Ohio appellate court puts age discrimination statute of limitations in doubt

Ohio's age discrimination statute of limitations has always been one of the quirks of Ohio employment law. All discrimination claims under R.C. Chapter 4112 have a six-year statute of limitations, except for age claims. Until recently, it has been well established that an age claim brought under R.C. 4112.99 had a 180-day statute of limitations. Meyer v. United Parcel Serv., Inc., decided last month by the Hamilton County Court of Appeals, rejects that longstanding conventional wisdom, and holds that plaintiffs have six years to bring such age claims.

One can bring an action for age discrimination under four different provisions within R.C. Chapter 4112:

• First, R.C. 4112.02(N) prohibits discrimination in employment on the basis of age and provides for "any legal or equitable relief that will effectuate the individual's rights." An age-discrimination claim under this statute must be brought within 180 days of the alleged unlawful discriminatory practice.
• Second, R.C. 4112.14(B) provides a remedy for age-based discrimination in the hiring and termination of employees "which shall include reimbursement to the applicant or employee for the costs, including reasonable attorney's fees, of the action, or to reinstate the employee in the employee's former position with compensation for lost wages and any lost fringe benefits from the date of the illegal discharge and to reimburse the employee for the costs, including reasonable attorney's fees, of the action." A six-year statute of limitations applies to these claims.
• Third, R.C. 4112.99 provides an independent civil action to seek redress for any form of discrimination identified in R.C. Chapter 4112. The statute makes violators of R.C. Chapter 4112 "subject to a civil action for damages, injunctive relief, or any other appropriate relief."
• Finally and alternatively, a plaintiff may file a charge administratively with the OCRC under R.C. 4112.05., but such a filing acts as an absolute bar to instituting a civil action in court.

When filing an age claim, one must elect which statute one is filing under.

At least as far back as the Ohio Supreme Court decided Bellian v. Bicron Corp. in 1994, it has been well established that an age claim under R.C. 4112.99 is subject to the 180-day statute of limitations in R.C. 4112.02(N). See Oker v. Ameritech Corp. ("An age-discrimination claim brought pursuant to R.C. Chapter 4112 must be initiated within the one-hundred-eighty-day statute of limitations period set forth in former R.C. 4112.02(N)."); McNeely v. Ross Correctional Inst. ("Whether an age discrimination claim is premised on R.C. 4112.02 or 4112.99, a plaintiff must file the claim within 180 days of the alleged discriminatory act.").

The Hamilton County Court of Appeals, however, has put this conventional wisdom in doubt. In Meyer v. United Parcel Serv., Inc., that court concluded that because R.C. 4112.99 provides an independent cause of action, it is separate from R.C. 4112.02(N), and therefore subject to the same six-year statute of limitations as other claims brought under R.C. 4112.99. The Court based its rationale on the recent Ohio Supreme Court decision in Leininger v. Pioneer National Latex holding that Ohio does not recognize a common-law tort claim for wrongful discharge based on the public policy against age discrimination:

Recently, in Leininger v. Pioneer National Latex, the Ohio Supreme Court held that Ohio does not recognize a common-law tort claim for wrongful discharge based on the public policy against age discrimination, "because the remedies in R.C. Chapter 4112 provide complete relief for a statutory claim for age discrimination." In reaching its holding, the court reiterated its prior holding that had rejected the argument that the specific-remedies provisions of subsections within the chapter prevail over the more general provisions of R.C. 4112.99. The court noted that "R.C. 4112.08 requires a liberal construction of R.C. Chapter 4112. Although R.C. 4112.02(N), 4112.08, and 4112.14(B) all require a plaintiff to elect under which statute (R.C. 4112.02, 4112.05, or 4112.14) a claim for age discrimination will be pursued, when an age discrimination claim accrues, a plaintiff may choose from the full spectrum of remedies available. Leininger's argument also does not take into account the scope of R.C. 4112.99's remedies. In Elek v. Huntington Natl. Bank (1991), 60 Ohio St. 3d 135, 573 N.E.2d 1056, we stated that R.C. 4112.99 provides an independent civil action to seek redress for any form of discrimination identified in the chapter. Id. at 136. A violation of R.C. 4112.14 (formerly R.C. 4101.17), therefore, can also support a claim for damages, injunctive relief, or any other appropriate relief under R.C. 4112.99. This fourth avenue of relief is not subject to the election of remedies."

Meyer's logic is a tortured reading of Leininger, which expressly found that R.C. 4112.02(N) and R.C. 4112.99 are subject to the same statute of limitations for age claims:

Although R.C. 4112.14 was the only statutory claim available to Leininger at the time she filed her complaint due to the expiration of the statute of limitations for claims under R.C. 4112.02 and 4112.05, this fact does not justify limiting our examination of the available remedies under the chapter as a whole. In determining whether a common-law tort claim for wrongful discharge based on Ohio's public policy against age discrimination should be recognized, we need to look at all the remedies available to a plaintiff at the time the claim accrued.

There is certainly some appeal to the argument that it does not make any sense that age claims and all other discrimination claims have different statutes of limitations. On the other hand, R.C. Chapter 4112 has three distinct remedial statutes for age discrimination, more than any other type of discrimination. The point is that if we are going to change the statute of limitations, it should be done by the legislature, and not by an appellate court diverging from 14 years of precedent. To again quote the Leininger decision: "Leininger contends that the short statute of limitations of R.C. 4112.02 ... detracts from the remedial scheme of R.C. Chapter 4112. The period within which a claim must be brought, however, is a policy decision best left to the General Assembly."

The Meyer case is most likely an anomaly. Regardless, if you are practicing in Hamilton County, you should be aware that employees have six-years to file their age claims in that court. This issues bears watching to see if any other appellate districts follow suit, or if the Supreme Court takes up this issue to resolve this recent divergence of opinion.

New breed of employee handbook creates legal problems

The blogosphere has been hopping the past several days over the new employee handbook drafted by newspaper conglomerate the Tribune Company. Rather than recapping the issues, I'll merely direct everyone to a very good summary at the Connecticut Employment Law Blog.

To sum up, though, the Tribune's new handbook (which comes in at a very concise 11 pages) is very informally written, probably in an attempt for it to be better understood. When your harassment policy, however, tells employees:

Working at Tribune means accepting that sometimes you might hear a word that you, personally, might not use. You might experience an attitude that you don't share. You might hear a joke that you might not consider funny.... This should be understood, should not be a surprise and is not considered harassment. Harassment means being told that a raise, promotion or other benefit is dependent on you going on a date with your boss or some other similar activity.

you might have a problem. Limiting the definition of sexual harassment to quid pro quo is a serious misstatement of the law that a review by a lawyer would have caught and corrected. Jocularity and informality are one thing, if that is the image you want to present. Discouraging employees from reporting a hostile environment by incorrect statements of the law is entirely different. There is nothing wrong with savings costs by drafting your own employee handbook. Not having a lawyer review it before it is disseminated, however, will end up costing a company a whole lot more in litigation costs then if it just had a lawyer draft it in the first place.

Untangling Employment Practices Liability insurance

Earlier this month, law.com had a very insightful article on the advantages and pitfalls of business insurance policies. See On the Horns of a Defense Counsel Dilemma. While the article did not specifically concern Employment Practices Liability policies, the issues are the same. Any insurance policy sets up a very curious relationship - the relationships between the policy holder and insurance company, the law firm and their insurance carrier referral source, and the attorney-client relationship.

When I used to do a lot of work for clients under EPL policies, the refrain I most often heard from my client was, "You're the insurance company's lawyer." Nothing could be further from the truth. Unless an insured has paid for the right to select counsel, the insurance company selects and retains counsel for the insured under the EPL policy, and, subject to the policy's deductible, pays the fees. The client, though, is always the insured, and not the insurance company. Ohio law supports the idea that although there exists this odd "tripartite relationship" between the insured, the lawyer, and the insurance company, the only attorney-client relationship that exists is between the lawyer and the insured; there exists no such relationship between the lawyer and the insurance company. A lawyer's ethical duties are always solely owed to the insured. See Swiss Reinsurance Am. Corp., Inc. v. Roetzel & Andress

Notwithstanding any EPL converage a company might have, there are certain key instances where a company may want to have its own employment or corporate counsel involved in litigation, working along side insurance counsel.

• EPL insurance will cover some, but not all, employment related claims in the state of Ohio. For example, it is illegal to insure against punitive damages in this state. Further, different policies may cover different types of claims. For example, discrimination claims may be covered, and wage and hour claims not covered. Therefore, it is important at the outset of any engagement in which there may be insurance coverage to have counsel review the claims, the policy, and any reservation of rights letters to make a determination as to what is and is not covered. Counsel may not agree with the insurance company on coverage. In that case, one is usually better served having an attorney fight that battle with the insurance company.
• Because not all claims may be insured, one might be left with uninsured exposure in a case. Punitive damages or damages that exceed policy limits are two examples of uninsured exposure. Because one might have certain aspects of a case for which there is no insurance coverage, it may be wise to have separate counsel monitoring the litigation, and if the stakes are high enough, taking an active role to hedge against the uninsured risk.
• Conflicts can also arise between the client's interest and that of the insurance company. How to defend a case, whether to settle, and for how much are all issues with which the insured and the insurer can have divergent issues. If such a conflict occurs, the insured may question the loyalty of the attorney hired by the insurance company. In such a circumstance it makes sense to get an outside law firm involved to manage the conflict, push back against the insurance company to triumph your interests, and even possibly take over the defense if the conflict cannot be resolved.

When these issues arise, they are rarely simple or easily resolved. Understanding the nature of this tripartite relationship is the first step in taking control of the process and ensuring that a defense is complete and proper.

Some words to ponder on MLK Day

Forty-five years ago, "the civil rights movement swirled into Birmingham, a city whose bitter resistance to change made it a battleground." Jack Bass, Unlikely Heroes 201 (1981). Dr. Martin Luther King Jr. remarked, "If we can crack Birmingham, I am convinced we can crack the South. Birmingham is a symbol of segregation for the entire South." Id. By blood, toil, and tears, segregation was, of course, cracked in Birmingham, and today the city is led by its fourth black mayor and a majority-black city council. Against this historical backdrop, this appeal from the Northern District of Alabama offers, amid a host of technical issues, an important reminder: despite considerable racial progress, racism persists as an evil to be remedied in our Nation.

Such are the words of the Hon. William H. Pryor Jr. of the 11th Circuit Court of Appeals in Goldsmith v. Bagby Elevator Co. Goldsmith involves appalling allegations of racial harassment, which resulted in a substantial jury verdict affirmed by the 11th Circuit. This Martin Luther King Day is as good a time as any for everyone to stop and reflect on Judge Pryor's words, and ask if you are doing all that you can to combat discrimination of all kinds in your workplace.

Supreme Court to hear retaliation (Crawford v. Nashville) and ADEA disparate impact (Meacham v. Knolls Atomic Power) cases

The U.S. Supreme Court has granted cert. in two more employment cases to be heard this term.

Crawford v. Metropolitan Government of Nashville, which is out of the 6th Circuit, asks if Title VII's anti-retaliation provision protects an employee from being fired because she cooperated with her employer's internal sexual harassment investigation.

Vicki Crawford claimed that her termination after she participated in a sexual harassment investigation constituted retaliation. The 6th Circuit disagreed, holding that participation in a purely internal, in-house investigation, in the absence of any pending EEOC charge, is not a protected activity. The Court reasoned that a contrary result would chill employers' investigations because they would not interview witnesses for fear of potential retaliation liability. Crawford, not surprisingly, is arguing the converse, that such protection is needed so that employees' willing participation in such investigations is not chilled. The EEOC, along with the 3rd, 5th, 8th, and 11th Circuits, disagree with the 6th Circuit's holding.

On first blush, it seems that the employee has the better of the argument. Employees already perceive that they can be fired if the company doesn't like what they have to say. It's hard enough as is to get employees to voluntarily cooperate, and assurances of no retaliation are usually necessary to get them to open up at all. A ruling for the employer in this case would make internal investigations all that much harder to conduct. To quote from the cert. petition:

Workers of ordinary prudence would be likely to avoid cooperating with a sexual harassment internal investigation if they knew they could be fired for doing so, certain as most will be that such cooperation will anger the alleged harasser, who usually is a supervisor and who all too often is the witness's own supervisor. Employees would have a disincentive to cooperate, if their participation in internal investigations is not protected. Placing a voluntary witness into this kind of legal limbo would impede remedial mechanisms by denying interested parties' access to the unchilled testimony of witnesses. (internal quotations and citations omitted).

Meacham v. Knolls Atomic Power Laboratory asks whether an employee alleging disparate impact under the ADEA bears the burden of persuasion on the "reasonable factors other than age" defense. More on this case as we get closer to oral argument.

What else I'm reading this week #14

A few sports related articles to start off this week's round-up. Michael Moore at the Pennsylvania Employment Law Blog discusses the flak over Kelly Tilghman's comments about Tiger Woods, and how her employer diffused a potentially problematic situation. Meanwhile, John Phillips at The Word on Employment Law talks about Randy Moss's legal troubles and an employer's potential liability for hiring a known bad egg. Finally, The HR Capitalist looks at the flip side of the Randy Moss issue, and uses Terrell Owens crying jag to examine the issue of whether your "morale killer" has turned the corner. Being a Philadelphia native and an unapologetic Eagles fan, I'll spare everyone my rant on T.O.

The Manpower Employment Blawg looks at an issue that I've touched on once or twice in last several months - wage and hour class action lawsuits as a booming industry for the plaintiffs' bar. For my thoughts on this issue from back in September, see Use a wage and hour audit to proactively head off claims, and Wage and hour litigation hits the big time.

From the ABA Journal comes a fascinating story about new technology being developed by Microsoft that will enable employers remotely to monitor their workers' productivity, competence, and physical well-being. According to this article, wireless sensors will provide employers with workers' heart rates and stress level, and determine whether they are smiling or frowning, among other data.

The Labor and Employment Law Blog gives a good summary of some of the liability issues implicated by e-mail and voice mail.

Finally, the HR World Blog has an interesting piece on workplace race relations in light of what we saw unfold earlier this week in the Democratic Presidential campaign. You can read my thoughts from October on racial harassment claims in Racial harassment lawsuits on the rise.

FMLA does not protect employees who fail to certify absences

Treatment for substance abuse is a serious health condition covered by the FMLA. Unexcused absences from work are not. The distinction between these two categories made all the difference for Krzysztof Chalimoniuk, who was terminated by Interstate Brands Corporation for excessive absences. In Chalimoniuk v. Interstate Brands Corporation, decided last week, the 7th Circuit upheld the termination and affirmed the trial court's dismissal of Chalimoniuk's FMLA claim.

Chalimoniuk had been battling alcohol addiction for 15 years. On Friday, July 28, he stopped on his way home from work, bought a large amount of alcohol, and over the next three days drank so much he lost his memory of that weekend. He was scheduled to work at IBC the following Monday (July 31), Wednesday (August 2), and Thursday (August 3). On Saturday, July 29, in the midst of his binge, his wife realized he had relapsed and called Fairbanks Hospital to see if she could bring her husband in for treatment. On Tuesday, August 1, Chalimoniuk called his physician's office but it was closed that day. On Wednesday, August 2, he called his doctor's office again, this time speaking to a nurse or receptionist who spoke to the doctor and referred Chalimoniuk to Fairbanks Hospital. On that same day, Chalimoniuk called Fairbanks Hospital and his insurance company to arrange his admission to the hospital. Because of a delay in obtaining insurance approval, Chalimoniuk was not admitted until August 4. He remained in the hospital until August 10. The FMLA certification completed by his doctor stated that he was in treatment from "7/29 - 8/11. Return 8/14."

Chalimoniuk's absences on July 31, August 2, and August 3 put him over the limit under IBC's attendance policy, unless they were covered by the FMLA. Because he did not start his inpatient treatment until August 4, IBC did not grant Chalimoniuk FMLA leave for his three missed work days, and terminated his employment under its attendance policy.

The regulations to the FMLA provide that substance abuse is a serious health condition only if the employee is receiving treatment, and not merely because of the employee's use of the substance:

Substance abuse may be a serious health condition if the conditions of this section are met. However, FMLA leave may only be taken for treatment for substance abuse by a health care provider or by a provider of health care services on referral by a health care provider. On the other hand, absence because of the employee’s use of the substance, rather than for treatment, does not qualify for FMLA leave. 29 C.F.R. 825.114(d).

Thus, under this regulation, Chalimoniuk was entitled to FMLA leave only for treatment for substance abuse. Because he was not in treatment until August 4, his three prior absences were not covered by the FMLA.

Chalimoniuk claimed that his medical certification was incomplete or invalid, creating a duty for IBC to alert him to the deficiency and allow him an opportunity to cure it. The FMLA regulations do impose such a duty on employers. "The employer shall advise an employee whenever the employer finds a certification incomplete, and provide the employee a reasonable opportunity to cure any such deficiency." 29 C.F.R. 825.305(d). IBC did not deny the FMLA leave not because the Certification was incomplete but because they believed it inaccurately overstated the time period that Chalimoniuk was in treatment. Moreover, even if the Certification was incomplete, it would have been impossible for Chalimoniuk to cure the deficiencies, because even he admitted that his treatment did not begin until August 4.

It would be an understatement to say that Chalimoniuk presented an at-risk termination, and it may strike some as unfair that IBC was allowed to terminate him purely because of an administrative delay in his being admitted for treatment. Chalimoniuk and his wife appear to have done everything right -- she called the hospital as soon as she found him drunk, they promptly tried to reach his doctor but could not, and got him admitted to hospital as quickly as their insurer would allow. Nevertheless, the FMLA does not protect him because his treatment did not begin until his actual admission for treatment. I suppose one could rationalize a result in which his treatment would be deemed to have started on the 29th when Chalimoniuk's wife made the call to the hospital, but that would strain the reality of his actual treatment. After all, even Chalimoniuk freely admitted that despite the dates on the Certification, he did not start treatment until he was admitted on August 4.

Most often, FMLA cases teach employers the importance of making sure that all their i's are dotted and t's are crossed. This case illustrates that the same is equally as important for employees, and that employers should consistently apply the FMLA's requirements to employees have failed to properly certify their absences.

Some lessons in handling departing employees and their files

ESPN is reporting that football program files have gone missing from the University of West Virginia office of former coach Rich Rodriguez, who left West Virginia for Michigan. From espn.com:

West Virginia University said Tuesday it will investigate the disappearance of player and football program files found to be missing from the former office of ex-Mountaineers coach Rich Rodriguez.

West Virginia University said Tuesday it will investigate the disappearance of player and football program files found to be missing from the former office of ex-Mountaineers coach Rich Rodriguez.

Paperwork detailing every player on West Virginia's roster, as well as the program's activities over the past seven years, went missing between Rodriguez's resignation as coach to take over at Michigan and the team's return from the Fiesta Bowl, the Charleston (W.Va.) Gazette reported....

After returning to work about a week ago, the staff at WVU's Puskar Center found that most of the files that had been stored in Rodriguez's office, as well as the players' strength and conditioning files in the weight room, were gone, the Gazette reported.

"It's unbelievable. Everything is gone, like it never existed," a source within the athletic department, who spoke on the condition of anonymity, told the Gazette. "Good, bad or indifferent, we don't have a record of anything that has happened." ...

According to the source, the missing files include all of the players' personal files, which encompass contact information, scholarship money awarded, class attendance records and personal conduct records, the Gazette reported....

According to the report, multiple sources said several people in the Puskar Center reported seeing Rodriguez and at least one of his assistants, video coordinator Dusty Rutledge, in Rodriguez's private office shredding paperwork on Dec. 18 -- the day he returned from Ann Arbor after being named Michigan's new head coach. Those who say they witnessed the action said they either paid it no mind or did not know what was being destroyed, according to the report....

West Virginia and Rodriguez are in the midst of a messy legal battle over his departure from Morgantown. The university is trying to recover $4 million from Rodriguez for leaving with six years remaining on his contract. Rodriguez, in turn, said West Virginia breached the contract by not fulfilling all of its terms of the deal.

If Coach Rodriguez took the files, I certainly hope that his attorney is advising him to return them. I couldn't imagine that Coach would try to leverage these valuable documents into a settlement of his other legal issues with the university.

Intrigue aside, Rich Rodriguez's plight is a good learning exercise for employers and employees. Unless there is an agreement that states otherwise, what an employee creates during his or her employment is the property of the employer. The employee is working for the benefit of the employer, and is being paid for it. Accordingly, the employer, and not the employee, owns the files and documents. Because it is the employer's property, the employee has no right to take the property with him or her at the end of employment. These issues are the same whether we are talking about paper or electronic files.

Some take away points for everyone:

• Make sure expectations are clear on the way in the door - handbooks, policy manuals, and employment agreements should clearly state that everything that is created during employment belongs to the company, and that it is expected to be left with the company at the end of employment.
• Supervisors and managers need to be trained so that they do not make any statements contradictory to the policy upon which an employee could claim reliance.
• As best as possible, monitor what employees take out of the company during their employment. Few jobs today are 9 - 5. More and more employees take work home, and some even telecommute. It becomes very difficult to keep tabs on where stuff is, and the more stuff taken out of the office or downloaded, the harder it will be to have it returned if an employee leaves. The good thing about e-mail and portable media is that at least they generally leave a trace that something was taken.
• Reinforce the policy during an exit interview by reminding the employee of the expectation that nothing will leave the company with him or her, and that everything must be returned immediately.
• When all else fails, a letter from a lawyer to a former employee and the new employer goes a long way to getting the documents returned.

6th Circuit affirms maternal profiling verdict

I've been writing lately about maternal profiling, which is employment discrimination against a woman who has, or will have, children. Last week, the 6th Circuit, in Lulaj v. The Wackenhut Corporation, provides us a good example of this type of stereotyping in action.

Lisa Lulaj worked at Chrysler as a fire security officer, first as a Chrysler employee and then as an employee of Wackenhut Corporation after Chrysler outsourced its security operations. Lulaj accepted the transition to Wackenhut solely because she was promised a promotion to a supervisor position. Shortly after the transition, Lulaj filled out forms notifying Wackenhut that she was pregnant and would need a larger uniform. Within a month, her immediate supervisor offered her a lesser promotion than she was originally promised, looking at her stomach and telling her, "You should consider this position considering your position." Within a month, Lulaj went out on maternity leave. When Wackenhut refused to promote her to the originally promised supervisor position at the end of her leave, she decided not to return to work. She sued to pregnancy discrimination under Michigan law, and the jury awarded her a total of $200,000, to which the judge added $49,500 in attorney's fees. The trial judge also took away $142,168 in lost wages because the jury found that Lulaj had voluntarily quit and had not been constructively discharged.

The 6th Circuit rejected Wackenhut's argument that there was no nexus between Lulaj's pregnancy and the promotion decision. The the contrary, the court considered three pieces of evidence critical to its decision that Lulaj was discriminated against:

1. Company managers were aware of her pregnancy long before she officially informed them.
2. The timing of the events suggests discrimination.
3. The way her superior glanced at her stomach suggested that pregnancy was a factor in denying the promotion.

This case is a good example of how maternal profiling can cause a bad result for an employer. At the same time, however, it sets a potentially dangerous precedent by allowing a discrimination claim to stand based in large part on subjective interpretations of glances and stares.

Congress expected to revisit expanded FMLA leave for military families

This morning's New York Times is reporting that Congress is expected to quickly revisit the National Defense Authorization Act that President Bush vetoed at the end of last year. The House and Senate overwhelmingly passed the legislation, which would, among many other things, amend the FMLA and provide up to 6 months of leave to family members (i.e., spouse, son, daughter, or parent) of combat-injured service members to care for their loved ones. The President vetoed it out of a concern that a provision in the bill could lead to legal claims by victims of Saddam Hussein's government against Iraqi assets held in U.S. banks. The Times quotes Congressional aides, who say that Congress will likely send the bill back to the Armed Services Committee, where the disputed provision can quickly be corrected. Congress hopes to have the measure brought back for a final vote by the end of the week. These issues should not affect the FMLA amendments in the bill, and with the amendments, President Bush is expected to sign it.

Supreme Court dismisses Huber v. Wal-Mart from its docket

After more than a decade practicing, it still amazes me how fluid the law actually is. Rarely anything is black or white, and most issues exist in uncertain shades of gray. Such will continue to be the case with Huber v. Wal-Mart. Recall that only a month ago, the Supreme Court decided to hear the issue of whether an employer that has an established policy to fill vacant job positions with the most qualified applicant is nevertheless required to reassign a qualified disabled employee to a vacant position even if that disabled employee is not the most qualified person for the job. According to SCOTUSblog, the Supreme Court has dismissed the case as it has settled.

With no forthcoming guidance from the Supreme Court on this issue, Ohio employers will now have to choose between the 8th Circuit's view in the Huber case (which allowed Wal-Mart to hire to most qualified person and deny the open position to a less qualified disabled employee) and the opposing view of courts such as the 10th Circuit (which require employers to automatically award an open position to a qualified disabled employee if even better qualified applicant are available and despite an policy to hire the best person for the job).

My opinion remains unchanged from when I first reported on this issue. When you don't hire the best person for an open position, it could lead a court to second-guess your judgment and question why a member of a protected class was overlooked in favor of the second/third/fourth/whatever best person. Recognize, however, that this issue is unsettled, and declining to accommodate a disabled employee by transferring that employee to an open position could result in a violation of the ADA if the court agrees with the 10th Circuit's rationale and rejects the 8th Circuit's Huber decision.

Will the Supreme Court review FMLA waivers?

SCOTUS Blog is reporting that the Supreme Court has asked the U.S. Solicitor General for the government's position on whether workers may settle claims under the Family and Medical Leave Act without approval by the Department of Labor or a court. By all appearances, the Court is seriously considering whether to grant cert. in Taylor v. Progress Energy, and resolve the current conflict between the 4th and 5th circuit on this issue. For my thoughts on this issue, click over to FMLA waivers pose a potential trap.

The Golden Rule of employment relations

John Phillips at The Word on Employment Law has a great post up this morning on the crucial role fairness plays in employment relations. John opines (and I wholeheartedly agree) that juries in employment lawsuits often discuss "fairness." In other words, all law aside, did the employer treat the employee fairly? John focuses on 5 key areas of fairness that employers must pass for any employment decision to survive scrutiny:

• Appearance: does an employment action appear fair to an outside observer?
• Counseling: except in the most egregious of cases, was the employee told of a deficiency and given a chance to correct it?
• Consistency: are similar disciplinary problems handled similarly and to the same degree?
• Documentation: can you point to a performance review, written warning, a note in a personnel file, or some other contemporaneous piece of paper that supports the personnel decision?
• Rationale: was the employee given a reason for the decision, and was it the real reason?

These 5 areas of fairness can be succinctly summed up in what I call The Golden Rule of Employment Law. If you treat your employees as you would want to treated (or as you would want your wife, kids, parents, etc. to be treated), most employment cases would never be filed, and most that are filed would end in the employer's favor. I've said this before, but it bears repeating. Juries are comprised of many more employees than employers, and if jurors feel that the plaintiff was treated the same way the jurors would want to be treated, the jury will be much less likely to find in the employee's favor.

Just say no -- Dealing crack is gainful employment, according to the Ohio Supreme Court

Every once in a while you come across a case that just makes you shake your head in disbelief. State ex re. Lynch v. Indus. Comm. is such a case.

In 1967, Henry Lynch suffered an injury at work, from which he was declared permanently and totally disabled and received a commensurate workers' compensation award. Thirty years later, a federal grand jury indicted Lynch for possession, sale, and distribution of crack cocaine, to which he pleaded guilty. It was alleged that from 1994 through 1997, he earned between $300 to $500 a week from selling crack. After he was incarcerated, the Bureau of Workers' Compensation moved to terminate Lynch's permanent total disability compensation. The commission found that Lynch's "criminal activities for profit ... constitute[d] sustained remunerative employment," and terminated his benefits retroactive to the date the federal indictment alleged he began selling crack.

The Ohio Supreme Court upheld that decision, holding that Lynch's ongoing crack-cocaine enterprise constituted sustained remunerative employment sufficient to terminate permanent total disability compensation. In the Court's words:

Lynch also claims that the commission cannot consider the activity he engaged in to be sustained remunerative employment, because the activity was illegal. We disagree. Lynch cannot use the illegality of his pursuits as a shield. Lynch exchanged labor for pay on a sustained basis. This constitutes sustained remunerative employment for purposes of permanent total disability.

So here are the questions of the day: If Lynch has 4 dealers working for him, does he have to abide by Ohio's employment discrimination laws? If he has 50 dealers working for him, does he have to grant them FMLA leave? Are his dealers eligible for workers' comp if they are injured on the job?

[Hat tip to the Evil HR Lady.]

What else I'm reading this week #13

Dan Schwartz of the Connecticut Employment Law Blog wins the prize for the 2 best posts of the week. Reductions in Force (RIF) Are Back; Are Employment Lawsuits (and MySpace Pages about Layoffs) Close Behind in 2008? comments that with our economy heading into a possible recession, and unemployment topping 5%, RIFs and age discrimination lawsuits will be a big trend this year. Using the Roger Clemens case as an example, Dan asks, Lie Detectors and the Workplace; Can Employers Force An Employee, Like Roger Clemens, To Take One?

The Legal Intelligencer, courtesy of Law.com, writes on the legal issues surrounding employee background checks, a topic I've touched on from time to time.

The Pennsylvania Employment Law Blog looks at whether companies can use customer preference in hiring and promotion decisions even if it may take race into consideration.

The Labor and Employment Law blog compares employee handbooks and policy manuals, and what should be included in each.

John Phillips at The Word on Employment Law has started another series, this time on a topic that should be of interest to all of my non-lawyer readers, avoiding employment lawsuits. Part I, Part II, and Part III are now available.

To end the week on a light note, hop over to Lowering the Bar and take their sexual harassment quiz.

Car failure is not a serious health condition under the FMLA

So says the U.S. District Court for the Eastern District of Arkansas. If only all of employment law was that easy.

(Hat tip to The FMLA Blog).

Ohio to prohibit discrimination based on "military status"

I try to stay on top of all issues that impact Ohio employers, but this one simply fell beneath my radar. On December 20, Governor Strickland signed into law House Bill 372 – The Ohio Veterans Package.

Of importance to employers, the law, which will go into effect on March 18, 2008, adds "military status" to the list of classes protected from discrimination in employment by Ohio Revised Code chapter 4112. "Military status" means a person's status in "service in the uniformed services," which includes active duty, active duty for training, initial active duty for training, inactive duty for training, full-time national guard duty, and performance of duty or training by a member of the Ohio organized militia, in addition to any period of time a person is absent from work for a fitness for duty exam for such service.

Ohio now joins a handful of other states in which it is illegal to discriminate based on military status. This law does will not affect the rights that employees already enjoy under the federal Uniformed Services Employment and Reemployment Rights Act (USERRA). Now is as good a time as any to educate your supervisors and managers that "military status" will be joining the list of employment law no-nos in Ohio, alongside race, sex, age, disability, religion, national origin, color, and ancestry.

(Hat tip to John Phillips' Word on Employment Law.)

Supreme Court considers use of age as factor in disability retirement benefits

Yesterday, the Supreme Court heard oral argument in Kentucky Retirement Systems v. EEOC. The issue is whether a benefit plan's use of age as a potential factor in the distribution of retirement benefits to disabled workers establishes a prima facie case of age discrimination. Kentucky’s disability retirement plan at issue awards benefits based in part on how close a disabled worker is to reaching normal retirement. For example, it disqualifies those who have already reached normal retirement age, and otherwise calculates disability retirement benefits so that an eligible older employee receives a lower monthly benefit payment than a younger disabled employee who is similar to in every relevant way other than age. It therefore affects older workers differently than younger workers, even though its goal is to provide workers with the same retirement benefits he or she would achieved by working until eligible for normal retirement.

The EEOC sued on behalf of a 61-year-old disabled employee. Because he was over age 55 and eligible for normal retirement, he received normal retirement benefits based on his years of service. The EEOC claimed that this policy constituted age discrimination because had he been under age 55 and not eligible for retirement, he would have received higher disability retirement benefits based on the 20 years of service he would have been granted under the plan.

The 6th Circuit decision from which the State of Kentucky appealed found that the EEOC established a prima facie case of age discrimination based on the facially discriminatory language of the plan, and further that when a plan is facially discriminatory one need not offer any further proof of discriminatory animus to establish a prima facie case.

The State argued that the plan is not facially discriminatory because it differentiates on the basis of retirement eligibility, and not age. The EEOC has countered that the plan is facially discriminatory because it uses age as a factor to the disadvantage of older workers.

Kentucky also argues that as age is a necessary component of any retirement plan, only plans that use age in an arbitrary manner can be considered discriminatory on the basis of age. The EEOC, on the other hand, counters that the the at-issue plan is arbitrary because its use of age to provide a claimed necessary safety net for younger workers is based on "stereotypical assumptions of the kind the ADEA seeks to eradicate."

Instead of reinventing the wheel on yesterday's oral argument, I'll merely point everyone to Professor Paul Secunda's thorough summary at the Workplace Prof Blog.

It is very difficult to get a read on what the Court is going to do with this case. If I had a vote, I would reject Kentucky's argument that there is a difference between retirement eligibility and age. The former certainly seems like a proxy for the latter, and both are facially discriminatory. Nevertheless, I would reverse the 6th Circuit, because the use of age in this context simply is not arbitrary. One simply cannot design a disability retirement plan without taking age into consideration.

Deconstructing the Ohio Healthy Families Act

Last week a colleague asked me for my opinion on the proposed Ohio Healthy Families Act that is now pending in the state legislature. I figured I'd share it with the world. I think that the OHFA is largely a political agenda that, at the end of the day, will do nothing more than create yet another avenue for employees to sue their employers, while at the same time creating an administrative mess for Ohio businesses. Sick Days Ohio, the group lobbying for this bill, estimates that 2.2 million Ohio employees cannot earn paid sick days. I have no idea where they get their numbers from, but it seems like a gross exaggeration to me. According to the 2000 census, Ohio has approximately 6.7 million people of working age. I find it hard to believe that one-third of all Ohio workers do not have access to paid days off.

Essentially, the OHFA will grant all employees working for companies with 25 or more employees 7 paid days off per year for (1) their own physical or mental illness, injury or medical condition, (2) their own professional medical diagnosis or care, or preventive medical care, and (3) the same for an employee's child, parent, or spouse. Employees who work less than 30 hours per week or 1,560 total hours per year will receive a pro rated amount of paid time off. Sick leave will begin to accumulate immediately, but employees will not be able to use it until they have been employed for 90 days. The paid sick leave must accrue at least monthly, and except for the initial 90 days of employment, employees will be able to use it as it is accrued. Employers will not be able to prohibit employees from carrying over up to 7 days of unused paid time off per year.

Similar to the FMLA, but without the FMLA's level of specificity, the OHFA will also allow for the use of incremental (i.e., less than a full day) time off, certification by a health care professional when an employee is out for more than 3 consecutive work days, an anti-retaliation provision, and a private right of action for aggrieved employees. It also will forbid employers from counting the use of paid sick leave under a no-fault attendance policy. It is unclear if this prohibition applies only to paid leave under this statute, or any paid leave granted by an employer. Finally, it will require employers to keep records documenting hours worked and paid sick leave taken by employees for a period of 3 years.

Proposed O.R.C. 4114.07(B) is what I believe to be the saving grace for most employers, and why I think the OHFA will not result in monumental practical changes for the vast majority of companies that already provide paid time off. That section provides: "An employer with a leave policy providing paid leave options shall not be required to modify such policy, if such policy offers an employee the option at the employee’s discretion to take paid leave that is at least equivalent to the sick leave described in this section." As I read that section, and this is where my colleague and I differ, if a company has a leave policy that already provides for at least 7 paid sick days, it will not have to grant any additional paid leave.

The limited practical effect of this legislation notwithstanding, the cons of the OHFA far outweigh its pros. First and foremost, that last thing that businesses want is another statute under which employees will be able to sue, especially when it provides for treble damages and attorneys fees. Take a look at proposed O.R.C. 4114.10(C)(2): "No employer shall discharge or in any manner discriminate against any employee for opposing any practice made unlawful by this Act, including ... using paid sick leave taken pursuant to this Act as a negative factor in an employment action, such as hiring, promotion, or a disciplinary action." "Negative factor" is far too lenient of a standard, and will hamstring employers from taking action against any employee who is out for even a day with an illness.

There are other serious gaps in the statute. For example, the OHFA states that it covers all employers with 25 or more employees. If a company has 1,000 employees nationwide, but only maintains one Ohio facility with 15 employees, will the OHFA apply to that employer? What does "physical or mental illness, injury or medical condition" mean? What type of certification by a health care professional will support an extended leave? Can an employer dispute such a certification and obtain a second opinion?

The legislature, and if necessary, Ohio's voters, should take a long, hard look at these serious deficiencies in the OHFA, and should not merely knee-jerk vote in its favor because paid time off is viewed by most employees (and most of us are employees) as a "good thing." If this statute becomes law in its current form, it will take a herculean effort by the director of commerce to draft clear and comprehensive rules and regulations that make this law workable for businesses, instead of leaving myriad unanswered questions for the courts to sort out at the expense of those companies who will have to defend their individual interpretations.

Health insurance audits poised as a trend for 2008

Does anyone remember the episode of the Drew Carey Show where Drew's dog needed a hip replacement? Drew couldn't afford it, so he claimed his dog as his gay husband to get coverage under his employer's medical plan. I was reminded of it Saturday morning when reading the front page of the Cleveland Plain Dealer's business section, which had an article on employer audits to verify health insurance dependents. The article reports that to control rising insurance costs, more and more companies are auditing their health plans and requiring employees to prove (via marriage and birth certificates) the status of claimed dependents. It cites Chrysler as an example, which found 20,000 ineligible dependents saving the company millions of dollars.

Maybe I'm missing something here, but isn't this fraud? Do we want employees working for us who willfully steal by claiming false dependents? Today's unqualified dependent could be tomorrow's embezzlement. Isn't this covered by our employee handbooks, which should have a policy that states that theft is grounds for immediate discharge? But, at the same time, can Chrysler continue to build cars if it has to terminate 20,000 employees? Could you survive if you had to immediately terminate a percentage of your workforce? You could pick one or several employees to set an example, but then you run the risk of being scrutinized under the discrimination laws for who you selected and did not select.

Maybe the best way to handle this problem is to write it directly into your employee handbook. Change your termination policy to clearly state that claiming an unqualified dependent for company benefits is considered theft and subject to discipline up to and including termination. That way, expectations are established on the front end, and employees will have less of reason to cry foul if they are terminated for this type of insurance fraud.

Ohio Healthy Families Act up for legislative consideration

As I reported in October, the Ohio legislature will this term consider the Ohio Healthy Families Act. The Act, if passed, will guarantee 7 sick days for all full time Ohio employees who work for companies with 25 or more employees, and a prorated number of days for part time employees. As today's Cleveland Plain Dealer reports, "If the Republican-led House and Senate fail to act within 120 days, the union-led coalition behind the Healthy Families Act will have the right to take the issue to the November ballot." That threat may spur the Republicans to pass the legislation, as having an issue such as this on the ballot in November will certainly draw more Democrats to the polls to vote for it, just as the Minimum Wage amendment did in 2006. This issue bears watching, and I will continue to post updates as this bill weaves it way through the legislature.

Federal court upholds punitive verdict with no compensatory damages

It has long been the law in Ohio that a jury cannot award punitive damages without also making a corresponding award of actual, compensatory damages. Further, since the United States Supreme Court decided State Farm Mut. Automobile Ins. Co. v. Campbell several years ago, it has also been the law that for a punitive verdict to satisfy due process, there cannot be an excessive disparity between the actual harm suffered by the plaintiff and the punitive damages award. The Supreme Court, albeit in dicta, suggested that "few awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy due process."

A case earlier this week out of the 5th Federal Circuit, however, casts serious doubt on both of these long-held principles. In Abner v. The Kansas City So. RR, a racial harassment case, the court of appeals upheld a $125,000 punitive damage jury verdict with a mere grant of $1 in nominal damages by the court. Abner involved allegations of racial graffiti, a noose hanging outside a door, racially derogatory comments, and a company that failed to correct this improper behavior.

In reaching its conclusion, the court relied heavily on the statutory damage caps put in place by the Civil Rights Act of 1991. The court found that under the plain language of Title VII and Section 1981, an award of punitive damages need not be accompanied by any compensatory damages. The statutory damages cap takes care of any potential runaway jury verdicts. Also because of the statutory cap, the court was unconcerned with the 125,000-1 ratio between the punitive and nominal damages. If the plaintiff was not harmed by the alleged harassing conduct, how could he have been sufficiently subjectively offended by the conduct to sustain the harassment claim in the first place? The gap in common sense in allowing this punitive verdict to stand for an uninjured plaintiff is astounding. Civil lawsuits are supposed to compensate for harm suffered, not to punish for the sake of punishment. If there is no harm to remedy, then the law has no role in doling out punishment.

Let me also point out that the conduct that led to a $125,000 verdict in Abner is eerily similar to the same conduct over which the EEOC settled with Lockheed Martin for $2.5 million earlier this week. I can't wait until the next time I'm asked to evaluate a racial harassment case and have to provide a range of $125,000 and $2.5 million as the potential exposure. Does this disparity make any sense at all?

Hat tip to John Phillips at The Word on Employment Law and Ross Runkel's Employment Law Blog.

6th Circuit limits scope of "regarded as" disability claims

The Americans with Disabilities Act not only protects employees who have actual disabilities, but also those who have a record of a disability and those who an employer regards as disabled. Gruener v. The Ohio Casualty Ins. Co., decided yesterday by a unanimous panel of the 6th Circuit, defines the scope of regarded-as-disabled claims.

Sharyn Gruener, an IT technician for Ohio Casualty, suffered from a long history of degenerative joint disease in her knee, which ultimately resulted in a double knee replacement. After the surgery, she returned to work with restrictions on her ability to squat, crawl, kneel, lift more than 20 pounds, or carry more than 10 pounds. When her supervisor learned that had been asking her co-workers to help her perform certain tasks she could not do, such as plugging in computers and lifting heavy monitors, the company terminated her, concluding that she could not perform the essential functions of her position without asking co-workers to live, move, or plug-in computer equipment for her.

Following her termination. Gruener sued Ohio Casualty under two different theories of disability discrimination -- actual disability and regarded-as-disabled disability. The jury found against her on the former, and the trial court refused to instruct the jury on the latter.

The appellate court found that that the trial court did not err in refusing to give a jury instruction on the regarded-as-disabled theory. The ADA's regarded-as-disabled provision protects employees who are perfectly able to perform a job, but are rejected or terminated because of "myths, fears, and stereotypes" that go along with disabilities. The theory requires that the employer "entertain misconceptions about the employee," either by mistakenly believing that the employee has a physical impairment that substantially limits one or more major life activities, or mistakenly believing that an actual non-limiting impairment substantially limits one or more major life activities.

In this case, there was no dispute that Gruener could not perform the essential functions her job without the help of co-workers. Moreover, the only understanding Ohio Casualty has about her impairments, their limits, and her ability to perform her job came directly from her own doctor's valid, permanent work restrictions. Following the specific recommendations of a treating physician does not wrongfully view an employee through a stereotype of disability.

While this case does not set earth shattering precedent in regarded-as-disabled cases, it does provide some added comfort for employers who rely upon an employee's treating doctor's work restrictions in making personnel decisions. It also further illustrates an issue that I wrote about earlier this week - discrimination cases are largely about harbored stereotypes and the impact they have on one's perception of another to perform a job.

What else I'm reading this week #12

Last week I reported on Arbino v. Johnson & Johnson, in which the Ohio Supreme Court upheld the constitutionality of Ohio's tort reform legislation. Teri Rasmussen at the Ohio Practical Business Law Counsel provides a detailed examination of the opinion. She also questions my supposition that tort reform does not apply to discrimination claims. So that my conclusion is clear, in light of the Ohio Supreme Court's recent narrowing of the public policy tort, discrimination claims under Ohio law are now almost certainly purely statutory. Because they present statutory claims, any caps on damages for those claims would have to come from an amendment to the statute. There are a host of non-statutory employment tort claims (defamation, intentional infliction of emotional distress, tortious interference, to name a few) that are impacted by the tort reform caps on damages.

On to other matters.

Kris Dunn, The HR Capitalist, always an excellent resource, writes about the NLRB's Register-Guard decision, and concludes that it stinks to have to say no to girl scout cookies to keep unions out of your workplace.

If a union does come knocking, Guerilla HR gives some helpful advice on what to do and what not to do in response. Most importantly, do not threaten or intimidate employees about their union support.

John Phillips' Word on Employment Law discusses employee privacy rights (or lack thereof) in off-work, personal Internet activity. For my thoughts on this issue, see Can employers base employment decisions on employees' personal Internet activities? As a bonus, John gives us a very thorough crib sheet covering the Presidential candidates' positions on various labor and employment issues.

Finally, Michael Moore at the Pennsylvania Employment Law Blog draws some good lessons from yesterday's reported $2.5 million settlement by the EEOC on behalf of one employee for a racial harassment claim. According to the EEOC's press release, the now wealthy employee was the target of repeated verbal abuse by coworkers and a supervisor, including calling him the "N-word" and saying "we should do to blacks what Hitler did to the Jews." For the company's part, it failed to discipline the harassers and instead allowed the discrimination to continue unabated even though it was aware of the unlawful conduct. I'm as against this type of conduct as anybody, but $2.5 million? Seems awfully excessive for someone who was subjected to words, no matter how offensive they might be.

"Maternal Profiling" listed as buzzword of 2007

With the calender barely having turned to 2008, I'm still catching up reviewing year end lists for 2007. One list, the New York Time's Buzzwords of 2007, should be of particular interest to employment lawyers, employers, and HR personnel. It lists "maternal profiling" as one of the phrases that took its place in the national conversation for 2007. Maternal profiling is defined as:

Employment discrimination against a woman who has, or will have, children. The term has been popularized by members of MomsRising, an advocacy group promoting the rights of mothers in the workplace.

A trip over to MomsRising.org reveals some frightening statistics about the workplace impact of maternal profiling. It cites one study which found that mothers are 79% less likely to be hired than non-mothers with equal resumes and job experiences. It cites another study that women without children make 90% as compared to a comparable man, as compared to 73% for women with children and 60% for single moms. It cites one final study that mothers were offered $11,000 less in starting pay than non-mothers with the same resumes and job experience, while fathers were offered $6,000 more.

I've spent a lot of time this year writing about family responsibility discrimination in light of the EEOC's recent enforcement guidance on the subject, and the $2.1 million verdict against Kohl's Department Stores for repeatedly passing over a qualified mom for promotion. Maternal profiling may have been one of the buzzwords of 2007, but it certainly appears that family responsibility discrimination is going to be a key employment issue in 2008 and beyond. Depending on how the political winds blow after the November elections, FMLA expansion, paid sick and parental leave, and incentives for family-friendly work programs will all be in play in 2009.

I am not suggesting that everyone rewrite their leave policies, but those who can afford to be family-friendly will have an advantage in recruiting and retention of employees for whom it is an important benefit (i.e., most people between the ages of 25 and 50). At a minimum you should be building the concept of maternal profiling into your harassment and EEO/diversity training. Discrimination in largely subconscious, and education is the first step towards prevention.

Hat tip to Carrie Kurzon at the New York Employment Lawyer Blog.

An argument for broader protection of confidential and proprietary information

Nelson Jewellery Arts Co. v. Fein Design Co., out of the 9th District Court of Appeals, involves two companies fighting over what we can only assume is a key employee. As is often the case in such disputes, the old employer claimed that the employee took with him to the new employer certain confidential and proprietary information, such as pricing and customer information. The appellate court, however, rejected the claim because the information did not meet the statutory definition of a "trade secret." It was readily ascertainable by other means such as telephone books and trade publications, and the company did not take reasonable measures to maintain the secrecy of its alleged confidential information. Therefore, the claim was dismissed. In so ruling, the court rejected any common law protection over the information, and limited the law's reach to that narrow category of corporation information that meets the specific statutory definition of a "trade secret" pursuant to O.R.C. 1333.61(D):

(D) "Trade secret" means information, including the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, pattern, compilation, program, device, method, technique, or improvement, or any business information or plans, financial information, or listing of names, addresses, or telephone numbers, that satisfies both of the following:

(1) It derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.

(2) It is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

This case raises the question of what corporate information should the law protect. Is is just information that meets the statutory definition of a trade secret, or is some broader category of information worthy of legal protection? It seems that companies should be able to stop employees from walking out the door with corporate information whether or not such information qualifies as a trade secret. After all, that which a company creates is its property, and it should be able to prevent its disclosure to or use by a competitor. Limiting such protection merely to "trade secrets" is overly restrictive, and ignores the property interest that businesses have in their documents, data, and other information.

How do we help put ourselves in the best position to protect stuff that may not meet the high threshold of a trade secret? Let me make a few suggestions:

1. Put provisions in employee handbooks that define the scope of the company's property - not just as trade secrets, but as all confidential and proprietary information, and everything that is created by or for the company.
2. Separate and apart from the employee handbook, have all employees who will come in contact with any information you might want to protect sign an agreement that defines what belongs to who, and specifically sets forth the company's right to the information at the end of employment.
3. When an employee leaves, have that employee sign a receipt that all company property and information has been returned, and that the employee is not taking anything with him or her. Where the separation is not voluntary, it may not always be easy to have the employee sign something on his or her way out the door. In that case, you can still protect yourself by sending the employee a certified letter reminding him or her of the corporate policy and their agreement to it.
4. If you think the ex-employee is not being forthcoming with you, correspond with the new employer, placing it on notice that you will hold it responsible for any of your information that is in its possession.
5. When all else fails, litigate. Bear in mind, however, that adherence to steps 1 - 4 will put you in a much better light should you have to litigate to seek protection over your information, whether or not it qualifies as a trade secret.

9th Circuit creates new affirmative defense under the ADA

Earlier this month I reported on the EEOC's Fact Sheet on Employment Tests and Selection Procedures. United Parcel Service provides an example of one such screening criteria, and gives some hope to employers who use medical or other criteria to screen out certain disabled employees.

UPS imposes a Department of Transportation hearing standard on all package-car drivers, even though the standard only applies to those who drive vehicles over 10,000 pounds. UPS disqualifies from employment any employee or applicant who cannot meet that standard, whether or not the vehicle that individual will operate is over or under the 10,000 pound threshold. Last week, the 9th Circuit, in Bates v. United Parcel Service, reversed a lower court, which had held that application of the standard to those who do not drive covered vehicles violated the ADA.

Section 12113(a) of the ADA makes it a defense to a disability discrimination claim "that an alleged application of qualification standards, tests, or selection criteria that screen out or tend to screen out or otherwise deny a job or benefit to an individual with a disability has been shown to be job-related and consistent with business necessity, and such performance cannot be accomplished by reasonable accommodation." This defense breaks down into three elements: 1) job-relatedness; 2) consistent with business necessity; and 3) that job performance cannot be accomplished by reasonable accommodation.

As evidence of the lawfulness of its hearing qualification standard, UPS offered up the DOT standard to show that a certain level of hearing is necessary to safely drive even non-DOT-regulated vehicles. The 9th Circuit found the 10,000 pound threshold irrelevant to whether UPS could lawfully rely on the DOT safety standard as a qualification standard for all driver positions:

To be sure, DOT's regulation does not apply to the category of vehicles at issue in this case. However, that circumstance does not mean that the standard has no relevance to the employer's safety argument. UPS is entitled to use as some evidence of its business necessity defense the fact that it relied on a government safety standard, even where the standard is not applicable to the category of conduct at issue.... Thus, while certainly not dispositive of UPS's showing of job-relatedness, business necessity or the reasonableness of potential accommodations, UPS's reliance on the government safety standard with respect to other vehicles in its fleet should be entitled to some consideration as a safety benchmark.

Thus, employers are entitled to rely on objective safety criteria (such as governmental regulations) as a qualification for a position, even if the at-issue regulations are not mandated for the specific position. Such reliance, however, is not dispositive as to the lawfulness of the qualification. Instead, one must examine the congruence between the safety standard and the position to which it is being applied. In other words, is there a bona fide, demonstrable correlation between the standard and performance of the essential functions of the position?

While this decision does not bind companies in Ohio, it should give employers everywhere some solace that objective screening criteria will not necessarily be found to be discriminatory, even if they effectively screen out from consideration for a position all disabled applicants and employees. It also lets employers know that they can employ reasonable selection criteria and safety standards without fear of necessarily being second-guessed by a court.

My New Year's resolutions for everyone

While it may be trite, the approach of a new year causes us to reflect on the past year and make some resolutions on how to better ourselves for the coming year. While we generally think of these resolutions in personal terms, it makes sense also to think of them from an organizational viewpoint. With that in mind, let me suggest some resolutions for your employment practices to make 2008 a better, more compliant year than 2007:

1. Review your employee handbooks and other personnel policies.
2. If it's been longer than 2 years since you did company-wide harassment training, schedule it for 2008.
3. Make sure you are using the new I-9 form for all new hires.
4. Audit your wage and hour practices.
5. Make a concerted effort to document all discipline and performance problems.
6. Do not make promises to your employees that you cannot keep.
7. Make hiring and firing decisions based on performance.
8. Be more understanding of your employees' family responsibilities outside of the office.
9. Employ the golden rule - treat your employees as you would want to be treated.
10. Above all else, try to have some fun at work.

My hope for everyone (except me) is that 2008 brings no lawsuits, no EEO charges, no sexual harassment complaints, no wage and hour audits, and no disgruntled employees. Be happy and be safe, and I'll see everyone in 2008.

President Bush expected to veto FMLA expansion

In what can only be described as a surprising turn of events, and in a lesson that would make any grade school civics teacher proud, President Bush is expected to use a pocket veto to kill the National Defense Authorization Act for Fiscal Year 2008. That bill includes an expansion of FMLA leave rights for the families of wounded service members. A couple of weeks ago, I reported that the President would be hard pressed to veto a bill that authorized $696 billion in military programs. Now, as the New York Times is reporting, the White House has stated that the President will veto the bill. At issue is one specific section over which the Iraqi government is concerned that Iraqi assets in American banks could be vulnerable to claims from victims of Saddam Hussein.

Given the overwhelming majority this bill passed both the House and Senate, one could assume that these issues will be resolved after Congress resumes in the new year. I'm done making predictions about this legislation, however, after my last prediction turned out to be wrong. All I can is to watch this space for further updates about this potential expansion of FMLA rights.

Hat tip to the Connecticut Employment Law Blog.

What else I'm reading this week #11

Given the mid-week holiday, it's still been pretty active in the blogosphere. As always, please take the time to click through these links and support my fellow employment law and HR bloggers.

John Phillips' The Word on Employment Law reports on a story that's had a lot of traction this week, Wikipedia's failure to discover the criminal history of its former COO, and draws some important lessons on the importance of conducting background checks for critical positions.

HR World blogs on how to handle bullying bosses. You can also read my thoughts on this issue here: Sticks and stones may break my bones...

The Manpower Employment Blawg draws some important lessons on FMLA leaves of absence from a case which held that formal notice is not necessary for an employee to be entitled to FMLA leave.

Finally, Texas' HR Lawyer's Blog discusses some employment law pitfalls that await those who carelessly e-mail.

Ohio Supreme Court upholds constitutionality of tort reform legislation

Arbino v. Johnson & Johnson, decided today by the Ohio Supreme Court, upheld the constitutionality of legislation that caps the amount of non-economic and punitive damages available in Ohio tort actions. The at-issue legislation applies to all "tort" claims except medical, dental, optometric, and chiropractic claims, and civil actions for damages for a breach of contract or another agreement. There is no exception for employment-related claims, such as intentional infliction of emotional distress, defamation, or wrongful discharge public policy claims.

The tort reform statute caps non-economic damages at the greater of $250,000, or 3 times the economic loss, to a maximum of $350,000 for each plaintiff or $500,000 for each occurrence that is the basis for the claim. There is no statutory cap for economic losses. Punitive damages are capped at 2 times the total amount of compensatory damages. However, for small employers (5o0 or less employees for manufacturing companies, and 100 or less employees for all others) and individuals, punitive damages are capped at the lesser of 2 times the total compensatory damages, or 10% of the small employer's or individual's net worth measured at the time the tort was committed, up to a maximum of $350,000.

No court has yet to rule whether this tort reform legislation specifically applies to statutory employment discrimination claims. While there is a clear distinction between common law tort claim, and statutory claims, one could certainly argue that discrimination claims, which are claims for harm to the person, are tort claims covered by the statute. Most likely, however, these claims are not covered by this tort reform because of their statutory nature. Regardless, this case marks another milestone in what has become a very business-friendly Supreme Court.

EEOC allows employers to reduce retiree health benefits at age 65

Pursuant to a new Rule published yesterday by the EEOC, employers can take Medicare into account when structuring retiree health benefit packages without violating the age discrimination laws. The rule clarifies the long standing practice of most companies that provide retiree health benefits, by which they reduce their health insurance expenses for retired workers once they turn 65 and qualify for Medicare. In other words, employers can lawfully spend more on retirees under the age of 65 years than those over 65 without running afoul of age discrimination laws. Practically, though, retirees in both age groups will most likely receive essentially the same benefits, just at a lower costs to employers.

A copy of the EEOC's new Rule on Retiree Health Benefits is available here, along with a Q&A explaining the Rule here.

7th Circuit holds that hostile environment is not defined by statutory limitations period

The facts of Bright v. Hill's Pet Nutrition explain that Elizabeth Bright was subject to pervasive harassment because of her sex during the her employment for the pet food company:

Elizabeth Bright was hired at the Richmond plant during February 2000, ... and quit in November 2002.... Bright was assigned to a Processing Team, where she worked for about 10 months before being transferred to a Stretchwrap Team. Between October 2001 and November 2002, ... and Bright [was] assigned to a Stretchwrap Team. Bright filed her charge of discrimination early in 2003 and filed suit later that year.

Bright presented evidence that the men routinely vexed the women in an effort to make them quit. The tactics included unwelcome sexual overtures and sex-related chatter, streams of misogynistic invective, refusal to train (team leaders tried to get women to view pornographic images on the men's computers, and, when women declined, the men would declare that they had no time for training), assigning women to the dirtiest jobs (which team leaders called "women’s work"), and threats of violence, some of which were fulfilled (for example, Bright's dog was shot, supposedly as a warning to her). According to one of Bright's witnesses, on being told that men referred to female workers as "whores," "c**ts," and "bitches," Vanderpool replied: "a hostile work environment is a productive work environment." ...

Hill's Pet Nutrition contended that none of this testimony should be believed. It did, however, concede having, a problem with pornography in the workplace, and it suspended 11 men for two weeks in March 2002 in response to their accumulation and viewing of inappropriate materials on the firm's computers. The employer maintains that this step solved the only problem that women had encountered at work.

The trial judge instructed the jury that it could not consider anything that happened to Bright before March 29, 2002, 300 days before she filed her EEOC charge, and could not consider any of the incidents related to the pornographic images. With that instruction, the jury returned a verdict against Bright.

According to the 7th Circuit, the trial court's instruction to the jury about which evidence it could not consider was in error. The evidence that predated the statutory filing period was relevant to the totality of the hostile environment in which Bright worked:

[A] hostile working environment must be treated as one unlawful practice even if the employee moves from one team to another.... [A] hostile environment in a single posting is one practice. Bright was part of a Stretchwrap Team for 22 months, from the beginning of 2001 until she quit in November 2002, but the judge allowed the jury to consider only the events of the final eight months, from April through November.... [T]he judge should have allowed the jury to consider the working conditions that Bright encountered for her entire employment at the Richmond plant.... [I]t is inappropriate to draw lines by time.

Moreover, to the extent that the employer remedied some or all of the harassment, the proper evidentiary ruling would not be to exclude the pre-remedy harassment, but instead to permit the jury to consider such evidence as part of parcel of its decision as to the employer's liability (i.e., was the employer negligent in responding to complaints of harassment or remedying the harassment):

When an employer takes steps such as the suspensions and purge of objectionable material from the computers' hard drives, these acts matter not to the duration of the unlawful practice or the evidence a plaintiff may offer, but to the question whether the employer is responsible. "[A]n employer can be liable ... where its own negligence is a cause of the harassment. An employer is negligent with respect to sexual harassment if it knew or should have known about the conduct and failed to stop it. Negligence sets a minimum standard for employer liability under Title VII".

Hill's Pet Nutrition may be able to show that its handling of the sexual images solved part of the problem and prevents attribution. Similarly it may be able to show that it neither knew nor should have known about some of the events that Bright encountered. If an employee unreasonably fails to take advantage of preventive or corrective opportunities, and the employer consequently does not know about the problem, then it cannot be held liable. The fact that an employer has raised these contentions, however, does not curtail the scope of the employee's proofs.... Unless the evidence is so lopsided that the employer is entitled to judgment as a matter of law, both the plaintiff and the employer must be allowed to present their full evidentiary cases at trial, and the district judge should instruct on all of these issues.

This case illustrates the important role that companies play in remedying and correcting harassment in the workplace, and how those efforts, or lack thereof, come into play in a sexual harassment trial. Employers will not be able to escape or minimize liability simply by relying upon Title VII's 300-day statute of limitations as a point in time by which to compare working conditions, and argue that because conditions were better during the 300 day period as compared to prior, the judge or jury should not consider the totality of the employee's work environment.

Court treats bias against transsexual job applicant as gender discrimination

Since the Supreme Court decided Price Waterhouse v. Hopkins 18 years ago, it has been well established that Title VII's protections against gender discrimination also encompass sexual stereotypes. An employer violates Title VII by punishing employees for failing to conform to sex stereotypes, including stereotypes regarding dress and appearance. For example, it is illegal for an employer to take action against an male employee for having feminine mannerisms, or against a female employee who is too macho or aggressive.

Recently, in Schroer v. Billington (as reported here by CCH), the federal district court for the District of Columbia permitted a male-to-female transsexual job applicant to continue her Title VII sex discrimination case against the Library of Congress. The Library withdrew is job offer for a research position after Schroer disclosed that he was under a doctor's care for gender dysphoria, and that consistent with the treatment, he would present at work as a woman, change his name, and dress in traditionally female clothing. Schroer claimed discrimination based on a failure to comply with the Library's sex stereotypical notions about women's appearance and behavior, and not on her status as a transsexual. Because the claim was grounded on a failure to conform to sexual stereotypes, it fell under Title VII.

In so ruling, the D.C. Court followed the lead of the Sixth Circuit in Smith v. Salem, which, as far as a I know, the only other case to recognize such a cause of action. Smith v. Salem not only protected the transsexual plaintiff because of sexual stereotyping, but also based on a rationale that Title VII's reference to "sex" encompasses biological differences between men and women. The Court in Schroer, though, differentiated between Smith v. Salem's two different legal theories. Based upon the recent legislative wrangling over the Employment Non-Discrimination Act of 2007, it rejected the latter. It relied upon the ENDA's legislative history, which took out protections for gender identity (i.e., transsexual and transgender individuals) (see House approves law to protect gay workers).

The difference is not merely one of semantics. Schroer concerned a motion to dismiss - that is, did the complaint state a legally recognized cause of action? The case will now continue to discovery and a likely Motion for Summary Judgment. The key issue in the case will be whether the Library rescinded the job offer because of her transsexual status, or because of sexual stereotypes. Only the latter will be permitted to go to a jury under Title VII. As the ENDA's Congressional debates illustrate, Title VII does not protect the former, nor will it, at least in the foreseeable future.

Merry Christmas

To all of my readers who have made the first 7 months of the Ohio Employer's Law Blog such a success, and to those who have simply stumbled upon me by happy accident or random Google search, happy holidays and merry Christmas. Now put the mouse down, stop thinking about employment law, and enjoy your holiday. I'll be back on Boxing Day.

NLRB rewrites employee solicitation rules

It is no secret that employers often use non-solicitation policies as a lawful means to limit union activities on company time and property. Last week, the NLRB delivered an early Christmas gift to employers. Register-Guard, decided 3-2 by the Board, signaled a strong victory for an employer's right to control its computer and e-mail system, and at the same time severely restricted an employee's ability to solicit using company property.

Register-Guard is a unionized newspaper publisher. In 1996, it began installing a new computer system. Around the same time it also implemented a new Communications Systems Policy ("CSM"), which governed employees' use of its communications systems, including e-mail. The policy stated, in relevant part:

Company communication systems and the equipment used to operate the communication system are owned and provided by the Company to assist in conducting the business of The Register-Guard. Communications systems are not to be used to solicit or proselytize for commercial ventures, religious or political causes, outside organizations, or other non-job-related solicitations (emphasis added).

Despite the policy, the company allowed its employees to send and receive personal e-mails, such as such as baby announcements, party invitations, and the occasional offer of sports tickets or request for services such as dog walking. However, it never allowed solicitations regarding any outside agency other than the United Way. The employer gave two warnings to an employee who sent three union-related e-mails, which lead to the charge that the employer was discriminatorily enforcing the policy.

In ruling that the policy, on its face, did not violate the NLRA, the Board relied upon an employer's legitimate business interest in its "basic property right to regulate and restrict employee use of company property," including its computer system. The Board saw no distinction between a traditionally bulletin board and an e-mail system:

[T]he Respondent's CSP does not regulate traditional, face-to-face solicitation. Indeed, employees at the Respondent's workplace have the full panoply of rights to engage in oral solicitation on nonworking time and also to distribute literature on nonworking time in nonwork areas.... What the employees seek here is use of the Respondent's communications equipment to engage in additional forms of communication.... "Section 7 of the Act protects organizational rights ... rather than particular means by which employees may seek to communicate."

A solicitation or other communication policy can lawfully bar employees' non-work related use of an employer-owned e-mail system or other property, unless, on its face, it discriminated against employees' exercise of Section 7 rights. Thus, a policy that prohibits employee use of an e-mail system for "non-job-related solicitations" does not violate the NLRA.

Along the same lines, the Board found that "discrimination" in the context of rules limiting employee solicitations means drawing a specific distinction along Section 7 lines. In the Board's words:

Thus, in order to be unlawful, discrimination must be along Section 7 lines. In other words, unlawful discrimination consists of disparate treatment of activities or communications of a similar character because of their union or other Section 7-protected status. For example, an employer clearly would violate the Act if it permitted employees to use e-mail to solicit for one union but not another, or if it permitted solicitation by antiunion employees but not by prounion employees.

This case concerned two different sets of e-mails. In the first, an employee called employees to take action in support of the union (such as wearing certain clothing and participating in a parade). While the employer tolerated personal employee e-mails (baby announcements, etc.), there was no evidence that the employer permitted employees to use e-mail to solicit for specific groups or causes. Thus, disciplining the employee for this set of e-mails did not discriminate along Section 7 lines, because the CSP did not permit any group or cause related solicitations. The second set of e-mails, however, presented a different problem. Those were not a solicitation or some call for collection action. Instead, they merely clarified the facts surrounding a union rally. Because the CSP only prohibited non-work-related "solicitations," and because the company permitted a wide range of non-work-related e-mails, disciplining the employee for an e-mail that disseminated information about the Union (as opposed to soliciting some action on its behalf) did discrimination along Section 7 lines and therefore violated the NLRA.

For employers, non-solicitation policies are always tricky. Now, the Board has given employers broad latitude to draft and enforce such policies, even as to e-mail communications, to bar all non-work-related solicitations. Further, enforcement is only a problem if it draws a clear line between Section 7 activities. While future Board and Court decisions will further flush out these standards, for now it is safe to say that non-solicitation and computer use policies will have to be reviewed, rewritten, and most likely broadened in light of this case and its new discrimination standards.

(Hat tip to the Pennsylvania Employment Law Blog).