Employee disloyalty and Facebook

Dan Leone was a lifelong fan of the Philadelphia Eagles. One could  only imagine that when his favorite team hired him as a game-day stadium employee, it was his dream job. Last week, the Denver Broncos signed free agent safety Brian Dawkins, the team’s emotional leader and one of the franchise’s historical great players. Upset with the Eagles’s decision not to resign Dawkins, Leone chose to vent on his Facebook page, updating his status: “Dan is [expletive] devastated about Dawkins signing with Denver. . .Dam Eagles R Retarted!!"

The Philadelphia Inquirer reports on the team’s termination of Leone:

Less than two days after posting the Dawkins remarks, Leone said, he was contacted by Leonard Bonacci, the team's director of event operations. According to Leone, Bonacci said they needed to talk about Leone's Facebook page, and Leone agreed. Leone - who deleted the comment - figured that the two would sit down and that he could apologize to Bonacci in person. But Leone said Bonacci never got back to him after that.

Two days later, Leone said, he received a call from Rachel Vitagliano, the team's guest services manager. Leone said she fired him over the phone. The conversation lasted less than 10 minutes.

No warning. No suspension. No face-to-face meeting. Just a quick call to tell Leone he'd been terminated.

All over the Internet, the Eagles are taking a beating for Leone’s. For example, according to an ESPN.com poll, 80.5% believe the Eagles were not justified in firing Leone.

Let me take the other side. It may seem heavy-handed for the Eagles to take a stand against a part-time seasonal employee. If an employer wants to effectively enforce policy, it has to do so across the board. The Eagles are sending the message that it will not tolerate its employees publicly making negative statements about the organization. While some will consider it unfair for this message to be sent at Leone’s expense, this employer will be better served the next time, when it is a high level front office employee instead of a part-time stadium employee. In employment law, consistency is key, and to be consistent, someone always has to be first.

Do you know? will return tomorrow, with a post on banning guns inside and outside the workplace.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Ohio Supreme Court to decide workplace breastfeeding rights

A few months ago I wrote on the lack of clarity under Ohio law on the rights of breastfeeding rights of moms at work. This week, the Ohio Supreme Court will take up this issue. It will hear the appeal of LaNisa Allen, a former employee of Totes/Isotoner, who sued the company for gender discrimination after it fired her for taking unscheduled restroom breaks to pump breast milk.

According to the Dayton Daily News:

She said other Totes workers weren’t required to seek permission for extra restroom breaks to relieve discomfort from menstrual symptoms or the need for frequent urination.

Allen’s attorneys say it’s gender discrimination because she was fired to relieve discomfort due to lactation, a condition exclusive to women.

Totes, which prevailed against Allen in a 2008 trial and a subsequent appeal, argues that the company didn’t discriminate because breastfeeding doesn’t legally constitute an illness or medical condition. The company says there is legal precedent showing that employers don’t have to give extra breaks to breastfeeding women.

This case should hinge on the answers to these questions: Are men allowed to take a break when nature calls? Has Totes ever fired a male employee for going to the bathroom? What about the treatment of employees who take smoke breaks during the work day?

A rule against breaks for lactation will, by its very nature, only apply to women. If Totes does not similarly discipline non-lactating employees who take breaks of similar duration during the work day for other reasons, it should have a hard time justifying Allen’s termination.

Before you institute a policy prohibiting pumping at work, or terminate a lactating employee, consider how you’ve treated other employees’ breaks during the work day. If you can’t find a consistent pattern of discipline or termination of similar non-lactating employees, you should reconsider the decision.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #69

Social networking (whether blogging, Facebook, LinkedIn, Twitter, or the myriad other available options) remains a hot topic for HR departments everywhere. My fellow bloggers have lots of good information on this topic this week:

• The Connecticut Employment Law Blog, on how to properly manage employees’ use of Twitter.

• The Delaware Employment Law Blog, on using Facebook profiles in litigation against former employees.

• Evil HR Lady, on the pluses and minuses of blogging for employees.

• California Workforce Resource Blog, on the value of Googling job applicants.

This week brought us the new regulations on the Genetic Information Non-Discrimination Act, which the LawMemo Employment Law Blog conveniently links for everyone.

The Washington Labor & Employment Wire reports on the introduction of the Arbitration Fairness Act of 2009, which would invalidate all pre-dispute arbitration agreements mandating the arbitration of any employment or civil rights disputes.

The Business of Management reminds employers to be diligent with departing employees’ proprietary information.

HR World gives some information on how to handle hourly employees whose shifts overlap this weekend’s time change.

This week’s review ends with some good news: Where Great Workplaces Start, the blog of the Employers Resource Council, reports on some recent job creation numbers for Ohio.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Employee Free Choice Act to be Introduced in House next week; President vows support

ShopFloor.org, the blog of the National Association of Manufacturers, is reporting that the Employee Free Choice Act will be introduced next Monday, March 9, in the House of Representatives. This news is not that surprising. The EFCA will likely pass that half of Congress, where the Democrats enjoy a sizeable majority and the Republican minority cannot filibuster. The real fight, which could be unlike anything we have seen in a generation, will be in the Senate, where the EFCA’s supporters will face a fierce battle to reach the 60 votes they need to ensure its passage.

Until this week, the White House has been quiet on this issue. On Tuesday, in pre-recorded remarks to the AFL-CIO Executive Council, President Obama gave his support for the EFCA:

I want to repeat something that those of you who joined us for the Task Force announcement heard me say: I do not view the labor movement as part of the problem. To me, and to my administration, labor unions are a big part of the solution. We need to level the playing field for workers and the unions that represent their interests – because we cannot have a strong middle class without a strong labor movement….

And as we confront this crisis and work to provide health care to every American, rebuild our nation’s infrastructure, move toward a clean energy economy, and pass the Employee Free Choice Act, I want you to know that you will always have a seat at the table.

This language can be viewed one of two ways – pandering remarks to a partisan crowd, or a promise to pass and sign the legislation. Given the President’s words on this issue just prior to his inauguration, the truth is probably somewhere in the middle:

Regardless, there are certain steps companies should be taking now to prepare for the EFCA:

1. Foster open employee communication. Do what you can to give employees a reason not to look outside the workplace for a voice to air their concerns.

2. Train supervisors in how to deal with employee issues. Fairness, evenhandedness, and responsiveness are crucial in preventing unions from gaining a foothold.

3. Implement a no-solicitation policy to minimize union’s access to employees.

[Hat tip: Pennsylvania Labor & Employment Blog]

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

How not to fire an employee

Today, I’m going to tell you a little story. It’s about a stay-at-home mom who works part-time from home. She’s worked for the same company for over a year, and performed well. Every three months, the employer would renew her tenure for another three-month period. Recently, the mom asked for and received time some time off to deal with a medical issue of one of her children. While she was out on leave, she received an email from her manager telling her that her position was being eliminated and that her services would no longer be needed.

The legal issues in this vignette are relatively easy to spot: ADA (based on associational disability), FMLA (if she worked enough hours for the company), and GINA (depending on the nature of her child’s medical condition and whether her employer is in possession of genetic information).

This story, though, raises a larger issue. All legal issues aside, is this employee more likely or less to sue following her termination? According to the Settle It Now Negotiation Blog, there are four main reasons why an employee might file a lawsuit:

1. Feelings of unfair, insensitive treatment at the time of termination.
2. Lack of notice of the termination.
3. Certain groups – women and minorities - are especially likely to sue.
4. Perception of poor on-the-job treatment.

Our story violates at least the first three of these rules.

This employer, however, made one key mistake that helps fan the flames of bad feelings and could lead to a lawsuit – communicating the termination by email. Email is cold and informal, and should never be used to fire an employee.

The moral of this story – in preventing lawsuits by terminated employees, how the employee is fired is as important, if not more important, that why the employee was fired.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Do you know? Ohio law protects employers that give negative job references

There are more people looking for work than at any time in the last 25 years. If you happen to be one of the companies hiring at the moment, you will likely have more applicants than you will know what to do with. How do you sift the good candidates from the bad, those who were laid off through no fault of their own from those who were terminated for poor performance? References are one tool, yet many employers seldom provide them out of a mistaken fear that they can be sued for giving a poor one.

Do you know? Ohio has a specific law, R.C. 4113.71, that protects employers that give negative job references. One employer can give another employer information about an employee’s job performance without fear of liability, unless:

1. the former employer knows the information is false, or makes the disclosure with the intent to mislead, in bad faith, or with a malicious purpose, or

2. the information is provided in violation of the employment discrimination laws (for example, an employer gives good references to white employees and bad references to black employees).

Thus, the only catch in giving employment references is that the information must be truthful and non-discriminatory. Business should not fear accurately responding to inquiries from other business about past employees. The next time you are asked for a reference on a former employee, consider responding accurately and honestly. Who knows, you might get the same courtesy in return.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

A textbook example in handling a problem employee

Every now and then, a case comes along that gives HR departments everywhere a good reminder that a few extra steps in dealing with a problem employee can go a long way in defeating a later lawsuit. Kiraly v. Office Max (2/26/09), out of Cuyahoga County, is just such a case.

Imagine you have what you can only describe as a difficult employee. He refuses to follow work rules, and when his supervisor presses him on why it is important for rules to be followed, he calls the police and claims harassment. Then, out of the blue, he simply stops coming to work. In a phone call with HR, he blames a medical condition. In response, the employer asks for medical documentation, which it does not receive. It then extends two more times the deadline for the employee to document his medical absences. When the employee misses both deadlines, the employer fires him for job abandonment. 

At any step in this process, the employer would have had good reason to fire Kiraly – for insubordination, failing to follow policies, or absenteeism. Yet, this employer’s HR department wisely gave this employee every possible chance to correct his deficiencies. Maybe Office Max saw the lawsuit on the wall and wanted to give Kiraly every benefit of every doubt. Maybe it had good employment lawyers orchestrating a rock-solid defense behind the scenes. Either way, how Office Max handled Karaly’s termination left the court with no doubt that discrimination did not motivate this employer’s decision:

We find nothing to refute Office Max’s conclusion that Kiraly had abandoned his position with the company. The record indicates that it is standard practice for Office Max’s store associates to wear the wireless headset while working. The record also contains Kiraly’s signed acknowledgment of this practice.

The record further indicates that after Kiraly’s refusal to wear the headset and his subsequent absences, the company gave him three extensions to produce medical documentation to excuse these absences. Finally, the record indicates that despite the three extensions, neither Kiraly nor his attorney produced the requested documentation. 

The record fails to establish that Kiraly’s employment with Office Max ended because of national origin discrimination.

The next time you are faced with a problem employee, consider if you are positioned to put on a defense similar to Office Max. If you fear is that the employee will suddenly see the light and you will be stuck with him, usually, once a problem, always a problem. The odds are that he will fail in whatever corrective path you send him down, and in the process will create a solid defense to any later claim he might bring.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #68

The Department of Labor and the IRS have published the various information and forms necessary to carry out the new COBRA subsidy. The Pennsylvania Labor & Employment Lawyer Blog and World of Work has the details.

The Connecticut Employment Law Blog has information on whistleblower protection provisions of the economic stimulus law.

The Delaware Employment Law Blog reports on the various ways employers are using social networking sites.

The Business of Management draws a connection between falling girl scout cookie sales and prospects for the Employee Free Choice Act.

The Death By Email Blog gives some good examples on how not to quit a job.

Law.com, on the legal risks associated with mandatory furloughs to cut costs.

BLR’s HR Daily Advisor, on the importance on proactive wage & hour audits.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

EEOC to issue proposed GINA regulations

By week’s end the EEOC will issue proposed regulations implementing the employment provisions of the Genetic Information Non-Discrimination Act (GINA). The EEOC announced the regulations at a public meeting yesterday. Once the regulations are published, a 60-day period will begin in which the EEOC will accept public comment on the regulations.

Generally, the regulations provide guidance on GINA’s employment provisions, which prohibit employers from discharging, refusing to hire, or otherwise discriminating on the basis of genetic information, bar employers from intentionally acquiring genetic information about applicants and employees, and (3) impose confidentiality requirements on the handling of genetic information if it is acquired.

The Washington Labor & Employment Wire received an advance copy of the regulations, and gives some of the highlights:

• “Employee” is defined to cover current and former employees, and also applicants.

• Drug and alcohol tests are not considered “genetic tests” covered by the Act.

• Each of the six exceptions to the statutory sections prohibiting employers from acquiring genetic information are explained. Those exceptions are: (1) inadvertently obtained genetic information; (2) where the employer offers qualifying health or genetic services, such as a voluntary wellness program; (3) FMLA medical certifications; (4) commercially and publicly available documents; (5) monitoring of the effects of toxic substances in the workplace; and (6) DNA analyses for law enforcement purposes.

Notably, the EEOC is specifically asking for public comment on two issues that should be of particular interest to employers:

1. What constitutes “voluntary” with respect to an employer-sponsored wellness program? For example, if an employer ties smoking cessation therapy to lower employee health insurance costs, is the program voluntary? What if an employee enters drug treatment after a positive drug test?

2. What should be included in the “commercially and publicly available” exception, particularly with respect to blogs and social networking sites? Under this exception, an employer cannot research medical databases or court records for the purpose of obtaining genetic information. However, what if an employee undergoing cancer treatment writes a personal blog on the topic. Or, imagine a parent who belongs to a support group on Facebook for a child’s genetic condition. If an employer happens upon this information accidentally,it would seem unfair to penalize the employer for obtaining the information. It seems that the issue should hinge on what the employer does with the information after it is learned. Is it kept confidential? Is it used in making an employment decision about the employee?

Expect much more to be written about these regulations in the coming months as they are published and digested.

[Hat tip: Connecticut Employment Law Blog]

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

6th Circuit decides that the closeness of a relationship does not matter in “associational discrimination” claims

Last year, in Thompson v. North Am. Stainless the 6th Circuit recognized a claim under Title VII’s anti-retaliation provision for associational retaliation: “Title VII prohibit[s] employers from taking retaliatory action against employees not directly involved in protected activity, but who are so closely related to or associated with” employees who engage in protected activity(emphasis added). I remain critical of this standard for leaving open the issue of how close is close enough.

This week, in Barrett v. Whirlpool Corp. (6th Cir. 2/23/09), the same court was faced with another issue concerning the relationships between protected and unprotected employees. In Barrett, the Court decided that in claims of associational discrimination – that is, where one employee claims discrimination because of a relationship with protected employees – the degree of closeness between the employees simply does not matter. The only relevant issue is whether the employee is discriminated against because of his or her race:

If a plaintiff shows that 1) she was discriminated against at work 2) because she associated with members of a protected class, then the degree of the association is irrelevant…. The absence of a relationship outside of work should not immunize the conduct of harassers who target an employee because she associates with African-American co-workers. While one might expect the degree of an association to correlate with the likelihood of severe or pervasive discrimination on the basis of that association—for example, a nonprotected employee who is married to a protected individual may be more likely to experience associational harassment than one who is merely friends with a protected individual—that goes to the question of whether the plaintiff has established a hostile work environment, not whether he is eligible for the protections of Title VII in the first place.

The treatment of two different plaintiffs in this case illustrate how this standard works.

Lynette Barrett, Caucasian, was friends with African-American employees. Those African-American employees were targeted with what can only be described as offensive and inappropriate misconduct by other white employees – the n-word and other racial epithets, threats of violence, and racist jokes and graffiti. Barrett claimed that other white employees shunned her at work because of her friendship with African-American employees. She sued Whirlpool for harassment. Ultimately, Barrett lost on the merits of her claim. None of the offensive conduct was directed at her, and general snubbing does not support a harassment claim.

Treva Nickens, also Caucasian, was also friends with African-American employees and also witnessed offensive racial conduct at work. Unlike Barrett, however, Nickens had conduct directed specifically at her. After she complained to a supervisor, she was threatened with physical violence. She was also told on more than on occasion by different employees that she needed to stay with her own kind and was called a “nigger lover.” Like Barrett, the racist comments and jokes not directed at her did not support Nickens’s discrimination claim. However, more than Barrett, Nickens was the victim of direct harassment resulting from her associations with black employees - she received a threat of physical violence for reporting racist language and was subjected to a regular stream of offensive comments about her relationship with an African-American co-worker.

The Barrett case is a common sense application of the general rule in discrimination cases – was the individual treated differently because of his or [fill in the protected class]? Unlike Thompson, which went beyond the limits of the statute to create a claim, Barrett falls well within the bounds of what Title VII and the other employment discrimination statutes clearly protect. Moreover, the differing outcomes between Barrett and Nickens shows that this standard has teeth, and something more than a mere association is required to prove discrimination.

Maybe Microsoft is reading the blog

Yesterday I reported on Microsoft’s gaffe in overpaying severance to laid-off employees. Caught in a potential public relations maelstrom, Microsoft has relented. It issued the following statement yesterday:

Last week, 25 former Microsoft employees were informed that they were overpaid as a part of their severance payments from the company. This was a mistake on our part. We should have handled this situation in a more thoughtful manner. We are reaching out to those impacted to relay that we will not seek any payment from those individuals.

Cnet has the rest of the details.

Do you know? Continued health benefits under COBRA

Last week, the federal government mandated a 65% employer-sponsored subsidy of employees’ health insurance premiums under COBRA for those employees involuntarily severed from employment between September 1, 2008, and December 31, 2009.

Do you know? What is COBRA, who and what does it cover, and what does it require?

“COBRA” stands for the Consolidated Omnibus Budget Reconciliation Act of 1986. It covers employer-sponsored group health plans of businesses that employed at least 20 employees (both full-time and part-time) on more than 50% of its typical business days in the previous calendar year. COBRA only applies to group health plans. It does not cover other type of employer-sponsored plans, such as disability or life insurance plans.

It requires employers to offer continuation coverage to covered employees, their spouses, their former spouses, and their dependent children when group health coverage would otherwise be lost due to certain specific events. The following chart summarizes the various qualifying events under COBRA, which beneficiaries are eligible for continuation coverage, and for how long:

QUALIFYING EVENT	QUALIFIED BENEFICIARIES	MAX. PERIOD OF CONTINUATION COVERAGE
Termination for reasons other than gross misconduct) or reduction of hours of employment	Employee Spouse Dependent Child	18 months
Employee enrollment in Medicare	Spouse Dependent Child	36 months
Divorce or legal separation	Spouse Dependent Child	36 months
Death of employee	Spouse Dependent Child	36 months
Loss of “dependent child” status under the plan	Dependent Child	36 months

 

Employers may require individuals who elect continuation coverage to pay the full cost of the coverage, plus a 2% administrative charge.

When a qualifying event occurs, employers must provide the employee or other beneficiary a notice describing their rights under COBRA and a form under which they can elect whether to continue group health coverage under COBRA.

Note that Ohio has its own mini-COBRA law, which requires the extension of COBRA benefits for 6 months to employers of as few as 10 employees.

Microsoft gaffe illustrates importance of administration of severance programs

For today’s worker, there is perhaps nothing more terrifying than being told that you are being laid off. The companies that can soften the blow with severance often do so. Imagine, though, that you have just been laid off, and receive in the mail from your former employer a letter telling you that your severance pay was miscalculated and that you have to return some of it. That is exactly what happened last week to a group of employees recently laid off by Microsoft.

The letters advise of the administrative error and the severance overpayment, and request repayment of the overage within 14 days. The letter does not spell out what consequences one could suffer by ignoring the request and keeping the extra cash. The legal fees in brining a lawsuit to collect each overpayment probably outweigh the amounts of the overpayments by several times, thus making legal action against the individuals unlikely. But, one never knows.

What a nightmare for Microsoft. It is unknown how many of the 1,400 laid-off employee were overpaid. Assume, however, that every employee was overpaid two weeks at an average salary of $1,000 per week. That mistakes would equal a potential $2.8M nut. The question for Microsoft is whether that amount of money (whatever it is) is worth the awful publicity that is being generated by the appearance of kicking these employees when they are down.

So, what lessons can other employers learn from Microsoft’s mistake?

1. Layoffs are time and paper intensive. They are often put together quickly under tremendous time constraints. They are also paperwork intensive. Decisions need to be made who to lay off, how and when to communicate the layoff, whether the layoff appears discriminatory by the demographics of the included employees, and whether to pay severance and if so how much. If releases are sought they must be drafted, and, very importantly, for workers over 40, OWBPA disclosures must also be drafted. In other words, layoffs are prone to mistakes. Take the time to make sure they are done properly in every aspect. It is much easier to do a layoff correctly than undo it when a mistake is made.

2. Especially in 2009, layoffs are very sensitive for employees. They must be delicately handled. How employees are told the news goes a long way in determining whether they will sign a release or go talk to a lawyer.

3. If a mistake is made, equal care should be taken in how to communicate that mistake to employees. If you ask for reimbursement of an overpayment, it is not a bad idea to actually show how the overpayment was calculated. Think about it. Are you more likely to send a check in response to a letter that simply says we overpaid you, or explains with detail how the overpayment happened?

My advice to Microsoft would be simple – you made the mistake, and you asked for the money back. Even if nary and employee reimburses you, I would chalk this mistake up to a lesson learned in how to handle layoffs and drop the issue.

[Hat tip: The Boy Genius Report]

WIRTW #67

Fellow blogger Teri Rasmussen, at her Ohio Practical Business Law blog, has compiled an exhaustive list of every Ohio-based legal blog. Thank you, Teri, for considering my little project one of the top 3 legal blogs in our state. The compliment is appreciated.

To follow up my post from yesterday on employers’ federal court successes in discrimination cases, the California Employment Law Report wonders if this trend will lead to the filing of more wage and hour cases, where employees enjoy better success.

Along the same vein, Gruntled Employees gives employers the lowdown on how to lose a wage and hour case.

Meanwhile, the Connecticut Employment Law Blog gives some suggestions on how to limit liability risks from layoffs.

The Delaware Employment Law Blog examines layoffs from the perspective of pregnant employees.

The Business of Management tries to put a cost on smoking cessation programs.

The Trade Secrets Blog discusses how many dollars trade secret misappropriations cost businesses last year.

Today’s Workplace talks about workplace harassment of teenagers.

Washington D.C. Employment Lawyer Update provides information on the Family-Friendly Workplace Act, which would amend the Fair Labor Standards Act to allow private employers to award comp time in lieu of overtime. For more on this issue under the current wage and hour laws, see Do you know? “Comp” time in lieu of overtime.

Finally, Death by Email offers some pointers on how to use Facebook and other social networking sites. The advice – consider the following three questions before posting something on Facebook: “Would you be upset if your mother saw it? Would you be upset if the most nefarious person you ever heard about saw it? Would you be upset if it was on the front page of USA TODAY?” This advice hold true for anything you write, whether it’s posted online, in an email, or in an internal document. If you wouldn’t want it read by a judge, read to a jury, or printed on the front page of the newspaper, don’t commit it to writing.

Documentation is key to dismissal of discrimination cases

While the laws under which employees can bring lawsuits are expanding, employees’ successes continue to retract, at least in federal court. Consider the following statistics, culled from an article in today’s Wall Street Journal on employers’ degree of success in federal court cases.

• From 1979 through 2006, federal plaintiffs won 15% of employment discrimination cases, as compared to a 51% success rate in all other civil cases.

• 12.5% of federal employment discrimination cases are terminated via summary judgment, with employers filing 90% of those motions. By comparison, only 3% of contract cases and 1.7% of personal-injury and property damages cases were summarily dismissed.

The explanation of U.S. District Court Judge David Hittner as to why employers enjoy this level of success in employment cases is very insightful: “Companies often have an extensive record that this [employee] was not doing their job well and that is the reason for the termination.”

Employers should heed Judge Hittner’s words. Success in discrimination cases is related to the employer’s ability to prove that it had a legitimate reason for the employment action taken. That reason will be much more believable, and much less likely to be criticized, if it is well-documented. Courts often remind us that they do not sit as super-personnel departments and will not second-guess employers’ reasoned business decisions. By having a historical paper trail to support all employment decisions, employers have taken the crucial first step toward the dismissal of any later challenges.

Five action points when your company is sued

Over the course of the past years, I’ve written a lot about best practices to prevent employee lawsuits. The fact remains, though, that no matter how good a company’s HR practices are, and no matter how proactive a company is with its legal compliance, a certain percentage of terminations and other employment decisions will turn into lawsuits. It is the simple the cost of doing business in 2009, especially as the economy worsens and more employees look to judges and juries for assistance.

The following are five things a company should be actively thinking about when it receives the inevitable lawsuit:

1. Relevant documents should be identified and preserved. Employment lawsuits are not as document intensive and some other disputes in which businesses are involved. Nonetheless, the documents are crucial. They provide a roadmap to the justification for the termination or other employment action, and the reasonableness of the employer’s actions. Key documents (personnel files, handbooks, other policies, investigative reports, emails, and other communications) should be gathered and set aside. Also, a litigation hold should be put in place to ensure that no relevant documents are accidentally destroyed.

2. Under Ohio’s discrimination law, managers and supervisors can be personally liable for their own individual acts of discrimination. Often, they are sued in their individual capacity along with the company. Potential conflicts of interest among any individual defendants and the company must be evaluated very early in the case to ensure that conflicts of interest do no exist. If they do, one attorney cannot represent all defendants. If conflicts are not identified until well into the case, the lawyer may have to withdraw, which could irreparably damage the defense.

3. Fight the urge to take it personally. When an ex-employee claims discrimination, companies can lose sight of the fact that lawsuits are part of doing business. Employer often shift into attack mode because they are accused of being bigots. There is a huge difference between aggressively defending a case and attacking for the sake of attacking. The former is smart strategy; the latter often leads to greater costs by losing focus. It also risks taking action that could be viewed as retaliatory and bring further claims. Extra care must be taken when the plaintiff is current employee, as opposed to an ex-employee.

4. If your company has Employment Practices Liability Insurance, timely file a claim with the insurer. If you have purchased a rider that permits you to select counsel, make sure you enforce that right. If you have not purchased that protection, consider having a candid conversation with the insurance company about the counsel they will choose for you.

5. Hire experienced employment counsel to defend the claim. Employment law is highly specialized. Retaining counsel that knows that ins and outs of this area of law is the best way to keep costs down as much as possible, while at the same time doing everything possible to aggressively defend the company.

Do you know? Agreements cannot waive future claims

Do you know? One of the mistakes that I see made over and over again in agreements I review is waivers of future claims. Take, for example, Hamilton v. General Electric Co. (6th Cir. 2/12/09), in which an employee had signed a “last chance agreement.” In exchange for reinstatement following an earlier termination, the employee agreed that he would not file legal action over any future termination. The 6th Circuit found that promise unenforceable because it amounted to a release of future claims.

For a waiver and release of claims to be valid, it only can release claims based on past conduct, and not future claims: As explained by the 6th Circuit in Adams v. Philip Morris, Inc.:

An employer cannot purchase a license to discriminate. An employment agreement that attempts to settle prospective claims of discrimination for job applicants or current employees may violate public policy … unless there were continuing or future effects of past discrimination, or unless the parties contemplated an unequivocal, complete and final dissolution.

If you are using any agreements for employees (such as severance agreements in connection with layoffs), be careful to ensure that they are not seeking to waiver any claims based on future conduct.

Stimulus Bill to provide for subsidized COBRA coverage for laid-off employees

COBRA provides workers and their families who lose health benefits the right to choose to continue group health benefits provided by their group health plan for up to 18 months. Historically, the cost of COBRA continuation coverage is borne 100% by the employee. Tomorrow in Denver, President Obama will sign into law the American Recovery and Reinvestment Bill of 2009, commonly known as the economic stimulus bill. This law will alter employers’ COBRA obligations by providing for subsidized COBRA premiums by employers.

The law will provide for a 65% subsidy of certain employees’ COBRA premiums for nine months. The subsidy will be available to any employee involuntarily terminated (except those severed because of gross misconduct, to whom COBRA does not apply) from employment between September 1, 2008, and December 31, 2009. The employer will pay 65% of the COBRA coverage premium, which would then be applied as a credit against payroll taxes. The employee would remain responsible for the other 35% of the COBRA premiums. Employers will have to amend their COBRA notices to include information about the availability of this subsidy.

Importantly, this subsidy is to be applied retroactively. Employees who were involuntarily terminated on or after September 1, 2008, but before the enactment of the stimulus bill, and who did not previously elect COBRA coverage, must be given an additional 60-day window to elect COBRA and benefit from the subsidy. If an employee elects COBRA after receiving the new notice, coverage would begin on February 17, not on the date of the actual termination.

Companies with 20 or more employees (COBRA’s coverage limit) must heed these changes. COBRA notices need to be amended for the remainder of 2009, and any employee involuntarily severed between September 1, 2008, and February 17, 2009, will have to be re-noticed to advise of the subsidy.

WIRTW #66

Overlawyered brings us the story of the week. File this one under what goes around comes around. A California attorney settled a consumer class action via the payment of gift cards for the class members. Since the class was being paid by gift cards, the court thought it was only fair that the lawyer be paid his fees the same way, 12,500 ten-dollar gift cards.

Gruntled Employees ticks off eight ways for a company to lose a non-compete case. Number 8 is the best tip, and its lesson translates to any employment case, not just non-compete cases:

Focus on the law instead of on the story. This is the most important lesson. Lawyers often fall in love with their legal arguments. But noncompete cases are equity cases, not law cases. To be sure, that distinction means less than it did a hundred years ago. But if you have a brilliant, clever, technical legal argument and an unsympathetic story, you are way more likely to lose.

Did you know that part of the Economic Stimulus Package will require employers to pay at least half of the COBRA premiums for involuntarily terminated employees? Me neither, until I read this article from HR Observations.

The Connecticut Employment Law Blog issue-spots the legal risks for employers using Google Map’s new locator service.

George’s Employment Blawg summarizes the FMLA’s new notice rules.

World of Work lists words to avoid in describing employees over 40.

The Delaware Employment Law Blog asks if the recession is going to put work-life balance initiatives at risk.

Trading Secrets correlates mass layoffs with the risk for mass theft of intellectual property.

Work Matters discusses the “one free dog bite” rule in retaliation cases.

Courts open Pandora’s Box in applying the Ledbetter Fair Pay Act

Today I am going to get technical and talk about statutory interpretation. Bear with me, though, because how some courts are incorrectly interpreting the Ledbetter Fair Pay Act has crucial implications for businesses

Michael Fox at Jottings by an Employer’s Lawyer highlights the following key passage in the Ledbetter Act:

For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.

Plaintiffs are arguing that the phrase “or other practice” covers the full panoply of employment decisions, such as promotions and demotions, and not just pay-setting decisions or policies. At least two courts have bought this argument:

• Bush v. Orange County Corrections Dept., (M.D. Fla. 2/2/09), which held that plaintiffs could timely challenge demotions, which resulted in reductions in pay, that occurred 16 years before earlier than their EEOC charges.

• Gilmore v. Macy’s Retail Holdings, (D.N.J. 2/4/09), which held that the Ledbetter Act applies to a discriminatory promotion that would have been to a higher paying job.

Applying the Ledbetter Act to cases such as Bush and Gilmore, which  involved long-ago promotions and demotions, is misplaced. For “or other practice” to have the expansive meaning given by the Bush and Gilmore courts, a comma is missing. Because there is no comma between “decision” and “or other practice,” “or other practice” modifies “compensation.” Thus, the more reasoned interpretation of this provision of the Ledbetter Act is that the Act covers a discriminatory compensation decision or other discriminatory compensation practice. A promotions or demotion is a personnel decision, not a compensation decision or practice.

The overly broad interpretation applied by the Bush and Gilmore courts goes well beyond the issue in the Ledbetter decision that the Ledbetter Act intended to overturn. Every employment decision, whether a hiring, promotion, demotion, or termination, has some effect on compensation. The Ledbetter Act cannot be so broad as to cover any and every personnel decision. This broad of a reading of the statute will eliminate virtually every statute of limitations in federal discrimination claims, providing employees with an unlimited amount of time to file any discrimination claim. If the Ledbetter Act means what Bush and Gilmore say it means, the Ledbetter Act could prove to be devastating for employers.

No Ohio court has yet to apply the Ledbetter Act. Ultimately, the meaning of “or other practice” will be up to the courts of appeals and the Supreme Court. Nevertheless, it is important for employers to realize that only two weeks into its life, at least two courts have broadly applied the Ledbetter Act to cover much more than the Ledbetter decision it overturned.