Do you know? What is the Paycheck Fairness Act are why should employers be concerned?

Today’s USA Today reports that the Obama Administration is going to make a renewed push for the passage of the Paycheck Fairness Act:

President Obama plans to press Congress today to pass pay-equity legislation that would make it easier for women to sue employers who pay them less than their male counterparts, the White House said Monday. “Women deserve equal pay,” White House senior adviser Valerie Jarrett said in an interview, citing government statistics that show women earn 77 cents for every dollar men earn. “It’s a very fundamental right.”

It would be hard to make an argument against this bill if all it did was guarantee equal pay for equal work. The Paycheck Fairness Act, however, goes much further by limiting the ability of businesses to defend against such claims, which should make businesses very concerned that this issue has reached the top of the President’s agenda.

The Paycheck Fairness Act (the full text of which is available here) makes 5 key changes to federal wage and hour laws:

1. Modified defense. Paycheck Fairness would impede the ability of employers to defend against sex discrimination wage payment claims. An employer can currently defend against an Equal Pay Act claim by showing that the pay difference between men and women was caused by “any factor other than sex.” Paycheck Fairness would alter this standard by requiring employers to show “a bona fide factor other than sex, such as education, training, or experience,” that is not sex-based, but is job-related to the position and consistent with business necessity. Moreover, even if an employer makes this showing, the employee could still prevail by showing that the employer refused to adopt an alternative employment practice that would serve the same business purpose without producing the same wage differential.
   
2. Enhanced damages. The current Equal Pay Act’s remedies include back pay and liquidated damages that are capped at the amount of the back pay. Paycheck Fairness would steepen the remedies for sex discrimination in wage payments by allowing for uncapped punitive and compensatory damages.
   
3. Non-retaliation. Paycheck Fairness would prohibit an employer from retaliating an employee who inquired about, discussed or disclosed the wages of the employee or another employee, unless discussing wages is part of an employee’s essential job function. While the National Labor Relations Act already covers this conduct, Paycheck Fairness’s enhanced remedies are much more extensive than those available under the NLRA.
   
4. Class actions. Paycheck Fairness would change sex discrimination wage payment class actions from “opt in” classes to “opt out” classes, making classes in these cases larger and easier for employees to join.
   
5. Reporting. Paycheck Fairness would require the EEOC to issue regulations on the collection of pay information from employers. It would also require the Office of Federal Contract Compliance Programs to use its “full range of investigatory tools” for investigation, compliance, and enforcement.
   

Employers should be very worried about the prospects for Paycheck Fairness. If it passes, employers will face increased risk and higher damages for sex discrimination wage claims. Perhaps the heavier burden, though, will be the significant compliance obligations from newly-empowered federal agencies.

Court recognizes “sabotage defense” in retaliation cases

Alvarez v. Royal Atlantic Developers, Inc. (11th Cir. 7/2/10) [pdf] asks this question: Can an employee who engages in protected activity pursue a retaliation claim if an employee slated for termination is fired sooner rather than later because of an exercise of protected activity? The court recognized that in certain circumstances, a legitimate and reasonable fear that an irate employee will use his or her position within the company to sabotage operations will justify termination, even if the company finds about the risk from the employee’s exercise of protected activity (such as a written complaint letter).

When Eliuth Alvarez got wind of her boss’s plans to replace her as the company’s controller, she wrote a letter of protest, complaining, among other things, about what she perceived to be discrimination against her based on her national origin. The company accelerated Alvarez’s termination because of the letter. It argued that it had to get rid of Alvarez when it did because the it feared that she might vindictively use her position as controller, with access to company computers and bank accounts, to sabotage operations.

The court recognized that in certain circumstances, such a fear is justified:

Suppose an employee with reason to believe that she has been discriminated against works in the control room of a nuclear power plant, and in her letter complaining of discrimination says that: “I’m mad as hell and I’m not going to take it anymore!” Or suppose she is a pilot and makes that statement in her letter of complaint. Or suppose she was not in a position to endanger the public, but her letter complaining of discrimination makes it clear that she is psychologically unstable and a danger to those who work around her. Discrimination laws do not require that their goals be pursued at the cost of jeopardizing innocent life or that employers tolerate a serious risk that employees in sensitive positions will sabotage the company’s operations. We are confident that if an employer removes an employee because of a reasonable, fact-based fear of sabotage or violence, the anti-retaliation provisions of our laws will not punish that employer for doing so.

In the specific circumstances of this case, however, the court was not persuaded that fear of sabotage motivated the employer’s decision to move up the termination:

Unless Royal Atlantic convinces a jury that it had a reasonable basis for fearing that unless it fired her immediately Alvarez would sabotage its operations or harm others, and there was no less drastic means of reliably preventing that other than firing her, Alvarez will be entitled to damages for the length of time she would have remained on the job if she had not sent the October 3, 2006 letter complaining of discrimination.

A few questions to consider if you a planning on using this defense in your next retaliation case:

• Did the employee’s position offer the opportunity to do real harm to the company?

• Did the employee make real threats against the company or anyone else, or provide a legitimate and reasonable basis to infer that he or she would disrupt operations?

• Did the company have no options other than termination (such as reassigning duties until a replacement could be hired) to protect itself from the feared sabotage?

• Did the employee’s continued employment pose a physical danger to other employees or the public?

The more of these questions to which you can answer yes, the better chance you will have to prevail on this defense.

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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 #135

The post of the week belongs to Dan Schwartz at the Connecticut Employment Law Blog, who correctly identifies the major shortcomings with the National Sexual Harassment Registry recently launched by eBossWatch. It is a must read for anyone with a job.

Here’s the rest of what I read this week:

Litigation

• Depositions: Quit wasting time and money – from What About Clients?

• Does Your Firm Suffer from OCD? – from Stephanie Thomas’s The Proactive Employer

• FACTS? We (the jury) Don't Need No Stinking Facts. (Or, do we?) – from Deliberations

• Can Costs of Employment Arbitration Be Unfair to Employer? – from Paul Kirgis at ADR Prof Blog

• Metadata Scrubbing: Are Lawyers Finally Getting the Message? – from Ride The Lightning

• ABA Reports That Pro Se Representation Is Increasing, To The Litigants’ Detriment – from Cleveland Law Library Weblog

Discrimination & Harassment

• Harassment Case Against Steven Seagal Dismissed – from Lowering the Bar

• Novartis Enters Settlement Agreement for Remaining Members of Gender Bias Suit – from HR Hero’s Human Resources News

• Discrimination from the Bottom Up – from Richard Bales at Workplace Prof Blog

• EEOC Vice-Chair: What's Particularly Important for Employers? – from HR Daily Advisor

• Western District of Virginia Refuses to Dismiss Sexual Harassment Suit – from Laconic Law Blog

• Fitness-for-duty exam does not support a “regarded as disabled” claim – from Employment Law Matters

• 1st Circuit: Sexual desire is not a necessary element of a hostile work environment claim – from Work Matters

Wage & Hour

• 9th Cir: Jury Decides Employment Status – from Alaska Employment Law

• Department of Labor Examines New Approach for Enforcing Federal Employment Laws – from Wyatt Employment Law Report

• If you were the judge: Employee’s performance review referred to FMLA-covered absences – from HR Cafe

• Hot Times in HR – from Jim Brennan at Compensation Cafe

Social Media & Technology

• Do you text and drive? TeleNav survey shows about 1/4 of you do – from Smartphones and Cell Phones

• Be Careful What You Tweet – from Mark Toth’s Manpower Employment Blawg

• Social Media Policy – from NJ Hess Associates Blog / Patterns of Work

LeBron James

• On Leadership: Gilbert's Letter to LeBron - Leader or Looney? – from Kris Dunn, The HR Capitalist

• LeBron James’ Employment Background Check: He Stole Our Hearts – from Nick Fishman at the employeescreenIQ Blog

• Dan Gilbert and LeBron: Dealing with a departing employee – from Sindy Warren at the Warren & Hays Employment Law Blog

• The King Has No Clothes, Lebron’s Lessons For Work – from Workplace Fairness

• LeBron James? He’s Just a Glimpse at Your Employee of the Future – from TLNT

• LeBron Is Not Taking Less Money: A Quick Tax Overview – from Wills & Wealth

• LeBron James Faces ‘Reverse Paternity Suit’ Filed by Alleged Father – from Inside Opinions: Legal Blogs

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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.

In litigation lockdown, silence in golden

When I was 17 years old I was in a car accident, the details of which are unimportant to this story. What is important, though, is that a week later, I saw the woman I hit in the library, but she didn't see me. She was telling the librarian all about the accident, including how she wasn't that badly injured, but that her attorney told her to keep treating so that they could ask for more money in her lawsuit.

When your company is sued, you need to instruct your employees to exercise extreme caution in who says what around whom. I refer to it as "litigation lockdown." You may not know which of your employees are friends with the plaintiff. And, as my story illustrates, you cannot always control who overhears what is said. Especially in the workplace, little is private. Walls are often paper-thin. You never know who might be listening to what is intended to be private conversation.

Suffice it to say the woman I hit got much less money than she otherwise might have because I was in the right place at the right time. Don't end up over-paying in case because of similar carelessness.

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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.

Compliance and training key to victory in overtime lawsuit

A New York federal court recently dismissed a wage and hour collective action that sought unpaid overtime for “off-the-clock” work. The plaintiffs in Keubel v. Black & Decker claimed their employer maintained a policy of refusing to pay employees for any hours worked over 40 in a week. The court concluded that Black & Decker did not have to compensate employees for time worked that it did not know about or could not reasonably have known about. In support of its conclusion, the court relied upon Black & Decker’s wage and hour compliance and training, including written wage and hour and work time reporting policies, an anti-retaliation policy, an anonymous hotline for reporting violations, and regular training of all employees at all levels on wage and hour compliance:

It is undisputed that there was a company wide written policy concerning accurately recording all hours worked on ones time sheets, including overtime. Indeed, Black & Decker maintains a Code of Ethics that requires all employees to maintain the integrity of company records, explains the company’s commitment to obeying all laws expressly, including all wage and hour laws, and requiring employees to report what they believe to be violations of the Code of Ethics. As part of the effort to reinforce the Code of Ethics with all employees, Black & Decker mailed a copy of a brochure entitled “Doing What’s Right” to all employees on April 10, 2006, which summarized the critical aspects of the Code of Ethics.

Black & Decker sent out a series of e-mails to all current employees, which focused on topics addressing the Code of Ethics. In fact, an e-mail sent to all employees in January 2007 regarding accurate business records provided that all employees were required to “ensure that business records (for example time cards, travel and expense reports, invoices, and purchase orders) are honest, complete and not misleading.” It directed employees to “watch out for falsifying records or documents” and to beware of “[a]ssisting anyone with or going along with the creation of inaccurate or misleading records.” Employees were told, “If you are asked or aware of efforts to alter, destroy, conceal, falsify or not create business records, report this to your supervisor immediately[.]” In addition, employees were given an e-mail address and phone number by which they could make anonymous reports of violations. Significantly, no complaint was ever made by plaintiff through this process, nor was any anonymous complaint made regarding plaintiff’s supervisors. Based on these undisputed facts, plaintiff cannot meet his burden of proving that Black & Decker had actual or constructive knowledge of the hours he worked off-the-clock.

I’ve said it before, and in light of this case I’ll say it again—policies, training, and other compliance initiatives are crucial in preventing and ultimately winning litigation. KJK offers a proprietary (and complementary) 200-point HR and employment practices audit, which includes wage and hour compliance. This examination of your practices and procedures is the first step in making your organization litigation resistant.

[Hat tip: ELT, Inc. Blog, c/o Fair Labor Standards Act Law]

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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? Eligibility for FMLA leave

FMLA leave continues to be one of the most confounding HR issues for employers. The first issue you often face is whether an employee seeking leave is eligible for the leave sought.

To be eligible for FMLA leave, an employee must meet two criteria:

1. The employee must have been employed for at least 12 months. These months, however, do not have to be consecutive and do not even have to immediately precede the request for FMLA leave. As long the employee has worked for the employer for a total of 12 months over any duration of time, this criteria is met.

2. The employee must have at least 1,250 hours of service during the previous 12-month period. “Hours of service” means hours worked. Thus, non-working time, paid or unpaid, such as vacations, holidays, furloughs, sick leave, other FMLA leave, and other time-off, do not count in the calculation of hours of service. This rule, however, has two key exceptions. First, an employee returning from fulfilling his or her National Guard or Reserve military obligation must be credited with the hours of service that would have been performed but for the period of military service in determining whether the employee worked the required 1,250 hours. Secondly, time that an employee would have worked but for an unlawful termination also counts towards the required 1,250 hours.

Because of these eligibility requirements, it is important to keep accurate records of work hours, even for exempt employees. If an employer does not keep an accurate record of hours worked, it will be presumed that the employee worked enough hours.

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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.

If you can’t trust your son…. Multi-million dollar jury verdict for boss’s son’s theft of trade secrets

According to the Youngstown Business Journal, a federal court jury awarded Allied Erecting & Dismantling $3.046 million for claims that its president’s son, Mark Ramun, misappropriated trade secrets while working for a competitor, Genesis Equipment & Manufacturing. The article describes the dispute:

At the center of the dispute is a product Allied … developed…. Between 1992 and 2001, court papers say, Mark Ramun had access to “highly confidential proprietary information and documentation” related to the Allied MT while employed at the company. Those trade secrets, Allied alleged, were given to Genesis after the company hired the younger Ramun in 2003. Allied argued in its case that Mark Ramun kept nearly 15,000 documents that contained “a substantial array of highly confidential and proprietary information.”

There is a good lesson to be learned from this story. When there is money to be made, even those who you trust the most are apt to let you down. I don’t know what the relationship between senior and junior Ramuns was like (although I’m pretty sure they won’t be sharing a Thanksgiving turkey anytime soon). I am confident, however, that dad never for a second thought his son would divert confidential information to a competitor. Even those who you trust the most should be locked down with agreements, and diligently pursued when they breach your trust.
[Hat tip: Trade Secrets 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.

WIRTW #134

At the bottom of the page you’ll notice a new feature I’m trying out – a Wibiya toolbar. It adds new functionality to the blog, including a revamped search engine, a widget for recent posts, and new ways to share content via Twitter and Facebook. Leave a comment (or tweet me) and let me know what you think.

Here’s what I read this week:

Discrimination

• When talking about disabilities, put people first – from Stephen Meyer at the HR Cafe

• Sometimes, the equal opportunity jerk defense prevails – from Sindy Warren at the Warren & Hays Employment Law Blog

• Disgruntlement – from Charles Sullivan at the Workplace Prof Blog

• Employee’s Fetus was Creating a Negative Energy Field in the Work Place – from Philip Miles’s Lawffice Space

• How To Screw Up A Termination Case And Pay Big Money! – from Minnesota Labor & Employment Law Blog

• Fitness-for-Duty Exams: When Can They Be Used? – from Mindy Chapman’s Case in Point

• Age is Just a State of Mind: At Least I Think So Because Today Is My Birthday – from Michael Haberman’s HR Observations

Social Media

• Indiana Jurors Instructed Not to “Talk” About the Case on Social Networking Sites – from Molly DiBianca’s Going Paperless

• How to Increase the Likelihood Employees will Follow Your Social Media Policy – from Defending The Digital Workplace

• Facebook Posts As Evidence? – from Lawyerist

Wage & Hour

• The Importance of Clear, Accurate Notices – from FMLA Insights

• Who’s The Bimbo Here? Another Class Action Focusing On Independent Contractor – from Wage & Hour - Development & Highlights

Miscellaneous

• The Top 10 Worst Fictional Bosses – from Alanah Throop (Hat tip to Bob Sutton’s Work Matters)

• Supreme Court recap: Employment Law – from LawMemo Employment Law Blog

• On the Road Again: What State Cell-Phone Bans Mean for Employers – from Adria Martinelli at the Delaware Employment Law Blog

• The Importance of Follow Through: More Lessons from Wal-Mart – from Stephanie Thomas’s The Proactive Employer

• Would You Want to Know About a Triple Murder Charge on an Employment Background Check? – from Nick Fishman at employeescreenIQ Blog

• “We Will Not Threaten to Kill You” – The Problem with NLRB Enforcement – from Work in Progress

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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.

What LeBron James teaches us about employee retention

I'm about to make a startling confession -- I could care less if LeBron James signs with the Cavs, Knicks, Bulls, Heat, or becomes the first NBA player in space. It doesn't affect my life one iota (other than the latter outcomes exponentially increasing the availability of my firm's Cavs tickets, at which point I wouldn't want them anyway). Frankly, I'm disgusted by the way King James has handled himself over the past several weeks, waiting for every media outlet and NBA fan to genuflect before him hoping to catch any hint at his impending choice. Our country's southern coastline is an ecological disaster, and we treat the contract choice of someone who plays a game for a living as the most important story of the decade.

Tonights primetime announcement of his team-of-choice on ESPN takes the cake. It is shameless PR for a player that is in love with his own sense of self-importance. Think back 15 years. There was no bigger sports story than MJ's return from baseball to the Bulls.  Yet, he made his announcement with no press conferences, no media circuses, and certainly no hour-long ESPN specials -- just a simple two-word press release: "I'm back." And yes, I know that 2010 is a whole lot different than 1995 in terms of the immediacy of news and the cult of celebrity. But, class is class whether its 1995, 2010, or 2110. Some people have it, and some are proving that they don't.

The LeBron circus leads me to this thought. Yesterday, at the blog of the Harvard Business Review, Sharon Daniels posted Retaining a Workforce That Wants to Quit. Ms. Daniels shares these stats:

• In each of the past three months, more employees quit their jobs than were terminated.
• The cost of replacing an employee is estimated at up to 250% of annual salary.
• Approximately one in every four employees plan to leave their jobs within a year. 

She correctly concludes that the three biggest reasons employees leave jobs -- even in a down economy and tight job market -- are a lack of growth opportunities, dissatisfaction with compensation, and employees feeling their contributions aren't being recognized. As for employers:

Regrettably, too many managers unwittingly encourage employees to walk out because they regard them as replaceable cogs in a wheel. The key to retaining valued employees is to manage them person-to-person rather than with one-size-fits-all management. Every employee marches to a different drummer; successful managers don't make them parade in lockstep.

In other words, your retention efforts have to be personalized. One more thought -- your organization need to have a back-up plan in the event your LeBron leaves. The Cavs have none, and are facing years of obscurity and mediocrity if LeBron chooses Miami (as is now being reported).

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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.

2nd Circuit issues groundbreaking ruling on sales reps and overtime payments

I’ve written a lot in the past about FLSA exemptions, particularly the administrative exemption and the outside sales exemption.

Yesterday, the 2nd Circuit issued a landmark ruling reconciling these two exemptions in the context of pharmaceutical sales reps. In In re Novartis Wage & Hour Litigation [pdf], the court was faced with the claims of approximately 2,500 Novartis reps who claim they are owed back overtime. Novartis claims it did not have to pay overtime to this class of employees, either because they qualified as exempt outsides sales people or exempt administrative professionals. The court disagreed.

The 33-page opinion is a must-read for any business that employs salespeople and pays them as exempt. The highlights:

Outside sales exemption: The sales reps do not qualify for the outside sales exemption because they do not actually sell any products. Instead, in their brief sales calls on physicians, they merely promote their employer’s product. The physician cannot neither buy directly from the rep, not commit to making a purchase:

In sum, where the employee promotes a pharmaceutical product to a physician but can transfer to the physician nothing more than free samples and cannot lawfully transfer ownership of any quantity of the drug in exchange for anything of value, cannot lawfully take an order for its purchase, and cannot  lawfully even obtain from the physician a binding commitment to prescribe it, we conclude that … the employee has not in any sense … made a sale.

Administrative employee exemption: The sales reps do not qualify for the administrative employee exemption because their jobs lack the exercise of discretion and independent judgment. Specifically, the court pointed to the reps’ lack of any role in planning marketing strategies or formulating the core messages delivered to doctors, inability to deviate from the promotional core messages or to answer any questions for which they have not been scripted, and quotas for doctors’ visits, sales pitches, and promotional events.

Three things about this opinion stand out to me:

1. Novartis has taken an absolute beating this summer. As Dan Schwartz at Connecticut Employment Law Blog points out, it was only seven weeks ago that a jury tagged the pharmaceutical company for a quarter-billion dollars in a sex discrimination lawsuit brought by female sales reps. Now, pending a reversal by the full 2nd Circuit or the Supreme Court, it is going to be on the hook for an untold amount of back overtime to another group of sales reps.

2. If your business employs salespeople, this opinion has the potential to dramatically alter how you pay them. At a minimum, you should be retaining employment counsel to review—and potentially overhaul—the classifications of your employees.

3. The Department of Labor is proving itself to be a formidable ally of the worker on the issue of FLSA exemptions. In March, it issued its game-changing Administrator’s Interpretation in which it pronounced, for the first time, that mortgage loan officers are generally non-exempt positions. In this case (as reported by Bloomberg News), the DOL submitted a brief in supporting the sales rep’s position. Your business should be looking at employees’ FLSA classifications with the same critical eye as the DOL to avoid potential problems down the road.

[Hat tip: Howard Bashman’s How Appealing]

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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.

The dark side of discrimination litigation

The San Francisco Chronicle reports that a jury awarded a former applicant for a job a Lucasfilm $113,800 in damages on a pregnancy discrimination claim. The jury concluded that the media company withdrew its job offer to Julie Veronese after she disclosed her pregnancy.

This case proves two important points about discrimination litigation:

1. The smoking-gun piece of evidence in the case was an email Veronese's supervisor-to-be in which she expressed concern about Veronese's ability to do the job while pregnant. This case illustrates the dangers of email and proves the point that if you should not put in an email what you do not want shown to a jury or published in the newspaper.

2. Veronese's attorney is reported as saying that she will seek $1.2 million in attorney's fees from Lucasfilm. While the number is stagging, what is more staggering is that one can collect ten-fold in attorney's fees than what she recovered as damages in the actual litigation. Many claims carry risk for damages, and a six-figure verdict is nothing to sneeze at. The real risk in many discrimination lawsuits, however, is the attorney's fees that a successful plaintiff can recover. The risk of a fee award must play into the exposure calculus in strategizing the defense of any discrimination claim. Failing to take both the likelihood of a fee award and the potential amount of that award into account very early on in litigation could lead to an expensive surprise at the end of the case.

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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 #133

Jeffrey Hirsch at the Workplace Prof Blog reports that the NLRB has announced its plan to handle some of the nearly 600 cases invalidated by the Supreme Court in New Process Steel. According to Professor Hirsch:

[T]he Board is addressing the cases currently pending in court—not the cases already decided in court, cases in which the losing party complied with the NLRB order, or cases that may be brought to court but haven’t yet. As expected, the Board will rehear these pending cases with a three-member panel that will include Chairwoman Liebman and Member Schaumber, who were on the original two-member panel. This makes sense, as it means that only one member will have to start from scratch on these cases.

The story of the week, however, comes via OnPointNews. I’ll let the title speak for itself. You’ll have to click over for the details – Bias Suit Claims New Age Boss Fired Woman for Fetus.

Like most of America, I’m off on Monday, enjoying the unofficial 4th of July. I’ll be back with fresh content on Tuesday. In the meantime, enjoy what I read this week:

HR

• Anti-nepotism policies: implement and exercise with caution – from Donna Seale’s Human Rights in the Workplace

• When a Storm Hits, What's an Employer to Do In Connecticut? – from Dan Schwartz’s Connecticut Employment Law Blog

• Top 10 Things I Learned as a Summer Intern – from KnowHR Blog

Wage & Hour

• BP Capping Wages for Recovery Workers at $200/Day – from Work in Progress

• No Wonder this Job is So Hard: Contradictory Messages From the Government – from Michael Haberman’s HR Observations

• DOL Testimony Regarding The Employment Misclassification Prevention Act And Misclassification Enforcement Efforts – from Overtime Advisor

• He Shoots … and Misses! Does the World Cup Invite FMLA Abuse? – from FMLA Insights

Discrimination

• Protecting yourself from age discrimination claims – from Employment Law Bits

• New York cop’s $80,000 bias award – from Walter Olson’s Overlawyered

• Educational requirements can be discriminatory, according to the EEOC – from Sindy Warren at the Warren & Hays Employment Law Blog

• Still No GINA Regs, But New Website on the Basics – from Delaware Employment Law Blog

• The Fourth Circuit Undercuts the “Equal Opportunity Jerk” Defense – from Maryland Employment Law Developments

Litigation

• Is Your Document Retention the Stuff of Nightmares? – from Stephanie Thomas at Compensation Cafe

• Discovery: Who to depose—and how to get ready – from What About Clients?

• Opening Statement? We’ve got an app for that – from Deliberations

Whistleblowing

• Financial Reform Bill Contains Several Provisions Impacting the Workplace – from Washington D.C. Employment Law Update

• SOX Whistleblower Must Actually Believe Employer’s Conduct Was Illegal, Says Eleventh Circuit – from Florida Employment Law Blog

And, finally, since I live in Cleveland and cannot escape the circus that is LeBron James, Matthew Gibson shares his thoughts at his Wills & Wealth blog – I Can't Take it Anymore. It's Time to Talk LeBron.

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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 weighs in on administrative exhaustion of EEOC charges

Before an employee can file a Title VII lawsuit, the employee must first file a timely administrative charge with the EEOC. As a general rule, an employee cannot bring claims in a lawsuit that were not included in the EEOC charge. However, because employees, and not attorneys, typically file EEOC charges, courts review them liberally, and typically will consider any claims that are reasonably related to or grow out of the factual allegations in the EEOC charge.

In Younis v. Pinnacle Airlines, Inc. (6th Cir. 6/30/10) [pdf], the 6th Circuit explains what it means for a claim to be reasonably related to or grow out of the factual allegations in the charge. In Younis, the employee alleged discrimination and harassment based on religion and national origin, in addition to retaliation. The 6th Circuit upheld the dismissal of the harassment and retaliation claims because the EEOC charge lacked any specific reference to those claims:

The problem in this case is that in his EEOC filing, Younis did not allege a claim of hostile work environment, and he cited only discrete acts of alleged discrimination, limited to three or four isolated comments by his peers that occurred over a three-year period. In order to establish a claim of hostile work environment, however, a plaintiff must present evidence of harassment that “unreasonably interfer[es] with [his] work performance and creat[es] an objectively intimidating, hostile, or offensive work environment.” … As a result, we have suggested in several unreported cases that the inclusion in an EEOC charge of a discrete act or acts, standing alone, is insufficient to establish a hostile-work-environment claim for purposes of exhaustion. We now hold that such evidence, cited in an EEOC charge to support a claim of disparate treatment, will not also support a subsequent, uncharged claim of hostile work environment “unless the allegations in the complaint can be reasonably inferred from the facts alleged in the charge.” …

Younis’s retaliation claim suffers from the same deficiency…. The EEOC form included a specific check-off box to indicate a charge of retaliation. Although Younis marked other boxes on the form evincing an intent to charge discrimination based on religion and national origin, he did not indicate that he was alleging retaliation. Moreover, there is nothing in the narrative portion of the EEOC charge that could be interpreted as claiming retaliation, nor is there any language that would have put the EEOC or the employer on notice that Younis was alleging retaliation by Pinnacle.

This ruling shows that courts give serous consideration to whether a plaintiff exhausted all claims with the EEOC. This exhaustion requirement furthers two key policies for employers:

1. It provides the employer information concerning the conduct about which the employee complains.
2. It affords the EEOC and the employer an opportunity to settle all disputes through conference, conciliation, and persuasion.

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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.

Following up on Thompson v. North American Stainless – the tea leaves of associational retaliation

In response to yesterday’s post on the Supreme Court agreeing to review the issue of associational retaliation, Michael Fox at Jottings by An Employer’s Lawyer suggests that Thompson might come out better for employers than one might think:

However, this is ultimately a question of statutory construction, which calls to mind Jackson v. Birmingham Board of Education, where the dispute was whether Title IX prohibited retaliation, although there was no anti-retaliation provision in the statute itself. In a 5-4 decision, the court’s opinion finding retaliation was prohibited was authored by Justice O’Connor. Significantly one of the dissenters was Justice Anthony Kennedy.

Despite some personnel changes since the Jackson case, the Court’s ideological split remains the same. Thompson will come down to a decision between statutory interpretation and policy (with Justice Kennedy likely holding the deciding vote).

The original Thompson v. North American Stainless (6th Cir. 3/31/08) [pdf] decision chose policy:

However, “[i]t is a well-established canon of statutory construction that a court should go beyond the literal language of a statute if reliance on that language would defeat the plain purpose of the statute[.]” … Here, a literal reading of section 704(a) suggests a prohibition on employer retaliation only when it is directed to the individual who conducted the protected activity. Such a reading, however, “defeats the plain purpose” of Title VII. There is no doubt that an employer’s retaliation against a family member after an employee files an EEOC charge would … dissuade “reasonable workers” from such an action.

The en banc panel [pdf]—the decision the Supreme Court agreed to review—went the opposite way, opting for the clear language of the statute:

The statutory language of § 704(a) … explicitly identifies those individuals who are protected – employees who “opposed any practice made an unlawful employment practice” or who “made a charge, testified, assisted or participated in any manner in an investigation, proceeding, or hearing” under Title VII. Section 704(a) thus clearly limits the class of claimants to those who actually engaged in the protected activity…. In other words, Congress carefully chose qualifying words of action (“opposed,” “testified,” “made a charge,” “participated,” “assisted”), not words of association…. The plain text simply cannot be read to encompass “piggyback” protection of employees like Thompson who, by his own admission, did not engage in protected activity, but who is merely associated with another employee who did oppose an alleged unlawful employment practice.

While the Supreme Court’s battle lines are clear, how the ruling will come out is less so. Jackson v. Birmingham Board of Education is one guidepost for us to look to. Crawford v. Metropolitan Gov’t of Nashville is another. In Crawford (decided unanimously just last year), the Supreme Court held that the opposition clause of Title VII’s retaliation provision covers an employee who merely answers questions during an employer’s purely internal investigation into a co-worker’s allegations of harassment against a different employee. In that case, the Court took a broad reading of the meaning of “opposition” to impart a policy choice against retaliation.

If you want to look to Crawford for further guidance, Justice Kennedy was part of the seven-member majority that defined “oppose” (albeit in dicta) as “to be hostile or adverse to, as in opinion.” Justices Alito and Thomas separately concurred to make the point that “opposition” must include “active and purposive” conduct, and to take the majority to task for embracing a definition that permits opposition without action. If Thompson ultimately interprets the opposition clause to include silent opposition, it could be a bad day for employers. The Court could conclude that one closely associated with another who engages in protected activity engages in opposition through the closeness of the relationship and the implied hostility to the employer’s position.

We won’t find out what all this means until sometime next year. The tea leaves are not at all clear. Employers should be concerned, though, that Title VII is about to be judicially expanded yet again, and the doors may swing wide open for the filing of more retaliation claim.

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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.

Supreme Court agrees to hear associational retaliation case

On the last day of its term, the Supreme Court has agreed to hear the issue of whether Title VII prohibits retaliation against an employee who is associated with another employee who engages in protected activity. The case—Thompson v. North American Stainless—hails from the 6th Circuit. I’ve covered this case in depth, so instead of recapping, I’ll simply direct you to my prior posts:

• En banc panel of 6th Circuit reverses prior holding in Thompson v. North American Stainless and rejects associational retaliation claims
• 6th Circuit decides that the closeness of a relationship does not matter in “associational discrimination” claims
• Associational retaliation revisited
• Courts sets boundary on associational discrimination claims
• 6th Circuit recognizes claim for associational retaliation

It is troubling that the Court accepted review of this case. For one thing, this Court has proven itself favorable to employee rights in retaliation claims. For another, there is no split among the circuit courts on this issue; the Court could have maintained the status quo simply by denying cert. Management-side employment lawyers and the businesses we represent should be concerned about the prospects of reversal and the recognition of a claim for associational retaliation. I will have much more coverage on this issue next year when the case is argued and decided.

[Hat tip: Workplace Prof Blog and LawMemo 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.

Do you know? Ohio military family leave law takes effect July 2

Beginning this Friday, July 2, 2010, Ohio employers with 50 or more employees will be required to provide leave for employees who are a spouse or parent of a member of the military who is called to active duty or is injured or hospitalized while serving on active duty.

The law—Ohio Revised Code Chapter 5906—has the following provisions and limitations:

• The employee eligible for leave must be a spouse, parent, or legal custodian of a person who is a member of the uniformed services and who is called into active duty, or who is injured, wounded, or hospitalized while serving on active duty.

• Employees are only eligible for leave if they have been employed for at least 12 consecutive months and for at least 1,250 hours in the 12 months immediately preceding the leave.

• Leave is limited to once per calendar year.

• Employees are entitled to the lesser of 10 work days or 80 work hours.

• It only covers full-time duty in the active military service for periods of longer than 30 days. It does cover training, or the period of time for which a person is absent from employment for an examination to determine fitness for military duty, unless it is contemporaneous with full-time military duty.

• An employee must provide at least 14 days’ notice prior to taking leave, unless the leave is taken because an employee receives notice from a representative of the uniformed services that the injury, wound, or hospitalization is of a critical or life-threatening nature.

• The dates on which an employee takes leave cannot occur more than two weeks prior to, or one week after, the deployment date of the employee’s spouse, child, or ward or former ward.

• The employee cannot have any other leave available, except sick leave or disability leave.

• Employers must continue to provide benefits to employees during the leave period. Employees remain responsible for their pro rata share of costs, if any.

• Upon the completion of the leave, employers must restore the employee to the position the employee held prior to taking that leave or a position with equivalent seniority, benefits, pay, and other terms and conditions of employment.

• An employer may require an employee requesting to use leave to provide certification from the appropriate military authority.

• Retaliation is prohibited.

• Employers cannot require employees to waive their leave rights.

• Employees can sue for injunctive relief and money damages to enforce their rights.

[Hat tip: @CCHWorkDay]

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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.

The dominos start to fall – some clarity on New Process Steel

On June 17, the Supreme Court held that the NLRB needs at least three members to have the authority to act. At the time, I wrote that with the stroke of their pens, the Supreme Court invalidated the nearly 600 decisions issued by the two-member NLRB over the prior 26 months. In truth, I was merely hypothesizing based on the practical meaning of that holding. Now, though, the circuit courts are beginning to weigh in. While the decisions issued by the two-member Board are invalid, the mechanics of what to do with them are very much up in the air.

In Galicks, Inc. v. NLRB (6th Cir. 6/24/10) (unpublished) [pdf], the 6th Circuit was presented with the review of an NLRB decision that had been issued by the two-member Board. The court refused to hear the case, and, in a terse eight-line opinion, remanded it back to the NLRB “for proceedings consistent with [New Process Steel].” The remand means that the now full five-member NLRB will be able to reconsider its prior decision.

The 6th Circuit’s approach, however, is not universal. As the GT LE Blog reported last week, the 2nd Circuit, facing the same issue, simply denied enforcement of the NLRB’s order, foreclosing any further proceedings by the five-member Board. In other words, because the Supreme Court provided no guidance to the circuit courts on what to do in light of its holding in New Process Steel, we are going to see a circuit-by-circuit approach. Some will remand, some will deny enforcement, and some may do something else. We may be left with a fragmented review of the last 26 months of federal labor law, with the reopening of these old decisions left up to the geographical whim of which part of the county from which they happen to hail. In other words, labor law is going to be a mess for a little while.

According to a footnote in Galicks, the NLRB intend to file motions to remand in all pending cases affected by New Process Steel. We’ll see if the NLRB’s proactive measures lead to a more uniform approach to the handling of these cases.

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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 #132

Although earlier this week I touched on Rent-A-Center v. Jackson, I did not discuss it in-depth. Thankfully, there are a lot of bloggers who did:

• Breaking: U.S. Supreme Court Affirms Arbitration Provisions in Employment Disputes; What It Means for Employers – from Dan Schwartz’s Connecticut Employment Law Blog

• The Potential Impact of Today’s Supreme Court's 5-4 Decision on Arbitrability – from Michael Fox’s Jottings By An Employer’s Lawyer

• SCOTUS Addresses Arbitrability Determination – from Philip Miles’s Lawffice Space

• New SCOTUS Arbitration Opinion: Both Boring & Important – from Tim Eavenson’s Current Employment

• Supreme Court Rules in Favor of Employer on Arbitration Agreements – from Tom Crane’s San Antonio Employment Law Blog

• Supreme Court Expands Enforcement of Arbitration Clauses Calling for The Arbitrator To Decide Arbitrability Issues – from Wyatt Employment Law Report

• Victory for Business in Rent-A-Center West v. Jackson – from Sarah Cole at the ADR Prof Blog

• Supreme Court: Arbitrator, Not Court, Decides Whether Arbitration Agreement is Unconscionable – from the Workplace Prof Blog

• New rule for deciding validity of agreements to arbitrate arbitration – from SCOTUS Blog

• SCOTUS: Arbitrator, not court, decides whether arbitration agreement is unconscionable (5-4) – from LawMemo

Here’s the rest of what I read this week:

Wage & Hour

• Counting Sheep Over Ledbetter – from Stephanie Thomas at Compensation Cafe

• A Wage/Hour Story Told in Million-Dollar Lawsuits and Wage and Hour Simple? I Don't Think So – from HR Daily Advisor

• Minimum Wage — HR Song of the Week – from The Word on Employment Law with John Phillips

• Senate Committee Holds Hearing on Worker Misclassification – from Washington D.C. Employment Law Update

• Sales Representatives’ Overtime Lawsuits Continue To Result In Conflicting Decisions – from Hunton Employment & Labor Perspectives™

Discrimination

• Gay worker bullied and harassed at Las Vegas Walmart: What’s next, “always low prices” on pink triangles? – from David Yamada’s Minding the Workplace

• The ADA and your EAP – from Sindy Warren at the Warren & Hays Employment Law Blog

• Can Social Recruiting Lead to Discrimination and Equal Opportunity Issues? – from Newton Software Blog

Competition & Technology

• Can Social Media Violate a Non-compete Clause? – from Lawyerist

• To Get Injunctive Relief, Be Able to Prove Specific Irreparable Harm – from Trading Secrets

• Email Rules - Beyond Foul Language – from Rob Radcliff’s Smooth Transitions

• Watch Out for Metadata – from Ken Adams’s AdamsDrafting

Miscellaneous

• Trends in Employment Background Screening – from Nick Fishman at employeescreenIQ Blog

• “Winning” Workplace Arguments is Really Just Consensus Building – from Victoria Pynchon’s Settle It Now Negotiation Blog

• Why and how to choose caddies and local counsel – from Michael’s Maslanka’s Work Matters

• Strategic Use of Swearing in the Workplace – from Bob Sutton

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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.

What do you do when the boss is accused of harassment?

Earlier this week, Forbes.com published an article entitled Bosses Behaving Badly. If you want an example of the type of misconduct the article chronicles, look no further than EEOC v. Fairbrook Medical Clinic (4th Cir. 6/18/10) [pdf], a sex harassment case decided last week. You really have to read the opinion to get the full picture of the degree and scope of inappropriate sex-based conduct in which the medical clinic’s sole owner, Dr. Kessel, was alleged to have engaged. Here’s some of the highlights:

• Repeatedly showing off an x-ray of his penis, calling it “Mr. Happy.”
• Referring to his wife’s “nice, tight pussy,” during a staff meeting.
• Telling dirty jokes, which included imitations of kissing a woman’s breasts.
• Frequently talking to staff members about oral sex and women’s breasts.
• Using terms like “slut” and “cunt” to describe female employees.
• Asking a female doctor if he could help her pump her breast milk, if he could see her breasts, and if he could like up some spilled breast milk.

The 4th Circuit, which is not necessarily known as being the most employee-friendly forum, decisively overturned the district court’s dismissal of the claim:

Activities like simple teasing, offhand comments, and off-color jokes, while often regrettable, do not cross the line into actionable misconduct. ... If they did, courts would be embroiled in never-ending litigation and impossible attempts to eradicate the ineradicable, and employers would be encouraged “to adopt authoritarian traits” to purge their workplaces of poor taste.... This case involves more than general crudity, however.… Kessel targeted her with highly personalized comments designed to demean and humiliate her.

This case, however, raises an issue above and beyond the difference between lawful workplace incivility and actionable harassment. The alleged perpetrator was also the sole owner of the business. If the buck stopped with him, to whom could an employee complain about his harassing behavior? In other words, what do you do when harassment reaches the highest levels of your organization? This question is a difficult one for businesses to answer. I’ll make a few suggestions:

1. Any harassment policy should have more than one avenue available for an employee to complain, such as different people across different department.

2. Additionally, employees should not be limited to complaining in person. Employees should be able to complain in writing, over the phone, or by email.

3. Consider setting up a telephone or email hotline to log complaints.

4. The owner, CEO, or other higher-up should be screened-off from any investigation, other than his or her investigatory interview.

[Hat tip: Daily Developments in EEO Law]

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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 rules that employers do not have to provide pregnant employees greater leave rights than non-pregnant employees

Yesterday, the Ohio Supreme Court handed businesses a huge victory on the issue of pregnancy leave rights.

Pataskala Oaks Care Center had a written policy that required all employees to work for a year before becoming eligible for leave for any reason. It fired Tiffany McFee three days after she gave birth because she was absent from employment before she had become eligible for leave under that policy. McFee sued for sex discrimination. The court of appeals held that Ohio’s antidiscrimination laws require that employers provide employees with a reasonable period of maternity leave, and the at-issue policy that denied McFee leave was direct evidence of sex discrimination.

In McFee v. Nursing Care Mgmt. of Am. (6/22/10) [pdf], the Ohio Supreme Court disagree, and held:

An employment policy that imposes a uniform minimum-length-of-service requirement for leave eligibility with no exception for maternity leave is not direct evidence of sex discrimination….

In reaching this decision, the Court pointed out that the pregnancy discrimination laws do not require preferential treatment for pregnant employees. They merely mandate that employers treat pregnant employees the same as non-pregnant employees who are similarly situated with respect to their ability to work. Because the at-issue length-of-service requirement is pregnancy-blind—it treats all employees the same by requiring every employee to 12 months of employment before becoming eligible for leave—it is not direct evidence of sex discrimination.

The court also harmonized Ohio’s pregnancy discrimination regulations on mandatory maternity leave—Ohio Adm. Code 4112-5-05(G)(2) and (G)(5).

• (G)(2) provides: “Where termination of employment of an employee who is temporarily disabled due to pregnancy or a related medical condition is caused by an employment policy under which insufficient or no maternity leave is available, such termination shall constitute unlawful sex discrimination.”
  
• (G)(5) provides: “Women shall not be penalized in their conditions of employment because they require time away from work on account of childbearing. When, under the employer’s leave policy the female employee would qualify for leave, then childbearing must be considered by the employer to be a justification for leave of absence for female employees for a reasonable period of time. For example, if the female meets the equally applied minimum length of service requirements for leave time, she must be granted a reasonable leave on account of childbearing.”
  

The Court recognized the potential tension between these two provisions. (G)(2) appears to indicate that a policy providing no leave is discriminatory, while (G)(5) states that a uniform minimum-length-of-service requirement for leave eligibility is permissible. But:

Reading these rules in light of the statutory purpose, Ohio Adm.Code 4112-5-05(G)(2) must mean that when an employee is otherwise eligible for leave, the employer cannot lawfully terminate that employee for violating a policy that provides no leave or insufficient leave for temporary disability due to pregnancy or a related condition…. This interpretation of the rule harmonizes (G)(2) with (G)(5), which specifies that when a woman qualifies for leave, the leave provided for childbearing must be reasonable.

Thus, an employer may terminate a pregnant employee who has not yet met a minimum-length-of-service requirement under a neutral leave policy. There are a three key takeaways for employers from this case.

1. Leave policies must be neutral. An employer cannot have a maternity leave policy with a length-of-service requirement, and a different leave policy for other situations with no length-of-service requirement, or one of a shorter duration.
   
2. Employers do not have to offer maternity leave to employees. However, if leave is offered for any reason, it must include maternity leave in at least the same amount and on the same conditions as other types of leave.
   
3. Merely having a neutral policy does not grant an employer carte blanche to terminate pregnant employees or new moms. The policy must still be applied equally to all employees with similarly disabling conditions. If new-employee Bill in accounting needs six weeks off to recover from back surgery, you cannot let Bill take the time unless you are prepared to similarly ignore the length-of-service requirement for all pregnant employees. Otherwise, you are opening yourself up to a claim of pretext—that the application of the facially neutral policy is a pretext for pregnancy discrimination.