers.

The regulations describe with specificity what steps employers should take upon receipt of a no-match letter:

1. Verify within 30 days that the mismatch was not the result of a record-keeping error on the employer’s part;
2. Request that the employee confirm the accuracy of employment records;
3. Ask the employee to resolve the issue with SSA;
4. If these steps lead to resolution of the problem, follow instructions on the no-match letter itself to correct information with SSA, and retain a record of the verification with SSA; and
5. Where the information could not be corrected, complete a new I-9 form without using the questionable Social Security number and instead using documentation presented by the employee that conforms with the I-9 document identity requirements and includes a photograph and other biographic data.

Employers unable to confirm employment through these procedures risk liability for violating the law by knowingly continuing to employ unauthorized persons.

Costs of compliance will potentially be high, especially for those employers that rely upon unskilled labor. Costs of non-compliance, however, could potentially be devastating. Employers cannot ignore these new rules. If you choose to disregard a No-Match Letter, and it is later determined that some of the employees listed are not authorized to work, your receipt of the letter is evidence that you have knowingly continued to employ unauthorized workers, which could lead to significant criminal and civil sanctions.

Are you facebooking as part of background checks?

Msnbc.com writes on the wealth of information employers can learn from a job applicant's Facebook and other social networking webpages.

Job candidates who maintain personal sites on Facebook or MySpace are learning — sometimes the hard way — that the image they present to their friends on the Internet may not be best suited for landing the position they’re seeking.

Although many employers are too old to qualify as members of the Facebook Generation, they’re becoming increasingly savvy about using social networking sites in their hiring due diligence. That has both job candidates and human resources professionals debating the ethics and effectiveness of snooping on the Web for the kind of information that may not come up in a job interview.

According to a March survey by Ponemon Institute, a privacy think tank, 35 percent of hiring managers use Google to do online background checks on job candidates, and 23 percent look people up on social networking sites. About one-third of those Web searches lead to rejections, according to the survey.

Social networking sites have gained popularity among hiring managers because of their convenience and a growing anxiety about hiring the right people, researchers say.

Big corporations long have retained professional investigators to check job applicants’ academic degrees, criminal records and credit reports. But until now the cost has deterred the ability of smaller firms to do the same level of checking, said Sue Murphy, a director of National Human Resources Association.

These online searches can reveal a wealth of information not otherwise attainable through a more customary background and criminal records search: risqué pictures, pictures of drug use or heavy alcohol use, poor writing skills, and radical political positions. Any one of these could convince a potential employer that a particular job candidate is not not a good fit or not worth the risk of hiring.

A word of caution -- if you choose to make these searches part of your hiring process, you should do so uniformly to avoid the appearance of disparate treatment. That is not to say that every job candidate for every position needs to be screened, but if you are going to screen one candidate for a particular position, you should do the same for all candidates, and apply the same standards based on the results. While the online search itself is lawful, it is still illegal to use that information in a disparate manner to unlawfully discriminate.

OCRC appears to bend on pregnancy leave regulations

Sunday's New York Times is reporting that Ohio business groups have successfully lobbied the Ohio Civil Rights Commission to revise its proposed maternity leave regulations. The article quotes various business organization leaders, in addition to the OCRC's Chairperson, in discussing the merits or lack thereof of the proposed regulations:

Jeanine P. Donaldson, who this year became the first woman to lead the commission, said the law on maternity leave needed to ensure that more women were protected against discrimination.

Ms. Donaldson said she was willing to bend on the number of weeks of guaranteed leave but hoped to preserve the stipulation that length of service would not affect eligibility.

“I don’t think a woman can decide when to get pregnant,” Ms. Donaldson said. “To choose motherhood over livelihood, I don’t think that is what the legislators had in mind.”

Business groups say the expanded leave would damage the economy. “There’s really no reason to change the current law,” said Tony Fiore, director of labor and human resources policy for the Ohio Chamber of Commerce.

Requiring small businesses to hold open positions would be a hardship, he said, as would the immediate eligibility for new workers at large corporations.

Ty Pine, legislative director for the Ohio branch of the National Federation of Independent Businesses, said the market was doing a good job of establishing reasonable maternity leaves for workers and businesses.

“We would like to maintain the current practice of reasonable time off without mandating specifically,” Mr. Pine said.

It now appears that some modified form of the revised OAC 4112-5-05(G) will go the legislature for approval. A revision to the amount of the guaranteed leave entitlement would take away rights that are already available to nearly all Ohio employees under judicial interpretations of the current 4412-5-05(G). I am amazed that the OCRC would bend so easily from a little bit of pressure from business lobbies. If the OCRC actually agrees to bend on the issue of the amount of available guaranteed leave, it will represent a genuine victory for small businesses. I will continue to post updates on this issue as the revised regulations are published.

You might want to double-check those FMLA medical certifications

Check out this article from the Chicago Sun Times. On MyExcusedAbsence.com (and other websites like it) employees can purchase authentic looking doctors notes to excuse their absences from work. According to a testimonial on the website: "I've managed to take the 9 weeks off using these templates! It couldn't be any easier!" Needless to say, providing a fake document for any reason is grounds for immediate termination. However, consider the overburdened HR professional, confused already by the FMLA's myriad requirements. Does that person have the time to check the veracity of each and every note provided by an employee? Nevertheless, the next time you think an employee might by trying to game the system, you might want to take a harder look at that doctor's note. Under the FMLA employers have options to check the veracity of an employee's serious health condition:

• Grant provisional leave until you resolve any doubts about the validity of the serious health condition.
• Send the employee for a 2nd opinion at the employer's expense.
• Request recertification during the leave under certain circumstances.
• Require a fitness for duty exam before allowing the employee to return to work.

These tools, when used consistently, properly, and dovetailed with appropriate corrective action, can deter employees' frauds such as MyExcusedAbsence.com.

Bill Proposes Elimination of Damages Caps

On the heels of the passage of the Lilly Ledbetter Fair Pay Act, Congress continues to try to tinker with the federal employment discrimination laws. Senator Edward Kennedy has introduced legislation that would eliminate the caps on the amount of non-economic compensatory damages and punitive damages plaintiffs can recover in employment discrimination cases under Title VII and the ADA -- the Equal Remedies Act of 2007. Senator Kennedy bases this legislation on the inequities in available damages between race and national origin discrimination and all other forms of discrimination prohibited by Title VII and the ADA (sex, religion, disability, etc.). Employees suing under Title VII or the ADA are capped in the amount of damages they can recover, while employees suing under 42 U.S.C. 1981, which only prohibits race and national origin discrimination, has no such limits. Of course, the Senator could just propose capping damages under Section 1981. As with most of the other pro-employee legislation currently pending in Congress, there is little chance of President Bush actually signing the Equal Remedies Act into law. January 2009, however, is not that far off.

A weighty issue...

In June, I reported on a small but growing trend of overweight employees trying to claim coverage under the Americans with Disabilities Act. Perhaps because these claims are seldom brought, the Boston Globe reports that Massachusetts is considering legislation to cover "fat" (as well as "short") as a protected class. Such legislation finds support in studies which show that obesity holds back one's career. One possible explanation is that obesity is linked to greater health costs, which in turn raise group health plan rates.

One could argue that this legislation is superfluous because the ADA already protects these employees. While courts almost uniformly find that obesity is not a protected disability (as compared to morbid obesity), health conditions associated with obesity (such as diabetes, joint problems, respiratory difficulties, high blood pressure) are most likely protected. Moreover, because it is not only unlawful under the ADA to discriminate because of an employee's disability, but also because the employee is regarded as having a disability, it is arguably unlawful to refuse to hire, to discipline, or to terminate an overweight employee because of the risk of increased health costs from obesity-related illnesses.

Arbitration Fairness Act would ban mandatory ADR of employment disputes

Mandatory arbitration agreements have long been favored as a tool by employers to limit the risks associated with jury trials. If the Democrats have their way, however, that tool may soon no longer be available. The Arbitration Fairness Act is currently pending in both the House and the Senate. These bills would amend the Federal Arbitration Act to render invalid and unenforceable pre-dispute arbitration agreements that require arbitration of employment disputes. Such disputes could only be arbitrated if the employer and employee agree to submit to arbitration after the dispute arises. The law's purpose is to prevent those with less bargaining power, such as employees, from being forced to arbitrate and give up their right to a jury trial. If this bill becomes law (which is doubtful as long as there is a Republican in the White House), arbitrations of employment disputes will all but disappear. It is hard to imagine a situation where a plaintiff would agree to give up a jury trial to have a dispute decided by a panel of arbitrators. If you currently use or would like to use arbitration as a means to resolve claims by your employees, you should write your Congressperson and Senator and urge opposition of these bills.

I am not an anti-dentite!

John Jordan, D.D.S. v. Ohio Civil Rights Commission, out of Fayette County, would not have made my radar except for the fact that it is the second case in as many weeks to involve pretty egregious acts by a dentist. In this case, the OCRC awarded Teresa Smith, a dental assistant, $45,568 for being subjected to the following sexual harassment by the good dentist, all within the span of a few weeks:

• Grabbing her from behind and pulling her towards him, on her second day of work.
• Telling her that his wife was going on vacation and suggesting a rendezvous.
• Describing the breeding habits of his horses in detail.
• Suggesting that she needed a "sugar daddy."
• Advising that several of his friends would "drop money" on her for sex.
• Recounting that the prostitutes in Vegas hated when men took Viagra because it wore them out.
• Relating to patients that she used to work in a strip club.
• Telling her that he could not tell about her body type because he hadn't seen her naked.
• Asking if he could show her nude photos.
• After a patient commented that she was left-handed, recounting that left-handed people make better lovers.

Maybe the ADA should consider a session on sexual harassment training at its next annual meeting.

Sixth Circuit confirms that it will not second-guess an employer's honest belief

The Sixth Circuit this week handed down two decisions that make it clear that pretext for discrimination or retaliation does not exist if the employer engages in a reasonable investigation and has an honest and good faith belief in the rationale for its employment decision. These cases are a good reminder that one of the best defenses to any discrimination, retaliation, or harassment claim is a thorough, well-documented investigation.

Michael v. Caterpillar Fin. Servs. Corp. concerned a six-year African-American employee who had a good employment record until her manager was replaced. Shonta Michael claimed that the discipline, including a very confrontational meeting in which the new manager aggressively yelled at her, was racially discriminatory and that she was retaliated against after she complained over the manager's treatment of her. Caterpillar, on the other hand, claimed that any conflict and discipline was solely because of legitimate performance issues. The Court skirted the issue of whether the disciplinary action (a performance plan) constituted an "adverse employment action," finding that regardless Michael could not prove that the employer's actions were pretext for discrimination or retaliation. Caterpillar's investigation included interviews of all of Michael's co-workers, many of whom found her difficult to work with. Michael claimed that her disagreement those facts established pretext. The Court disagreed:

Michael’s disagreement with the facts uncovered in Caterpillar’s investigation does not create a genuine issue of material fact that would defeat summary judgment “as long as an employer has an honest belief in its proffered nondiscriminatory reason.” The key inquiry in assessing whether an employer holds such an honest belief is “whether the employer made a reasonably informed and considered decision before taking” the complained-of action. An employer has an honest belief in its rationale when it “reasonably relied on the particularized facts that were before it at the time the decision was made.” “[W]e do not require that the decisional process used by the employer be optimal or that it left no stone unturned.” ... Caterpillar presented sound, nondiscriminatory reasons for the action that it took based on a reasonable investigation of events that occurred after Michael’s favorable performance review.

Because Caterpillar had extensive documentation of its investigation, it could reasonably rely on its conclusions with no finding of pretext or retaliatory animus.

By comparison, in Denhof v. City of Grand Rapids, the issue was whether the Grand Rapids Chief of Police reasonably relied upon a psychological fitness for duty exam in refusing to permit the plaintiff to return to work. The Court found that the Chief's reliance on the medical opinion was unreasonable because the doctor's written opinion showed that he had a preordained opinion on Denhof's unfitness for duty:

In his January 11, 2002, letter recommending a fitness for duty examination for Patricia Denhof, Dr. Peterson employed language that, at a minimum, suggested his opinion had already been formed. For instance, he noted that in view of the tension between Denhof and the department, “it is difficult to imagine how she could continue to work in this environment.” ... This language should have signaled to Chief Dolan, and indeed any reasonable recipient, that Dr. Peterson was predisposed to finding Denhof unfit for duty. Indeed, after comments like this, it is hard to see any possibility that Dr. Peterson’s examination would yield a result other than finding that Denhof should be separated from the police force. Instead, when Dolan was confronted with a psychologist who had already formed his opinion before examining the patient, he asked that doctor to proceed with the examination. In doing so, he forfeited the protection of the honest belief rule, because the jury could have easily concluded that his reliance on a doctor who had already made up his mind did not qualify as reasonable reliance.

According to the Court, the employer could not have an honest belief about Denhof's lack of fitness to return to work because, according to the opinion the doctor upon whom it was relying was predisposed. Thus, the decision could not have been bona fide.

I'm troubled by the ease with which the Denhof panel writes off the employer's reliance on a medical opinion and delves into the motivations of the psychologist. The doctor's language does not seem nearly as clear to the me as it did to the Sixth Circuit. Moreover, if an employer cannot have an honest belief about a medical opinion what can it hold an honest belief about? Nevertheless, these two cases reaffirm the honest belief rule, and demonstrate that courts will not second-guess a personnel decision if it is based on a rational, reasoned, honest belief.

The more things change the more they stay the same

According to today's Columbus Dispatch, the Ohio Civil Rights Commission is considering adopting new regulations under which pregnant employees would be entitled to 12 weeks of unpaid maternity leave immediately upon their date of hire. These new rules would apply to any employer with 4 or more employees, as opposed to the federal FMLA's 50-employee limit. Finally, these new state rules would require employers to offer a pregnant employee a light-duty assignment where practical and to reinstate a worker to her former position or an equivalent post when she returns to work. Before any changes can take effect, they must be approved by the Joint Committee on Agency Rule Review, a legislative panel. If the panel approves the changes, they could take effect in September. A copy of the proposed regulations, which amends OAC 4112-5-05(G), are available from the OCRC here, and redlined here.

It is unclear why the OCRC feels these new rules are necessary. It is true that the FMLA only applies to companies with 50 or more employees and to employees with at least one year of employment who have worked a minimum 1,250 hours in the previous 12 months. As this May 22, 2007, post makes clear, Ohio law already requires at least 12 weeks of maternity leave for all pregnant employees. Further, the federal Pregnancy Discrimination Act and its Ohio counterpart already require that employers treat pregnant employees the same as other employees with similarly disabling medical conditions. In other words, if a pregnant employee requests light duty to accommodate pregnancy symptoms, the company must treat that employee's request the same as it would any other similarly disabled employee's request. Similarly, an employer that terminates a pregnant employee during maternity leave does so at its own peril regardless of whether she is FMLA-eligible or not. Such disparate treatment is pregnancy discrimination under current laws.

These proposed new rules do nothing more than codify the status quo. They seem to simply jump on the "family responsibility discrimination" bandwagon. If any good is to come from of these new rules it is that employers will be further educated about maternity leave rights of Ohio employees, which will still remain a minefield for the unwary HR professional. These new rules, however, are not groundbreaking, and should not cause any change in the law or how companies administer maternity leaves.

Family Responsibility Discrimination gains more coverage

Family responsibility discrimination continues to gain traction. It was front and center in a featured piece in yesterday's New York Times Magazine available here, (free online registration required). Aside from providing a nice summary of the legal landscape in this evolving amalgam of discrimination, the article makes five interesting point:

• The U.S. lags behind the rest of the developed world, most of which has much more flexible family leave laws.
• More than 50% of family responsibility discrimination claims are successful, which is significantly higher than the less than 20% success rate for other types of discrimination.
• These lawsuits result in six and seven figure verdicts.
• Even conservative courts are embracing these claims, under the umbrella of "family values."

These points are intertwined, and warrant serious attention from companies. Almost all judges and jurors can relate to caregiving. Even former Chief Justice Rehquist, not known for his liberal viewpoints, in Nevada Dep't of Human Resources v. Hibbs, wrote, "The fault line between work and family [is] precisely where sex-based overgeneralizations has been and remains strongest." The New York Times article makes the point that until either Congress amends the FMLA to extend family leave, other laws are passed, the aggrieved will continue to push reform via discrimination lawsuits, a potentially costly prospect for companies.

Why I love being an employment lawyer

This article, courtesy of the Wall Street Journal's Law Blog, needs no further explanation: The Best Dentist Related Lawsuit Ever. You'd think after 10 years of this I would stop being surprised or entertained at what goes on in places of employment. The biggest surprise is that the dentist was sued for outrage, battery, invasion of privacy, false light, public disclosure of private acts, medical negligence, lack of informed consent, affliction of emotional distress, and retaliation, but not sexual harassment.

And for the Seinfeld fans:

Elaine: Maybe you were still under the gas.Maybe you were hallucinating you're coming out of the gas but you were still under the gas.

Jerry: I don't think so. I think they were getting dressed and not only that - my shirt was out!!!

Elaine: Your shirt was out?

Jerry: I think so.

Elaine: Well, what kind of shirt was it?

Jerry: You know! Like a tennis shirt.

Elaine: Oh! Well - You don't tuck those in?

Jerry: Sometimes I tuck 'em sometimes I don't

Elaine: Well. Were you tucked?

Jerry: I think I was tucked!

Elaine: All right then say you were. I mean - what do you think could have happened?

Jerry: I don't know but I was spitting out and rinsing like there was no tomorrow.

Elaine: Ughhhh!

Jerry: Is this guy a dentist or Caligula?

The Jimmy, Seinfeld Episode 105 (original air date March 16, 1995).

Foreign accents as direct evidence of national origin discrimination

According to the EEOC:

An employment decision based on foreign accent does not violate Title VII if an individual's accent materially interferes with the ability to perform job duties. This assessment depends upon the specific duties of the position in question and the extent to which the individual's accent affects his or her ability to perform job duties. Employers should distinguish between a merely discernible foreign accent and one that interferes with communication skills necessary to perform job duties. Generally, an employer may only base an employment decision on accent if effective oral communication in English is required to perform job duties and the individual's foreign accent materially interferes with his or her ability to communicate orally in English. Positions for which effective oral communication in English may be required include teaching, customer service, and telemarketing. Even for these positions, an employer must still determine whether the particular individual's accent interferes with the ability to perform job duties.

In re Rodriguez demonstrates these principles. Jose Rodriguez applied and was rejected for two vacant supervisory positions at FedEx, despite the hiring manager believing him to be qualified for the positions. The Human Resource Manager, Adkinson, however, expressed concern that Rodriguez was difficult to understand and that his Hispanic accept and speech pattern would adversely affect his ability to rise through the company's ranks. Witnesses also attributed to Adkinson disparaging comments about Rodriguez's "language" and "how he speaks." After trying to be promoted for nearly a year, Rodriguez ultimately gave up, resigned, and sued FedEx for national origin discrimination. The Sixth Circuit held that Adkinson's comments concerning Rodriguez's accent was direct evidence of national origin discrimination, and sent the case back to the district court to determine FedEx would have refused to promote Rodriguez even without a discriminatory motive. In reaching that conclusion, the Court reinforced that "accent and national origin are inextricably intertwined," and that the EEOC "recognizes linguistic discrimination as national origin discrimination." It is probably little solace for FedEx that the court of appeals affirmed the dismissal of the hostile environment, constructive discharge, and retaliation claims. Now it will have to prove to a jury the legitimacy of its termination in the face of the HR Manager's comments.

Jury verdict underscores rights of veterans

A federal jury in Portland, Oregon, returned a $985,000 verdict in favor of a National Guardsman terminated by Target after his return from military duty. The jury found that the employee was fired when he tried to come back to his old job and that it retaliated against him for asking for reinstatement. The evidence at trial was that Target management told the employee that his enlistment following 9/11 "would not be beneficial to his future career," that he was demoted following his return from active duty, and when the National Guard intervened on his behalf to have his previous position restored, Target terminated him. The jury awarded $85,000 in economic damages and $900,000 in punitive damages for the retaliatory termination. It found the demotion, however, lawful.

This verdict highlights the rights held by employees who take military leaves of absence. Military leaves are covered by the federal Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). USERRA provides reemployment protection and other benefits for veterans and employees who perform military service. The law applies to all members of the United States military, reserves, and national guard. Under the statute, military service is not only defined as actual active duty, but also inactive duty training. In sum, USERRA requires that all employers must grant military leave for all full-time and part-time employees for up to a period of 5 years, provided the employee provided appropriate documentation for the leave. Employers have no obligation to pay employees during a military leave, and employees have the option to use, but cannot be required to use, accrued paid time off (such as vacation days) during the leave. If a military absence was 90 days or shorter, the employer must restore the employee to his or her former position. If a military absence was 91 days or longer, the employer must restore the employee either to his or her former position if it is still available, or if it is not available, to a job that is equal to the former position in status and pay. Upon an employee’s return from a military leave of absence, the employee must be compensated at the rate of pay he or she would have received had he or she continued working during the period of leave. The employee must also be restored to full participation in benefit plans.

It is a good idea to have a military leave policy so that all supervisors and managers understand the rights and responsibilities under this law.

Federal minimum wage increases today

Today is July 24, which means that the federal minimum wage increases from $5.15 to $5.85 an hour. The Department of Labor is even nice enough to print a new wage and hour poster to hang in your business.

For Ohio businesses, this increase does not mean much, because last November's ballot initiative already raised this State's minimum wage to $6.85. Regardless every Ohio employer subject to the FLSA's minimum wage provisions must post, and keep posted, in a conspicuous place in all of their establishments the federal wage and hour poster. The federal minimum wage may again have meaning to Ohio employers when it increases to $7.25 two years from today.

Small claims court needs reform

Did you know that a company cannot represent itself in an Ohio small claims court? An employee is free to go to small claims court and file any claim $3,000 or under against an employer, and the employer must hire an attorney to represent it at court. Even though a corporation is defined as a "person" under the law, and an individual can appear pro se, a company that tries to exercise the same right will be barred under the guise of the unauthorized practice of law. This rule needs to be fixed. Because the cost of defense often outweighs the cost of the claim, how is justice served if companies have little incentive to litigate? Often, however, companies want to challenge the claim, because at stake is the sanctity of a policy that the employer has spent time and money having drafted, implementing, and enforcing. Also, companies need to send the message that they will not roll over even for small claims brought by employees. So, what you are left with is a company that may not want to pay to fight the claim, and if they do pay to fight it, a pro se plaintiff that will be outmatched in court by having to face cross examination by a hired professional. This system is crying out for reform. Ohio law should be amended so that a company can appear in small claims court through a corporate officer and without an attorney. This amendment will allow the system to work as it is intended, so that small claims can actually be tried with small costs and small hassle.

Mind your (mis)represenations - part 3

The Sixth Circuit has recently published two opinions on the issue of employer misrepresentations under ERISA and COBRA: Thurman v. Pfizer, Inc. (reported here) and Thomas v. Miller (reported here). The latter expressly recognizes a claim for equitable estoppel under COBRA. The former holds that ERISA does not preempt a state law misrepresentation claim when the misrepresentation relates to the benefits provided by ERISA-governed plan. Last week, the First Circuit (which covers federal courts in Maine, Massachusetts, New Hampshire, Rhode Island, and Puerto Rico), in Zipperer v. Raytheon Co., reached the opposite result, and held that ERISA does preempt state law claims of negligence, equitable estoppel, and negligent misrepresentation stemming from an erroneous estimate of retirement benefits that led to an employee's voluntary early retirement.

Factually, Zipperer is no different that Thurman. Both deal with an improper calculation of retirement benefits, albeit at different stages (acceptance of employment versus retirement). In both cases the employee took action in direct reliance upon that calculation. And yet, the cases reach the exact opposite conclusion. The Zipperer court certainly seems to get the better of the argument. ERISA preempts any state law causes of action that "relate to" an ERISA plan, because Congress has determined that employee benefit plans need uniform administration. As the magistrate judge concluded in the case below in Zipperer:

Allowing a cause of action to proceed for the negligence in making the representation or the negligence in maintaining and transferring the pertinent records amounts to an alternative enforcement mechanism to enforce (or estop the employer from denying) extra-contractual benefits. Such claims inevitably and directly conflict with the carefully chosen and carefully limited remedies provided under ERISA.... Regardless of the label of the state law claims, in essence they seek extracontractual benefits not authorized by the terms of the Plan. Such an end run around the carefully crafted benefits Raytheon chose to provide amounts to an attempt to authorize remedies beyond those provided by the Plan.

In other words, a claim that alleges misrepresentation about benefits owed under an ERISA plan must relate to that plan. While I understand the Sixth Circuit's concern about holding employers to their representations, the issue is not whether an employer can escape liability at all, but whether liability will be imposed under state law or ERISA.

Regardless of whether the claim must be brought under state law or ERISA, the lesson for employers does not change: companies must judiciously select their words when talking to employees about benefits or other terms and conditions of employment, and misrepresentations should be avoided at all costs.

Sedona Conference publishes the Second Edition of its Sedona Principles Addressing Electronic Document Production

For those interested in e-discovery, the Sedona Conference, one of the country's preeminent legal think tanks in the areas of antitrust law, intellectual property, and complex litigation, has published The Sedona Principles (Second Edition): Best Practices Recommendations and Principles for Addressing Electronic Document Production, available for download from the Sedona Conference here. The First Edition, published prior to the recent amendments to the Federal Rules of Civil Procedure, is widely considered to be the bible of best practices for e-discovery. The Second Edition reflects the new language found in the amended Federal Rules, and updates the language and commentary on metadata and the imposition of sanctions.

Are we overreacting to Ledbetter?

Today's New York Times reports on current efforts by Senate Democrats to introduce equal pay legislation in light of the Supreme Court's ruling in Ledbetter v. Goodyear Tire & Rubber Co. Recall that in May the Supreme Court ruled 5 to 4 against Lilly Ledbetter, who discovered, after working at Goodyear for nearly 20 years, that her male co-workers had been receiving higher salaries. The Justices started her 180-day statute of limitations upon alleged discriminatory pay decision, time barring her suit.

In light of Ledbetter, the House last month introduced and passed the Lilly Ledbetter Fair Pay Act, which would allow pay discrimination claims to be filed within 180 days of the issuance of a discriminatory paycheck. It seeks to amend Title VII, the ADEA, the ADA, and the Rehabilitation Act to specify that for a claim of compensation discrimination because of race, color, religion, sex, national origin, age, or disability, the discriminatory pay act does not occur, and the statute of limitations does not begin to run, until "an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice." In other words, the aggrieved employees would have, depending on the state, 180 or 300 days from the receipt of each alleged discriminatory paycheck to file a charge with the EEOC to challenge the pay decision as discriminatory. According to the New York Times article, Senators Edward Kennedy, Hillary Clinton, Barack Obama, and others intend to introduce similar legislation in the Senate.

If this legislation becomes law (which is doubtful while Bush is still President), pay discrimination claims would have a floating statute of limitations, potentially granting all employees the right to sue in perpetuity. Statutes of limitations serve several important purposes, including promoting certainty, in that a company needs to know that it will reach a point in time when a decision cannot be challenged in court, and recency, in that at some point in time employees leave companies, memories of events fade, and evidence becomes stale. Lilly Ledbetter, for example, sued for a decision nearly 20 years hence. Who at Goodyear still has any knowledge about that decision? Senator Kennedy is quoted as saying, “The rules for filing equal-pay claims should reflect basic fairness.” Fairness, however, works both ways, for the employer and the employee. Granting a perpetual statute of limitations fosters a perceived fairness for one at the expense of the other.

Vicarious release held ineffective

Edwards v. Ohio Inst. of Cardiac Care is not earth shattering for what it says, but I write because of the novel argument made by the employer in trying to escape a jury verdict. It is well-settled Ohio law that supervisors and managers are jointly and severally liable with their employers for their own acts of discrimination. After suffering a $200,000 jury verdict on a sexual harassment claim, the employer in Edwards made the novel argument to the appellate court that the plaintiff's pretrial settlement with the accused supervisor extinguished the company's liability. While the Court seemed impressed with the creativity of the argument, it ultimately rejected it (the case was reversed on other grounds relating to the jury instructions). The Court reasoned that the supervisor is not liable simply as the employer's agent, but is liable because the statutory definition of "employer" in R.C. 4112.02(A)(2) includes individual supervisors and managers whose conduct violates the law. In other words, the supervisor and the company are co-employers. Thus, a settlement with one does not extinguish the liability of the other. In other words, if you want to obtain a release, you have to make sure you are a party to the agreement.

FMLA waivers pose a potential trap

There are few worse feelings than being sued by an employee with whom you had previously negotiated a severance or settlement agreement and learning that the release of claims that had protected you from that very eventuality is invalid. Taylor v. Progress Energy, Inc., decided last week by the Fourth Circuit, presents that very dilemma under the FMLA, and holds that no waiver of any claim or right under the FMLA is valid unless it is first approved by the Department of Labor or a court.

Section 825.200(d) of the regulations for the FMLA states: "Employees cannot waive, nor may employers induce employees to waive, their rights under FMLA." At issue in Taylor was whether 825.200(d)'s proscriptions apply to any claim under the FMLA, certain types of FMLA claims, or only future FMLA claims. First, the Court concluded that the regulation applies to all types of FMLA claims: those regarding substantive rights (i.e., denials of leave), those regarding proscriptive rights (i.e., retaliation), and those regarding remedial rights (i.e., actions to recover damages). Secondly, because there is nothing in the text of 825.200(d) that distinguishes between past and future claims, and because the word "waive" has a retrospective connotation, the regulation applies to any claim under the FMLA, past or future. The Court so ruled because of the strong policies that merit protection under the FMLA: "[W]ith respect to the FMLA, ... settlements that are cheaper than compliance would encourage noncompliance, thereby undermining the Act's purpose of imposing minimum standards for family and medical leave."

The Sixth Circuit has not addressed this issue, but at least two other courts have, with each reaching the opposite result from Taylor. The Fifth Circuit has held that section 825.200(d)'s prohibition against waivers only applies to prospective waivers of substantive rights such as rights to leave, reinstatement, etc. The Eastern District of Pennsylvania interprets 825.200(d) even more narrowly in holding that it does not prohibit an employee from waiving any past FMLA claims as part of a severance agreement or settlement.

Because this issue is open in the Sixth Circuit, Ohio employers would be prudent to tread conservatively and obtain judicial or DOL approval of any agreement that contains any waiver of any rights under the FMLA, or at a minimum include indemnification language (an issue not addressed by Taylor) in such agreements to cover any future lawsuits. Ultimately, the Sixth Circuit could (and should) adopt the common sense approach and permit a waiver of past FMLA claims as part of a severance or settlement agreement. After all, no one pays an employee severance or a settlement to leave unreleased claims that could later mature into a lawsuit. Releases are intended to cover all past conduct and claims, which is why the employee is paid a sum of money to which he or she would not otherwise be entitled. However, there is certainly a risk that the Sixth Circuit will find Taylor persuasive and find all unapproved FMLA waivers null and void.

EEOC confirms that it is not age discrimination to favor older workers

The EEOC on Friday published revised regulations on age discrimination that conform with the Supreme Court's 2004 ruling in General Dynamics Land Systems, Inc. v. Cline. Cline rejected the notion of "reverse age discrimination" and held that it is not age discrimination for an employer to favor an older employee at the expense of a younger employee, and that such disc. The EEOC's revised regulations, available here, clarify that the ADEA does not prohibit employers from favoring older employees over younger ones when both are protected by the Act:

It is unlawful for an employer to discriminate against an individual in any aspect of employment because that individual is 40 years old or older, unless one of the statutory exceptions applies. Favoring an older individual over a younger individual because of age is not unlawful discrimination under the ADEA, even if the younger individual is at least 40 years old. However, the ADEA does not require employers to prefer older individuals and does not affect applicable state, municipal, or local laws that prohibit such preferences.

Emotional distress damages are taxable

In rehearing Murphy v. IRS, decided 11 months ago, the same three-judge panel of the D.C. Circuit has reversed itself and held that damages for non-physical injuries such as emotional distress and mental anguish are taxable. Last August, that Court ruled that Marrita Murphy's $70,000, awarded for emotional distress and loss of reputation by the Department of Labor Administrative Review Board in a whistleblower case against her employer, was akin to an award for physical injuries and therefore tax exempt. This week, the Court held that the money should have been included in her gross income:

Murphy no doubt suffered from certain physical manifestations of emotional distress, but the record clearly indicates the Board awarded her compensation only “for mental pain and anguish” and “for injury to professional reputation.” Although the Board cited her psychologist, who had mentioned her physical aliments, in support of Murphy’s “description of her mental anguish,” we cannot say the Board, notwithstanding its clear statements to the contrary, actually awarded damages because of Murphy’s bruxism and other physical manifestations of stress.... At best — and this is doubtful — at best the Board and the ALJ may have considered her physical injuries indicative of the severity of the emotional distress for which the damages were awarded, but her physical injuries themselves were not the reason for the award.

Thus, it is not enough that the emotional distress has some physical symptoms (such as sleeplessness, loss of appetite, etc.), and it appears that unless physical injuries are the reason for the award or settlement, emotional distress damages will be taxable. Because discrimination and other employment-related cases rarely involve physical injuries, it is safe to assume that all non-economic damages will be taxable in most employment cases.

Harassment training must be effective to provide a defense

A case handed down by the Sixth Circuit last week provides a good example of how not to handle a sexual harassment investigation. In Parker v. General Extrusions, Inc., the plaintiff, Nancy Parker had been subjected to several years of pervasive harassment, the details of which you can read in the opinion, and which most companies would find patently inappropriate and would result in a full and complete investigation. Instead of investigating Parker's complains, however, witnesses testified at trial the company's responded by generally ignoring her, and by saying behind closed doors that the workplace was a mill-type environment, that she could work somewhere else if she was uncomfortable, and that the harassment was merely a joke. A jury awarded Parker $25,000 in compensatory damages and $75,000 in punitive damages. The district court tossed out the latter, holding that the company took the harassment complaints seriously and made a good faith effort to comply with Title VII. The Sixth Circuit disagreed and reinstated the punitive damages verdict. The company argued that because it had a sexual harassment policy and trained its employees on harassment, it made a good faith effort to comply with Title VII and should not be liable for punitive damages. To the contrary, witnesses at trial testified that they could not remember any harassment training taking place prior to Parker's complaints, and regardless the policy was not enforced. The company's HR manager testified that in his 21 years at the company, he could not remember ever disciplining any forepersons for not reporting a witnessed incident of harassment. On that basis (among others), the appellate court reinstated the verdict.

The lesson here is basic but one that is worth reinforcing. Harassment policies should be reviewed frequently and updated when necessary. Training should take place annually, and not merely as a reaction to an issue in the workplace. Policies should be uniformly enforced, and employees should be disciplined for failing to follow them. Combatting sexual harassment should be a company-wide initiative. Companies can never guarantee against a lawsuit by a disgruntled employee, but those that are proactive about workplace harassment will stand the best chance of successfully defending against such a lawsuit.