Do you know? Preservation of personnel files

Do you know? In Ohio, employers should preserve personnel files for six years after an employee leaves an organization. Under Ohio Revised Code section 4112.99, an employee has six years to file a discrimination lawsuit for all types of discrimination other than age (which, for some unknown anomalous reason is only 180 days). Because of this long statute of limitations, companies should not alter, destroy, dispose of any employee files or records until that time period expires. Moreover, all employees should be instructed pursuant to a written record retention policy of this requirement.

The potential penalties for the premature alteration, destruction, or disposal of any employee’s files or records are severe. For example, if an employee files a lawsuit related to his or her termination, and the employee’s personnel file cannot be located, a court may bar the employer from presenting evidence of the employee’s poor performance that led to the termination. A court might also create an inference, binding for the case, that the employee was, in fact, a good employee and that the performance problems did not exist. If a court believes that the disposal was done willfully to hide evidence, it may even go so far as to enter judgment in the employee’s favor. Courts take these obligations seriously, and so should you.

Risks abound for businesses considering unpaid time off to save costs

Workforce Management and SlashGear both report that Dell is encouraging its employees to take an unpaid week off as a means to cut costs and avoid layoffs. Dell is not the only company considering such measures. Companies are going to four-day work weeks, or weeks off, to save enough cash to avoid having to cut staff. Times are getting scary, and many businesses are considering these drastic measures to meet their bottom lines while keeping as many people employed as possible. They assume, probably correctly, that employees would rather work less and keep their jobs than face layoffs.

These measures, however, must be carefully considered and implemented to avoid any wage and hour complications. One of the cornerstones of the FLSA’s exemptions is that the employee must be salaried. By definition, a salaried employee receives the same predetermined amount of money for each week worked. Employers can jeopardize exemptions by docking employees’ pay for hours or days missed from work. If an employer reduces an employee’s pay for hours or days missed in a week, the employee is not receiving a standard predetermined amount for all work performed during the week, and therefore no longer salaried. If an employee is not salaried, he or she cannot be exempt. Exemptions are bad things to lose, because it would make an employee eligible for overtime.

Thus, paying an employee four-fifth’s of his or her salary for a four-day work week might jeopardize that employee’s exemption. The employee is no longer receiving a static amount for all work performed during the week. The Department of Labor would probably take the position that the employer is treating the employee as hourly by reducing the salary by the hours missed during the week.

If, however, an employee is taking an entire week off, the employer can withhold an employee’s salary for that entire week without putting an exemption at risk. In that case, the employee is still receiving the same static weekly amount for all weeks in which any work is performed.

The bottom line – if your organization is considering reducing work hours to cut costs, consider doing so on a weekly basis, and not on a smaller increment. Also, discuss these measures with counsel to ensure that all legal implications are covered.

WIRTW #55

It only seems fitting to begin this week with a small roundup of some of the blog posts I’ve tagged about the election:

• Pennsylvania Labor & Employment Blog
• Workplace Prof Blog
• Wall Street Journal Law Blog 
• The Word on Employment Law with John Phillips
• Delaware Employment Law Blog

The Connecticut Employment Law Blog also points out that President-elect Obama’s Change.gov has gone live, and highlights the labor and employment initiatives his new administration will put forward.

This week also brings some other notable posts about issues other than the election.

Rush on Business (courtesy of an article on IowaBiz) reminds companies of the importance of EPL (Employment Practices Liability) insurance.

HRWorld discusses ways to protect your business when firing an employee.

The Word on Employment Law with John Phillips talks about the wave of layoffs that is likely during this down economy.

Human Rights in the Workplace brings a story from north of the border about a 44-year-old exotic dancer who is claiming age discrimination.

The Non-Compete and Restrictive Covenants Blog discusses IBM’s efforts to halt employee migration to Apple via non-competition agreements.

Trading Secrets, meanwhile, discusses the general trends related to non-compete litigation in the financial services sector.

World of Work reports on the latest case-handling trends at the NLRB.

Finally, Overlawyered brings us the bizarre story of the week, about a sham arbitration agreed to as part of sexual harassment settlement. All hell is breaking lose now that the plaintiff and the arbitrator are refusing to participate.

Religious accommodation for prayer becomes hot issue

As I've written before, Title VII requires employers to reasonably accommodate an employee whose sincerely held religious belief, practice, or observance conflicts with a work requirement, unless doing so would pose an undue hardship. Recently, the issue of accommodating employee’s prayer at work has gotten a lot attention. Articles in both the USA Today and the Wall Street Journal recount stories of Muslim employees whose employers refused to permit time at work to accommodate daily prayer.

The following table, courtesy of the EEOC and the USA Today, illustrates the rise of religious discrimination claims brought by Muslims, in the last 10 years, and especially after Sept. 11:

Year	Muslim	Jewish	Catholic	Protestant
1998	285	276	118	159
1999	282	287	101	171
2000	284	282	134	178
2001	330	294	143	210
2002	720	317	118	204
2003	598	260	145	241
2004	504	275	135	228
2005	507	281	122	206
2006	594	282	118	233
2007	607	287	177	258

 

Two facts stick out from this table: religious bias claims are way up across the board, and claims brought by Muslim employees lead the pack by an eye-popping margin. Before you knee-jerk prohibit Muslim (or other) employees from praying at work, consider these numbers, what real effect five minutes of prayer will have on your organization, and whether you want to be defending the bona fides of that effect at the EEOC or in court.

President Obama

A lot of ink has been spilled already, with tons more to come, about just how truly historic last night was. Given our country’s history, one cannot overstate the importance of the first African-American President. When you drill down a little deeper, however, President Obama will serve as a symbol of something potentially deeper. Will President Obama mean the end of affirmative action? Consider what happened. An African-American man, raised by a single mother, succeeded to the most important position in the world. Is it still credible for minorities to say that historic racism and biases makes it impossible for them to compete for jobs, and that the playing field needs to be leveled by quotas and preferences? Last night may prove to be the final leveling of the playing field and the functional end of affirmative action.

Only time will tell if we truly find ourselves in a post-racial era. What we know as we wake up this morning and start to absorb what happened yesterday is that if have not reached that mark, we have taken a giant step in its direction.

Do you know? The Pregnancy Discrimination Act at 30

Do you know? The Pregnancy Discrimination Act turned 30 years old last week. The PDA outlawed employment discrimination on the basis of “pregnancy, childbirth, or related medical conditions” as unlawful sex discrimination. It does not require that employers give pregnant women preferential treatment (that, after all, would discriminate against men), but it does mandate that pregnant women be treated as would any employee with a similarly disabling temporary condition. Yet, despite being ingrained into our way of thinking that pregnancy discrimination is wrong, the number of claims filed with the EEOC continue to rise. In 2007, pregnancy discrimination filings with the EEOC hit an all-time high of 5,587 (source: Time Magazine).

According to a study published by the National Partnership for Women & Families, the number of claims might actually be higher, as women may under-report pregnancy discrimination out of fear of causing long-term career damage. Who knows if this conjecture is true. What is true, however, is that employees, regardless of gender, have the right to have a career and a family and not be punished for the choice. The sooner businesses recognize this undercurrent of potential bias the sooner they can put measures in place to prevent pregnancy discrimination from becoming a potential problem area.

Court sanctions employee for perjury

I can’t tell you how many times I’ve had a client ask me, “I thought perjury is illegal. How can she lie during her deposition like that?” Well, perjury is illegal, but unless your name is Barry Bonds, it’s a crime that is usually not worth the scarce governmental resources it takes to prosecute it. Negrete v. Nat’l Railroad Pass (7th Cir. 10/27/08), decided last week by the 7th Circuit, illustrates that dishonest conduct in litigation has real implications.

In Negrete, the 7th Circuit affirmed the trial court’s dismissal of an employee’s workplace injury claim because he had missed repeated discovery deadlines, hidden and tampered with evidence, and lied in his deposition. Negrete was a former track repair worker for Amtrak. After the hurt his back at work, he claimed that the injury had left him permanently disabled and unable to work. The two key issues in the case were how badly Negrete was injured, and whether he was still able to work.

Negrete’s missteps included:

• Producing only 12 pages out of a 236-page medical report, which omitted a key medical opinion that he was able to work.
• Turning over documents that appeared to have been tampered with.
• Lying about his current sources of income.
• Lying about the extent of physical labor he performed on owned rental property.

Based on this misconduct, the Court concluded as follows:

True, Negrete often produced documents directly contradicting his deposition testimony, but that does not prove, as his lawyer claims, that his false testimony was inadvertent; it shows only that Negrete is a poor liar. Given Negrete’s repeated misconduct, it would have been hard to reach any conclusion other than that he was acting in bad faith.

Negrete also argues that the sanction of dismissal was too harsh because he is uneducated and lied only about collateral issues. But Negrete’s misconduct related to the most important issues of the case—how badly he was injured and whether he was able to work. And although Negrete may not be well educated, it does not take a graduate degree to understand that it is unacceptable to hide evidence and lie in a deposition.

This case should serve as a warning to all litigants, plaintiffs and defendants, that judges’ tolerance for shenanigans and dishonesty in discovery is getting lower and lower. Hiding evidence and lying will never help a case. Credibility is everything with judges and juries. One of our jobs as lawyers is to spin bad facts in the best light for our clients. We cannot do that, however, unless all of the facts are out on the table.

WIRTW #54

As I celebrate the Phillies first World Series title in 28 years, and Philly’s first title in any of the major sports in 25 years (believe it or not, the Phillies, Eagles, 76ers, and Flyers played a combined 9,029 games without producing a championship until Wednesday), we move our attention to more mundane issues, like next week’s Presidential election. Given the lack of media coverage over the last few months, I’m sure November 4 has snuck up everyone. So, I’ll try to catch everyone up on the labor and employment implications of next week’s vote:

• The Word on Employment Law with John Phillips gives us one last look at where the candidates stand on various pieces of legislation that impact employers.

• The HR Capitalist focuses on one key issue likely to be taken up by Congress early in 2009, the Employee Free Choice Act, and gleans some lessons from converse legislation in England three decades ago.

• The Workplace Prof Blog gives its take on politicking by employers, captive audience meetings for employees warning about the dangers of an Obama administration and how it could cause more economic pain by making it easier for unions to organize.

BLR’s HR Daily Advisor reminds everyone that it is fairness, and not the technical ins and outs of the law, that matters most to employees and juries.

On an issue I’ve spent some time discussing this week already, Law.com clues everyone in that the time is nearing to re-learn the ADA.

Fair Labor Standards Act Law addresses a very interesting issue, whether time waiting for a computer to boot at the beginning of the work day in considered “hours worked” under the FMLA.

The Connecticut Employment Law Blog asks what happened to the flood of ERISA fiduciary litigation that was supposed to come in the wake of Larue v. Wolff.

The Labor & Employment Law Blog reports that the Department of Homeland Security has reissued its final rule on the No-Match Safe Harbor Regulations. Recall that it was first issued last summer, and enjoined by the 9th Circuit. The rules have been in limbo since, and the new rules aim to address the 9th Circuit’s concerns.

The Federal Civil Practice Bulletin examines a decision that denied a motion to dismiss in a Title VII racial harassment case.

Will end this week with a little humor – HR World presents the annual list of the best employee excuses for missing work. The best, in my humble opinion:

• Employee said he had a heart attack early that morning, but that he was “all better now.”
• Employee was kicked by a deer (better not to ask for details).
• Employee contracted mono after kissing a mailroom intern at the company holiday party and suggested the company post some sort of notice to warn others who may have kissed him.
• Employee’s wife burned all his clothes and he had nothing to wear to work.
• Employee was up all night because the police were investigating the death of someone discovered behind her house.
• Employee’s psychic told her to stay home.

More on smoking as a disability

In commenting on my post on workplace smoking bans from earlier this week, Michael Moore at the Pennsylvania Employment Law Blog suggests that that the recent ADA Amendment Act (ADAAA) could make nicotine addiction a protected disability.

The recent ADA amendments significantly change the statutory definition of “disability.” In Sutton v. United Airlines, the Supreme Court held that whether an impairment substantially limits a major life activity must be determined with reference to the effects of mitigating measures on the impairment. For example, a diabetic who has the condition under control with insulin might not meet the definition of “disability.” The ADAAA expressly reverses that ruling by requiring the determination of whether an impairment substantially limits a major life activity is to be made without regard to the ameliorative effects of mitigating measures. Thus, when the amendments go into effect on January 1, 2009, a diabetic will be “disabled” under the ADA whether or not insulin is used to control the diabetes.

Michael argues:

The Americans with Disabilities Act was recently amended to expand the definition of “disability” to the point that it may encompass nicotine addiction. The few ADA cases on “smoking” as a disability have not recognized a claim based on the pre-amendment definition of disability. However, the rationale for denying disability status to “smoking” or “nicotine addiction” is squarely predicated on the remedial nature of the condition exempting it from coverage of the ADA as expounded in Sutton v. United Airlines, Inc. The ADA Amendments expressly abrogated Sutton.

Whether or not something is a disability with or without remedial measures, however, is only one step in the analysis. The next step is to determine whether that disability “materially restricts” (using the language of the ADAAA) a major life activity. What major life activity does smoking or nicotine addiction materially restrict? Breathing? Maybe, but only if one’s lungs are compromised from years of smoking. At that point, a bronchial disease might qualify as a disability, but how will allowing employees to smoke reasonably accommodate that disability? If anything, an employer’s anti-smoking initiatives present a better accommodation for an employee’s breathing problems.

I recognize that the ADAAA is going to expand the protections of the ADA beyond the scope of where courts have taken it in recent years. I do not believe, however, as some have argued, that it has been taken so far to encompass things such as nicotine addiction. We will have to take a wait-and-see approach on the post-amendment scope of ADA until courts start weighing in on exactly how broad the definition of “disability” has become. I stand by my earlier prediction, though, that smoking is not a protected disability under the ADA, a classification that should not change after January 1.

New FMLA regulations are on their way

On October 20, the Department of Labor forwarded its final draft of new Family and Medical Leave Act regulations to the Office of Management and Budget for its review. The OMB’s review process could take up to a month, and the OMB is expected to publish the new regulations some time in November.

In February 2008, the DOL proposed new FMLA regulations. It also asked for public comment. It is unknown what comments were received, and what changes, if any, were made to the proposed regulations as a result.

What we do know is that the proposed regulations suggested the following 12 key changes:

Changes to improve employers’ ability to plan and schedule around FMLA leaves:

1. An employee simply calling in sick does would no longer suffice as a request for FMLA leave. This change will greatly improve employers’ ability to plan and schedule around employees’ medical leaves.

2. Employers would be given greater latitude to deny a request for foreseeable leave if an employee do not provide sufficient notice.

3. An employee on intermittent leave for a chronic serious health condition would need to follow an employer’s standard call-in procedures for unscheduled absences. The employee would no longer be able to use intermittent leave and designate it as such after the fact.

Changes to the medical certification process:

4. The current process of employer conditionally designating FMLA leave as such pending the receipt of medical certification would be abolished. Instead, an employer would first advise an employee of his or her general eligibility for FMLA leave, and only approve the leave as FMLA-qualifying after the employee submits all of the required paperwork, including the medical certifications. This is one instance where bifurcating a process into two steps actually simplifies it.

5. Employers would be given more time to issue FMLA notices – five days instead of two – to employees requesting FMLA leave.

6. The DOL’s current medical certification forms would be revised.

7. Employers would be entitled to require employees to obtain certification of FMLA-eligible medical conditions twice a year instead of once.

8. Employers would be permitted to contact an employee’s healthcare provider directly to seek clarification or additional information about a medical certification, and would 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.

9. Healthcare providers would be able to provide information on the diagnosis of the employee’s health condition on medical certification forms.

Changes to the meaning of “serious health condition”:

10. The meaning of “continuing treatment” under the definition of a serious health condition would be changed to specify that the two required visits to a healthcare provider must occur within 30 days of the beginning of the period of incapacity.

Other changes:

11. Employees would have a five-year cap on years of service for FMLA eligibility. This change would eliminate the problem of an employee working for a company for six months, leaving, returning 10 years later, and qualifying for FMLA leave after another six months of employment.

12. For employees that also qualify as disabled under the ADA, employers would be able to suggest reasonable accommodations that could preclude the need for FMLA leave without violating the FMLA.

I’ll have more on these new regulations, including which of the above changes made the final cut, when they are published in final form.

[Hat tip: BLR, c/o The FMLA Blog]

Do you know? Time off to vote on election day

Do you know? Ohio law requires that employers provide all employees a reasonable amount of time off to vote on election day. According to O.R.C. 3599.06:

No employer, his officer or agent, shall discharge or threaten to discharge an elector for taking a reasonable amount of time to vote on election day.... Whoever violates this section shall be fined not less than fifty nor more than five hundred dollars.

The time off does not have to be paid, but companies should be wary of docking salaried employees.

Next Tuesday is election day. Voter turnout is expected to reach an all-time high. Don’t make the mistake of disciplining employees if they arrive late, leave early, or take a long lunch because they are exercising their right to vote.

Are there legal risks with smoking bans?

I had the privilege of speaking last week at the COSE 2008 Small Business Conference. I received a question on the legality of workplace policies that prohibit employees from smoking at all – during the work day, off work, anywhere, any time. As The Cincinnati Enquirer reports, there is a definite trend of businesses refusing to employ smokers. Companies view these policies are part of wellness programs that are used to control health insurance costs. Often, the programs not only prohibit smoking, but offer programs to smokers to aid in their efforts to quit:

Taking the employee wellness program to another level, a local company is refusing to hire smokers unless they enter a program to help them quit.

USI, the insurance and financial services company located downtown, started the program this year. The program applies only to new employees, who are tested when they are hired.

"We decided not to hire smokers because they add additional expense to our health plan and our ongoing operation," said Dennis Curran, chief human resources officer for USI's Midwestern region….

Nationally, the Scotts Miracle-Gro lawn-care company and the Cleveland Clinic have started similar programs. Locally, the Hamilton County Public Health agency also doesn't hire smokers.

29 states and the District of Columbia have so-called “smoker protection” laws – laws that elevate smokers to a protected class, making it illegal to discriminate against an employee because he or she smokes. Ohio is not such a state. Thus, in Ohio, there is nothing per se illegal about making employment decisions based on one’s status as a smoker.

As far as I know, this type of smoking ban has never been tested in an Ohio court. I have three thoughts, though, of possible laws that could be implicated by a blanket smoking prohibition:

1. The ADA: The ADA and its Ohio counterpart protect “addiction” as a disability. For example, a company cannot terminate an employee because that employee has a record of drug or alcohol addiction, or is perceived as a drug addict. There is a potential claim out there that employees who are addicted to nicotine are protected by the ADA. However, to be legally disabled under the ADA, it is not enough to simply suffer from some affliction. That affliction must substantially limit a major life activity. While a smoker is often addicted to nicotine, I fail to see how that addiction could be a disability protected by the ADA.

2. ERISA: Section 510 of ERISA prohibits employment actions taken with the specific intent of interfering with an employee’s ERISA benefits. Section 510, however, generally does not apply when the loss of benefits is a consequence of, but not a motivating factor behind, a termination of employment. There are lots of reasons why an employer may not want smokers in the workplace – the odor and the frequent smoke breaks are two reasons in addition to the added health costs. Moreover, the employee is not being hired because of an intent to interfere with health benefits, but the loss of benefits is coincident to the loss of employment. In other words, I think this claim has some sex appeal to it, but ultimately will fail on its merits.

3. Privacy: Ohio has no law the specifically protects employees in their private, off-duty conduct. For the same reasons that drug testing is legal, smoking inquiries should also be legal. The remedy for an employee who does not want to answer questions about smoking habits, or have a smoking panel included in a workplace drug test, is to look for employment elsewhere.

I think there should be little risk in enacting a workplace smoke-out, but these legal theories are untested. For small and mid-sized businesses then, the question becomes if you want to be the business that get such a policy challenged. There is nothing wrong with taking aggressive HR positions and testing the bounds of permissible policies. Make no mistake, though, it is not a questions of if a terminated employee will challenge such a policy, but when, and you better be prepared to defend the policy in court. In other words, as a small or medium-sized employer, are you better off taking a risk and implementing even a relatively safe policy such as an employee smoking ban, or letting larger, richer businesses test the bounds of the law and follow their lead when a court upholds the policy as lawful?

WIRTW #53

In honor of my beloved Phillies first World Series appearance in 25 years, I’m starting this week’s roster with a couple of sports-related posts. The HR Capitalist writes on the culture of losing, and the Trade Secrets Blog asks if Brett Favre misappropriated trade secrets when he left the Packers.

Work Matters discusses workplace vulgarity.

Case in Point picks up on the concept of the bulletproof employee in the context of a request for FMLA leave.

The Connecticut Employment Law Blog suggests that we look at the Presidential candidates’ resumes to help decide who to vote for.

Staying on the topic of politics, Suits in the Workplace gives some insight on the legality of discussing politics at work.

Bob Sutton takes the position that performance evaluations are broken and need to discarded, or at least reinvented and replaced.

World of Work and HR Observations both comment on the implications of mis-classifying an employee as and independent contractor.

Legalethics.com reports on a default judgment entered against a company for e-discovery violations and the destruction of evidence.

BLR’s HR Daily Advisor tells that employees cannot take the 5th in workplace investigations.

Until next week, “Why can’t us?” Go Phils!

Is administrative exhaustion a statutory or jurisdictional requirement?

It is axiomatic that a plaintiff must file a charge with the EEOC before filing a complaint alleging discrimination in federal court, and that the EEOC charge must contain a written statement sufficiently precise to identify the parties, to describe generally the action or practices complained of, and identify the specific type of discrimination alleged. Allen v. Highlands Hosp. (6th Cir. 10/21/08), which I discussed yesterday, may alter this conventional wisdom in a significant way. It held that exhaustion is a statutory element of a plaintiff’s discrimination claim, but not a jurisdictional requirement to filing suit.

In Allen, the plaintiffs’ EEOC charges alleged age discrimination, but not the specific disparate impact theory pursued in the case. The Hospital argued that the disparate-impact claim should be dismissed because the plaintiffs failed to exhaust their EEOC administrative remedies, and that identifying the specific claim of discrimination before the EEOC with sufficient precision is a jurisdictional prerequisite to maintaining that claim in federal court.

The 6th Circuit overturned its prior precedent and disregarded the employer’s argument. Six years ago, in Weigel v. Baptist Hosp. of E. Tenn. (6th Cir. 7/15/02), the 6th Circuit held that “federal courts do not have subject matter jurisdiction to hear [ADEA] claims unless the claimant explicitly files the claim in an EEOC charge or the claim can be reasonably expected to grow out of the EEOC charge.” In Allen, however, the court reversed court and held “that although administrative exhaustion is still a statutory prerequisite to maintaining claims brought under the ADEA, the prerequisite does not state a limitation on federal courts’ subject matter jurisdiction over such claims.”

The distinction between a jurisdictional and statutory requirement is significant. A jurisdictional requirement would serve as an absolute bar to any plaintiff pursuing a claim without exhaustion. By making this requirement statutory, the 6th Circuit makes available arguments such as equitable tolling, which would enable a plaintiff to stay in federal court even if the charge was filed late.

Practically, this ruling should have a minimal effect on discrimination claims in Ohio. Ohio’s state employment discrimination statute has no exhaustion requirement at all. Under Ohio Rev. Code 4112.99, an aggrieved employee can proceed directly to court without first filing any charge whatsoever with any administrative agency. Thus, in Ohio discrimination claims, exhaustion rarely becomes an issue. Where this decision may have some effect is in age discrimination claims. Age claims under Ohio law are subject to a short 180-day statute of limitations, as compared to all other forms of employment discrimination, which have a six-year filing period. An employee, however, has 300 days to file an age discrimination charge with the EEOC. For an employee who misses the shorter 180-day filing period under 4112.99, an EEOC charge and later federal lawsuit under the ADEA is always an option. Thus, this decision could impact those employees who miss the relatively short state statute and have to go the EEOC for relief to enable a federal court filing under the ADEA.

Cost cutting does not necessarily equate to age discrimination

Layoffs have become all the rage. Just yesterday, one of Cleveland’s larger employers, National City Bank, announced that it will be cutting 4,000 employees nationwide. Often, when companies look to cut costs, they will shed more senior employees in favor of hiring less costly employees, who are often, but not necessarily, younger. This strategy is exactly what Highlands Hospital Corp. employed that resulted in an age discrimination claim by two terminated employees. In Allen v. Highlands Hosp. (6th Cir. 10/21/08), the 6th Circuit reaffirmed that a plaintiff cannot support an age discrimination disparate impact claim by simply relying upon a general policy or practice, but must isolate and identify a specific employment practice that disproportionately impacts employees who are at least 40 years old.

Jo Ann Allen (age 63) and Debra Slone (age 53) were both employees of Highlands Hospital. The hospital’s CEO, Harold Warman, decided to terminate both of them for violating its patient privacy policy. Specifically, Allen and Slone removed the x-rays of Allen’s granddaughter without the patient’s written permission and signed a backdated documents to try to cover their tracks.

Allen and Slone sued the hospital for age discrimination. Among other claims, they alleged that Warman’s cost-cutting measures had a disparate impact on their age. Warman had been systematically terminating employees based on seniority to facilitate the hiring of new, less costly employees.

Contrary to the disparate impact claim, the statistics showed that Warman’s program did not necessarily disproportionately affect older employees at the hospital:

Date	Total # of Employees	Employees Age 40 and Older	Employees Younger than Age 40
July 1998	672	273	399
Dec. 2002	488	253	235
Dec. 2004	530	267	263

 

In July 1998, 40% of the hospital’s total employees, including Allen and Slone, were age 40 or older. By December 2002, that ratio increased to 52%, which also included Allen and Slone. Two years later, that number had slightly decreased to just over 50%.

A disparate impact claim involves employment practices that are neutral on their face but in application fall more harshly on one group over another. Plaintiffs that allege disparate impact discrimination under the ADEA must isolate and identify a specific employment practice that is allegedly responsible for the statistical disparities. it is not sufficient for a plaintiff to simply point to a generalized policy that leads to a perceived impact.

Allen and Slone argued on that the effect of the policy demanding the termination of the highest paid employees had a illegal impact based on age. The Court found, however, that the plaintiffs failed to isolate and identify “a specific employment practice that disproportionately impacts employees who are at least 40 years old”:

As we have already explained, the plaintiffs have at best alleged that HHC desired to reduce costs associated with its highly paid workforce, including those costs associated with employees with greater seniority. But the plaintiffs have not established that this corporate desire evolved into an identifiable practice that disproportionately harms workers who are at least 40 years old. Because Allen and Slone have simply “point[ed] to a generalized policy,” as opposed to specific practice, they have therefore failed to raise a genuine question of material fact with respect to their disparate impact claim.

Coupled with the compelling statistical evidence, the appellate court affirmed the district court’s dismissal of the age discrimination claim.

Disparate impact claims are much more seldom litigated than disparate treatment claims. Because it is likely that mass layoffs will increase as the health of the economy decreases, it is also likely that these types of claims will pick up in frequency. Because of the possibility of a disparate impact claim with a mass layoff, companies should consider conducting pre and post-layoff statistical analyses to ensure that otherwise neutral selection criteria do not unfair impact one group over another. A little planning can go a long way to preventing the type of lawsuit that plagued Highlands Hospital in this case.

[Thanks to Steve Sutton for sending this decision to me]

A labor & employment civics lesson

Today brings us two interesting posts detailing employment law issues to consider on election day. Michael Moore at the Pennsylvania Labor & Employment Blog and Dan Schwartz at the Connecticut Employment Law Blog both nicely summarize some of the key employment law issues that the next president might face.

If you are interested in a decidedly pro-business take on some of these issues, you should also take a look at website of the U.S. Chamber of Commerce, which has detailed information on a variety of workplace issues, including:

• Equal Employment Opportunity
• Absence Abuse and Medical Leave
• Paid Family and Medical Leave
• The Employee Free Choice Act

As we consider some of the more controversial of these initiatives (such as the Employee Free Choice Act), it’s important to remember that a President is but one piece in a complex governmental puzzle. Currently, if you count the two Independent Senators that caucus with the Democrats, the Dems hold a slim 51-49 lead in the Senate. Assuming that Senators Lieberman and Sanders continue to caucus on the left, nine current seats would have to change from red to blue for the Dems to reach the magic number of 60. Recent polling data suggest that the Democrats will certainly get closer to 60 than they are now, but it should prove very difficult to get over that hump.

Why is 60 such an important number? Because that is number needed to make the Democratic majority filibuster-proof. A filibuster is where a senator, or a series of senators, speak for as long as they want and on any topic they choose on the Senate floor. By way of example, Strom Thurmond once spoke for more than 24 straight hours to try to block passage of the Civil Rights Act of 1957. Practically, a filibuster permits one or more senators to derail a vote indefinitely, unless a supermajority (that magic number, 60) invokes cloture, which brings the filibuster to an end.

Because a filibuster poses such a huge risk, its threat is usually enough to derail controversial legislation without the support of at least 60 senators. Thus, if the Democrats don’t reach 60 (or even 58, depending on the inclinations of the two Independents), a Republican minority should be able to block controversial issues such as the Employee Free Choice Act.

On election night, while we watch the states change to red or blue on the electoral college map, it is equally important to follow some of the close Senate races. Without understanding both, one cannot truly decipher what the employment law landscape will look like after January 20, 2009.

Do you know? Ohio’s wage payment statute

Do you know? Ohio has a specific law that details how companies are to pay their employees. O.R.C. 4113.15 provides, in relevant part:

(A) Every individual, firm, partnership, association, or corporation doing business in this state shall, on or before the first day of each month, pay all its employees the wages earned by them during the first half of the preceding month ending with the fifteenth day thereof, and shall, on or before the fifteenth day of each month, pay such employees the wages earned by them during the last half of the preceding calendar month….

(B) Where wages remain unpaid for thirty days beyond the regularly scheduled payday or, in the case where no regularly scheduled payday is applicable, for sixty days beyond the filing by the employee of a claim or for sixty days beyond the date of the agreement, award, or other act making wages payable and no contest court order or dispute of any wage claim including the assertion of a counterclaim exists accounting for nonpayment, the employer, in addition, as liquidated damages, is liable to the employee in an amount equal to six per cent of the amount of the claim still unpaid and not in contest or disputed or two hundred dollars, whichever is greater….

(D) As used in this section:

(1) “Wage” means the net amount of money payable to an employee, including any guaranteed pay or reimbursement for expenses, less any federal, state, or local taxes withheld; any deductions made pursuant to a written agreement for the purpose of providing the employee with any fringe benefits; and any employee authorized deduction.

In plain English, businesses have to pay their employees at least two time a month, at least as frequently on the 1st and 15th of each month. Of course, employers can choose to pay more frequently, but any less often would violate the statute.

If wages go unpaid for 30 days past a regularly scheduled payday, or 60 days if no payday applies (such as a vacation or bonus payout), the employer could be held liable for liquidated damages of the greater of 6% of the unpaid wages or $200, provided that there is not a legitimate dispute over the payment of the wages. For example, if an employee claims that they are owed unused vacation days on termination, or claims that a bonus is owed, and an employer disputes that claim in good faith (based on a policy, for example), the liquidated damages provision would not apply.

This law does specifically speak to the handling of unpaid wages on termination. One reasonable reading of the statute would make them due on the first regularly scheduled payday following the last day of employment. Another reasonable reading would make them due within 60 days after the last date of employment. The more prudent interpretation of the statute would suggest that employers make a habit of including final paychecks with the next regular payroll. However, under 4113.15(B), the employer will not incur any potential liability until 30 days after that next payroll.

Comment about employee’s job security leads to reversal of summary judgment in FMLA retaliation case

A maintenance technician with a history of back problems suffers from unpredictable episodes of back pain that temporarily rendered him unable to perform his job duties. As a result, his employer granted him intermittent FMLA leave. The problem worsened to the point that he needed FMLA leave of more significant duration. Prior to taking the leave, the employee claims that his employer’s HR Director told him “if I took that FMLA for that period of time, there would not be a job waiting for me, when I returned.” Shortly after the FMLA leave began, the company experienced a layoff, which required the company to let go one maintenance technician. The employee on FMLA leave was the least senior maintenance tech and was selected for the layoff.

He sues for FMLA retaliation, but the district court grants the employer’s motion for summary judgment and dismisses the claim. In Daugherty v. Sajar Plastics (6th Cir. 10/16/08), the 6th Circuit reversed the grant of summary judgment on the FMLA retaliation claim, finding that the HR Director’s comment was direct evidence of the company’s retaliatory intent:

Clearly, this unambiguous comment, which we must take as true at the summary judgment stage, constitutes direct evidence that Daugherty’s termination was motivated by unlawful, discriminatory animus. Alexander was Daugherty’s immediate supervisor and a decision maker at Sajar. A fact finder would not be required to draw any inferences to determine that Alexander retaliated against Daugherty when Alexander explicitly threatened such retaliation and the threat – that Daugherty would not have a job waiting for him when he returned from leave – was realized….

For its part, the company had valid reasons to lay-off and not recall Daugherty: he was the least senior employee in a bloated department, and he refused to provide medical certification when Sajar Plastics tried to recall him a few months later. One comment, however, from a person in a position of authority over Daugherty’s job, casts enough doubt on the company’s motive to cloud the legitimacy of its justifications and create an issue for trial. Let this case serve a cautionary story – be very careful in the words you select whenever dealing with anyone remotely engaging in protected activity.

WIRTW #52

Happy 1-year anniversary to my first attempt at a weekly column, What I'm Reading This Week. Thanks to all of my fellow bloggers who have given me ample links to post each and every week. On to this week's batch of links for everyone's betterment.

Work Matters reminds everyone to beware the dreaded "cc:" on company e-mails.

The Non-Compete and Restrictive Covenants Blog gives some practical information of the dangers in trying to enforce a non-compete agreement.

Wage & Hour - Developments & Highlights reports on the spate of class action lawsuits affecting the financial services industry, as if that sector needs another worry.

The steady and reliable Connecticut Employment Law Blog digests the new federal rules on attorney-client privilege.

World of Work discusses pending legislation that could become a reality after January, the Employee Misclassification Prevention Act.

The Pennsylvania Labor & Employment Blog, meanwhile, discusses another employee-friendly piece of legislation, the RESPECT Act.

The FMLA Blog reports on a case that I hope is an anomaly, in which an employer was put on notice of an employee's need for FMLA leave because she was crying.

The HR Lawyer's Blog warns against the dangers of snooping on employees' private e-mails and other electronic information.

The Word points out the distinction between gender differences and gender discrimination.

Old news is bad news for businesses: Labor & Employment cases remain most popular targets

Fulbright & Jaworski has published its annual report on litigation trends, and the news is scary for American businesses. Labor and employment cases remain the most numerous type of case pending in 2008. 47% of U.S. companies surveyed reported being sued in a labor or employment case. When you focus just on the Midwest, the number jumps to 54%.

Other highlights of interest to employers:

• Wage-and-hour lawsuits spiked 19%.
• After wage-and-hour, companies saw big increases in five other areas of workplace litigation: discrimination, employee privacy, ERISA, disability claims, and age discrimination.
• Of all of the different types of employment litigation, U.S. companies singled out race discrimination cases as creating the highest financial exposure, followed by sex discrimination, wage-and-hour violations, age claims, harassment, retaliation, disability, non-compete cases, and FMLA violations.

There are a lot of lessons that businesses can draw from these findings. I'd like to focus on two. First, especially in a down economy, it is naive for employers to think that claims brought by employees will decrease or even flat-line in 2009. If anything, these claims will increase even more.

There is no way to prevent yourself from being sued. But, there is one surefire way to limit the risk, which brings me to my second lesson -- training and preventative measures are key. Has your handbook recently been reviewed and updated? Have you done harassment and EEO training in the past two years? Are you supervisors and managers up to date on how to effectively discipline employees? Will your myriad wage and hour practices pass legal muster? If you answer "no" to even one of these questions, your company is at risk in becoming a stat in Fulbright's 2009 survey.