Our Own Point of View

Coronavirus / COVID-91 and employers with over 500 employees

2020-03-20T17:06:00.000-04:00

Yesterday's post concerned the Families First Coronavirus Response Act (FFCRA), i.e, the paid leave bill that mandates employers with less than 500 employees provide some type of paid leave.

But what about employers with 500 employees or more?

One thing to remember is that employers who have 500 or more employees are likely (depending on the number of employees at specific locations) already covered by FMLA. So if they have someone who has tested positive or has symptoms of the Coronavirus – or has a close relative who has it and the employee needs to care for them, the employee likely has a “serious health condition” which would trigger FMLA leave and restoration rights.

The Department of Labor is sadly non-committal on whether having Coronavirus symptoms or testing positive is FMLA covered. The DOL issued a webpage on the issue a few days ago, https://www.dol.gov/agencies/whd/fmla/pandemic, but the page does not say whether testing positive or having COVID-19 symptoms is a serious health condition.

The criteria for having a serious health condition are not all that high. For conditions such as COVID-19 it can mean hospitalization or an incapacity for three days with “continuing treatment by a health care provider.” The latter is broadly defined to meant at least one in person visit to a doctor with a follow up. But even here, there is an “extenuating circumstances” exception to the in person follow up visit requirement. I would think the Coronavirus would unquestionably qualify as an “extenuating circumstance.” In short, I would think an employer could and should designate the leave as FMLA covered and protected.

But, to be clear, the DOL webpage also states that “[l]eave taken by an employee for the purpose of avoiding exposure to the flu would not be protected under the FMLA.” I'll assume this is correct (though I expect an impacted employee will at some point argue they are due FMLA for avoiding exposure). So, unlike the FFCRA, the FMLA does not cover employees who need to stay home because a child’s school or day care is closed. Of course, if the child or close family member has a serious health condition, the leave would very likely then be FMLA covered.

Paid Sick and FMLA Leave for the Coronavirus / COVID-19

2020-03-19T18:17:00.000-04:00

While I'm told there are likely to be changes, my partners at Kramer Rayson LLP have put together a short summary of the paid leave provisions in the Families First Coronavirus Response Act (FFCRA). I'll post what we've developed below.

As always, this is not legal advice and you should always consult qualified counsel before taking any action.

On March 18, 2020, Congress passed the Families First Coronavirus Response Act (FFCRA). The president signed the bill the same evening. This new law addresses a number of topics related to Coronavirus such as funding for certain benefits, this alert will focus on the FFCRA’s major impact on employers by requiring paid sick leave in light of the COVID-19 pandemic. This new law goes into effect on April 2, 2020, so employers should not delay in making plans to comply with new paid leave requirements.

FFCRA provides employees with paid sick leave through the use of two new laws: (1) the Emergency Family and Medical Leave Expansion Act and (2) the Emergency Paid Sick Leave Act. Additionally, the new law includes refundable tax credits for employers who are required to provide Emergency FMLA or Emergency Paid Sick Leave.

The Emergency Family and Medical Leave Expansion Act

Employers Covered: All government employers; and all employers with fewer than 500 employees. However, the Secretary of Labor may later exempt businesses with fewer than 50 employees when providing such leave “would jeopardize the viability of the business.” The Department of Labor is expected to issue regulations in the near future that will, among other things, clarify the process to request an exemption.

Employee Eligibility: Those who have been employed for at least 30 calendar days. Does the new law require those days to be consecutive? At this point, that is unclear.

Qualifying Reason: An employee who is unable to work (or telework) due to a need for leave to care for their child if the child’s school or place of care has been closed or the childcare provider is unavailable due to a “public health emergency.” “Public health emergency” has been defined as “an emergency with respect to COVID-19 declared by a federal, state or local authority.” Note: earlier versions of the FFCRA had additional qualifying reasons, but in the version that passed, this is the only qualifying reason.

Amount of Leave: 12 weeks, just like any other kind of FMLA.

Paid and Unpaid Leave: The first ten days of leave is unpaid. However, employees may elect to substitute an accrued vacation leave, personal leave, or sick leave during this ten-day period. After the initial ten-day period, the employer is required to provide ten weeks of paid leave, paid at two-thirds (2/3) of the employee’s regular rate of pay. The law limits the dollar amount of paid leave to $200 per day and $10,000 in the aggregate.

Notice Requirement: As much as is practicable for the employee.

Intermittent Leave: The law does not specifically mention intermittent leave.

Reinstatement Rights: The default FMLA rules apply. However, there is an exemption for businesses with less than 25 employees, if certain conditions are met.

Effective Date: April 2, 2020.

Expires: December 31, 2020.

The Emergency Paid Sick Leave Act

Employers Covered: Once again, only government employers and companies with fewer than 500 employees. Businesses with fewer than 50 employees can request an exemption (same as above).
Employee Eligibility: All employees are immediately eligible (regardless of days of service).

Qualifying Reasons: The Emergency FMLA was limited in this regard. The Emergency Paid Sick Leave Act provides that employees may qualify for leave under several scenarios if the employee is unable to work (or telework):

the employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis;
the employee is caring for an individual who is subject to quarantine or isolation order, or who has been advised to self-quarantine due to COVID-19;
the employee is caring for a son or daughter whose school or place of care is closed, or the childcare provider is unavailable, due to COVID-19 precautions; or
the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Amount of Leave: Full-time employees are entitled to 80 hours (two weeks) of paid sick leave. Part-time employees are entitled to leave equaling the number of hours the employee works, on average, over a 2-week period.

Paid Leave: This depends on if the employee takes leave under the first three scenarios (1-3) or the last three scenarios (4-6). If the employee takes leave under scenarios 1-3, then the employee is to receive his or her regular rate of pay. This is limited to $511 per day and $5,110 in the aggregate. If the employee takes leave under scenarios 4-6, then the employee is to receive 2/3 of his or her regular rate of pay. This is limited to $200 per day and $2,000 in the aggregate.

Employer Limitations: Employers cannot require employees to find a replacement or require employees to use “other paid leave provided by the employer” instead of the Emergency Paid Sick Leave. Presumably, this means the employee gets paid sick time under the new law in addition to any PTO he or she has already accrued.

Penalties for Violations: Same as a minimum wage violation under the Fair Labor Standards Act. This includes fines, imprisonment, damages to the employee amounting to double the unpaid wages and reasonable attorney fees and court costs.

Poster: Within 7 days, there should be a model poster available from the Department of Labor notifying employees of their rights under the Emergency Paid Sick Leave Act. Employers will be required to post that notice in a conspicuous place in the workplace.

Effective Date: April 2, 2020.

Expires: December 31, 2020

TAX CREDITS The new law provides a refundable payroll tax credit equal to 100 percent of qualified paid sick and family leave wages an employer pays for each calendar quarter. It also provides for tax credits for self-employed individuals, as well.

UNCERTAINTIES exist with the current law, such as:

What is the interplay between the two paid leave provisions?
How does intermittent leave play a part, if any, in this new law?
How is the process for seeking exemptions supposed to work? Who decides whether an employee is unable to work or telework?
If an employee is unable to work or telework because the employee is experiencing COVID-19 symptoms, can an employer designate that leave as a serious health condition under the FMLA?
How will the joint employer rules in the Fair Labor Standards Act apply to employers who have more than 500 employees?

We will be sure to keep you up to date as these regulations are implemented.

Again, please be sure to consult with your own counsel before taking any action. We have tried to summarize key points in the Act but the situation is changing daily and your own situation is unique.

The honest-belief rule kicks in even when the reason for firing an employee turns out to be factually mistaken.

2020-03-04T14:12:00.000-05:00

Most employment discrimination claims require the employee to prove that the employer's stated reasons for the adverse action are a pretext. By statute claims based on Tennessee discrimination and retaliation claims require employees “demonstrate that the reason given by the defendant was not the true reason for the challenged employment action and that he stated reason was a pretext for illegal discrimination or retaliation. Tenn. Code Ann. § 4-21-311(e); Tenn. Code Ann. § 50-1-304(g).

Courts define pretext to mean a "lie", more specifically, a lie designed to hide the real reason for a decision. In discrimination claims, the "real reason" needs to be discrimination, of course, so a lie alone won't suffice. St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 511 (1993).

What's hard for folks who are not familiar with employment law to understand is that showing the facts that led to an employee's termination were incorrect does not necessarily mean the employer lied. An employee must show "more than a dispute over the facts upon which the discharge was based." Braithwaite v. The Timken Co., 258 F.3d 488, 494 (6th Cir. 2001). So, a factual dispute about whether the fired employee shoved a co-worker doesn't make the employer's stated reason pretextual. Same for when the employee denies having made the payroll data errors the employer cited as the basis for his termination. Majewski v. Automatic Data Processing, Inc., 274 F.3d 1106, 1117 (6th Cir. 2001) ("Majewski's assertion that he did not delete the payroll wrap is insufficient to call into question ADP's honest belief that he did.").

An employer's honest mistake can itself be a legitimate nonpretextual reason for firing an employee. Today's unpublished decision in Smith v. Towne Properties Asset Management Co. Inc. demonstrates this. Smith worked for Towne, an Ohio apartment management company. She lived in one of the apartments rent free. A co-worker accused Smith of theft in the form of not paying for gas, electricity and parking. Towne investigated, even talked to one of the prior owners (who had employed Smith before them) and asked if the prior owners had agreed to free utilities and parking for Smith (he said no). Shortly after Towne fired Smith, one of the other owners said she believed Smith was entitled to the free utilities and parking.

So, it turns out that Smith probably had not stolen utilities (at least not intentionally). She sued Towne under the ADA and FMLA. Towne won. It prevailed because while it was mistaken, its investigation was reasonably informed and established Towne honestly believed, at the time it made the decision, Smith had misappropriated utilities.

Smith argued Towne's mistake was too obvious to be unintentional, that is, if an employer's "mistakes in its investigation" are so "blatant," that can raise doubts about the honesty of the employer's reasons. But blatant mistakes are hard to prove, especially when the employer carefully documents the steps it took to investigate the employee's misconduct.

Here, Smith argued Towne made a blatant mistake by not talking to her before firing her. But it is settled precedent that an employer ordinarily does not have to interview an employee before a termination decision. Of course, there may be times it is a good idea to talk to an employee, this case shows why. On the other hand, in a theft investigation, giving an employee the opportunity to deny stealing is often a pointless exercise.

Towne did not reconsider its position when it learned there may be doubts about the reason why Smith wasn't paying for utilities. The court said this didn't matter because there was no evidence Smith ever asked for her job back after being fired. Had she, Towne might have had a more difficult time in the litigation. It didn't necessarily have to take her back if she had asked, but Towne would have needed to come up with a legitimate reason for the refusal that was based on more than its prior mistake.

Reading between the lines, there was more to this story than Towne being mistaken. Towne went with theft as a stated reason but Smith was apparently a manager, so Towne could have justified the decision on less sensational grounds. Employers can rightly expect managers to adhere to a higher standard. So when Smith asked Towne for a letter itemizing her compensation and the letter she received did not mention free utilities and parking, Towne could have justified later firing her for continuing to receive the "free" perks even if Smith believed she was entitled to them. As long as it treated nondisabled managers the same, Towne can expect managers to be proactive and forthright.

Employers don't always have to go with the most sensation reason for terminating an employee. Sometimes, particularly with a manager, going with the simplest explanation - we've lost trust in you - and explaining why - is better.

CA6 clarifies disparate treatment (similarly situated) Issues

2020-02-28T12:12:00.001-05:00

One of the published CA6 decisions from today (Straser v. City of Athens) while not an employment decision, exemplifies the principal that in comparing who is similarly situated, the first question is disparity. The disparity issue is usually obvious when the employees are of different races or sexes. The disparities are less obvious when religion and retaliation are involved. The question there starts with the principle that the comparators (those who are being compared too) must have been more favorably treated because they were of a different religion or they had not engaged in protected activity.

Here, an Athens citizen didn’t like being told his carport violated the city’s 30 foot setback requirement. The city's attorney said they would not permit a variance because they "had had trouble with a Muslim” who too had violated the setback requirement. This was a disparity, the employee argued, because he was a Christian and being used as an example.

The Sixth Circuit disagreed, holding equal enforcement – being treated the same – is not a disparity. "It’s equal treatment, indeed the epitome of equal treatment."

Sixth Circuit: ADA Does Not Require Employer to Accommodate Employee's Commute

2012-05-10T11:02:00.000-04:00

Alisha Regan worked for Faurecia Automotive Seating, an automotive manufacturing facility in Michigan. When hired, Regan's work hours were from 6 am to 3 pm. When her husband later took a new job, they moved some 79 miles from Ms. Regan's job, resulting in her commute to work lasting between two and four hours.

Regan has narcolepsy but continued to work without incident until Faurecia determined that her group's 6 to 3 shift was inefficient because materials the group needed did not get to them until later in the morning. When Faurcia change the hours from 7 to 4, Ms. Regan asked to be allowed to leave work at 3 pm (by skipping lunch or starting work earlier) as an accommodation because driving home from work at the later time would put her in heavier traffic. She explained that heavy traffic tired her out more quickly and cause her to become tired. Her commute would take longer because she would have to pull over and rest more often. Faurecia offered FMLA leave but refused to let her end work at 3.

As a threshold matter, the court of appeals addressed whether Ms. Regan's requested accommodation was reasonable because it sought to accommodate difficulties she encountered outside of the work environment. Relying upon decisions from other courts, the court of appeals held that "the Americans with Disabilities Act does not require Faurecia to accommodate Regan’s request for a commute during more convenient hours. Under the facts present here, her proposal of a modified work schedule for purposes of commuting during hours with allegedly lighter traffic is not a reasonable accommodation."

Tennessee employers should not read more into this decision than it says. The EEOC agrees that an employer is not required to "provide assistance in getting [an] employee to and from work." But the EEOC's position is also that an employer must allow an employee to work a "modified work schedule" (e.g. different start or ending times) as an accommodation for a disability.

Frankly, it is not easy to reconcile the Sixth Circuit's decision with the EEOC's position. The Sixth Circuit apparently concluded that difficulties caused by the heavier commute were too attenuated from a symptom of her disability (which an employer must accommodate). I suspect the EEOC might not agree, saying that Regan's disability was a major reason Regan felt she needed to leave early.

EEOC Addresses Employer's Use of Criminal Background Checks

2012-04-25T17:50:00.000-04:00

Today, the EEOC issued an "enforcement guidance" that addresses Title VII liability arising out of an employer's use of criminal background checks.

Of course, as the EEOC acknowledges, Title VII prohibits employment discrimination based on race, color, religion, sex, or national origin but "[h]aving a criminal record is not listed as a protected basis in Title VII." Instead, employers can be found liable under Title VII when, for example, "the evidence shows that a covered employer rejected an African American applicant based on his criminal record but hired a similarly situated White applicant with a comparable criminal record." Most employers get this point.

The more difficult question is when will the EEOC find that an employer's reliance on criminal background checks causes a disparate impact. The EEOC's guidance cites to FBI and other studies and finds that

African Americans and Hispanics are arrested in numbers disproportionate to their representation in the general population. In 2010, 28% of all arrests were of African Americans, even though African Americans only comprised approximately 14% of the general population.

The EEOC also found that imprisonment rates among African Americans was between 5.6 to 10 times higher than imprisonment rates among whites. Comparative statistics for Hispanic arrests and incarcerations are less reliable but equally troubling.

Based on these statistics, the EEOC concludes that "that criminal record exclusions have a disparate impact based on race and national origin." There are two points to note here. I don't dispute the statistics the EEOC relies upon, but the EEOC's adverse impact findings do not distinguish arrests from imprisonment. Assuming neutrality, employers should be able to treat past convictions as more serious than past arrests. Also, as the EEOC acknowledges, these statistics are no substitute for actual statistics tailored to the employer's hiring pool. The EEOC cites national statistics and if, as is usually the case, an employer does not hire from a national pool of applicants, then the employer has the right to insist on the use of accurate local data.

But let's assume there is an adverse impact. The question at this point is whether the practice (however it is defined) is "job related for the position in question and consistent with business necessity." Discussing arrests separately from convictions, the EEOC takes the position that a blanket policy against employing (hiring or firing) individuals because of an arrest history violates Title VII: "an exclusion based on an arrest, in itself, is not job related and consistent with business necessity." But, the EEOC also says, although "an arrest record standing alone may not be used to deny an employment opportunity, an employer may make an employment decision based on the conduct underlying the arrest if the conduct makes the individual unfit for the position in question.." So, with arrests, employers are advised to take each question individually (and, of course, make consistent decisions to avoid disparate treatment liability).

With convictions, the EEOC is a little more flexible but even here it makes the inquiry too complicated. The EEOC does not go so far as to prohibit any questions about prior convictions. It cautions, however, that the "best practice" is to "not ask about convictions on job applications and that, if and when they make such inquiries, the inquiries be limited to convictions for which exclusion would be job related for the position in question and consistent with business necessity." One has to wonder whether the EEOC has ever written a job application because I'm having a hard time seeing how a job application could be written in this manner.

The EEOC also needlessly complicates the task of determining whether a past criminal conviction renders an applicant unqualified. An employer's past conviction policy, it says, must be "tailored to the rationale for their adoption" (considering all the factors) and will "need to be narrowly tailored to identify criminal conduct with a demonstrably tight nexus to the position in question." The EEOC never explains what it means by a "demonstrably tight nexus," much less whether this standard is the same as the business necessity standard in the statute (presumably it is). So far as I (using Google and Lexis) can tell, the EEOC has never used this phrase for any concept. And of all things, why adopt a confusing and potentially more demanding standard in a Guidance on the use of criminal histories. There is just no support for this in the statute.

But while I question whether courts will adopt the EEOC's vague standard, I agree that the better practice for an employer is to never make knee jerk reactions. Blanket exclusions, no matter what the job, are not a good idea. But employer can adopt rational policies, especially for jobs that require the employee be put in a position of trust. The EEOC even acknowledges that "Title VII thus does not necessarily require individualized assessment in all circumstances."

What disappoints me most of all, however, is that the EEOC did not address the kind of evidence or showing it will take for an employee to establish that there was a "less discriminatory 'alternative employment practice' that serves the employer’s legitimate goals as effectively as the challenged practice." The EEOC should have done more than simply parrot the statute especially since, on this question, it is hard to understand how there could be a less discriminatory alternative.

Finally, the EEOC guidance acknowledges that employers will have a valid defense where federal law establishes job criteria. As always, however, employers will need to be able to show that their decisions consistently applied these federal mandates.

Calling Your Lawyer is Not Evidence of Retaliation

2012-04-18T11:10:00.002-04:00

The Sixth Circuit issued a very interesting decision (Sander v. Gray Television Group, Inc. today involving a television news reporter who got mad and stormed off the job, saying "I'm qoing to quit" or words to that effect. The decision is interesting for the holding that the employee did in fact quit and therefore could not establish a prima facie case (because quitting, short of a constructive discharge, is not an adverse action).

But what interested me was that the court, in discussing whether the employer, assuming it had fired the reporter, considered whether one manager telling another manager to contact the station's lawyers because knowing the employee, the station "would end up at this point sitting at this [litigation] table.” In arguing that his "termiantion" was retaliatory (the court assumed the reporter engaged in protected activity) the reporter cited to this comment as evidence of retaliation. The Sixth Circuit didn't buy it:

Companies that terminate employment relationships for legitimate reasons often choose to speak with counsel; therefore, Gray Television’s choice to do so here does not necessarily support a conclusion that Sander was fired in retaliation for complaints about age discrimination.

As of late, I've revived my interest in "age conscious statements" and this decision addressed an argument that is currently being made by older employees. In his ADEA claim, the reporter (Sander) cited to allegedly age biased statements made by his new supervisor (Thomas) (who made some significant changes to the station). The court, however, rejected the argument:

Sander claims that Thomas “admitted that he harbored an age-related bias against Sander.” However, to support this claim Sander can only point to Thomas’s comments regarding Sander’s “weak” energy levels and his perceived reluctance to change. The “perceived reluctance to change” was in relation to Sander’s disgruntled attitude toward learning to post stories on the web, which is not necessarily age-related. As for the “weak” comment, as the district court explained, one’s energy level is not only not necessarily related to age, but also is essential to the success of a television station.

I typically suggest, perhaps a bit unrealistically, that employers avoid making any statements that might be taken to reflect an age animus. (My point is it is better to be explicit, not conclusory, in describing an employee's performance issues and anything that avoids the cost of litigation is a good thing for an employer. But truth be told, this decision shows that many innocent comments can be twisted and used against an employer.

The ADEA and "New Eyes"

2012-03-29T10:53:00.003-04:00

Earlier in my career I tried to compile a list of the alleged "age conscious statements" addressed by federal court decisions. It was fun, but impossible to keep up to date. I still use it from time to time.

A CA6 decision issued today (Metz v. Titanium Metals) involved a new one for me. In making a reduction in force decision, a decision maker (Heatherington) sent an email which compared the respective candidates. The email said:

[Dickinson] has been employed with us for seven-and-a-half years and has continually performed in various capacities at a high level. He is a solid performer and will bring new eyes and tools to the material movement area of the plant . . . . The two Supervisors currently in that area have been with Timet for many, many years, Hercules, 42-plus, Metz, 23-plus, and Mike Saletta is looking to bring new ideas to the area. Hercules will most likely retire within six-to-nine months. [Dickinson] is well-suited to ensuring improvement in this area.

The court rejected the argument that these comments reflected an age bias, explaining:

These comments do not require the conclusion that Timet discriminated against Metz. Heatherington was describing Metz’s and Hercules’s tenures at Timet, which is not the same as their age. See Hazen Paper Co. v. Biggins, 507 U.S. 604, 611 (1993) (an employer’s consideration of an employee’s years of service does not equal discrimination). Heatherington’s remarks about “new eyes and tools” and “new ideas” are ambiguous and do not necessarily refer to age. See Abnet v. Unifab Corp., No. 06-2010, 2009 WL 232998, at *4 (6th Cir. Feb. 3, 2009) (a supervisor’s statement about the need to bring in “new blood” or a “change agent” did not show discrimination). And her mention of Hercules’s plan for retirement does not show age-based animus. See Woythal v. Tex-Tenn Corp., 112 F.3d 243, 247 (6th Cir. 1997) (comments on an employee’s planned retirement, without more, do not show discrimination).

While the court ruled these comments were not discriminatory, employers should not take this as permission to use these words. It is best to play it conservatively. The better practice is to avoid the use of somewhat conclusory statements ("new eyes and tools") in favor of a more detailed explanation of the critical skills the surviving employee possesses.

Subjective Assessments

2012-03-29T10:24:00.002-04:00

There's nothing automatically wrong with basing employment decisions on subjective assessments. For many jobs, particularly exempt jobs, it can be the only way to evaluate an employee's performance.

It is important, however, to do it right. That means being able to explain the reason for the subjective decision adequately. In the disciplinary context, it also helps, strongly helps, to be able to point to past attempts to correct the employee's problematic conduct.

A decision (Segal v. Kimberly Clark) from the Sixth Circuit released today demonstrates the difference between an unsupported subjective decision made in a vacuum and laying the proper groundwork. Consider Kimberly Clark's reason for firing Segal:

First, Kimberly-Clark’s reasons for Segel’s termination are richly supported by the record. Segel’s annual performance reviews persistently expressed concern regarding Segel’s inflexibility toward his colleagues and his clients as early as 2000. When Segel’s 2006 performance review indicated a heightened level of dissatisfaction with Segel’s inflexibility, Kimberly-Clark provided Segel with both a 90-day PIP and a 30-day Last Chance Agreement to improve his behavior. Both documents highlighted Segel’s inflexibility as the reason for Segel’s probationary status with Kimberly-Clark and made clear that Segel’s failure to improve would result in termination.

Segal argued that “flexibility” is an entirely subjective criterion, and that “[s]ubjective assessments are easily susceptible to manipulation in order to mask the interviewer’s true motivations.” He tried to rely upon a a previous CA6 decision, White v. Baxter Healthcare Corp., 533 F.3d 381 (6th Cir. 2008). The court, however, explained what White held and why that didn't apply to Segal:

In White, an African-American employee appealed the district court’s grant of summary judgment in favor of his prior employer. 533 F.3d at 384. The employee in this case had received stellar performance reviews and was interviewed for an internal promotion; ultimately, however, another candidate was selected for the job. Id. at 386-87. The employer explained that the other candidate was selected because the interviewers considered the employee “extremely aggressive” and “confrontational.” Id. at 387. This Court reversed the district court’s grant of summary judgment, holding that:

any evaluation of [plaintiff’s] interview performance is an inherently subjective determination, and thus easily susceptible to manipulation in order to mask the interviewer’s true reasons for making the promotion decision. Indeed, since the very issue in dispute is whether the reasons given by these interviewers for their decision should be believed, it would be highly inappropriate for us to assume . . . that their own subjective perceptions of [plaintiff] were accurate.

Id. at 394. Accordingly, this Court found that a jury could reasonably disbelieve the employer’s proffered explanation and that the employee’s case was entitled to go forward.

The facts in this case are distinguishable from White. The record in this case presents a longstanding concern with Segel’s flexibility; whereas the adverse employment decision in White occurred in a vacuum of otherwise glowing reviews, Kimberly-Clark’s decision to terminate Segel took place after years of documented concerns regarding his flexibility. Further, the plaintiff in White was interviewed by only four people on one occasion, whereas Segel was evaluated by a greater number of individuals on multiple occasions over the course of many years. So, even though a subjective term like “aggressive” was not a sufficiently clear motivating factor in White, we find that a similarly subjective term—“inflexible”—is adequate where it was repeatedly utilized by varying people on numerous occasions.

So, wise employers won't rely upon subjective decisions "in a vacuum of otherwise glowing reviews" but will lay the ground work by showing a history of addressing the problematic conduct with the employee.

Sixth Circuit Rules Employer Violated FMLA by Failing to Advise Employee How It would Calculate FMLA Leave Eligibility

2012-01-20T10:54:00.001-05:00

The Sixth Circuit issued an ugly decision today in an FMLA interference claim. It's ugly because it didn't need to happen.

The dispute concerned when the employee was required to return from FMLA leave. The employee thought he had longer than did the employer, who fired the employee when the employee didn't return by the employer's deadline. The employee maintained he would have been able to return to work by the deadline as he understood it.

The problem arose in how the employer calculated the employee's eligibility for 12 weeks of leave. The court explained:

The FMLA stipulates that, “an eligible employee shall be entitled to a total of 12 work weeks of leave during any 12-month period . . . because of a serious health condition that makes the employee unable to perform the functions of the position of such employee.” 29 U.S.C. § 2612(a)(D). Employers, for their part, are “permitted to choose any one of . . . [four] methods for determining the ‘12-month period’ in which the 12 weeks of leave entitlement . . . occurs.” 29 C.F.R. § 825.200(b). Two of these four methods, namely, the “rolling” method and the “calendar” method, are pertinent to this case. The “rolling” method calculates an employee’s leave year “backward from the date an employee uses any FMLA leave.” Id.

Under the rolling method, the employee's 12 weeks of leave would have expired on June 13, while under the “calendar” method, the allowed leave would have extended theoretically through July 14. The problem, the court said, was that (the emphasis belongs to the court):

At no time throughout the FMLA process did the Company mention to Thom that his leave time would be governed by a “rolling” 12-month period. The only written document he received from the company stated that his leave would expire on June 27. He was only notified that American Standard had accelerated his return-to-work date on June 14, after it had already elapsed the day before. The first time Thom was given actual notice that the Company was using a “rolling” method requiring him to return to work on an earlier date was after he filed his lawsuit in this case when the defense lawyers raised the rolling method as a defense.

The employer tried to argue that it had given notice to the employee but the court didn't buy it:

employers should inform their employees in writing of which method they will use to calculate the FMLA leave year. This standard is consistent with the principles of fairness and general clarity, and applying it, [the employer']s notice to [the employee] fell decidedly short. Although [the employer] did internally amend its FMLA leave policy in March 2005 to indicate that it would now calculate employee leave according to the “rolling” method, it did not give [the employee] actual notice of this changed policy.

Even worse, the employer had approved the employee's FMLA leave for though June 27, which was well after it later maintained, in the litigation, the employee's leave expired.

The lesson is pretty simple. Make sure to designate the manner in which you will calculate FMLA leave eligibility. The rolling calendar method is the one most employer's favor. But more importantly, make sure to calculate FMLA leave eligibility for each employee before approving a return to work date. But even if you mistakenly approve a return to work date after an employee's eligibility expires, you can fix the mistake by notifying the employee of the new return to work date. Depending on the circumstances, specifically, the employee's reliance on the longer leave period, you may have to be flexible in when the employee returns.

Sixth Circuit Upholds FedEx Reorganization Decision

2011-09-15T10:10:00.000-04:00

Linda Epps worked for FedEx in Memphis as an IT Manager, managing one project called the Managed Resource Services Office or MRSO. In 2006, FedEx brought in another manager (named Black) who carried four projects and one initiative. Not much later, Werner (to whom Black and Epps reported) decided to eliminate Epp's IT Manager position and transfer the MRSO duties to Black. Epps trained Black on those duties. FedEx gave Epps the opportunity to locate a new management position but after she was unable to do so, she took a demotion which required her to report to Black and reduced (gradually over an 18 month period) her salary. Epps later sued for race discrimination.

What seems most helpful about the unpublished decision is how the court analyzed FedEx's reasons for the reduction/demotion. The question, of course, was why select Black instead of Epps to be the IT Manager.

Assigning the consolidated duties to Black required Black to learn one new project: MRSO. In contrast, had the consolidated job been assigned to Epps, she would have been required to learn four new projects and one initiative. Based on the number of direct reports managed by Epps and Black prior to the demotion, it is likely that MRSO was a larger project than any one of the projects on which Black was working. However, it appears that Black had the larger sum total of management responsibilities, and her work covered a greater number of discrete areas. Therefore, FedEx has provided a legitimate, nondiscriminatory explanation that it was more efficient to assign the MRSO project to Black than to move all of Black’s projects to Epps.

Further, Black had a longer tenure with FedEx, had more experience reporting to senior level management, and had won two of the company’s five-star awards for excellent work. Although Epps had a consistently positive work history with FedEx and had earned a promotion to management, her most recent year-end evaluation had identified several areas in which improvement was needed. Werner stated that he was focused on efficiency—not prior job performance—in choosing who should take on the consolidated duties. However, he mentioned his awareness of Black’s strong track record with the company, and that history further supports the business decision to select Black over Epps for the remaining management position.

In making difficult decisions to select employees for a reduction in force, employers are smart if they can explain the reasons for the decision in the manner recounted above. The temptation, as I bemoaned before, is to try to objectify or quantify what is really a subjective analysis. While not illegal, I feel it is better to be able to explain the decision in words, as FedEx did, rather than by assigning numbers to subjective factors.

Epps tried to argue her selection was pretextual because she had gotten her first negative evaluation just after her demotion. The court's response to this argument is a good lesson for all employers because even Epp's prior evaluations, while overall positive, "indicated several areas in which" Epps supervisor "expected improvement, clearly signaling the potential for a future negative review." Again, wise employers will address performance problems as they arise, and then document them as areas for improvement on performance evaluations, even if the issues do not themselves merit a lower overall rating.

Documenting Poor Performance

2011-09-14T10:30:00.000-04:00

It's a recurring theme, one I have addressed before, but it can't be stressed enough how helpful it is in defending employment litigation to have adequate documentation of poor performance.

In an unpublished decision issued today, the Sixth Circuit affirmed summary judgment for ServiceMaster in an age and disability lawsuit because the employee's new manager properly documented her dissatisfaction with the employee.

The court rejected the employee's ("Webb") several attempts to establish that he was meeting the employer's legitimate qualifications for the job, explaining:

Webb does not offer probative evidence that he was qualified. First, Webb relies on positive performance reviews from prior years to establish his qualifications at the time of termination. On facts closely resembling this case, this court in Strickland expressly rejected such use of prior year-end performance reviews because they suffered from “staleness” and did not establish that a plaintiff was “qualified at the time of her termination.” Strickland, 45 F. App’x at 424. As in Strickland, this evidence is stale because Webb’s performance or ServiceMaster’s expectations may have legitimately changed since the prior review period. Second, Webb offered emails in which coworkers requested Webb’s assistance on a project, which Webb believes show that his work was adequate and, therefore, met ServiceMaster’s expectations. The opinion of Webb’s coworkers is irrelevant: under both the ADEA and THRA the relevant test is the legitimate expectations of an employer, not a coworker. See Strickland, 45 F. App’x at 424. Even if the court were to consider these emails, they do not create a genuine issue of material fact: no reasonable jury could find that one routine request for assistance demonstrates that Webb was meeting the legitimate expectations of his employer. For these reasons, Webb has provided no evidence that he was meeting his employer’s legitimate expectations at the time of his termination and, therefore, has not established either his age or disability discrimination claims.

What did the employer do right? The court explained that Webb's new manager, "had concerns about Webb’s productivity, began supervising him directly and found his work unacceptable or incomprehensible, gave Webb a negative midyear performance review, placed him on a [performance improvement plan] during which Webb failed to improve, and ultimately recommended Webb’s termination for unsatisfactory performance and a failure to perform “at the manager level.”

There was, of course, no evidence of disparate treatment.

Similarly Situated Evidence - Employers Must Consider Differences

2011-09-12T15:00:00.000-04:00

The court of appeals in Chicago recently issued an instructive decision on comparing similarly situated employees. The fired employee worked for the Indiana Department of Corrections and repeatedly refused a job assignment to the point that the DOC fired her. She sued under the ADA alleging the firing was a pretext for getting rid of her because she had back problems (which was one reason she refused the job assignment).

The court of appeals initially addressed whether the employee was similarly situated to two other employees who had also refused (to some degree) a job assignment. This aspect of the decision can be summed up by saying that employers shouldn't try to split too fine a hair in making employee comparisons.

The more important point, it seems to me, is that employers should consider all factors that distinguish an employee from co-workers when deciding on the level of discipline for an employee. Here, when the lawsuit got to litigation, the employer argued that the fired employee was not similarly situated to other employees who were not fired because the fired employee had a worse disciplinary history. Of course, an employee's disciplinary history is a perfectly valid consideration in imposing discipline.

The problem for the employer was that (as the court said): "not only does the evidence fail to indicate that disciplinary history was considered, but the record makes clear that disciplinary history played no role in DOC’s decision to terminate . . . employment." It explained:

A characteristic that distinguishes two employees, regardless of its significance when objectively considered, does not render the employees non-comparable if the employer never considered that characteristic. The purpose of the similarly situated requirement is to provide a basis for a judgment about the fairness of the employer’s decision. Factors never considered by the employer cannot provide any insight as to whether the employer’s decision was motivated by discriminatory intent.

The problem here was that the employer's evidence established that disciplinary history was not a consideration at the time.

So, in considering discipline for misconduct, it will help to make sure your documentation demonstrates you took into account all the differences between employees. While this should be documented (so as to avoid the argument that the evidence was manufactured after the fact), it is at least as important to consider all the reasons for distinguishing employees. At a minimum, the decision-makers need to be able to convincingly testify that they considered the factors which distinguished the fired employee from employees who were not fired.

Sixth Circuit: Tennessee Employers May Require Prompt Reporting of Compensable Injuries

2011-09-09T11:00:00.000-04:00

Julie Geronimo worked for Caterpillar in Dyersburg until she was terminated for failure to promptly report a work injury. Geronimo worked as a machinist and then an assembler. Not long after starting the assembler work, Geronimio began to experience pain. Her job required her to press down clutch plates on an assembly line and from the start, Geronimo experienced "muscle strain" in her palms, upper arms, and fingers. The pain continued and, after four weeks on the job, it increased, causing her hands to go numb and tingle when performing manual tasks even outside of work.

Geronimo said nothing to Caterpillar about the pain for some 35 days. She then spoke to the company nurse, telling the nurse she may have to have surgery. Geronimo had not consulted a physician. Rather, as she told the nurse, she had read about her condition on the internet a week earlier. By the time Geronimo spoke to the nurse, she was characterizing her pain levels as almost unbearable. The day after seeing the nurse, Caterpillar fired Geronimo because of her "failure to communicate an injury in a timely manner."

Caterpillar's safety rules require employees to report the occurrence of injuries immediately or, if the injury was gradually-occurring, to report it as soon as an employee realizes they are injured and suspects it is work related. Geronimo admitted she knew the policy. She decided not to report the pain, she said, because she thought she would lose her job.

Geronimo filed a lawsuit alleging Caterpillar's reporting requirements, specifically, her termination for failing to follow the reporting requirements, violated Tennessee's workers' compensation law. Her argument was that the workers' compensation law permits employees to obtain compensation if the employee reports an injury within 30 days and Caterpillar's immediate reporting requirement contravened the statutory reporting provisions.

The Sixth Circuit didn't buy it, holding that even though the statute gives her thirty days in which to report a gradually-occurring injury if she wants to obtain workers’ compensation benefits, the statute also provides that an injury "shall" be reported immediately. Tenn. Code Ann. § 50-6-201(a). Thus, the court held, an employer's policy requiring prompt reporting of injuries is not inconsistent with the workers' compensation law.

Caterpillar imposed the reporting rule, it explained, because the "late reporting of injuries can result in otherwise avoidable aggravation of those injuries, whereas timely reporting will allow the problems to be addressed before they become severe and may also help to prevent other employees from becoming similarly injured."

The court agreed with this policy, characterizing Geronimo's argument as giving:

employees the opportunity to aggravate existing work injuries, potentially compromise the safety of other individuals, and prevent their employers from providing possible remedies for gradually-occurring injuries at the earliest possible date, by choosing not to report their injuries for days, or even weeks, after the employee realizes she has been injured. Moreover, although the statute grants an employee a maximum of thirty days in which to report the injury and still obtain workers’ compensation, the language itself not only mandates immediate reporting by all employees, but provides incentive to do so by refusing to allow payment of physician’s fees or compensation for the period of time between when the injury occurred and when the employee provided notice of the injury. See Tenn. Code Ann. § 50-6-201(a).

Tennessee employers thinking about adopting Caterpillar's injury reporting policy should be aware that the facts of this case are rather unique and it will (or should) be rarely used to fire an employee. Geronimo made a crucial mistake in admitting to the nurse that she knew she had injured herself before she reported it. Most employees won't make that mistake, at least not after the employer fires an employee for violating the timely reporting requirement. In addition, employers must enforce a reporting policy evenhandedly. There was no allegation of disparate treatment in this case. Nor was there any evidence that Caterpillar used the reporting requirement to rid itself of employees who sustained compensable injuries, or that it fired employees before they could claim a compensable injury. Evenhanded enforcement will also help to avoid any potential FMLA or ADA concerns.

It can't be emphasized enough that employers who have a policy of this nature should do everything possible to avoid firing employees who timely report injuries. Had Geronimo, for example, presented evidence that employees who timely reported injuries did, in fact, lose their jobs (as she believed) the outcome might have been different.

Of course, Caterpillar's goal was to head off gradual (or soft) injuries before they necessitate significant or costly corrective action. That is laudable from several aspects and one or two firings for violating the policy should serve to emphasize that the employer is serious about employee safety.

Sixth Circuit Holds Volunteer Firefighters Can Be "Employees" for Title VII Coverage

2011-09-02T10:59:00.000-04:00

A published decision from the Sixth Circuit today held that volunteer firefighters may be counted as "employees" for purposes of determining whether the "employer" has enough employees for Title VII coverage.

Title VII only applies to employers of 15 or more employees. How to count 15 employees is somewhat complex and has required the Supreme Court to set in and resolve the issue on at least one occasion. The statute requires counting the number of “employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year . . . .” 42 U.S.C. § 2000e(b).

In this case, the employer only had 4 "employees" and without counting the volunteer firefighters, there would be not be enough employees to permit the employee to sue for sexual harassment under Title VII.

The EEOC position on whether to count volunteers is that "an individual may be considered an employee of a particular entity if . . . [she] receives benefits such as a pension, group life insurance, workers' compensation, and access to professional certification . . . .” EEOC Compliance Manual. The benefits must, the EEOC states, constitute "significant remuneration" rather than merely the "inconsequential incidents of an otherwise gratuitous relationship."

Where the Sixth Circuit parted company with the district court and to some degree the EEOC (which had previously ruled in favor of coverage) was in how to consider the remuneration factor. The Sixth Circuit concluded the district court, by holding there had to be "significant remuneration" put too much emphasis on the remuneration factor to the exclusion of other considerations. To the court the question is whether there is "remuneration" not "significant remuneration" and to illustrate the point, noted that the volunteer firefighters:

received worker’s compensation coverage, insurance coverage, gift cards, personal use of the Department’s facilities and assets, training, and access to an emergency fund . . . and that, for particular portions of the relevant time period, certain firefighter-members received a one-time, lump-sum retirement payment4 and others received an hourly wage. The district court, however, limited its analysis to remuneration without considering any other aspects of the Department’s relationship with its firefighter-members. Although remuneration is a factor to be considered, it must be weighed with all other incidents of the relationship.

Tennessee Appeals Court Addresses Similarly Situated Standards

2011-09-01T22:45:00.000-04:00

Sharon Hartman worked for Tennessee Tech for about 13 years as a Stock Clerk. Her job was to purchase supplies and equipment, which required her to be intimately familiar with Tech's purchasing policies. Tech fired Ms. Hartman after she made unauthorized purchases which exceeded the monetary limits of her authority. The mistake was inadvertent but had Hartman followed the purchasing policies it would not have occurred.

In Ms. Hartman's sex discrimination claim under the Tennessee Human Rights Act, she argued she was similarly situated to a male named Parks who was plumbing shop supervisor. Unlike Hartman, Parks was not charged with being familiar with Tech's purchasing policies. On one ocassion, Parks ordered plumbing supplies which exceeded the same monetary limits. Unlike Hartman, however, when Parks learned the supplies were over the limit, he rejected the order and went through the appropriate procedures for the purchase.

The court of appeals rejected Hartman's argument that she and Parks were similarly situated, explaining:

The duties and responsibilities listed on Ms. Hartman’s official job description include: “Maintains warehouse stock item inventory. Solicits, evaluates and awards bids; and orders warehouse stock items,” “Initiates bid process for warehouse stock items,” “Makes contract award recommendations to Purchasing [Office] regarding warehouse inventory stock items,” “Secures additional specification recommendations to Purchasing regarding warehouse inventory stock items.”

Troy Parks’s official job description, by contrast, does not contain a single reference to the purchasing guidelines or the bidding process. According to Ms. Hartman, Mr. Parks was required to work with a Buyer from the Purchasing Office, or someone with equivalent purchasing authority in order to make purchases. The affidavit of Dr. Michael Nivens, the director of Facilities and Business Services, states that “Troy Parks does not have the same kind of purchasing authority as [Ms. Hartman.] [Ms. Hartman] was a purchaser. Mr. Parks is not, and he is not expected to have the same level of knowledge regarding the purchasing policies.” The affidavit of Dr. Claire Stinson, the Vice-President for Finance and Planning, states, “[Troy Parks] is not expected to be familiar with the purchasing guidelines. It was a job requirement that [Ms. Hartman] be familiar with the purchasing guidelines.”

Ms. Hartman does not dispute these facts. Instead she contends the court should not consider the differing levels of responsibility and authority when evaluating whether she is similarly situated to Troy Parks. In essence, she asserts that the only relevant similarity in this case is the fact that both she and Mr. Parks were subject to the same purchasing rules and that they both violated those rules. We find no merit in this argument. It was a job requirement for Ms. Hartman to know and understand the purchasing policies because she had significant discretion in carrying out purchases using public funds. Mr. Parks on the other hand, required supervision when carrying out purchases, often times supervision by Ms. Hartman. He did not fail to fulfill an essential job requirement when he violated the purchasing policy.

* * *

Moreover, Ms. Hartman’s conduct was different from Mr. Parks’s. Troy Parks voluntarily informed his supervisors about his order before the University was required to pay the supplier. By contrast, Ms. Hartman’s supervisors approached her after the first invoice arrived on the filters, which were custom made and non-refundable. Even at that time, she did not inform her supervisors that the order was not complete, and that a second invoice would be arriving. Ms. Hartman argues that the effects of her actions vis á vis those of Mr. Parks are irrelevant, because the fact remains that they both violated the same rule. Again, we disagree. It is significant that Mr. Parks voluntarily notified his supervisors at a time when the damage could be limited.

The decision is significant because it recognized that job responsibilities as well as differences in conduct may establish that two employees are not similarly situated.

Sixth Circuit Holds Employee Did Not Agree to Arbitration When Handbook Simply Referred to Dispute Resolution Procedure

2011-08-30T11:30:00.000-04:00

Bickford Senior Living Group fired Maureen Hergenreder, a nurse, in early January 2007 and she filed a lawsuit alleging her firing violated the Americans with Disabilities Act. Bickford moved to compel arbitration. None of the documents Hergenreder signed when she started employment (only a few months before she was fired) mentioned arbitration. Bickford's employee handbook, as is typical, said it was not a contract of employment, but that it was a summary of policies and procedures that apply to employment.

The handbook made no mention of "arbitration" as such. Instead, it stated: “Dispute Resolution Process Please refer to the Eby Companies Dispute Resolution Procedure (DRP) for details.” The Dispute Resolution Procedure, of course, required employees to submit all disputes to arbitration. While Hergenreder acknowledged receipt of the employee handbook, she submitted an affidavit in which she stated she had "never seen or signed" for the Dispute Resolution Procedure. Bickford did not produce any acknowledgment form signed by Hergenreder for the Dispute Resolution Procedure. Instead, it provided an affidavit from its Vice President of Employee Relations, Jerry Knight, who states that the DRP “is distributed to employees.”

Absent evidence that Hergenreder had actual knowledge of the arbitration clause or at least was advised of the significance of the Dispute Resolution Procedure, the Sixth Circuit held Hergenreder could not be compelled to submit her ADA claim to arbitration (emphasis added):

There was neither an offer nor an acceptance. The objective signs that Bickford made Hergenreder an offer to be part of the arbitration agreement are few in number. The best Bickford can say is that Hergenreder was informed that, for “Employee Actions,” she should “refer” to the DRP. In Bickford’s view, Hergenreder “was or should have been aware of the DRP and so is bound by it.” Bickford Br. at 13 (capitalization removed). Yet she was not required to refer to the DRP; the “handbook does not constitute any contractual obligation on [Hergenreder’s] part nor on the part of Bickford Cottage[.]” Hergenreder Br. at Ex. 6 (Receipt of Employee Handbook Form). Moreover, the simple reference in the Handbook to “the Eby Companies Dispute Resolution Procedure” for “details” is not “the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.” Kloian, 733 N.W.2d at 770 (internal quotation marks omitted). This statement says nothing about arbitration, and it says nothing that would indicate to Hergenreder that accepting or continuing her job with Bickford would constitute acceptance. Indeed, it is incorrect to conflate the fact that Hergenreder knew generally of the DRP with the notion that she knew of the arbitration language—and Bickford’s desire to create an arbitration agreement—contained within the DRP. Were Hergenreder required to read, or even notified of the importance of reading, the DRP, the analysis here might be different. But this court’s inquiry is focused on whether there is an objective manifestation of intent by Bickford to enter into an agreement with (and invite acceptance by) Hergenreder, and we are not convinced that there is any such manifestation made by Bickford in the record in this case.

It turns out the holding is relatively narrow. If the employee handbook or any other document the employee signs does not expressly require arbitration of employment disputes, then the document must at least emphasize the "importance of reading" the document that contains the arbitration clause. The decision serves as a good reminder that the best course for employers is to have the employee sign a document consenting to arbitrate all employment disputes. While the Sixth Circuit may require less than this, there's no reason to beat about the bush on something like this.

In fact, I'm having a hard time understanding why the employer didn't mention the arbitration clause here. Perhaps it was just a clerical oversight. In any event, employers are generally free to draft policies and procedures how they want. In drafting employment contracts, policies and even benefit plans, I often advise clients to "take the easy road" and include language that will avoid a dispute if at all possible. It is relatively easy to add a sentence to a policy when drafting a document especially if it might avoid costly litigation.

Sixth Circuit Addresses "Associational Discrimination" Under the ADA

2011-07-08T10:30:00.001-04:00

A little used provision in the ADA prohibits "excluding or otherwise denying equal jobs or benefits to a qualified individual because of the known disability of an individual with whom the qualified individual is known to have a relationship or association." 42 U.S.C. § 12112(b)(4). Under this provision, the EEOC has explained,

an employer may not treat a worker less favorably based on stereotypical assumptions about the worker’s ability to perform job duties satisfactorily while also providing care to a relative or other individual with a disability. For example, an employer may not refuse to hire a job applicant whose wife has a disability because the employer assumes that the applicant would have to use frequent leave and arrive late due to his responsibility to care for his wife.

The Sixth Circuit appeal involved an employee, Stansberry, who managed the employer's, Air Wisconsin, operations at the Kalamazoo Michigan Airport from 1999 until he was fired on July 26, 2007. In the mid-1990s Stansberry’s wife developed Polyarteritis Nodosa, a very rare and debilitating autoimmune disorder. The treatment for this condition "involves medications to suppress the immune system, including prednisone and cyclophosphamide." It is expensive. Costing Air Wisconsin's insurer some $4,000 every six weeks.

At some point in 2007, Air Wisconsin increased it operations in Kalamazoo, growing from eleven employees to twenty-five. Stansberry was responsible for ensuring all employees properly carried out their jobs and there were several significant problems with the new hires. Between February and May 2007, six different employees received a total of nine security violation letters from the Kalamazoo airport director. Stansberry failed to notify Air Wisconsin’s corporate headquarters about the violations, they learned about the violation only when the Transportation Security Administration sent a letter of investigation to Air Wisconsin’s headquarters.

Stansberry, already had issues with his boss, Mulder. When Mulder reviewed the security violations, he let the TSA know he would be taking "severe disciplinary action" against Stansberry. Air Wisconsin asserts that it terminated Stansberry for poor performance based on his failure to stay within budget, failure to report security violations, and improper supervision of employees, which led to the security violations in the first place. The prepared termination letter Mulder brought with him to the meeting, however, simply mentioned the security violations.

Relying on a Seventh Circuit decision, Larimer v. Int’l Bus. Machs. Corp., 370 F.3d 698, 700 (7th Cir. 2004), the Sixth Circuit decision summarized the types of theories under which an associational discrimination claim could be brought:

Several circuits, including this Court in an unpublished opinion, have relied on Larimer’s outline of three theories into which “association discrimination” plaintiffs generally fall: (1) “expense”; (2) “disability by association”; and (3) “distraction.” The “expense” theory covers situations where an employee suffers an adverse employment action because of his or her association with a disabled individual covered under the employer’s health plan, which is costly to the employer. The “disability by association” theory encompasses two related situations. Either the employer fears that the employee may contract the disability of the person he or she is associated with (for example the employee’s partner is infected with HIV and the employer fears the employee may become infected), or the employee is genetically predisposed to develop a disability that his or her relatives have. The “distraction” theory is based on the employee’s being somewhat inattentive at work because of the disability of someone with whom he or she is associated. Id. at 700.

Stansberry relied only on a “distraction” theory. Stansberry, who lacked direct evidence, argued that the court should infer discrimination because he was discharged shortly after his wife's condition worsened. The court rejected the argument:

although her condition grew worse immediately before Stansberry was terminated, Air Wisconsin had been aware of her illness for many years. Because Air Wisconsin knew of her disability for a long period of time, this undercuts the inference that Stansberry’s termination was based on unfounded fears that his wife’s disability might cause him to be inattentive at work.

While the court held Stansberry couldn't establish a prima facie case, it also held he could not show his discharge was because of his association with his wife:

Importantly, while Stansberry’s poor performance at work was likely due to his wife’s illness, that is irrelevant under this provision of the Act. Stansberry was not entitled to a reasonable accommodation on account of his wife’s disability. Cf., e.g., Larimer, 370 F.3d at 700. Therefore, because his discharge was based on actually performing his job unsatisfactorily, and not fears that his wife’s disability might prevent him from performing adequately, Air Wisconsin’s conduct is not prohibited by this section of the Act.

There is an important caveat to the decision. While the ADA does not require an accommodation in these circumstances, the FMLA (which may not have applied to Stansberry) might require time off from work.

The EEOC also points out that "an employer must avoid treating an employee differently than other employees because of his or her association with a person with a disability." It gives two examples:

Example J: Kyung, an employee at an accounting firm, requests a week of unpaid leave and is told by her supervisor that there will be no difficulty in granting the leave. Kyung then mentions that she will be using the leave to care for her mother with a disability, who is coming into town for medical treatments. The supervisor denies the leave request, telling Kyung that the firm's leave policy is not intended to cover this type of situation and that she should hire someone to look after her mother. A few days later, the supervisor approves Diego's request for a week of unpaid leave to attend a father-son camp with his son. If the firm grants requests for unpaid leave for certain personal or family reasons, it is a violation of the ADA's association provision to deny Kyung's request because she wishes to use the time to assist her mother with a disability.

Example K: A law firm permits its attorneys to use 100 hours of administrative leave a year to provide pro bono legal services. One attorney, Sylvia, wants to use these hours to work with a non-profit organization that provides legal and other services to individuals with psychiatric disabilities. The law firm denies her request because it does not believe that this type of work will reflect well on its image. If the firm allows attorneys to use administrative leave to provide pro bono legal services, it is a violation of the association provision of the ADA to deny Sylvia's request because she wishes to use the time to assist individuals with disabilities.

DOL Wage and Hour Division Looking to Hire 6 New Investigators for Tennessee

2011-06-27T18:01:00.000-04:00

I like to follow local (Knoxville for me) openings for federal employees. It is not tempting personally but I do a lot of business with the federal government and it is a good barometer of hiring activity.

I was intrigued by the fact that the U.S. Department of Labor today announced openings for six new Wage and Hour investigators working out of Nashville, Memphis and Knoxville (here is a link to all six openings). The position vacancy posting encouraged applicants (who pretty much must be federal employees already) to "Begin a challenging career with the U.S. Department of Labor (DOL), and you will help shape the workforce of tomorrow." I thought Tennessee employers might benefit from seeing the minimum objective qualifications required for the position.

The job duties are described:

The incumbent conducts complete investigations and negotiations involving routine issues and situations to obtain the compliance of business enterprises and State and local governments with the provisions of Federal labor laws, regulations, and orders pertaining to minimum wage rates, overtime pay requirements, child labor provisions, wage garnishments, employment eligibility, domestic service in households, and similar matters pertaining to conditions of employment, wages, and hours worked. Develops information required to resolve issues in cases requiring a full investigation through: interviews with employers and workers; analysis of pertinent business records; and review of laws enforced by the Wage and Hour Division, related interpretive bulletins, and precedents to identify specific provisions that are applicable to the case peculiarities. Conducts negotiations with the firm owner or manager, attorney, or other firm representative at the appropriate authority level to: (1) advise the employer that there is a violation of the law; (2) fully explain requirements needed to achieve and maintenance compliance; (3) persuade the employer to accept computed back wages found due to employees; and (4) obtain agreement to pay the back wages due employees involved within prescribed monetary limitations. Prepares case reports, including recommendations for closing the case or any further administrative actions that should be taken. The above duties are developmental assignments, and as the incumbent progresses, the assignments will become more difficult and complex, leading to progression ultimately to the full performance level of GS-12.

The qualifications (forgetting the ones unique to being a federal employee) are:

1. General knowledge of Federal wage and hour labor laws, industrial occupations, wage scales, employment practices, or salary and wage administration practices.
2. Skill in analyzing written/verbal information and numerical data and making decisions on issues based on interview, records review, reconstruction of missing or fraudulent records and applying legal or regulatory provisions, precedents, and principles to specific investigative matters.
3. Skill in personal contacts requiring the ability to explain requirements or rights and obtain information and cooperation from people with diverse backgrounds and levels of understanding, reconcile conflicting interests, and persuade others to comply voluntarily with requirements.
In addition to the criteria specified above, applicants must have knowledge of and ability to apply the provisions of Federal wage and hour labor laws pertaining to wages, hours of work, or related conditions of employment. Examples of qualifying specialized experience include:
Developing, interpreting, or applying policies, procedures, and operating standards in determining compliance for an organization or government based program. Conducting interviews and providing information about laws and/or regulations. Industrial personnel or salary and wage administration or responsible work in a certified public accounting firm. Analyzing or apply labor legislation. Reviewing and evaluating operations and procedures through analysis, audits, or surveillance inspections. Federal, State, or self-regulatory agency work involving obtaining compliance with appropriate program requirements.

I have almost always gotten along with the DOL investigators with whom I have dealt. I don't necessarily agree with them all but that is the nature of the business anyway. Here is hoping the new hires are well-qualified for the job.

Governor Signs Bills Restoring Summary Judgment to Employment Discrimination Claims in Tennessee

2011-06-20T14:54:00.000-04:00

The Governor has now signed both bills passed by the General Assembly designed to restore summary judgment standards in Tennessee.

The General Assembly's website indicates that on June 10, 2011, the Governor signed HB 1641, which, as I explained in a prior post, codifies the McDonnell Douglas / Burdine analysis at all stages of the proceedings, including, on a motion for summary judgment. While the Act takes effect as of June 10, 2011, it also provides that it applies “to all causes of action accruing on or after such effective date.” Thus, employment decisions made after this date, will have summary judgment decisions adjudicated using the McDonnell Douglas / Burdine analysis.

My prior post mentioned another bill. This one is not directed at employment discrimination claims but applies to all civil claims. It legislatively overrules Tennessee Supreme Court decisions that made it much more difficult (if not impossible) to obtain summary judgment. The governor signed this bill on June 16, 2011. The summary judgment bill, by the way, would not take effect until July 1, 2011, and states that it only applies to “actions filed on or after that date."

These bills will certainly be good news to employers who have been sued for discrimination or retaliation in state court where the evidence of discrimination or retaliation is weak or non-existent. Prudent employers shouldn't take the passage of these bills as a "get out of jail free" card. Courts will still have the responsibility to deny summary judgment when the material facts are disputed. As I have said several times on this blog, the dumbest thing employers can do is run their mouths. Loose lips are a sure fire way to be forced to defend an employment decision before a jury.

U.S. Supreme Court Reverses Wal-Mart Class Certification

2011-06-20T11:11:00.000-04:00

The largest class action ever certified in a discrimination claim is history. The decision is interesting if you like issues that arise under the federal rules of civil procedure class action but that makes it pretty wonkish from the employer's point of view. At first read, the Court's decision (it was unanimous in part) will spell doom for large employment based class actions where the evidence does not present a policy or practice of intentional discrimination or a practice that unintentionally causes a disparate impact.

What really hurt the employees trying to get their claims certified was that they took inconsistent positions in trying to establish that their claims of discrimination had an important point in common. They claimed Wal-Mart had a policy of providing store management with unchecked discretion. The Court didn't buy it, saying the employees failed to identify "a common mode of exercising discretion that pervades the entire company:"

we have recognized that, “in appropriate cases,” giving discretion to lower-level supervisors can be the basis of Title VII liability under a disparate-impact theory—since “an employer’s undisciplined system of subjective decision making [can have] precisely the same effects as a system pervaded by impermissible intentional discrimination.” Id., at 990–991. But the recognition that this type of Title VII claim “can” exist does not lead to the conclusion that every employee in a company using a system of discretion has such a claim in common. To the contrary, left to their own devices most managers in any corporation—and surely most managers in a corporation that forbids sex discrimination—would select sex-neutral, performance-based criteria for hiring and promotion that produce no actionable disparity at all. Others may choose to reward various attributes that produce disparate impact—such as scores on general aptitude tests or educational achievements, see Griggs v. Duke Power Co., 401 U. S. 424, 431–432 (1971). And still other managers may be guilty of intentional discrimination that produces a sex-based disparity. In such a company, demonstrating the invalidity of one manager’s use of discretion will do nothing to demonstrate the invalidity of another’s. A party seeking to certify a nationwide class will be unable to show that all the employees’ Title VII claims will in fact depend on the answers to common questions.

The decision reduces the risk that an employer will have a class action filed against it alleging all of its decisions are discriminatory. This decision will require a pretty good showing that the discrimination claims have facts or decision making in common. As I said earlier, employers that have discriminatory policies or who permit neutral practices to have a discriminatory effect are still at risk.

Eighth Circuit Remands Dismissal of Retaliation Claim Where Employer Refused to Consult Lawyer

2011-06-17T12:57:00.000-04:00

Today, the Eighth Circuit upheld the dismissal of a racial hostile work environment claim but reversed the dismissal of a retaliation claim. Even recognizing that there are disputes over the facts, the case is a good lesson in how not to respond to a complaint about racial comments even if you believe the employee to be lying.

In July 2007, NuAir hired Lionel Pye as a temporary employee doing metal finishing work. It was entry level work. He was made a regular employee in October 2007, at which point he asked the company payroll administrator to fill out a form so he could get housing assistance from the county government. The payroll administrator was apparently rude to Pye, and uttered a racial slur in his hearing (she disputed this). Pye complained about it to the HR manager (Johnson) who met with Pye and his supervisor. What was said at the meeting was disputed. After the meeting, Johnson reported to the Vice-President (Peters) that Pye was trying to shake down the company by making an implied threat to sue. The court explained what happened next:

Johnson suggested to Peters that a lawyer be consulted to see if NuAire could fire Pye for making threats. Peters responded that he did not need to consult a lawyer, and directed McKnight [the supervisor] to fire Pye when Pye next returned to work on Monday, November 19, 2007. The only information Peters had at the time he made the decision to terminate Pye pertained to Pye’s allegations of discrimination, and to the investigation; he had no information regarding Pye’s performance on the job.

The court's decision shows the employer made a critical error. "There is no evidence that NuAire had any concerns regarding Pye’s performance before he engaged in protected conduct. Indeed, Peters acknowledged that he had no information regarding Pye’s work performance when he made the decision to terminate him." This led the court to hold that, if Pye's version was true, a jury could "believe that NuAire’s assertions of intimidation, coercion, and threatening behavior were pretext for -- if not further evidence of -- NuAire’s true prohibited reason for Pye’s termination."

Making false accusation of racial misconduct is not protected any more than are using those false accusations in an attempt to shake down an employer. Even so, the standard, as I said in a prior post about a decision from this same court, is very high. Most of the time, the employer's decision will have to be defended to a jury. The employer could hopefully have saved itself some grief and expense by consulting with an attorney before firing Pye.

Given this post's title, I suppose I should say what I would have recommended had I been called after the meeting. In a situation like this, I would have recommended the employer document the statements made at the meeting in a memo to the employee. I would ask the employee to confirm that the memo is accurate or get the employee's version of events (in writing, if possible). Only then would I make a decision about whether to fire or otherwise discipline the employee for making threats. A little patience goes a long way. (And yes, I realize the title is self-serving and hope it is taken with the humor in which it is intended.)

Court Clarifies Federal Summary Judgment Standard in Employment Discrimination Claims

2011-06-01T13:28:00.001-04:00

The topic of summary judgment, being procedural, is not frequently a topic of a post. It is discussed, of course, because, short of settlement, summary judgment is the way most employment-related claims avoid going to trial.

But summary judgment has recently been in the news with the General Assembly's passages of two bills that would override Tennessee Supreme Court decisions on summary judgment and how to analyze employment discrimination and/or retaliation claims in ruling on a motion for summary judgment.

For that reason, I thought the perspective of the federal court of appeals in St. Louis on summary judgment in employment discrimination claims would be of interest. (It is also a slow employment news day.) Two applicants brought a failure to hire claim against the Rochester, Minnesota fire department. After losing the claim in the trial court, they appealed and a three judge panel ruled in their favor. The full court, on the city's motion, agreed to reconsider the panel's ruling. The decision on the merits divided the court; one judge made the difference in affirming the dismissal of the failure to hire claims.

While they split on whether a trial was needed, all of the judges agreed that the same summary judgment rules apply to a discrimination or retaliation claim.

Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed “to secure the just, speedy and inexpensive determination of every action.”
Celotex Corp., 477 U.S. at 327 (quoting Fed. R. Civ. P. 1). Because summary judgment is not disfavored and is designed for “every action,” panel statements to the contrary are unauthorized and should not be followed. There is no “discrimination case exception” to the application of summary judgment, which is a useful pretrial tool to determine whether any case, including one alleging discrimination, merits a trial.

What made the decision interesting (at least to legal wonks like me) was that the court specifically and unequivocally disavowed a number of the court's previous decisions that had said summary judgment in employment discrimination cases should “seldom” or “sparingly” be granted, not in “very close” cases, only “with caution,” or after being “particularly deferential” to the employee.

I suppose it always depends on your point of view.

Courts Finds Account Manager for Media Buyer Meets FLSA Administrative Exemption

2011-05-27T09:59:00.000-04:00

The administrative exemption from the FLSA overtime requirements presents a challenge for many employers, so much so that some employer don't try to use it. It is much less clear and therefore more difficult to apply than the professional or executive exemptions (and contrary to the latter's name, the exemption applies to supervisors who have some meaningful input into hiring or firing). A decision issued today (Verkuilen v. MediaBank) from the federal court of appeals in Chicago helps to better define the rather vague DOL regulation that governs the administrative exemption.

In general terms (from a DOL fact sheet on the subject) the administrative exemption requires that:

The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

The court of appeals sitting in Chicago dealt with the "primary duty" questions. The employer was in the business of selling a software package to advertising firms that would help them place advertising in media outlets. The software was complex, the court explained, "because it integrates so many functions, and it must be customized to the needs of each client, which vary. The complexity and variance are where the account manager comes in. The manager of a customer’s account has to learn about the customer’s business and help MediaBank’s software engineers determine how its software can be adapted to the customer’s needs."

The account manager's job was "to learn about the customer’s business and help MediaBank’s software engineers determine how its software can be adapted to the customer’s needs." She is

on the customer’s speed dial during the testing and operation of the customer’s MediaBank software. As the intermediary between employees of advertising agencies struggling to master complex software and the software developers at MediaBank, she has to spend much of her time on customers’ premises training staff in the use of the software, answering questions when she can and when she can’t taking them back to MediaBank’s software developers, and then explaining their answers to the customer and showing the customer how to implement the answers in its MediaBank software. Identifying customers’ needs, translating them into specifications to be implemented by the developers, assisting the customers in implementing the solutions—in the words of MediaBank’s chief operating officer, account managers are expected to “go out, understand [the customers’ requirements], build specifications, understand the competency level of our customers. Then they will build functional and technical specifications and turn it over to . . . developers who will then build the software, . . . checking in with the account manager, making sure what they are building is ultimately what the customer wanted.”

This, the court held, meant that the account managers "primary duty was directly related to the general business operations both of her employer and (as in a consulting role) of the employer’s customers." It didn't matter, the court further held, that the account manager did not perform all or even many of the functions listed in the DOL regulation on what makes a job administratively exempt. See 29 C.F.R. § 541.202 (listing numerous "[f]actors to consider when determining whether an employee exercises discretion and independent judgment with respect to matters of significance.")

General Assembly Passes Bill Legislatively Overruling Deeply Flawed Gossett Decision

2011-05-24T18:16:00.001-04:00

A prior post addressed a bill pending in the Tennessee General Assembly which would have the effect of over-ruling the Tennessee Supreme Court's decision in Gossett v. Tractor Supply. (My post on Gossett can be found here).

Last week, both houses of the General Assembly voted to send the bill (as amended) to the governor. If Governor Haslam approves the bill, it becomes law immediately, but would only apply to causes of action that accrue after the Governor signs the bill (more on that in a minute).

The version of the bill that passes can be found here: http://www.capitol.tn.gov/Bills/107/Amend/SA0598.pdf. This is an amendment the Senate adopted to clarify the effective date. The Senate passed the bill on May 20, 2011. The House approved the amendment a day later.

The purpose of this bill was to require application of the McDonnell Douglas Burdine (MDB) analysis in all THRA claims and retaliatory discharge claims (common law and statutory) including on summary judgment motions. (“The foregoing allocations of burdens of proof shall apply at all stages of the proceedings, including motions for summary judgment.”) Remember that Gossett held that McDonnell Douglas Burdine was inconsistent with the Court's summary judgment precedent.

The operative language in the bill is (similar language is used for wrongful discharge claims) is:

In any civil cause of action alleging a violation of this chapter or of Tennessee Code Annotated, Section 8-50-103[which prohibits disability retaliation], the plaintiff shall have the burden of establishing a prima facie case of intentional discrimination or retaliation. If the plaintiff satisfies this burden, the burden shall then be on the defendant to produce evidence that one or more legitimate, nondiscriminatory reasons existed for the challenged employment action. The burden on the defendant is one of production and not persuasion. If the defendant produces such evidence, the presumption of discrimination or retaliation raised by the plaintiff’s prima facie case is rebutted, and the burden shifts to the plaintiff to demonstrate that the reason given by the defendant was not the true reason for the challenged employment action and that the stated reason was a pretext for illegal discrimination or retaliation. The foregoing allocations of burdens of proof shall apply at all stages of the proceedings, including motions for summary judgment. The plaintiff at all times retains the burden of persuading the trier of fact that he or she has been the victim of intentional discrimination or retaliation.

To anyone familiar with employment discrimination litigation, the bill requires courts apply the McDonnell Douglas Burdine analysis to all discrimination and retaliation cases. An interesting point about the language of the bill is that in some situations, such as where the employee claims to have so-called "direct evidence" of discrimination (e.g., an admission of discrimination by the decision-maker), this bill seems to require application of McDonnell Douglas/Burdine even where a federal court might not. This isn't a big deal as an admission of this nature is probably going to be sufficient to require a jury trial even under the federal summary judgment rule. The argument could also be made that this bill negates any hint of a dual motive analysis under the THRA (though that was probably not the intent). Again, this is not a huge issue, as I explained in my prior blog posts about the U.S. Supreme Court's decision in Gross.

As noted, the effective date is interesting:

This act shall take effect upon becoming a law, the public welfare requiring it and shall apply to all causes of action accruing on or after such effective date.

The word "accruing" means, in this context, "happens" but that can be somewhat uncertain in the employment discrimination context. A termination of employment claim accrues when the employee is informed of the decision. Easy enough. But a hostile work environment claim accrues over time, not all at one. These will not be insurmountable problems, just headaches for judges to work out over the next few years.

Note that the bill has not been enacted yet. It still needs Governor Haslam’s approval.

On another note, the General Assembly also passed a separate bill which would require the Tennessee courts to the federal summary judgment standards. A full explanation of this issue would be beyond the scope of this blog.

It is enough to say that both bills, if signed by the Governor, will restore a Tennessee employer's repeatedly dashed hope of obtaining summary judgment in state court when the employee has no competent evidence to warrant a trial.