Penny-wise, pound-foolish employment practices

Rush Nigut of Rush on Business shares some words on wisdom for businesses on doing things right on the front end versus paying a lot more to fix them on the back end. His advice is tailored to general business issues, and it got me thinking about what employers can do proactively in their workplaces to avoid the headaches of litigation and its high costs. It may cost some legal fees up front to have an attorney bring your workplace into compliance, but that cost pales in comparison to what it would cost in legal fees to defend a bad policy or practice in litigation.

1. Review and update handbooks, policy manuals, and forms (such as applications, FMLA forms, background check authorizations, etc.). While the Internet provides a wealth of business resources, using canned materials can be dangerous. One does not know who prepared the materials, if a lawyer reviewed them, and if they were reviewed, under which state's law the review was conducted. Laws change almost daily; it's dangerous to assume that free forms on the web are reviewed and updated that frequently.
2. In this era of electronic discovery, a document retention and destruction program is a must. If documents are destroyed during litigation, even accidentally, it is virtually impossible to explain that destruction to a judge if you don't have a retention policy and a workable litigation hold in place. Lawyers need to be involved early in this process to advise how long to keep documents outside of litigation, and what documents need to be kept when litigation becomes reasonably anticipated.
3. Implement a harassment training program, which includes a basic review of policies for new hires, and comprehensive training for all employees at least once every two years. A quick trip back through my archives will reveal how companies get tripped up by not providing this essential training. In my experience, employees tend to take this issue much more seriously when a lawyer is presenting as opposed to a co-worker.
4. Audit job descriptions and employee classifications for wage and hour compliance. Again, my archives are filled with wage and hour nightmares. Wage and hour litigation has become the hot employment claim for 2007 and beyond. It's naive to think that at some point your company will not have a wage and hour issue to deal with. Better to get your hands around it now than when a class action or the Department of Labor forces your hand.
5. Make sure that all managers and supervisors properly document all performance problems. This point should be self-evident, but it always amazes me how many issues I have with empty personnel files for so-called problem employees. A quick call to counsel to confirm whether an employee can be terminated would save a lot of heartache in having to defend a poorly documented firing.

Rush Nigut, citing to Chris Moander of the Wisconsin Business Law and Litigation Blog, sums up this idea by reminding businesses that they can pay for it now, or pay a lot more for it later: "Many business people sadly lump legal services into the 'too costly' or 'unnecessary' categories when it comes to starting or running a business. And while good legal services are not cheap it may actually save you in the long run.... It costs a lot more to repair ... than to do it right in the first place." I could not have said it better myself (which is why I didn't).

DOL publishes proposed new FMLA regulations

Weighing in at an astounding 477 pages, the Department of Labor has published its proposed new FMLA regulations. According to the DOL, these regulations will "preserve[] workers' family and medical leave rights while improving the administration of FMLA by fostering better communication in the workplace." They seem to be an improvement over the current regime, although they are far from perfect. These regulations are not final, and will be subject to at least a 60-day comment period.

If you don't have the time or the willpower to sift through 477 pages to figure out the impact these regulations will have on your FMLA responsibilities, here are some of the high points:

• Except in emergency situations, employees will be required to follow the employer's policy for notification of FMLA leave, eliminating employees' ability under the old regulations to take up to 2 days after an absence begins to notify their employer that they intend to take FMLA leave. This change will greatly improve employers' ability to plan and schedule around employees' medical leaves.
• Employers will be able to directly contact employees' doctors when employers have questions about FMLA medical certification forms that the doctors have filled out. Employers will no longer have to go through the employee as an intermediary, or retain their own doctor to contact the employee's doctor. While this change may have some effect on employee privacy, it will greatly improve the flow of information and streamline the ability of employers to make proper decisions based on full and complete medical information. This rule will also eliminate the expense and burden of companies having to retain their own doctors simply to ensure that a form is properly filled out.
• To employers' dismay, the regulations do not change the time increments in which employees can take intermittent leave, but do require that an employee using intermittent leave use the employer's regular call in procedure except in emergencies. Thus, employees will still be able to take intermittent leave in very short increments, continuing for employers the administrative nightmare of intermittent leave, albeit with some additional notice.
• Employers will be entitled to require employees to obtain certification of FMLA-eligible medical conditions twice a year instead of annually.
• Currently, the clock under which employees accrue their 12 months of service for eligibility has no time limit, even after multiple breaks of service. Thus, if I work for 6 months for a company, and return 10 years later, I am eligible for FMLA leave after another 6 months. The new regulations place a 5-year cap on years of service for calculating eligibility, except for military or childrearing leaves, or where rehiring is covered by a collective bargaining agreement.

The DOL is also soliciting input on how it should handle the recent FMLA expansion for military-related leaves of absence. For the adventurous, the complete proposed regulations are available for download here.

[Hat tip: Jottings by an Employer's Lawyer].

Retaliation decision underscores importance of termination discussions

A couple of weeks ago, the 6th Circuit held that where an adverse employment action occurs very close in time after an employer learns of a protected activity, such temporal proximity between events is significant enough to constitute evidence of a causal connection for the purposes of satisfying a prima facie case of retaliation (see 6th Circuit holds that temporaral proximity alone is sufficient to show a causal nexus in retaliation cases). Today, that same court, in Imwalle v. Reliance Medical Products, illustrates the converse of Mickey v. Zeidler Tool & Die, what additional evidence will prove a nexus when temporal proximity alone is not enough. It also highlights the importance of carefully watching one's words in termination meetings, and how saying the wrong thing can come back to haunt you.

Imwalle concerns a corporate president who was terminated from his long-tenured position 3 months after he filed an age and national origin discrimination charge with the EEOC. During the termination meeting, the COO told Imwalle: "I know that you know that Haag-Streit (HS) never committed discrimination in the past, at present, and will not in the future. I therefore canot [sic] understand why you raise such a claim. We are not discriminatory, just not."

The Court relied heavily on that statement in affirming the jury's verdict in Imwalle's favor on his retaliation claim:

[T]he fact that Ott made this statement about Imwalle's discrimination complaints at such a critical moment raises questions about Haag-Streit's true motivation for firing Imwalle.

On the one hand, the statement can be taken at face value, made solely for the purpose of assuring Imwalle that his firing had nothing to do with the alleged discrimination on the part of Haag-Streit because such discrimination purportedly did not exist. But another plausible explanation for Ott's statement is that Imwalle's discrimination claim had caused both frustration and resentment on the part of Haag-Streit, and that Ott's statement was designed to mislead Imwalle and discourage him from suing. Ott obviously felt strongly enough about the accusations of discrimination to prepare a written statement and read it as the first order of business at the meeting he called to let Imwalle go.

Furthermore, the timing of the statement, literally moments before Imwalle was notified that he was no longer President of Reliance or of HSH US and that his employment agreement was being terminated, clearly shows that Imwalle’s complaint of discrimination was at the forefront of Ott's mind.

While it's difficult to know what the COO's true motivation was, it's easy to understand how a jury could interpret the phrase, "I cannot understand why you raise such a claim," uttered while terminating Imwalle, as retaliatory. If the COO's intent was retaliation, then he did an awful job of hiding it. If, however, his intent was innocent, he should have chosen his words much more carefully. Use his mistake as a valuable lesson -- be careful what you say in a termination meeting, and even more careful what is written down. The words can, and will, be used, twisted, and construed against you.

What else I'm reading this week #17

I'm coming out this week smokin' -- or at least with a pair of posts about smoking. John Phillips' Word on Employment Law discusses some of the potential legal implications of smoking in the workplace. Should you think that you needn't worry about this issue since it is illegal to smoke in just about every workplace in Ohio, Representing Management gives us a tale of a lawsuit permitted to proceed under ERISA brought by an employee whose employment was terminated after he tested positive for smoking in violation of his employer's wellness program.

The Pennsylvania Employment Law Blog reminds us that in guarding against potential lawsuits, how you terminate an employee is often as important, if not more so, than the reason for the termination.

The Labor and Employment Law Blog gives us Part 2 of its series on how to avoid a whistleblower claim.

Workplace Privacy Counsel brings us information on whether dead employees' medical records are entitled to protection under HIPAA (short answer, yes).

Finally, Electronic Discovery Navigator provides helpful information on implementing record retention policies.

Blawgosphere criticizes workplace bullying laws

Since I blogged last week on workplace bullying (see Bullying boss justifies unemployment award), there has been a flurry of activity in the blawgosphere on this issue. This month's ABA Journal has an article discussing both sides of the anti-bullying movement, while Overlawyered and the Laconic Law Blog, like me, are critical of this initiative.

The Tennessee appellate decision cited in the ABA Journal article frames this issue best:

It is necessary to distinguish between harassment and discriminatory harassment to insure that discrimination laws do not become a general civility code…. If there is harassment in the work place, the burden is on the plaintiff to establish that such harassment is based upon one's age, race, sex or other protected class characteristic that is prohibited by the civil rights statutes. The fact that a supervisor is mean, hard to get along with, overbearing, belligerent or otherwise hostile and abusive, does not violate civil rights statutes…. Nothing in the record established that Ms. Doyle treated age-protected employees any differently than non-protected employees, rather, the testimony clearly showed that Ms. Doyle was an equal opportunity oppressor, using her intense, dominant, abrupt, rude, and hard-nosed management style on all St. Thomas employees. Disagreement with a management style alone, without evidence of a discriminatory intent or motive, no matter how disagreeable that style may be, is simply insufficient to warrant protection…. The Sixth Circuit has recognized that, "personal conflict does not equate with discriminatory animus," … and it has further emphasized that "it is important to distinguish between harassment and discriminatory harassment in order to ensure that Title VII does not become a general civility code."

Ohio Supreme Court holds that retained memory can constitute a trade secret

It has long been thought that under Ohio's trade secret statute, R.C. 1333.61, that which an employee holds in retained memory does not meet the definition of a trade secret. Thus, prior courts have differentiated, for example, between employees who remove documents or files and those who recreate the contents of those documents from memory. The former were covered by the trade secret statute, while the latter were not. This week, the Ohio Supreme Court, in Al Minor & Assoc., Inc. v. Martin, has upended this conventional wisdom, and in doing so has greatly expanded the enforceability of not only the trade secret law, but also noncompetition agreements.

R.C. 1333.61(D) defines a "trade secret" as:

[I]nformation, 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.

At issue in Al Minor & Assocs. v. Martin was whether a customer list compiled by a former employee strictly from memory can form the basis for a statutory trade secret violation. The Ohio Supreme Court unanimously answered this question in the affirmative, holding that information that constitutes a trade secret under R.C. 1333.61(D) does not lose its character by being recreated from memory. In reaching its conclusion, the Court relied upon the language of the statute, which does not differentiate between physical information and that which is reproduced from memory.

While this will change the landscape of trade secrets, it does not alter the longstanding rule that information which can otherwise be discovered through reasonable means does not qualify as a trade secret. Thus, customer lists often lose trade secret protection if they can be reverse engineered, such as by simply looking in the phone book. This decision, however, will make it more difficult for an employee to demonstrate that a customer list was reverse engineered, because of the fact that the fruits of such reverse engineering is often the product of the employee's memory.

This case will not only expand trade secret protection, but also the class of employees against whom noncompetition agreements can be enforced. One of the key factors that courts examine in the enforcement of such agreements is whether the agreement seeks to protect a legitimate interest of the employer. That component will be much easier to satisfy with the expansion of trade secrets to include retained memory.

This decision will be a boon for employers who want to protect information or lock up employees with noncompetition agreements. The flip side, however, is that employers must now be more diligent than ever in the hiring process. It will no longer be enough to simply ask that an employee not bring anything (documents, files, etc.) with him or her to a new job. At the same time, it is impossible to ask an employee to turn off his or her mind or erase his or her memory.

Thus, one possible unintended consequence of this decision will be an increase in the transaction costs of recruiting and hiring. Anytime an employee is recruited, that employee now has the potential to bring trade secrets with him or her in memory. The recruiting process might now have to include the former employer in the hiring process to ensure against any future legal claims concerning retained memory trade secrets. Otherwise, I don't know how an employer hiring anyone who had access to anything that could remotely be construed as a trade secret can have any comfort level with the hiring.

Carnival of HR #26 is available

This post comes to you from the Holiday Inn Express in Tulsa, Oklahoma. Three Star Leadership Blog has posted the 26th Carnival of HR. It includes posts on predatory employees, the problems with bored employees, 10 ways to screw up a performance appraisal, and a post from yours truly on bullying bosses and unemployment compensation. I recommend that everyone take a few minutes to click over to the Carnival and read some of the best HR posts from the past few weeks.

Don't confuse "family status" for "family responsibility discrimination"

I've blogged a lot on "family responsibility discrimination," which is discrimination against parents or caregivers because of their status as such. "Family responsibility" or "caregiver status", however, are not protected classes in and of themselves. They are only illegal if the alleged conduct otherwise violates Title VII or the ADA. In other words, the law prohibits discrimination on the basis of race, sex, religion, national origin, ancestry, color, age, and disability. Thus, for example, it is not illegal to discriminate against all parents because of their parental status, but only if you treat moms differently than dads, or black parents differently than white parents, or parents of disabled children different than parents of non-disabled children.

Adamson v. Multi Cmty. Diversified Servs., Inc. clarifies this important distinction. In that case, decided last week by the 10th Circuit, the plaintiffs, a husband, wife, and daughter who were terminated by a non-profit organization, claimed that "familial status" is a protected classification under Title VII. The Court rejected that argument:

Title VII protects neither the family unit nor individual family members from discrimination based on their "familial status" alone…. "Familial status" is not a classification based on sex any more than is being a "sibling" or "relative" generally. It is, by definition, gender neutral. The use of gender to parse those classifications into subcategories of "husbands, wives and daughters" is a social and linguistic convention that neither alters this fact nor elevates those subcategories to protected status. Mr. Adamson’s claim that he was terminated in violation of Title VII based on his status as Patricia's "husband" (and Jessica's "father"), and Patricia and Jessica's claims that they were terminated by virtue of being Barry's "wife" and "daughter," respectively, fall outside the scope of Title VII and its purpose in protecting employees against invidious discrimination on the basis of sex, and we reject those claims….

Thus, an employer that discriminates against an individual solely on the basis of his or her "familial status" violates no law, unless the discrimination is tied to some specific protected class.

Appeals court allows ex-employee's retaliation caim to proceed based on the filing of a lawsuit against an employer

Retaliation cases continue to be one of the hot button employment law issues. This term, the Supreme Court has agreed to hear three separate retaliation cases. (See Retaliation Cases Hit High Court En Masse). Not to be outdone, the Ohio Supreme Court has handed down several important retaliation decisions in the past few months, including one which held that an employer's lawsuit against an employee who has engaged in protected activity is not retaliation if the employer has an objective basis for filing the lawsuit. On the issue of brining a lawsuit against an employee, I have cautioned, "The decision of whether to file a claim against an employee or ex-employee is not an easy one, and should not be undertaken without careful thought, a clear strategy of the goals to be achieved, and consideration of whether those goals are worth the risk of defending against a likely retaliation claim or the perception in court that the counter-suit is merely retaliatory." These words ring more true than ever after last week's decision by the 4th Circuit in Darveau v. Detecon, Inc., which permitted an employee's retaliation claim based on a lawsuit filed by the employer.

Larry Darveau filed a complaint against his former employer employer, Detecon, seeking compensation for unpaid overtime under the Fair Labor Standards Act. Two weeks later, Detecon filed an action against Darveau, alleging fraud arising out of a sales contract whose termination Darveau allegedly hid to meet his goal for an annual bonus. In response, Darveau amended his own complaint to include a retaliation claim, contending that Detecon's lawsuit constituted retaliation under the FLSA in violation of 29 U.S.C. § 215(a)(3). That section makes it unlawful "to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter." Because Darveau's complaint alleged that Detecon filed its lawsuit with a retaliatory motive and without any reasonable basis in fact or law, he stated a proper reclaim and the district court improperly dismissed the retaliation claim.

Detecon argued that it could not retaliate against Darveau because he was no longer its employee when it filed its lawsuit against him. The 4th Circuit roundly rejected that position:

Somewhat surprisingly, Detecon contends that looking to the Supreme Court's Title VII jurisprudence in this FLSA case will generate the "anomalous result" of extending protection from retaliation to former employees who no longer enjoy the substantive protections of the FLSA. Yet in Burlington Northern, the [Supreme] Court rejected this very argument in the Title VII context, observing that Title VII's anti-retaliation provision serves a different purpose than its substantive provisions and that such "differences in ... purpose ... remove any perceived 'anomaly.'" The more unfortunate anomaly would be if an employee’s underlying FLSA claim could be brought after he quit, but the employee's protection from retaliation ended when the employee stepped beyond the employer's doorstep. ... There is nothing in the language or history of [the FLSA] to indicate that Congress intended to penalize dissatisfied employees who voluntarily leave an employer by thereafter denying them the protections of [the Act]. There is every reason to conclude precisely the contrary.

This case reminds us that retaliation does not end when employment ends, because an employee can be chilled from exercising protected rights long after he or she leaves one's employ. It also underscores the myriad legal problems that companies potentially face when choosing to pursue a claim, meritorious or not, against a current or former employee.

The importance of confidential settlement agreements

Kathleen Peratis at the Jewish Daily Forward is proposing the passage of legislation to prohibit settlement agreements in employment discrimination cases from containing confidentiality clauses, and requiring their filing with a court so that they are publicly available. Her rationale is that because most of the enforcement of our civil rights laws is done by private lawsuits, the confidential settlement of those lawsuits chills public knowledge about discriminatory misconduct and the enforcement of the laws against it. In Ms. Peratis's own words:

Lately, however, a new and alarming flaw has emerged, a flaw that urgently warrants response: Although the number of employment discrimination cases filed has nearly tripled in the last 10 years, the amount of public information about them has dwindled to practically nothing. About 70% of employment discrimination lawsuits are settled — less than 4% actually go to trial — and nearly all settlement agreements require strict "confidentiality," meaning no one can reveal the terms of the settlement, including the amount paid to the plaintiff.

Thus, an important aspect of civil rights enforcement has become invisible. A weak system has become a secret system, and the public interest is suffering. None of this was supposed to happen.

"Employment discrimination statutes were not envisioned to promote secret settlement," says Minna Kotkin, a law professor at Brooklyn Law School who has studied the issue. "The whole thrust of the legislation was that, by facilitating employee suits, discrimination would be brought to public attention and the litigation process would serve to deter other employers from similar conduct." ...

With secret settlements, the penalties for job discrimination become invisible. Deterrence value is squandered. After expenditure of judicial resources and perhaps a blaze of media coverage, the silenced victim appears to say, "Oh, never mind." The general public comes to believe, as some surveys suggest, that employment discrimination is a thing of the past, attitudes of jury pools are skewed, and the chances of success for the next victim are diminished....

The problem has an easy fix: Prohibit the parties from withdrawing or dismissing any employment discrimination lawsuit unless the settlement agreement is filed as a public document with the court. Of course, as with all rules, there could be exceptions for good cause shown, but the default position would favor openness.

Ms. Peratis correctly points out that most employers will not settle an employment claim without confidentiality, perceiving that public knowledge of a settlement will only encourage others to bring claims. Her argument, however, has several key flaws, each of which underscores why I oppose her proposal.

First, it rests on the faulty premise that all settled claims have merit. Nothing could be further from the truth. Confidentiality is a necessary component of settlements to deter the disgruntled employee from filing a questionable lawsuit to make a quick dollar. Confidentiality has no effect on whether those who are being discriminated against, or perceive they are being discriminated against, will file a lawsuit. That class of employees will still seek lawyers, and those claims will still be filed.

Secondly, information about lawsuits is already publicly available. All court dockets are open and available to anyone who wants to go to the courthouse or, in most cases, to anyone who can access the Internet. The mere fact that a lawsuit has been filed serves Ms. Peratis's purpose of keeping the public informed about workplace discrimination claims.

Finally, while according to Ms. Peratis only 4% of employment cases proceed to trial, the jury verdicts for those that are successful are routinely large and frequently reported in the press. You tell me which of the following will have a greater impact on the likelihood of an employee filing a lawsuit - a tiny docket entry noting a $10,000 nuisance value settlement that no one will ever find unless they are specifically looking for it, or a front page article about a $16 million discrimination verdict? Indeed, if what Ms. Peratis says is correct, and the number of employment discrimination cases filed in the last 10 years has tripled, how can this alleged secrecy be a problem?

[Hat tip: Professor Paul Secunda at the Workplace Prof Blog]

Bullying boss justifies unemployment award

It has long been accepted that our discriminations laws do not set forth "a general civility code for the American workplace." (Oncale v. Sundowner Offshore Services). Certain fringe groups hope to change this by passing anti-bullying legislation (see Sticks and stones may break my bones...). Nevertheless, as it stands now, employees cannot sue their employers for bullying or being abusive unless the harassment is because of sex or some other protected class.

This week the Summit County Court of Appeals, in Ro-Mai Industries, Inc. v. Weinberg, awarded unemployment compensation to an employee who quit his job because he could not deal with his admittedly abusive boss.

According to the opinion:

Weinberg accepted a position at Ro-Mai after interviewing with Maier. Weinberg, who had extensive experience in sales, was told that his position at Ro-Mai would involve sales work and would require him to be at the office from approximately 8:00 a.m. to 5:00 p.m. After a few days of work, however, it became clear that Weinberg's actual duties differed from the job description that he received. He was not given any sales work and he often worked well over the nine hour shift that he was promised. Moreover, Weinberg discovered that Maier had a habit of yelling at the employees. Although Weinberg told Maier that he did not appreciate being treated in such a manner, Maier continued to yell.

On November 3, 2005, Weinberg informed Ro-Mai's head of human resources that he intended to quit. However, before Weinberg left the office Maier sought him out, promised to stop yelling at him, and convinced him to stay. Weinberg returned to work the next day, and Maier resumed his habit of yelling at him. Accordingly, Weinberg quit the following day….

Maier admitted that he often yelled at his employees. During the hearing, he stated: "When I hired [Weinberg], I told him I'm probably the worst employer to ever work for[.] I'm difficult. I expect a lot. And I warned him in advance that I'm very difficult…. [W]hen it comes to the business, I – I can yell. I did yell." Weinberg testified that when he complained to human resources about Maier’s yelling, he was told: "[O]h, it[] gets worse. That’s the way he is."

Maier’s yelling was not a single, isolated incident…. It was a repetitive problem that Weinberg unsuccessfully tried to address with Ro-Mai’s human resources department prior to quitting. Weinberg even agreed to resume work the first time that he intended to quit because Maier asked him to stay and promised to stop yelling. He did not abandon his employment without warning, or leave with utter disregard for the good of the business.

Thus, the Court concluded that Weinberg was justified in quitting his job because of his abusive boss and upheld his award of unemployment.

I've always subscribed to the law and economics model on the issue of bad bosses. Bad bosses beget transitory workforces and ultimately cannot succeed as bosses because of their revolving door. Good bosses create loyalty, retain good employees, and succeed accordingly. Imposing liability (even for unemployment comp) merely for being subjected to a bad boss sets a dangerous precedent that has the real potential to eliminate the "at will" from all such employment relationships.

What else I'm reading this week #16

Last week, I gave everyone my thoughts on IBM's reaction to its $65 million wage and hour settlement (An expectational argument for overtime pay). HR World has been kind enough to compile some other thoughts from around the blogosphere on this topic, and let's just say I'm decidedly in the minority.

The HR Capitalist comments on the pitfalls of political banter in the workplace.

John Phillips' Word on Employment Law has a timely post on how e-mails and instant messages can come back to haunt those who use their work computers for evil.

Tracy Coenen's Fraud Files comments on the extension of unemployment benefits under President Bush's economic stimulus package, and opines that it will actually hurt the economy by de-incentivizes people from working.

Suits in the Workplace discusses a 2nd Circuit case in which a doctor was found to be an employee and not an independent contract, and therefore covered by Title VII.

Finally, Workplace Privacy Counsel reports on the California Supreme Court's proclamation that an employee's legal use of medical marijuana does not insulate that employee from being terminated for failing a drug test.

6th Circuit holds that temporal proximity alone is sufficient to show a causal nexus in retaliation cases

It has been generally understood that in retaliation cases, temporal proximity alone does not establish the required causal connection between the protected activity and the adverse employment action. In Mickey v. Zeidler Tool & Die Co., decided today, the 6th Circuit has held that where an adverse employment action occurs very close in time after an employer learns of a protected activity, such temporal proximity between events is significant enough to constitute evidence of a causal connection for the purposes of satisfying a prima facie case of retaliation.

Charles Mickey, age 67, was a 33-year employee of Zeidler Tool & Die. After the company's owner, Harold DeForge, cut his responsibilities and pay following Mickey's refusal to retire, Mickey filed an age discrimination charge with the EEOC. DeForge first learned of Mickey's EEOC charge when he arrived at the company on the morning of October 19, 2004. When Mickey arrived at 7:30 that same morning, DeForge followed him into his office and immediately fired him. The district court dismissed Mickey's retaliation claim on summary judgment, relying on the proposition that temporal proximity, without more, is insufficient for a reasonable juror to concluded that DeForge would not have terminated Mickey but for the EEOC charge.

The 6th Circuit reversed that dismissal, ruling that where an adverse employment action occurs very close in time after an employer learns of a protected activity, such temporal proximity, in and of itself, is significant to constitute evidence of a causal nexus. Contrarily, where some time elapses between when the employer learns of the protected activity and the adverse action, the employee must present other evidence of retaliatory conduct to establish the required causality. The Court explained its rationale for this distinction:

[If] an employer immediately retaliates against an employee upon learning of his protected activity, the employee would be unable to couple temporal proximity with any such other evidence of retaliation because the two actions happened consecutively, and little other than the protected activity could motivate the retaliation. Thus, employers who retaliate swiftly and immediately upon learning of protected activity would ironically have a stronger defense than those who delay in taking adverse retaliatory action....

In those limited number of cases–like the one at bar–where an employer fires an employee immediately after learning of a protected activity, we can infer a causal connection between the two actions, even if Mickey had not presented other evidence of retaliation.

Hedging its bets, the Court continued, and further reasoned that even if the nearly instantaneous temporal proximity was insufficient to establish the nexus, Mickey's alleged disparate treatment before DeForge learned of the EEOC charge also was sufficient evidence of a retaliatory motive.

A strong concurring opinion took the majority to task for its fall-back position:

"Retaliate," according to Merriam-Webster's Online Dictionary, available at http://www.merriam-webster.com/dictionary/retaliate (last visited January 24, 2008), is either a transitive verb meaning "to repay (as an injury) in kind," or an intransitive verb meaning "to return like for like; especially: to get revenge." One cannot repay or act in response to or get revenge for something that has not yet happened. No reasonable juror could conclude that DeForge intended to retaliate against Mickey for his filing the EEOC charge before he was aware that Mickey had done so, let alone before Mickey had undertaken the protected activity in the first place, and therefore, DeForge's actions prior to Mickey's filing of the EEOC charge cannot be evidence of retaliation for that protected activity. This evidence is immaterial to Mickey's retaliation claim and cannot be used to support it.

The impact of this decision will be fought over the meaning of the phrase "very close in time." The majority is vague in its understanding of that phrase. Employers will push very hard for Judge Batchelder's concurring interpretation: "[I]n a case in which the employer's learning of the protected activity is so closely followed by the employer's taking of an adverse action that the two are virtually contemporaneous — exactly the circumstances in this case — the temporal proximity between the two is alone sufficient to establish the causal connection necessary for the fourth prong of a prima facie case of retaliation." Employees, meanwhile, will push in the opposite direction and attempt to have courts stretch out the timeline.

We will have to wait and see where courts draw the line — minutes, as was the case in Mickey, days, weeks, or longer. It's hard to argue that Mickey presents a unique case, because the termination was a knee-jerk reaction to learning of the EEOC charge. The longer an employer allows an employee to stay on the job, however, the less likely a retaliatory motive exists, unless there is some other evidence of that motive. We will simply to have wait and see how long is too long.

Taking a look at bereavement leave policies

According to a 2007 Bureau of Labor Statistics report, 69% of private workers receive paid funeral leave. Yet, MSNBC.com is questioning whether companies are doing enough for grieving employees. The article suggests that businesses provide longer leaves (anywhere from 5 days up to as long as the employee needs) and including part-time employees. As support, it cites a study by the Grief Recovery Institute, which estimates that U.S. businesses lose more than $100 billion annually because of absenteeism, mistakes, and low productivity from workplace grief.

There is no law that requires a business to provide for bereavement leave. It is a benefit, and entirely up to the employer whether to provide for such leave at all, and if so, for how long, whether it is paid or unpaid, how wide to cast the family net, and whether to require an employee to provide proof of the death. How you choose from this menu of options will all impact employee morale, retention, and maybe productivity (although I question the agenda of the Grief Recovery Institute). As always, when you apply a bereavement leave policy, make sure it applied fairly and equally across the board to avoid any appearance of disparate treatment and a potential discrimination claim.

ADA Restoration Act unnecessarily seeks to broaden the definition of "disability"

An editorial in this morning's New York Times calls for Congress to pass legislation to undo recent Supreme Court precedent limiting the reach of the employment discrimination laws. By way of example, the editorial points to the Fair Pay Restoration Act and the Civil Rights Act of 2008, both of which are currently pending in Congress.

The Americans with Disabilities Restoration Act of 2007 is another currently pending bill in the same vein. It would amend the ADA to:

1. redefine "disability" as a physical or mental impairment, a record of a such impairment, or being regarded as having a such impairment, eliminating the requirement that it substantially limit a major life activity;
2. in determining whether an individual has an impairment, prohibit any consideration of the impact of any mitigating measures the individual may be using or whether any impairment manifestations are episodic, in remission, or latent;
3. consider actions taken because of an individual's use of a mitigating measure to be actions taken on the basis of a disability; and
4. shift the burden of proving that one is a "qualified individual with a disability" from the employee to the employer, as an affirmative defense.

This bill would radically alter the order of proof in ADA cases, and overturn a more than a decade of Supreme Court precedent on the definition of "disability."

George Lenard, at his Employment Blawg, asks the question, Does the ADA Need "Restoration"? George's opinion:

There have been some cases in which the definition of "disability" has been construed too narrowly, preventing individuals with quite substantial impairments from having their day in court. But the definition as it now stands is a sound one, and the Supreme Court cases were correctly decided under this definition.… But vastly more people would be within the "protected class" of individuals with disabilities, so increased litigation would be a given, including not only accommodation cases, but also ordinary disability discrimination claims (e.g., discharges allegedly due to trivial impairments). Even if employers would fare relatively well, litigation costs would rise. This is a legitimate concern.

George is spot on with his take on this bill and its likely effects. Let me add one more thought, that largely the current law takes care any concerns over the perceived narrowness of the definition of "disability." Remember, the ADA does not just protect those who meet the definition of having a disability, but also those who are "regarded as" disabled by their employers. As recently pointed out by the 6th Circuit in Gruener v. The Ohio Casualty Ins. Co.:

The ADA’s regarded-as-disabled definition of disability … protects employees who are "perfectly able" to perform a job, but are "rejected … because of the myths, fears and stereotypes associated with disabilities." Accordingly, it applies when "(1) [an employer] mistakenly believes that [an employee] has a physical impairment that substantially limits one or more major life activities, or (2) [an employer] mistakenly believes that an actual, nonlimiting impairment substantially limits one or more [of an employee's] major life activities." Either application requires that the employer "entertain misperceptions about the [employee]." (quoting (quoting Sutton v. United Air Lines, 527 U.S. 471, 489–90 (1999)).

Indeed, just last week the conservative 4th Circuit decided Wilson v. Phoenix Speciality, upholding a $200,000 verdict in favor of an employee who was regarded as disabled because of his medically controlled Parkinson's disease. The ADA already protects those who need to be protected. Expanding the coverage of those who qualify as truly "disabled" as envisioned by the ADA Restoration Act will only serve to undermine the original spirit of the law, the elimination of the misconceptions and stereotypes about the ability of the disabled to fairly compete for jobs.

President Bush signs bill amending the FMLA

President Bush has signed the National Defense Authorization Act that he had previously vetoed. Its changes to the FMLA go into effect immediately.

As amended by the NDAA, the FMLA now permits a "spouse, son, daughter, parent, or next of kin" to take up to 26 workweeks of leave to care for a "member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness." It also permits an employee to take FMLA leave for "any qualifying exigency ... arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the Armed Forces in support of a contingency operation." The DOL will define "qualifying exigency" in subsequent regulations.

According to the DOL, employers are required to act in good faith in providing FMLA leave under these circumstances while it works to prepare comprehensive guidance on rights and responsibilities under this new legislation.

The Department of Labor's website has available for download the full text of the FMLA, as amended by the NDAA.

Remedial measures do not have to be perfect to win harassment claim

Dan Schwartz at the Connecticut Employment Law Blog posts today about treating harassment complaints seriously and taking appropriate action, but not overreacting.

Coincidentally, I make the same exact point in the February 2008 issue of InsideCounsel, discussing Brenneman v. Famous Dave's of America, a sexual harassment case I originally reported on in November:

The court recognized "a company doesn't have to be perfect," explains Jonathan Hyman, an employment lawyer with Kohrman Jackson & Krantz.

"So if a company gets a complaint of harassment, has an adequate policy, undertakes an investigation ... and then makes what it thinks is a reasoned remedial step to stop the harassment, courts much more often than not aren't going to second-guess what the company does. The remedial measures don’t have to be perfect either; they just have to be reasonable and adequate," he says.

Ohio appellate court tolls noncompete while litigation pending

Homan, Inc. v. A1 AG Services, LLC, decided this week by the 3rd District Court of Appeals, answers the following question: if an employer believes a former employee is violating a noncompetition agreement, but does not seek a preliminary injunction, is the time period in the noncompete agreement nevertheless tolled while the case is litigated?

The basic facts of the case are as follows. Kaiser signed a 3-year, 150 mile noncompetition agreement as a condition of his employment with Homan. In January 2004, Homan filed bankruptcy and either laid off or terminated its employees, including Kaiser. Immediately thereafter, Kaiser and his wife started a new business for the express purpose of competing against Homan. When Homan reminded Kaiser about his noncompete, he stopped working for his new business, but a year later rejoined the business, deciding that 1 year was long enough for him to sit out. Within 3 months, Homan sued to enforce the noncompete. It took nearly 2 years for the trial court to decide in Kaiser's favor.

The appellate court determined that a 2-year noncompete was reasonable, and reverse the trial court's judgment. Notably, the Court found that even though the noncompete had already expired, it was retroactively enforceable against Kaiser:

[A] covenant not to compete may not expire while the enforceability of that contract is being litigated…. [T]he plaintiff "should not be denied the benefit of their bargain simply because the time period specified in the negative covenant all but expired while [the plaintiff] sought to enforce the contract through the court system." … [T]he covenant was not enforced while litigation was pending, leaving the defendant to engage in direct competition with the plaintiff…. [I]f it held that the contract had expired during resolution of the litigation, it would be "sanctioning litigation as a delay tactic. All an individual would have to do would be to contest the negative covenant in court until the restrictive time period elapsed. If this were true, covenants not to compete would be virtually ineffective."

Thus, the Court of Appeals found that the trial court erred in ruling that the noncompete agreement had expired.

This decision completely ignores the practicalities of litigation in noncompete cases. At the outset of the litigation, the former employer has a clear remedy available to prevent a noncompete from expiring and the case becoming moot while the litigation is on-going – a preliminary injunction. A preliminary injunction maintains the status quo until the litigation is over, keeping the contract in force. If Homan was concerned about Kaiser's noncompete agreement expiring during the litigation, Homan should have moved for a preliminary injunction. No one be punished because a former employer sat on its rights and failed to avail itself of this widely recognized remedy. A holding that noncompete agreements are tolled during litigation rewards the former employer that fails to act to protect its rights.

The bottom line, Homan notwithstanding – don't wait to enforce noncompete agreements. Temporary Restraining Orders and Preliminary injunctions are available to halt employees who are violating noncompetes, and should be timely used to enforce the agreement while its merits are litigated.

Congress introduces the Civil Rights Act of 2008

20 Democratic Senators (including Clinton and Obama) have sponsored the Civil Rights Act of 2008. It's basically a laundry list of pro-employee changes to virtually every federal employment statute. For example, it proposes to:

• eliminate damage caps under Title VII and the ADA.
• limit the "bona fide factor other than sex" defense under the Equal Pay Act.
• add compensatory and punitive damages to FLSA claims.
• amend the Federal Arbitration Act to prohibit clauses requiring arbitration of federal statutory claims.
• allow winning plaintiffs to recover expert fees.
• give the NLRB authority to award back pay to undocumented workers.
• require that ADEA disparate impact claims be analyzed the same as Title VII claims.
• condition states' receipts of federal funds on waivers of sovereign immunity under various federal employment statutes.

This bill has zero chance of becoming law under the current administration. It gives insight, however, into the labor and employment platform of whomever becomes the Democratic candidate for President. These changes would potentially be devastating for businesses litigating employment claims, and is one issue to keep in mind as you go the polls now and in November. [Hat tip: Workplace Prof Blog]

English-only debate is not going away

Since I last wrote on English-only workplace rules and Congress's attempt to prohibit legal challenges of them (Congress debates legality of English-only rules) the debate has continued. Yesterday, the New York Times gave its 2 cents:

Politicians like Senator Lamar Alexander, Republican of Tennessee, have jumped into the fray. Last year, Mr. Alexander introduced legislation to prevent the [EEOC] from suing over English-only rules. After that measure died in conference committee, he introduced a similar one in December.

"This bill’s not about affecting people's lunch hour or coffee break — it's about protecting the rights of employers to ensure their employees can communicate with each other and their customers during the working hours,” he said in a recent statement. "In America, requiring English in the workplace is not discrimination; it’s common sense."

Time out, everyone. Let’s think about what really makes sense here.

Certainly, safety issues arise in some workplaces. The Federal Aviation Administration, for example, requires air traffic controllers to "be able to speak English clearly enough to be understood over radios, intercoms, and similar communications equipment."

Managers may also need employees who can speak English to English-speaking customers. And they may hear complaints if English-speaking employees say they feel excluded or gossiped about when colleagues converse in another language. Such situations, in fact, gave rise to English-only rules in the first place.

The bottom line on this issue remains unchanged, and is largely grounded in common sense. English-only rules have their time and place. If you have a legitimate problem – such as safety, communication with customers, or communication among employee – such a rule will probably pass muster. If, however, you are enacting such a rule to discourage non-Americans from working at your place of business, or if the rule overreaches by banning foreign languages in non-work spaces (lunch rooms, etc.), you should prepare yourself to unsuccessfully defend a lawsuit. As long as immigration remains a hot political topic, this issue is not going away. Being smart about these rules, though, will help you from being stung by their legal traps.

Columbus Dispatch on military status discrimination

This morning's Columbus Dispatch reports on Ohio's ban on military status discrimination, which will go into effect on March 23. For some information on what this law protects, take a look at my January 10 post: Ohio to prohibit discrimination based on "military status". The Dispatch's article quotes me on some the new law's effects:

The courts will eventually decide how to interpret the new law, though it's not hard to guess what some interpretations might be, experts say. For example, gender-based discrimination is illegal, and courts have decided that means that sexual harassment is illegal, said Jonathan Hyman, a labor and employment lawyer with the Cleveland firm of Kohrman, Jackson & Krantz.

"It's not a stretch that harassment because of military status could be illegal," he said. In that interpretation, an employee who is anti-war could violate the law by making fun of an activated military member's service.

Even the most ardent opposition of the Iraq war would be hard pressed to be in favor of discrimination against the men and women who volunteer to serve and defend our country. Nevertheless, by including military status as a protected class in our employment discrimination laws, the claims based on political speech has the potential to be injected into private workplaces like never before. If military status is protected, then in all likelihood, harassment because of military status will be actionable. Heated workplace debates about war policy could turn into discrimination claims. When Ohio's courts are asked to interpret this statute in a harassment context (and trust me, they will be asked), I hope that they seriously consider free speech versus what is truly a hostile environment, and rule accordingly.

Remedies available for destruction of computer files

Employers can take a lot of internal steps to protect confidential and proprietary information. Confidentiality and non-disclosure policies, limiting distribution to a need-to-know basis, passwords to secure data, locks for file cabinets, and security cameras are some of the more common tools at an employer's disposal. One thing that is difficult to guard against, though, is a disgruntled employee purposely sabotaging or destroying data, which is exactly what Fox News is reporting happened to an architectural firm in Jacksonville, Florida. An employee saw a help-wanted ad in the newspaper for her job, assumed she was about to be fired, went into the office late at night, and erased 7 years' worth of drawings and blueprints worth $2.5 million.

In cases such as these, where an employee erases data, the employer has a federal statutory remedy – the Computer Fraud and Abuse Act. This criminal statute generally prohibits one from causing the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causes damage without authorization to a protected computer.

The seminal case for employee liability under this statute is International Airport Centers v. Citrin. In that case, Citrin decided to quit his employment with IAC and going into business for himself. Before returning his laptop to IAC, he wiped the hard drive loading a secure-erasure program, permanently erasing all of the stored data. His intent was not only to prevent his employer from recovering his work product, but also to hide the improper conduct in which he had engaged before he decided to quit. The 7th Circuit permitted IAC to pursue a private cause of action against Citrin under the Computer Fraud and Abuse Act. To date, no Ohio Court that I am aware of has ruled on whether this liability is available under the CFAA.

While courts are still wrestling with the limits of the CFAA in the employment context, it provides employers with a powerful weapon against disgruntled employees and employees who seek to harm an employer for anti-competitive purposes. To try to deter this type of conduct in your workplace, think about putting language into employee handbooks that informs employees that it would be a violation of federal law to engage in this type of industrial espionage.

[Hat tip: Strategic HR Lawyer]

DOL proposes FMLA changes

In June 2007, the Department of Labor published a 181-page report on the FMLA that concluded, "In the vast majority of cases, the FMLA is working as intended." So, if the FMLA is working just fine, why is today's New York Times reporting that the DOL has proposed new regulations to address corporate complaints that workers are abusing the FMLA?

The Times reports that the proposed changes would require workers to call in to request a leave before being eligible to take it, eliminating the current two-day grace period, with an exception for employees who are too ill to call in. The DOL also proposes tightening medical certification procedures to eliminate disagreements over whether an employees had done enough to show they qualified for leaves.

While this is certainly a step, it remains be seen if this is a step in the right direction for employers who are dying for some help with the FMLA quagmire.

What else I'm reading this week #15

This week has been a historic one for the Blog, as I passed 10,000 visits. Thank you to all my readers for helping me reach this milestone. Part of this success comes from links from other blogs, so allow me to return the favor.

John Phillips from The Word on Employment Law publishes Part IV in his series on Avoiding Employment Lawsuits, focusing on whether you should offer a terminated employee the opportunity to resign.

Dan Schwartz at the Connecticut Employment Law Blog reports on a 2nd Circuit case that reminds us of a very important wage and hour point: if an employee works overtime, you have to pay it even if it was not authorized and even if you have a policy that says it won't be paid unless authorized.

Michael Moore from the Pennsylvania Employment Law Blog continues his series on Five Things Every HR Generalist Should Know, this time focusing on the classification of workers as employees or independent contractors. For my thoughts on this prickly issue, check out Stripping independent contractor protections.

Workplace Horizons has a very thorough post on Microsoft's scary new employee monitoring patent.

D. Jill Pugh's Employee Handbooks Blog gives us some more pointers to keep in mind when firing an employee.

The Labor & Employment Law Blog gives us 5 ways to avoid whistleblower retaliation claims.

HR World reminds us that family-friendly policies help attract and retain employees. I've also written on the pros and cons of family friendly policies.

Alaska Employment Law comments on how well intentioned laws such as the ADA have unintended consequences.

Finally, Lou Michels from Suits in the Workplace reminds us of the dangers instant messaging can cause in the workplace.

An expectational argument for overtime pay

Another day, another wage and hour issue.

In 2006, IBM settled a wage and hour class action lawsuit for $65 million. In the lawsuit, it was alleged that IBM had misclassified 7,600 technical workers as exempt and therefore withheld overtime from them. As a result of the settlement, IBM has reclassified those employees as non-exempt, and has begun to pay them overtime. However, to ensure that the employees not be paid a higher overall salary, IBM has cut their salaries by 15% to compensate for overtime payments. The goal is not to punish the employees, but to keep their total compensation roughly the same as before the reclassification. [See IBM Cuts Base Salaries by Switching 7,600 Workers to Nonexempt Status.]

The blogosphere is starting to light up with criticism of IBM. From HR World: "Newsflash, people aren’t stupid: salary is guaranteed income and overtime is not. Can you say disgruntled employees?"

Let me offer a different perspective, based on expectations. Let's say someone is hired and told, "We are going to pay you $60,000 a year." So, twice a month, the employer expects to cut a check for $2,500 and the employee expects to receive a check for that amount. Now, let's say the Department of Labor comes in and says, "No, no, that is a non-exempt position. You have to pay that employee overtime." Why should that change the fact that the employee still expects to earn $60,000 per year? The employee is doing the same exact work, and should expect the same pay. The only thing that has changed is the Department of Labor's opinion on an exemption. But that determination should have no effect on the employee's salary expectation. So, if an employer wants to figure out what hourly rate, coupled with an average amount of overtime, will get an employee to the expected $60,000 per year, where's the harm? I need someone to explain to me how the employee has been hurt.

Fortune Small Business Magazine: The ticking time bomb of overtime

Fortune Small Business Magazine has a frightening article this week on fatal wage and hour mistakes. While I've written on this topic repeatedly, this article caught my eye because it spotlights an Ohio company that got caught in the Department of Labor's cross hairs.

Rod Cotner, owner of Jericho Mortgage in Lancaster, Ohio, was shocked when the U.S. Department of Labor showed up at his door to investigate a wage-and-hour lawsuit filed on behalf of his 54 loan officers and sales managers. His company was growing - sales exceeded $4 million that year - and his employees were profiting: "Some of the staffers named in the lawsuit were making over $150,000," he says. "After working in the industry for years, I'd never heard of this happening. Everyone pays their officers on a commission basis. How can someone who makes six figures a year demand back wages for his time?"

Ultimately, the lawsuit cost Cotner a $220,000 settlement of back overtime, untold legal fees, and has caused him to cut his staff to fewer than 10 employees. Needless to say, Jericho Mortgage exemplifies how a Department of Labor investigation can devastate a small business.

What really grabbed my attention was this quote: "Cotner, 37, incorrectly assumed that his employees were exempt under the U.S. Fair Labor Standards Act." Jericho Mortgage was not trying to game the system. He was merely doing what his years of experience told him was industry practice, figuring that commissioned loan officers who were earning a good living during the height of the mortgage boom couldn't possibly gripe about their wages. Nevertheless, this small business owner, who was not out to hurt anyone, has had his business decimated.

The fact is few if any companies do wage and hour perfectly. The biggest mistake the a company can make, though (apart from intentionally trying to skirt their obligations) is to assume that employees are not owed overtime. The regulations that govern who is and is not exempt are complex, tricky, and highly fact sensitive. Companies should be engaging lawyers to scrutinize their exempt classifications to ensure that all employees who are supposed to be paid overtime are being paid overtime. All it takes is one phone call by a disgruntled employee to the Department of Labor for any company to be in the same shoes as Jericho Mortgage. Ask anyone who's been audited by the DOL - those are very uncomfortable shoes to wear.

For other posts I've done on the topic of wage and hour audits and the proliferation of these claims, take a look at:

• Use a wage and hour audit to proactively head off claims
• Wage and hour litigation hits the big time
• Department of Labor investigations highlight important wage and hour compliance issues

[Hat Tip: California Labor & Employment Defense Blog]

Take two in FMLA expansion for military families

Both the House and Senate have again overwhelmingly signed the National Defense Authorization Act that President Bush vetoed at the end of last year. It now sits on President Bush's desk where he again is expected to sign it. While I've been burned on this once before, I am optimistic that the President will sign the bill this time. A White House spokesman has said that President Bush is expected to sign the revised legislation. The bill will expand the FMLA to provide FMLA leave because of exigencies related to active military duty, permit an eligible employee to take up to 26 weeks of FMLA leave to care for an injured servicemember, and adds "next of kin" to the family members entitled to take such FMLA leave.

[Hat tip: The FMLA BLog]

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.